‘‘(A) ACCESS FOR THE CONDUCT OF LAW 
ENFORCEMENT AND OVERSIGHT ACTIVITIES.— 
For purposes’’; 
(ii) in subparagraph (A), as added by 
subclause (I), by inserting ‘‘, including, in 
accordance with section 301(e)(1)(D) of 
the Medicare and Medicaid Fighting Fraud 
and Abuse to Save Taxpayers’ Dollars Act, 
the Integrated Data Repository under 
paragraph (1)’’ before the period at the 
end; and 
(iii) by adding at the end the fol-
lowing new subparagraph: 
‘‘(B) ACCESS TO REDUCE WASTE, FRAUD, 
AND ABUSE.—For purposes of reducing waste, 
fraud, and abuse, and to the extent consistent 
with applicable information, privacy, security, 
and disclosure laws, including the regulations 
promulgated under the Health Insurance Port-
ability and Accountability Act of 1996 and sec-
tion 552a of title 5, United States Code, and 
subject to any information systems security re-
quirements under such laws or otherwise re-
quired by the Secretary, the Secretary, in con-
sultation with the Inspector General of the De-
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partment of Health and Human Services, shall 
allow appropriate State agency access to claims 
and payment data of the Department of Health 
and Human Services and its contractors related 
to titles XVIII, XIX, and XXI, including, in ac-
cordance with section 301(e)(2)(A) of the Medi-
care and Medicaid Fighting Fraud and Abuse 
to Save Taxpayers’ Dollars Act, the Integrated 
Data Repository under paragraph (1).’’. 
(f) GENERAL PROTOCOLS AND SECURITY.— 
(1) IN GENERAL.—The Secretary shall ensure 
that any data provided to an entity or individual 
under the provisions of or amendments made by this 
section is provided to such entity or individual in ac-
cordance with protocols established by the Secretary 
under paragraph (2). The Secretary shall consult 
with the Inspector General of the Department of 
Health and Human Services prior to implementing 
this subsection. 
(2) PROTOCOLS.— 
(A) IN GENERAL.—The Secretary shall es-
tablish protocols to ensure the secure transfer 
and storage of any data provided to another en-
tity or individual under the provisions of or 
amendments made by this section. 
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(B) CONSIDERATION
OF
RECOMMENDA-
TIONS OF THE INSPECTOR GENERAL OF THE 
DEPARTMENT OF HEALTH AND HUMAN SERV-
ICES.—In establishing protocols under subpara-
graph (A), the Secretary shall take into account 
recommendations submitted to the Secretary by 
the Inspector General of the Department of 
Health and Human Services with respect to the 
secure transfer and storage of such data. 
(g) DEFINITIONS.—In this section: 
(1) FEDERAL HEALTH CARE PROGRAM.—The 
term ‘‘Federal health care program’’ has the mean-
ing given such term in section 1128B(f) of the So-
cial Security Act (42 U.S.C. 1320a–7b(f)). 
(2) MEDICAID PROGRAM.—The term ‘‘Medicaid 
program’’ means the program under title XIX of the 
Social Security Act (42 U.S.C. 1396 et seq.). 
(3) MEDICARE PROGRAM.—The term ‘‘Medicare 
program’’ means the program under title XVIII of 
the Social Security Act (42 U.S.C. 1395 et seq.). 
(4) MEDICARE PROGRAM SAFEGUARD CONTRAC-
TORS AND OTHER OVERSIGHT CONTRACTORS.—The 
term ‘‘Medicare program safeguard contractors and 
other oversight contractors’’ includes zone program 
integrity contractors, program safeguard or integrity 
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contractors, recovery audit contractors under section 
1893(h) of the Social Security Act (42 U.S.C. 
1395ddd(h)), special investigative units at Medicare 
contractors (as defined in section 1889(g) of the So-
cial Security Act (42 U.S.C. 1395zz(g))), and any 
other oversight contractors designated by the Sec-
retary. 
(5) PROVIDER OF SERVICES.—The term ‘‘pro-
vider of services’’ has the meaning given such term 
in section 1861(u) of the Social Security Act (42 
U.S.C. 1395x(u)). 
(6) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Health and Human Services. 
(7) STATE.—The term ‘‘State’’ includes the 
District of Columbia, the Commonwealth of Puerto 
Rico, the Virgin Islands, Guam, and American 
Samoa. 
(8) SUPPLIER.—The term ‘‘supplier’’ has the 
meaning given such term in section 1861(d) of the 
Social Security Act (42 U.S.C. 1395x(d)). 
SEC. 302. EXPANDING AUTOMATED PREPAYMENT REVIEW 
OF MEDICARE CLAIMS. 
(a) AUTOMATED PREPAYMENT REVIEW.— 
(1) IN GENERAL.—Subject to subsection (b), 
the Secretary shall establish automated prepayment 
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review of all Medicare claims under parts A and B 
of title XVIII of the Social Security Act (42 U.S.C. 
1395 et seq.) by not later than September 30, 2012. 
(2) IMPLEMENTATION.—The provisions of this 
section shall be implemented in conjunction with, 
and as part of, any predictive modeling and other 
analytics technologies implemented under section 
4241 of the Small Business Jobs Act of 2010 (42 
U.S.C. 1320a–7n), except that any requirement 
under such section 4241 that conflicts with a re-
quirement under this section shall not apply to this 
section. 
(b) ELEMENTS.—Such automated prepayment review 
shall include the following: 
(1) PROGRAM INTEGRITY SYSTEM.— 
(A) IN
GENERAL.—Subject to subpara-
graph (D), a program integrity system under 
which relevant claims under such parts A and 
B are compared in order to— 
(i) identify errors or fraud under the 
Medicare program, including— 
(I) duplicate claims for items or 
services; and 
(II) claims where payment of 
benefits under one such part is only 
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available if such payment is not avail-
able under another such part; and 
(ii) obtain such other information or 
conduct such other analysis as the Sec-
retary determines is useful for program in-
tegrity purposes. 
(B) IMPLEMENTATION.—Not later than 
September 30, 2013, the Secretary shall ensure 
that all relevant daily claims data under such 
parts A and B are compared as part of such 
program integrity system. 
(C) PLAN
FOR
INCLUSION
OF
PART
D 
CLAIMS DATA.—Not later than September 30, 
2013, the Secretary shall establish a plan for 
including Medicare claims under part D of such 
title XVIII (42 U.S.C. 1395w–101 et seq.) for 
use in comparisons under such program integ-
rity system. 
(D) NO IMPACT ON PROMPT PAYMENT RE-
QUIREMENTS.—In no case shall the program in-
tegrity system under this paragraph have any 
impact on prompt payment requirements under 
such parts A and B, including such require-
ments 
under 
sections 
1816(c)(2) 
and 
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1842(c)(2) of the Social Security Act (42 
U.S.C. 1395h(c)(2); 1395u(c)(2)). 
(2) 
AUTOMATED
RISK-BASED
PROVIDER 
VERIFICATION.— 
(A) IN
GENERAL.—An automated risk- 
based verification system for the purpose of 
verification and analysis of providers of services 
and suppliers under the Medicare program on 
an ongoing basis, including during the period 
between the enrollment of the provider of serv-
ices or supplier under section 1866(j) of the So-
cial Security Act (42 U.S.C. 1395cc(j)) and the 
revalidation (or any subsequent revalidation) of 
such provider of services or supplier under such 
section. Subject to subparagraph (C), such sys-
tem shall include criminal background checks 
for providers of services and suppliers who the 
Secretary determines present a high risk of 
waste, fraud, and abuse. 
(B) 
IMPLEMENTATION.—The 
Secretary 
shall establish the system under subparagraph 
(A) not later than September 30, 2013. 
(C) NO
DUPLICATION
OF
SCREENING 
UNDER
ENROLLMENT
PROCESS.—The system 
under subparagraph (A) shall be in addition to 
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and shall not duplicate any screening, including 
any criminal background check, conducted 
under section 1866(j)(2) of the Social Security 
Act (42 U.S.C. 1395cc(j)(2)). 
(D) PROHIBITION
ON
DISCLOSURE
OF 
RISK-BASED
DATA
AND
ANALYSIS.—The Sec-
retary shall not disclose to the public any data 
collected or analysis conducted under the auto-
mated risk-based verification system under sub-
paragraph (A). 
(3) TRACKING REJECTED CLAIMS.— 
(A) IN
GENERAL.—For the purpose of 
identifying and analyzing potentially fraudulent 
and otherwise inappropriate claims under the 
Medicare program, a process for identifying and 
tracking, including by provider of services or 
supplier, claims for payment under the Medi-
care program that were rejected or denied 
under the automated edit process of a medicare 
administrative contractor under section 1874A 
of the Social Security Act (42 U.S.C. 1395kk). 
(B) 
IMPLEMENTATION.—The 
Secretary 
shall establish the process under subparagraph 
(A) not later than September 30, 2013. 
(c) DEFINITIONS.—In this section: 
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(1) MEDICARE PROGRAM.—The term ‘‘Medicare 
program’’ means the program under title XVIII of 
the Social Security Act (42 U.S.C. 1395 et seq.). 
(2) AUTOMATED
PREPAYMENT
REVIEW.—The 
term ‘‘automated prepayment review’’ means screen-
ing using automated data analysis and intelligent 
analysis prior to making payment. Such term does 
not include prepayment medical review. 
(3) PROVIDER OF SERVICES.—The term ‘‘pro-
vider of services’’ has the meaning given that term 
in section 1861(u) of such Act (42 U.S.C. 
1395ww(u)). 
(4) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Health and Human Services. 
(5) SUPPLIER.—The term ‘‘supplier’’ has the 
meaning given such term in section 1861(d) of such 
Act (42 U.S.C. 1395ww(d)). 
SEC. 303. 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 ‘‘Sec-
retary’’) shall establish a plan to encourage and facilitate 
the inclusion of States in the Medicare-Medicaid Data 
Match Program (commonly referred to as the ‘‘Medi-Medi 
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Program’’) under section 1893(g) of the Social Security 
Act (42 U.S.C. 1395ddd(g)). 
(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 insert-
ing ‘‘or otherwise’’ after ‘‘eligible entities’’; 
(2) in clause (i)— 
(A) by inserting ‘‘to review claims data’’ 
after ‘‘algorithms’’; and 
(B) by striking ‘‘service, time, or patient’’ 
and inserting ‘‘provider, service, time, or pa-
tient’’; 
(3) in clause (ii)— 
(A) by inserting ‘‘to investigate and re-
cover amounts with respect to suspect claims’’ 
after ‘‘appropriate actions’’; and 
(B) by striking ‘‘; and’’ and inserting a 
semicolon; 
(4) in clause (iii), by striking the period and in-
serting ‘‘; and’’; and 
(5) by adding at end the following new clause: 
‘‘(iv) furthering the Secretary’s de-
sign, development, installation, or enhance-
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ment of an automated data system archi-
tecture— 
‘‘(I) to collect, integrate, and as-
sess data for purposes of program in-
tegrity, program oversight, and ad-
ministration, including the Medi-Medi 
Program; and 
‘‘(II) that improves the coordina-
tion 
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 med-
ical assistance under title XIX of the Social Security 
Act access to relevant data on improper or erroneous 
payments made under the Medicare program under 
title XVIII of the Social Security Act (42 U.S.C. 
1395 et seq.) for health care items or services pro-
vided to dual eligible individuals. 
(2) DUAL ELIGIBLE INDIVIDUAL DEFINED.—In 
this section, the term ‘‘dual eligible individual’’ 
means an individual who is entitled to, or enrolled 
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for, benefits under part A of title XVIII of the So-
cial Security Act (42 U.S.C. 1395c et seq.), or en-
rolled for benefits under part B of title XVIII of 
such Act (42 U.S.C. 1395j et seq.), and is eligible 
for medical assistance under a State plan under title 
XIX of such Act (42 U.S.C. 1396 et seq.) or under 
a waiver of such plan. 
SEC. 304. IMPROVING CLAIMS PROCESSING AND DETEC-
TION OF FRAUD WITHIN THE MEDICAID AND 
CHIP PROGRAMS. 
(a) MEDICAID.—Section 1903(i) of the Social Secu-
rity Act (42 U.S.C. 1396b(i)), as amended by section 
2001(a)(2)(B) of the Patient Protection and Affordable 
Care Act (Public Law 111–148), is amended— 
(1) in paragraph (25), by striking ‘‘or’’ at the 
end; 
(2) in paragraph (26), by striking the period 
and inserting ‘‘; or’’; and 
(3) by adding at the end the following new 
paragraph: 
‘‘(27) with respect to amounts expended for an 
item or service for which medical assistance is pro-
vided under the State plan or under a waiver of such 
plan unless the claim for payment for such item or 
service contains— 
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‘‘(A) a valid beneficiary identification num-
ber that, for purposes of the individual who re-
ceived such item or service, has been deter-
mined by the State agency to correspond to an 
individual who is eligible to receive benefits 
under the State plan or waiver; and 
‘‘(B) a valid provider identifier that, for 
purposes of the provider that furnished such 
item or service, has been determined by the 
State agency to correspond to a participating 
provider that is eligible to receive payment for 
furnishing such item or service under the State 
plan or waiver.’’. 
(b) CHIP.—Section 2107(e)(1)(I) of the Social Secu-
rity Act (42 U.S.C. 1397gg(e)(1)(I)) is amended by strik-
ing ‘‘and (17)’’ and inserting ‘‘(17), and (27)’’. 
SEC. 305. REPORTS. 
(a) REPORT TO CONGRESS ON PLAN FOR IMPLEMEN-
TATION.— 
(1) REPORT.— 
(A) IN
GENERAL.—Not later than 270 
days after the date of enactment of this Act, 
the Secretary of Health and Human Services, 
in consultation with the Commissioner of Social 
Security and the Attorney General, shall submit 
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to Congress a report containing a plan for im-
plementing the provisions of and amendments 
made by sections 301 through 304, including, 
with respect to the implementation of section 
303, the plan described in subparagraph (B). 
(B) PLAN FOR INCREASING RECOVERY OF 
OVERPAYMENTS.—The report submitted under 
subparagraph (A) shall include a plan, devel-
oped by the Secretary of Health and Human 
Services, in consultation with the inspector 
General of the Department of Health and 
Human Services, to increase the recovery of 
overpayments for health care items or services 
provided to dual eligible individuals (as defined 
in section 303(c)(2)). 
(2) INCLUSION
IN
ANNUAL
HEALTH
CARE 
FRAUD AND ABUSE CONTROL ACCOUNT REPORT.— 
Section 1817(k)(5) of the Social Security Act (42 
U.S.C. 1395i(k)(5)) is amended— 
(A) in subparagraph (A), by striking 
‘‘and’’ at the end; 
(B) in subparagraph (B), by striking the 
period at the end and inserting ‘‘; and’’; and 
(C) by adding at the end the following new 
subparagraph: 
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‘‘(C) effective beginning with the report 
submitted January 1 following the date the re-
port under section 306(a)(1) of the Medicare 
and Medicaid Fighting Fraud and Abuse to 
Save Taxpayers’ Dollars Act is submitted, any 
updates to the plan included in the report 
under such section 306(a)(1), including any po-
tential challenges to meeting the deadlines for 
implementation of the provisions of and amend-
ments made by sections 301 through 304 of 
such Act.’’. 
(b) REPORT TO CONGRESS ON INTERAGENCY CO-
OPERATION AND DATA SHARING.—Not later than 180 
days after the date of enactment of this Act, the Secretary 
of Health and Human Services, in consultation with the 
Administrator of the Veterans Administration, the Sec-
retary of Defense, the Director of the Office of Personnel 
Management, and the head of any other relevant Federal 
agency that administers a Federal health care program, 
shall submit to Congress a report on the potential of data 
sharing, including the sharing or data checking of Medi-
care provider and Medicare beneficiary databases, to pre-
vent and detect potential fraud and improper payments 
under the Medicare program. 
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TITLE IV—IMPROVING CMS 
CONTRACTOR PERFORMANCE 
SEC. 401. ESTABLISHING MEDICARE ADMINISTRATIVE CON-
TRACTOR ERROR REDUCTION INCENTIVES. 
(a) IN GENERAL.—Section 1874A(b)(1)(D) of the 
Social Security Act (42 U.S.C. 1395kk(b)(1)(D)) is 
amended— 
(1) by striking ‘‘QUALITY.—The Secretary’’ and 
inserting ‘‘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 INCENTIVE PLAN.—The 
Secretary shall establish a plan to provide 
incentives for medicare administrative con-
tractors to reduce the improper payment 
error rates in their jurisdictions. 
‘‘(iii) CONTENTS OF PLAN.—The plan 
established under clause (ii)— 
‘‘(I) may include a sliding scale 
of bonus payments and additional in-
centives to medicare administrative 
contractors that reduce the improper 
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payment error rates in their jurisdic-
tions to certain benchmark levels; and 
‘‘(II) shall include penalties, in-
cluding 
substantial 
reductions 
in 
award fee payments under award fee 
contracts, for any medicare adminis-
trative contractor that reaches an 
upper end error threshold or other 
threshold as determined by the Sec-
retary.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to contracts entered into on or 
after the date that is 12 months after the date of enact-
ment of this Act and to current contracts through modi-
fication when practicable. 
SEC. 402. SEPARATING PROVIDER ENROLLMENT AND 
SCREENING FROM MEDICARE ADMINISTRA-
TIVE CONTRACTORS. 
(a) IN GENERAL.—Section 1866(j)(1) of the Social 
Security Act (42 U.S.C. 1395cc(j)(1)) is amended by add-
ing at the end the following new subparagraph: 
‘‘(D) IMPLEMENTATION.—The enrollment 
process established under subparagraph (A) 
and the provider screening under paragraph (2) 
shall be carried out under one or more con-
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