PRIME Act of 2013

To amend titles XVIII and XIX of the Social Security Act to curb waste, fraud, and abuse in the Medicare and Medicaid programs. 1. Short title; table of contents (a) Short title This Act may be cited as the Preventing and Reducing Improper Medicare and Medicaid Expenditures Act of 2013 PRIME Act of 2013 (b) Table of contents The table of contents of 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. I Curbing improper payments 101. Requiring valid prescriber National Provider Identifiers on pharmacy claims Section 1860D–4(c) of the Social Security Act ( 42 U.S.C. 1395w–104(c) (4) Requiring valid prescriber National Provider Identifiers on pharmacy claims (A) In general For plan year 2015 and subsequent plan years, subject to subparagraph (B), the Secretary shall prohibit PDP sponsors of prescription drug plans from paying claims for prescription drugs under this part that do not include a valid prescriber National Provider Identifier. (B) Procedures The Secretary shall establish— (i) procedures for determining the validity of prescriber National Provider Identifiers under subparagraph (A); and (ii) procedures for transferring to the Inspector General of the Department of Health and Human Services and appropriate law enforcement agencies and other oversight entities information on those National Provider Identifiers and pharmacy claims, including records related to such claims, that the Secretary determines are invalid under clause (i). (C) Report Not later than January 1, 2017, the Inspector General of the Department of Health and Human Services shall submit to Congress a report on the effectiveness of the procedures established under subparagraph (B). . 102. Reforming how CMS tracks and corrects the vulnerabilities identified by Recovery Audit Contractors (a) In general Section 1893(h) of the Social Security Act ( 42 U.S.C. 1395ddd(h) (1) in paragraph (8)— (A) by striking report report (A) In general Subject to subparagraph (C), the Secretary ; and (B) by adding after subparagraph (A), as inserted by subparagraph (A), the following new subparagraphs: (B) Inclusion of improper payment vulnerabilities identified Each report submitted under subparagraph (A) shall, subject to subparagraph (C), include— (i) a description of— (I) the types and financial cost to the program under this title of improper payment vulnerabilities identified by recovery audit contractors under this subsection; and (II) how the Secretary is addressing such improper payment vulnerabilities; and (ii) an assessment of the effectiveness of changes made to payment policies and procedures under this title in order to address the vulnerabilities so identified. (C) Limitation The Secretary shall ensure that each report submitted under subparagraph (A) does not include information that the Secretary determines would be sensitive or would otherwise negatively impact program integrity. ; and (2) by adding at the end the following new paragraph: (10) Addressing improper payment vulnerabilities The Secretary shall address improper payment vulnerabilities identified by recovery audit contractors under this subsection in a timely manner, prioritized based on the risk to the program under this title. . (b) Use of Medicare and Medicaid recovery audit contractor recoveries for provider education and To prevent improper payments and fraud (1) Medicare RAC program Section 1893(h)(1)(C) of the Social Security Act (42 U.S.C. 1395ddd(h)(1)(C)) is amended— (A) by striking the Secretary shall retain (i) shall retain ; (B) in clause (i), as added by subparagraph (A)— (i) by inserting , in addition to any other funds that may be available, available (ii) by inserting until expended Services (iii) by striking the period at the end and inserting a semicolon; and (C) by adding at the end the following new clauses: (ii) may retain an additional portion of the amounts recovered (not to exceed 25 percent of such amounts recovered) which shall be available, in addition to any other funds that may be available, to such program management account until expended for purposes of activities to address problems that contribute to improper payments and fraud under this title; and (iii) shall retain an additional 5 percent of such amounts recovered to be made available, in addition to any other funds that may be available, to the Inspector General of the Department of Health and Human Services until expended for the Inspector General to carry out activities of the Inspector General relating to investigating improper payments or auditing internal controls associated with payments under this title. . (2) Medicaid RAC program Section 1936 of the Social Security Act (42 U.S.C. 1396u–6) is amended by adding at the end the following new subsection: (f) Amounts recovered through recovery audit contractors Notwithstanding any other provision of law, the Secretary— (1) may retain a portion of the amounts recovered pursuant to the program established under section 1902(a)(42)(B) (not to exceed 25 percent of the Federal share of such amounts recovered) which shall be available, in addition to any other funds that may be available, to the program management account of the Centers for Medicare & Medicaid Services for purposes of activities to address problems that contribute to improper payments and fraud under this title; and (2) shall retain an additional 5 percent of the Federal share of such amounts recovered to be made available, in addition to any other funds that may be available, to the Inspector General of the Department of Health and Human Services until expended for the Inspector General to carry out activities of the Inspector General relating to investigating improper payments or auditing internal controls associated with payments under this title. . (3) Effective date The amendments made by this section shall take effect on January 1, 2014. 103. Improving Senior Medicare Patrol and fraud reporting rewards (a) In general The Secretary of Health and Human Services (in this section referred to as the Secretary 42 U.S.C. 1395b–5(b) (1) ways to enhance rewards for individuals reporting under the incentive program, including rewards based on information that leads to an administrative action; and (2) extending the incentive program to the Medicaid program. (b) Public awareness and education campaign The plan developed under subsection (a) shall also include recommendations for the use of the Senior Medicare Patrols authorized under section 411 of the Older Americans Act of 1965 (42 U.S.C. 3032) to conduct a public awareness and education campaign to encourage participation in the revised incentive program under subsection (a). (c) Submission of plan Not later than 180 days after the date of enactment of this Act, the Secretary shall submit to Congress the plan developed under subsection (a). 104. Strengthening Medicaid Program integrity through flexibility Section 1936 of the Social Security Act (42 U.S.C. 1396u–6) is amended— (1) in subsection (a), by inserting , or otherwise, entities (2) in subsection (e)— (A) in paragraph (1), in the matter preceding subparagraph (A), by inserting (including the costs of equipment, salaries and benefits, and travel and training) Program under this section (B) in paragraph (3), by striking by 100 by 100, or such number as determined necessary by the Secretary to carry out the Program, 105. Establishing Medicare administrative contractor error reduction incentives (a) In general Section 1874A(b)(1)(D) of the Social Security Act ( 42 U.S.C. 1395kk(b)(1)(D) (1) by striking quality quality (i) In general Subject to clauses (ii) and (iii), the Secretary ; and (2) by inserting after clause (i), as added by paragraph (1), the following new clauses: (ii) Improper payment error rate reduction incentives The Secretary shall provide incentives for medicare administrative contractors to reduce the improper payment error rates in their jurisdictions. (iii) Incentives The incentives provided for under clause (ii)— (I) may include a sliding scale of bonus payments and additional incentives to medicare administrative contractors that reduce the improper payment error rates in their jurisdictions to certain benchmark levels, as determined by the Secretary; and (II) shall include substantial reductions in award fee payments under award fee contracts, for any medicare administrative contractor that reaches an upper end error threshold or other threshold as determined by the Secretary. . (b) Effective date (1) In general The amendments made by subsection (a) shall apply to contracts entered into or renewed on or after the date that is 12 months after the date of enactment of this Act. (2) Contracts entered into or renewed prior to effective date In the case of contracts in existence on or after the date of the enactment of this Act and that are not subject to the effective date under paragraph (1), the Secretary of Health and Human Services shall, when appropriate and practicable, seek to apply the incentives provided for in the amendments made by subsection (a) through contract modifications. 106. Strengthening penalties for the illegal distribution of a Medicare, Medicaid, or CHIP beneficiary identification or billing privileges Section 1128B(b) of the Social Security Act (42 U.S.C. 1320a–7b(b)) is amended by adding at the end the following: (4) Whoever knowingly, intentionally, and with the intent to defraud purchases, sells or distributes, or arranges for the purchase, sale, or distribution of a Medicare, Medicaid, or CHIP beneficiary identification number or billing privileges under title XVIII, title XIX, or title XXI shall be imprisoned for not more than 10 years or fined not more than $500,000 ($1,000,000 in the case of a corporation), or both. . II Improving data sharing 201. Access to the National Directory of New Hires Section 453(j) of the Social Security Act (42 U.S.C. 653 (j)) is amended by adding at the end of the following new paragraph: (12) Information comparisons and disclosures to assist in administration of the Medicare program and State health subsidy programs (A) Disclosure to the Administrator of the Centers for Medicare & Medicaid Services The Administrator of the Centers for Medicare & Medicaid shall have access to the information in the National Directory of New Hires for purposes of determining the eligibility of an applicant for, or enrollee in, the Medicare program under title XVIII or an applicable State health subsidy program (as defined in section 1413(e) of the Patient Protection and Affordable Care Act ( 42 U.S.C. 18083(e) (B) Disclosure to the Inspector General of the Department of Health and Human Services (i) In general If the Inspector General of the Department of Health and Human Services transmits to the Secretary the names and social security account numbers of individuals, the Secretary shall disclose to the Inspector General information on such individuals and their employers maintained in the National Directory of New Hires. (ii) Use of information The Inspector General of the Department of Health and Human Services may use information provided under clause (i) only for purposes of— (I) determining the eligibility of an applicant for, or enrollee in, the Medicare program under title XVIII or an applicable State health subsidy program (as defined in section 1413(e) of the Patient Protection and Affordable Care Act (42 U.S.C. 18083(e))); or (II) evaluating the integrity of the Medicare program or an applicable State health subsidy program (as so defined). (C) Disclosure to State agencies (i) In general If, for purposes of administering an applicable State health subsidy program (as defined in section 1413(e) of the Patient Protection and Affordable Care Act ( 42 U.S.C. 18083(e) (ii) Condition on disclosure by the Secretary The Secretary shall make a disclosure under clause (i) only to the extent that the Secretary determines that the disclosure would not interfere with the effective operation of the program under this part. (iii) Use and disclosure of information by State agencies (I) In general A State agency may not use or disclose information provided under clause (i) except for purposes of administering a program referred to in clause (i). (II) Information security The State agency shall have in effect data security and control policies that the Secretary finds adequate to ensure the security of information obtained under clause (i) and to ensure that access to such information is restricted to authorized persons for purposes of authorized uses and disclosures. (III) Penalty for misuse of information An officer or employee of the State agency who fails to comply with this clause shall be subject to the sanctions under subsection (l)(2) to the same extent as if such officer or employee were an officer or employee of the United States. (iv) Procedural requirements State agencies requesting information under clause (i) shall adhere to uniform procedures established by the Secretary governing information requests and data matching under this paragraph. (v) Reimbursement of costs The State agency shall reimburse the Secretary, in accordance with subsection (k)(3), for the costs incurred by the Secretary in furnishing the information requested under this subparagraph. . 202. Improving the sharing of data between the Federal Government and State Medicaid programs (a) In general The Secretary of Health and Human Services (in this section referred to as the Secretary Medi-Medi Program (b) Program revisions To improve Medi-Medi Data Match Program participation by States Section 1893(g)(1)(A) of the Social Security Act (42 U.S.C. 1395ddd(g)(1)(A)) is amended— (1) in the matter preceding clause (i), by inserting or otherwise eligible entities (2) in clause (i)— (A) by inserting to review claims data algorithms (B) by striking service, time, or patient provider, service, time, or patient (3) in clause (ii)— (A) by inserting to investigate and recover amounts with respect to suspect claims appropriate actions (B) by striking ; and (4) in clause (iii), by striking the period and inserting ; and (5) by adding at end the following new clause: (iv) furthering the Secretary’s design, development, installation, or enhancement of an automated data system architecture— (I) to collect, integrate, and assess data for purposes of program integrity, program oversight, and administration, including the Medi-Medi Program; and (II) that improves the coordination of requests for data from States. . (c) Providing states with data on improper payments made for items or services provided to dual eligible individuals (1) In general The Secretary shall develop and implement a plan that allows each State agency responsible for administering a State plan for medical assistance under title XIX of the Social Security Act access to relevant data on improper or fraudulent payments made under the Medicare program under title XVIII of the Social Security Act ( 42 U.S.C. 1395 et seq. (2) Dual eligible individual defined In this section, the term dual eligible individual 42 U.S.C. 1395j et seq. 42 U.S.C. 1396 et seq. 203. Improving claims processing and detection of fraud within the Medicaid and CHIP programs (a) Medicaid Section 1903(i) of the Social Security Act ( 42 U.S.C. 1396b(i) (1) in paragraph (25), by striking or (2) in paragraph (26), by striking the period and inserting ; or (3) by adding after paragraph (26), the following new paragraph: (27) with respect to amounts expended for an item or service for which medical assistance is provided under the State plan or under a waiver of such plan unless the claim for payment for such item or service contains a valid beneficiary identification number that, for purposes of the individual who received such item or service, has been determined by the State agency to correspond to an individual who is eligible to receive benefits under the State plan or waiver. . (b) CHIP Section 2107(e)(1)(I) of the Social Security Act ( 42 U.S.C. 1397gg(e)(1)(I) and (17) (17), and (27) III Report on implementation 301. Report on implementation Not later than 270 days after the date of the enactment of this Act, the Secretary of Health and Human Services shall submit to Congress a report on the implementation of the provisions of, and the amendments made by, this Act.

Summary: Preventing and Reducing Improper Medicare and Medicaid Expenditures Act of 2013 or PRIME Act of 2013 - Amends part D (Prescription Drug Benefits) of title XVIII (Medicare) of the Social Security Act (SSA) to direct the Secretary of Health and Human Services (HHS) to prohibit sponsors of prescription drug plans (PDPs) from paying claims for prescription drugs that do not include the valid National Provider Identifier for the drug's prescriber. Requires the Secretary's annual report to Congress on the use of recovery audit contractors under the Medicare Integrity Program to: (1) describe the types and financial cost of improper payment vulnerabilities identified by recovery audit contractors and how the Secretary is addressing them, and (2) assess the effectiveness of changes made to Medicare payment policies and procedures in order to address those vulnerabilities. Requires the Secretary to address improper payment vulnerabilities in a timely manner, prioritized based on the risk to the Medicare program. Authorizes the Secretary, under recovery audit contracts under both Medicare and Medicaid (SSA title XIX), to retain a certain portion of the recovered amounts for a program management account for activities addressing problems that contribute to improper payments and fraud. Requires the Secretary, under such contracts, to retain an additional 5% of the recovered amounts to be made available to the HHS Inspector General to investigate improper payments or audit internal controls associated with Medicare or Medicaid payments. Directs the Secretary to develop a plan to revise the incentive program under the Health Insurance Portability and Accountability Act of 1996 for the reporting of fraud and abuse to encourage greater participation by individuals reporting Medicare fraud and abuse. Requires the plan to include certain recommendations for: (1) ways to enhance rewards for individuals reporting, and (2) extention of the incentive program to the Medicaid program. Amends SSA title XIX to cover the costs of equipment, salaries and benefits, and travel and training in appropriations for the Medicaid Integrity Program. Allows the Secretary to increase Centers for Medicare and Medicaid Services (CMS) staff whose duties consist solely of protecting the integrity of the Medicare program by a number determined necessary to carry out the Program (currently, by 100). Directs the Secretary to provide incentives for Medicare administrative contractors to reduce the improper payment error rates in their jurisdictions. Requires imprisonment for up to 10 years or a fine of up to $500,000 ($1 million in the case of a corporation), or both, for knowingly, intentionally, and with the intent to defraud purchasing, selling, distributing, or arranging for the purchase, sale, or distribution of a Medicare, Medicaid, or CHIP beneficiary identification number or billing privileges under SSA titles XVIII, title XIX, or title XXI (Children's Health Insurance Program). Amends SSA title IV part D (Child Support and Establishment of Paternity) with respect to the Federal Parent Locator Service to give the CMS Administrator access to information in the National Directory of New Hires to determine the eligibility of an applicant for, or enrollee in, the Medicare program or an applicable state health subsidy program under the Patient Protection and Affordable Care Act (PPACA). Requires the Secretary to disclose to the HHS Inspector General information on individuals and their employers in the National Directory of New Hires if the HHS Inspector General gives the Secretary their names and Social Security account numbers. Restricts the use of such information to: (1) determining the eligibility of an applicant for, or enrollee in, the Medicare program or an applicable state health subsidy program; or (2) evaluating the integrity of such programs. Sets forth rules for the use and disclosure of such information by state agencies. Directs the Secretary to establish a plan to encourage and facilitate the participation of states in the Medicare-Medicaid Data Match Program (Medi-Medi Program). Revises Medi-Medi Data Match Program purposes. Amends SSA title XIX, as amended by PPACA, and XXI with respect to claims processing and detection of fraud within the Medicaid and CHIP programs.