I 
114TH CONGRESS 
2D SESSION 
H. R. 4802 
To require consideration of the impact on beneficiary access to care and 
to enhance due process protections in procedures for suspending pay-
ments to Medicaid providers. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 17, 2016 
Mr. BEN RAY LUJA´N of New Mexico (for himself and Ms. MICHELLE LUJAN 
GRISHAM of New Mexico) introduced the following bill; which was re-
ferred to the Committee on Energy and Commerce 
A BILL 
To require consideration of the impact on beneficiary access 
to care and to enhance due process protections in proce-
dures for suspending payments to Medicaid providers. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Medicaid Program In-
tegrity Enhancement Act of 2016’’. 
SEC. 2. REVISION OF REGULATIONS. 
(a) IN GENERAL.—Not later than 180 days after the 
date of enactment of this section, the Secretary shall re-
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vise part 455 of title 42, Code of Federal Regulations, re-
lating to Medicaid program integrity as follows: 
(1) Section 455.2, relating to the definition of 
credible allegation of fraud, to comply with the re-
quirements described in subsection (b). 
(2) Section 455.23, relating to the suspension 
of Medicaid payments to a provider by a State Med-
icaid agency, to comply with the requirements de-
scribed in subsection (c). 
(b) REQUIREMENT TO CONSIDER IMPACT ON BENE-
FICIARY ACCESS TO CARE IN DETERMINING A CREDIBLE 
ALLEGATION OF FRAUD.—The revised section 455.2 shall 
provide that an allegation shall be considered to be a cred-
ible allegation of fraud only if— 
(1) the allegation has indicia of reliability; 
(2) the State Medicaid agency has reviewed all 
allegations, facts, and evidence carefully and acts ju-
diciously on a case-by-case basis; and 
(3) the State Medicaid agency has taken into 
consideration the potential impact a payment sus-
pension may have on beneficiary access to care. 
(c) DUE PROCESS REQUIREMENTS FOR PAYMENT 
SUSPENSION
BASED
ON
CREDIBLE
ALLEGATION
OF 
FRAUD.— 
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(1) PROCESS
REQUIRED
BEFORE
SUSPEN-
SION.—A State Medicaid agency that has received 
an allegation of fraud against a provider shall not 
suspend payments to such provider until the agency 
takes the following actions: 
(A) The State Medicaid agency consults 
with the Medicaid fraud control unit for the 
State or, if the State has no Medicaid fraud 
control unit, the State attorney general, before 
suspending payments and receives a written 
verification from the Medicaid fraud control 
unit or attorney general, in such form as the 
Secretary may require, confirming that such 
consultation took place. 
(B) The State Medicaid agency certifies to 
the Secretary that it has considered whether— 
(i) beneficiary access to items or serv-
ices would be jeopardized by a payment 
suspension; 
(ii) a good cause not to suspend pay-
ments exists under section 455.23(e) of 
title 42, Code of Federal Regulations (as 
revised after the application of this Act); 
and 
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(iii) a good cause to suspend pay-
ments only in part exists under section 
455.23(f) of such title of such Code (as so 
revised). 
(C) The State Medicaid agency furnishes 
the provider with the agency’s reasons for find-
ing that there is no good cause to refrain from 
suspending payments in whole or part. 
(2) PROCESS REQUIRED AFTER SUSPENSION.— 
After a State Medicaid agency suspends payments 
(in whole or part) to a provider on the basis that the 
agency has determined that there is a credible alle-
gation of fraud against a provider for which an in-
vestigation is pending under the Medicaid program, 
the agency shall take the following actions: 
(A) At the beginning of each fiscal quarter 
that begins after payments to the provider have 
been suspended, the State Medicaid agency 
shall— 
(i) certify to the Secretary that it has 
considered whether the suspension of pay-
ments should be terminated or modified 
because— 
(I) a good cause not to suspend 
payments 
exists 
under 
section 
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455.23(e) of title 42, Code of Federal 
Regulations (as revised after the ap-
plication of this Act); or 
(II) a good cause to suspend pay-
ments only in part exists under sec-
tion 455.23(f) of such title (as so re-
vised); and 
(ii) if the agency finds that there is no 
good cause to terminate or modify the sus-
pension of payments, furnish to the pro-
vider the agency’s reasons for such finding. 
(B) If the investigation is not resolved in 
a reasonable amount of time (as determined by 
the Secretary), the State Medicaid agency shall 
disclose to the provider the specific allegations 
of fraud that formed the basis for the agency’s 
determination that there is a credible allegation 
of fraud against the provider. 
(C) Every 180 days after the initiation of 
a suspension of payments based on credible al-
legations of fraud, a State Medicaid Agency 
shall— 
(i) evaluate whether there is good 
cause to not continue such suspension; and 
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(ii) request a certification from the 
Medicaid fraud control unit for the State 
or, if the State has no Medicaid fraud con-
trol unit, the State attorney general, or 
other law enforcement agency that the 
matter continues to be under investigation 
warranting continuation of the suspension. 
(D) Good cause not to continue to suspend 
payments to an individual or entity against 
which there are credible allegations of fraud 
shall be deemed to exist if a payment suspen-
sion has been in effect for 18 months and there 
has not been a resolution of the investigation, 
except a State Medicaid Agency may extend a 
payment suspension beyond such period if— 
(i) the case has been referred to, and 
is being considered by, the Medicaid fraud 
control unit for the State or, if the State 
has no Medicaid fraud control unit, the 
State attorney general, for administrative 
action or such administrative action is 
pending; or 
(ii) the Medicaid fraud control unit 
for the State or, if the State has no Med-
icaid fraud control unit, the State attorney 
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general, submits a written request to the 
State Medicaid Agency that the suspension 
of payments be continued based on the on-
going investigation and anticipated filing 
of criminal or civil action or both or based 
on a pending criminal or civil action or 
both. At a minimum, the request shall in-
clude the following: 
(I) Identification of the entity 
under suspension. 
(II) The amount of time needed 
for continued suspension in order to 
conclude the criminal or civil pro-
ceeding or both. 
(III) A statement of why or how 
criminal or civil action or both may be 
affected if the requested extension is 
not granted. 
(d) DEFINITIONS.—For purposes of this section: 
(1) The term ‘‘Medicaid fraud control unit’’ 
means a State Medicaid fraud control unit as de-
fined in section 1903(q) of the Social Security Act 
(42 U.S.C. 1396b(q)). 
(2) The term ‘‘Secretary’’ means the Secretary 
of Health and Human Services. 
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(3) The term ‘‘State Medicaid agency’’ means 
the agency responsible for administering a State 
plan under title XIX of the Social Security Act (42 
U.S.C. 1396 et seq.). 
SEC. 3. APPEALS PROCESS. 
(a) IN GENERAL.—Section 1902(a)(39) of the Social 
Security Act (42 U.S.C. 1396a(a)(39)) is amended— 
(1) by striking ‘‘shall exclude’’ and inserting 
‘‘shall— 
‘‘(A) exclude’’; 
(2) by adding ‘‘and’’ after the semicolon at the 
end; and 
(3) by adding at the end the following new sub-
paragraph: 
‘‘(B) establish and codify a process where-
by a provider to whom payments have been sus-
pended, in whole or part, on the basis of cred-
ible allegations of fraud against such provider 
may appeal any decision (including a decision 
not to terminate or modify a payment suspen-
sion that is already in place) by the State agen-
cy that no good cause exists under the regula-
tions of the Secretary to terminate, modify, or 
refrain from imposing such suspension of pay-
ment;’’. 
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(b) EFFECTIVE DATE.— 
(1) IN GENERAL.—Subject to paragraph (2), 
the amendments made by this section shall take ef-
fect on the date that is 1 year after the date of the 
enactment of this Act. 
(2) DELAY PERMITTED IF STATE LEGISLATION 
REQUIRED.—In the case of a State plan approved 
under title XIX of the Social Security Act which the 
Secretary of Health and Human Services determines 
requires State legislation (other than legislation ap-
propriating funds) in order for the plan to meet the 
additional requirements imposed by this section, the 
State plan shall not be regarded as failing to comply 
with the requirements of such title solely on the 
basis of the failure of the plan to meet such addi-
tional requirements before the 1st day of the 1st cal-
endar quarter beginning after the close of the 1st 
regular session of the State legislature that ends 
after the 1-year period beginning with the date of 
the enactment of this section. For purposes of the 
preceding sentence, in the case of a State that has 
a 2-year legislative session, each year of the session 
is deemed to be a separate regular session of the 
State legislature. 
Æ 
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