226 
‘‘(3) PRIORITY.—A medicare administrative 
contractor shall give priority to activities under such 
program that will reduce improper payments that 
are one or more of the following: 
‘‘(A) Are for items and services that have 
the highest rate of improper payment. 
‘‘(B) Are for items and service that have 
the greatest total dollar amount of improper 
payments. 
‘‘(C) Are due to clear misapplication or 
misinterpretation of Medicare policies. 
‘‘(D) Are clearly due to common and inad-
vertent clerical or administrative errors. 
‘‘(E) Are due to other types of errors that 
the Secretary determines could be prevented 
through activities under the program. 
‘‘(4) INFORMATION
ON
IMPROPER
PAYMENTS 
FROM RECOVERY AUDIT CONTRACTORS.— 
‘‘(A) IN
GENERAL.—In order to assist 
medicare administrative contractors in carrying 
out improper payment outreach and education 
programs, the Secretary shall provide each con-
tractor with a complete list of the types of im-
proper payments identified by recovery audit 
contractors under section 1893(h) with respect 
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to providers of services and suppliers located in 
the region covered by the contract under this 
section. Such information shall be provided on 
a time frame the Secretary determines appro-
priate which may be on a quarterly basis. 
‘‘(B) INFORMATION.—The information de-
scribed in subparagraph (A) shall include infor-
mation such as the following: 
‘‘(i) Providers of services and sup-
pliers that have the highest rate of im-
proper payments. 
‘‘(ii) Providers of services and sup-
pliers that have the greatest total dollar 
amounts of improper payments. 
‘‘(iii) Items and services furnished in 
the region that have the highest rates of 
improper payments. 
‘‘(iv) Items and services furnished in 
the region that are responsible for the 
greatest total dollar amount of improper 
payments. 
‘‘(v) Other information the Secretary 
determines would assist the contractor in 
carrying out the program. 
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‘‘(5) COMMUNICATIONS.—Communications with 
providers of services and suppliers under an im-
proper payment outreach and education program are 
subject to the standards and requirements of sub-
section (g).’’. 
(b) USE
OF
CERTAIN
FUNDS
RECOVERED
BY 
RACS.—Section 1893(h) of the Social Security Act (42 
U.S.C. 1395ddd(h)) is amended— 
(1) in paragraph (2), by inserting ‘‘or para-
graph (10)’’ after ‘‘paragraph (1)(C)’’; and 
(2) by adding at the end the following new 
paragraph: 
‘‘(10) USE OF CERTAIN RECOVERED FUNDS.— 
‘‘(A) IN
GENERAL.—After application of 
paragraph (1)(C), the Secretary shall retain a 
portion of the amounts recovered by recovery 
audit contractors for each year under this sec-
tion which shall be available to the program 
management account of the Centers for Medi-
care & Medicaid Services for purposes of, sub-
ject to subparagraph (B), carrying out sections 
1833(z), 1834(l)(16), and 1874A(a)(4)(G), car-
rying out section 514(b) of the Medicare Access 
and CHIP Reauthorization Act of 2015, and 
implementing strategies (such as claims proc-
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essing edits) to help reduce the error rate of 
payments under this title. The amounts re-
tained under the preceding sentence shall not 
exceed an amount equal to 15 percent of the 
amounts recovered under this subsection, and 
shall remain available until expended. 
‘‘(B) LIMITATION.—Except for uses that 
support claims processing (including edits) or 
system 
functionality 
for 
detecting 
fraud, 
amounts retained under subparagraph (A) may 
not be used for technological-related infrastruc-
ture, capital investments, or information sys-
tems. 
‘‘(C) NO REDUCTION IN PAYMENTS TO RE-
COVERY
AUDIT
CONTRACTORS.—Nothing in 
subparagraph (A) shall reduce amounts avail-
able for payments to recovery audit contractors 
under this subsection.’’. 
SEC. 506. 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 ‘‘Sec-
retary’’) shall develop a plan to revise the incentive pro-
gram under section 203(b) of the Health Insurance Port-
ability and Accountability Act of 1996 (42 U.S.C. 1395b– 
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230 
5(b)) to encourage greater participation by individuals to 
report fraud and abuse in the Medicare program. Such 
plan shall include recommendations for— 
(1) ways to enhance rewards for individuals re-
porting under the incentive program, including re-
wards based on information that leads to an admin-
istrative action; and 
(2) extending the incentive program to the 
Medicaid program. 
(b) PUBLIC AWARENESS
AND EDUCATION CAM-
PAIGN.—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 sub-
section (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). 
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231 
SEC. 507. REQUIRING VALID PRESCRIBER NATIONAL PRO-
VIDER IDENTIFIERS ON PHARMACY CLAIMS. 
Section 1860D–4(c) of the Social Security Act (42 
U.S.C. 1395w–104(c)) is amended by adding at the end 
the following new paragraph: 
‘‘(4) REQUIRING VALID PRESCRIBER NATIONAL 
PROVIDER IDENTIFIERS ON PHARMACY CLAIMS.— 
‘‘(A) IN GENERAL.—For plan year 2016 
and subsequent plan years, the Secretary shall 
require a claim for a covered part D drug for 
a part D eligible individual enrolled in a pre-
scription drug plan under this part or an MA– 
PD plan under part C to include a prescriber 
National Provider Identifier that is determined 
to be valid under the procedures established 
under subparagraph (B)(i). 
‘‘(B) PROCEDURES.— 
‘‘(i) VALIDITY
OF
PRESCRIBER
NA-
TIONAL
PROVIDER
IDENTIFIERS.—The 
Secretary, in consultation with appropriate 
stakeholders, shall establish procedures for 
determining the validity of prescriber Na-
tional Provider Identifiers under subpara-
graph (A). 
‘‘(ii) INFORMING
BENEFICIARIES
OF 
REASON FOR DENIAL.—The Secretary shall 
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establish procedures to ensure that, in the 
case that a claim for a covered part D 
drug of an individual described in subpara-
graph (A) is denied because the claim does 
not meet the requirements of this para-
graph, the individual is properly informed 
at the point of service of the reason for the 
denial. 
‘‘(C) REPORT.—Not later than January 1, 
2018, 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)(i).’’. 
SEC. 508. OPTION TO RECEIVE MEDICARE SUMMARY NO-
TICE ELECTRONICALLY. 
(a) IN GENERAL.—Section 1806 of the Social Secu-
rity Act (42 U.S.C. 1395b–7) is amended by adding at 
the end the following new subsection: 
‘‘(c) FORMAT OF STATEMENTS FROM SECRETARY.— 
‘‘(1) 
ELECTRONIC
OPTION
BEGINNING
IN 
2016.—Subject to paragraph (2), for statements de-
scribed in subsection (a) that are furnished for a pe-
riod in 2016 or a subsequent year, in the case that 
an individual described in subsection (a) elects, in 
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233 
accordance with such form, manner, and time speci-
fied by the Secretary, to receive such statement in 
an electronic format, such statement shall be fur-
nished to such individual for each period subsequent 
to such election in such a format and shall not be 
mailed to the individual. 
‘‘(2) LIMITATION ON REVOCATION OPTION.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), the Secretary may determine a max-
imum number of elections described in para-
graph (1) by an individual that may be revoked 
by the individual. 
‘‘(B) MINIMUM OF ONE REVOCATION OP-
TION.—In no case may the Secretary determine 
a maximum number under subparagraph (A) 
that is less than one. 
‘‘(3) NOTIFICATION.—The Secretary shall en-
sure that, in the most cost effective manner and be-
ginning January 1, 2017, a clear notification of the 
option to elect to receive statements described in 
subsection (a) in an electronic format is made avail-
able, such as through the notices distributed under 
section 1804, to individuals described in subsection 
(a).’’. 
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234 
(b) ENCOURAGED
EXPANSION
OF
ELECTRONIC 
STATEMENTS.—To the extent to which the Secretary of 
Health and Human Services determines appropriate, the 
Secretary shall— 
(1) apply an option similar to the option de-
scribed in subsection (c)(1) of section 1806 of the 
Social Security Act (42 U.S.C. 1395b–7) (relating to 
the provision of the Medicare Summary Notice in an 
electronic format), as added by subsection (a), to 
other statements and notifications under title XVIII 
of such Act (42 U.S.C. 1395 et seq.); and 
(2) provide such Medicare Summary Notice and 
any such other statements and notifications on a 
more frequent basis than is otherwise required under 
such title. 
SEC. 509. RENEWAL OF MAC CONTRACTS. 
(a) IN GENERAL.—Section 1874A(b)(1)(B) of the 
Social Security Act (42 U.S.C. 1395kk–1(b)(1)(B)) is 
amended by striking ‘‘5 years’’ and inserting ‘‘10 years’’. 
(b) APPLICATION.—The amendments made by sub-
section (a) shall apply to contracts entered into on or 
after, and to contracts in effect as of, the date of the en-
actment of this Act. 
(c) CONTRACTOR PERFORMANCE TRANSPARENCY.— 
Section 1874A(b)(3)(A) of the Social Security Act (42 
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U.S.C. 1395kk–1(b)(3)(A)) is amended by adding at the 
end the following new clause: 
‘‘(iv) 
CONTRACTOR
PERFORMANCE 
TRANSPARENCY.—To the extent possible 
without compromising the process for en-
tering into and renewing contracts with 
medicare administrative contractors under 
this section, the Secretary shall make 
available to the public the performance of 
each medicare administrative contractor 
with respect to such performance require-
ments and measurement standards.’’. 
SEC. 510. STUDY ON PATHWAY FOR INCENTIVES TO STATES 
FOR STATE PARTICIPATION IN MEDICAID 
DATA MATCH PROGRAM. 
Section 1893(g) of the Social Security Act (42 U.S.C. 
1395ddd(g)) is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(3) INCENTIVES FOR STATES.—The Secretary 
shall study and, as appropriate, may specify incen-
tives for States to work with the Secretary for the 
purposes described in paragraph (1)(A)(ii). The ap-
plication of the previous sentence may include use of 
the waiver authority described in paragraph (2).’’. 
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236 
SEC. 511. GUIDANCE ON APPLICATION OF COMMON RULE 
TO CLINICAL DATA REGISTRIES. 
Not later than one year after the date of the enact-
ment of this section, the Secretary of Health and Human 
Services shall issue a clarification or modification with re-
spect to the application of subpart A of part 46 of title 
45, Code of Federal Regulations, governing the protection 
of human subjects in research (and commonly known as 
the ‘‘Common Rule’’), to activities, including quality im-
provement activities, involving clinical data registries, in-
cluding entities that are qualified clinical data registries 
pursuant to section 1848(m)(3)(E) of the Social Security 
Act (42 U.S.C. 1395w–4(m)(3)(E)). 
SEC. 512. ELIMINATING CERTAIN CIVIL MONEY PENALTIES; 
GAINSHARING STUDY AND REPORT. 
(a) ELIMINATING CIVIL MONEY PENALTIES FOR IN-
DUCEMENTS TO PHYSICIANS TO LIMIT SERVICES THAT 
ARE NOT MEDICALLY NECESSARY.— 
(1) IN GENERAL.—Section 1128A(b)(1) of the 
Social Security Act (42 U.S.C. 1320a–7a(b)(1)) is 
amended by inserting ‘‘medically necessary’’ after 
‘‘reduce or limit’’. 
(2) EFFECTIVE DATE.—The amendment made 
by paragraph (1) shall apply to payments made on 
or after the date of the enactment of this Act. 
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