(42 U.S.C. 1320a–7b(a)) is amended, in the matter 
following paragraph (6), by striking ‘‘not more than 
five years or both, or (ii)’’ and inserting ‘‘not more 
than 10 years or both, or (ii)’’. 
(2) ANTIKICKBACK.—Section 1128B(b) of such 
Act (42 U.S.C. 1320a–7b(b)) is amended— 
(A) in paragraph (1), in the flush text fol-
lowing subparagraph (B), by striking ‘‘not more 
than five years’’ and inserting ‘‘not more than 
10 years’’; and 
(B) in paragraph (2), in the flush text fol-
lowing subparagraph (B), by striking ‘‘not more 
than five years’’ and inserting ‘‘not more than 
10 years’’. 
(3) FALSE
STATEMENT
OR
REPRESENTATION 
WITH RESPECT TO CONDITIONS OR OPERATIONS OF 
FACILITIES.—Section 1128B(c) of such Act (42 
U.S.C. 1320a–7b(c)) is amended by striking ‘‘not 
more than five years’’ and inserting ‘‘not more than 
10 years’’. 
(4) EXCESS
CHARGES.—Section 1128B(d) of 
such Act (42 U.S.C. 1320a–7b(d)) is amended, in 
the flush text following paragraph (2), by striking 
‘‘not more than five years’’ and inserting ‘‘not more 
than 10 years’’. 
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(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to acts committed after the date 
of the enactment of this Act. 
SEC. 3. ANNUAL MEDICARE, MEDICAID, AND CHIP FRAUD 
REPORTS. 
(a) IN GENERAL.—By not later than July 1, 2012, 
and each subsequent year, the Secretary of Health and 
Human Services shall submit to the Committees on Ways 
and Means and Energy and Commerce of the House of 
Representatives and the Committee on Finance of the 
Senate a report that contains the following: 
(1) AMOUNT OF FRAUD.—The amount, as esti-
mated by the Secretary— 
(A) of total suspected fraud committed 
against the Medicare program under title XVIII 
of the Social Security Act, the Medicaid pro-
gram under title XIX of such Act, and the Chil-
dren’s Health Insurance Program under title 
XXI of such Act; and 
(B) the amount of such suspected fraud 
that is committed by employees of the Depart-
ment of Health and Human Services who have 
access to data from any of the programs under 
subparagraph (A). 
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(2) DATA ACCESS IMPLEMENTATION.—Informa-
tion on implementation of the data access require-
ment under section 1128J(a)(2) of the Social Secu-
rity Act (42 U.S.C. 1320a–7k(a)(2)). 
(b) USE OF AUDITS.— 
(1) ESTIMATE BASED ON AUDITED CLAIMS.— 
The Secretary shall base the estimate of suspected 
fraud under subsection (a)(1)(A) on an audit of a 
random sample of at least 10,000 claims for pay-
ment made under the programs under title XVIII, 
XIX, or XXI of the Social Security Act. 
(2) AUTHORITY OF THE SECRETARY.—For pur-
poses of conducting the audits under paragraph (1), 
the Secretary may— 
(A) request that a health care provider or 
supplier submit documentation relating to the 
claim being audited and review such docu-
mentation; 
(B) conduct unannounced onsite visits; and 
(C) interview patients. 
(3) SUBMISSION OF INFORMATION.—Not later 
than 30 days after receiving a request for docu-
mentation under paragraph (2)(A), the health care 
provider or supplier shall provide to the Secretary all 
requested documentation related to such claim. 
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(4) INTERNAL
AUDIT.—The Secretary shall 
base the estimate of suspected fraud committed by 
employees of the Department of Health and Human 
Services under subsection (a)(1)(B) on an internal 
audit. 
(c) FRAUD DEFINED.—In this section, the term 
‘‘fraud’’ has the meaning given such term in section 455.2 
of title 42, Code of Federal Regulations. 
SEC. 
4. 
PROTECTING 
PREDICTIVE 
ANALYTICS 
TECH-
NOLOGIES FROM COMPELLED DISCLOSURE 
UNDER THE FREEDOM OF INFORMATION 
ACT. 
Section 4241 of the Small Business Jobs Act of 2010 
(42 U.S.C. 1320a–7m) is amended by adding at the end 
the following: 
‘‘(j) EXEMPTION FROM FOIA.—The algorithms used 
in predictive modeling and other analytics technologies 
under this section are exempt from disclosure under sec-
tion 552(b)(3) of title 5, United States Code. 
‘‘(k) AUDIT AND REVIEW.—The Inspector General of 
the Department of Health and Human Services and the 
Comptroller General of the United States shall, beginning 
on January 1, 2013, and annually thereafter, complete an 
audit and review of the implementation of this section, in-
cluding the effectiveness of the algorithms used in pre-
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dictive modeling and other analytics technologies under 
this section.’’. 
SEC. 5. REQUIRING VALID NATIONAL PROVIDER IDENTI-
FIERS FOR PRESCRIBERS ON PHARMACY 
CLAIMS AND LIMITING ACCESS TO THE NA-
TIONAL PROVIDER IDENTIFIER REGISTRY. 
(a) REQUIRING VALID NATIONAL PROVIDER IDENTI-
FIERS OF PRESCRIBERS ON PHARMACY CLAIMS.— 
(1) IN
GENERAL.—Section 1860D–2(e)(2) of 
the Social Security Act (42 U.S.C. 1395w– 
102(e)(2)) is amended by adding at the end the fol-
lowing new subparagraph: 
‘‘(C) DRUGS
PRESCRIBED
BY
NONVALID 
PRESCRIBERS.—For plan years that begin on or 
after January 1, 2013, such term does not in-
clude a drug prescribed by an individual who 
does not have a valid National Provider Identi-
fier, as determined through procedures estab-
lished by the Secretary.’’. 
(2) IDENTIFYING
AND
REPORTING
INVALID 
PRESCRIBERS.— 
(A) TRANSFER OF INFORMATION TO THE 
INSPECTOR
GENERAL.—In the case that the 
procedures established by the Secretary of 
Health and Human Services under section 
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1860D–2(e)(2) of the Social Security Act result 
in a PDP sponsor identifying a claim for reim-
bursement under a prescription drug plan 
under part D of title XVIII of such Act as 
being for a drug that was prescribed by an indi-
vidual who did not have a valid National Pro-
vider Identifier, the PDP sponsor shall submit 
to the Inspector General of the Department of 
Health and Human Services any information on 
such invalid prescribers on pharmacy claims, in-
cluding any invalid national provider identifiers 
being used to submit such claims and any 
records related to such claims. 
(B) RESPONSIBILITY OF THE INSPECTOR 
GENERAL.—The Inspector General of the De-
partment of Health and Human Services shall 
provide to the appropriate law enforcement 
agencies information submitted under subpara-
graph (A). 
(C) REPORT
TO
CONGRESS.—Not later 
than January 1, 2014, the Inspector General of 
the Department of Health and Human Services 
shall submit to Congress a report on the effec-
tiveness of the procedures established under 
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section 1860D–2(e)(2)(C) of the Social Security 
Act. 
(b) LIMITING
ACCESS
TO
NATIONAL
PROVIDER 
IDENTIFIER REGISTRY.— 
(1) IN GENERAL.—The Secretary of Health and 
Human Services, in consultation with the Attorney 
General, the Inspector General of the Department of 
Health and Human Services, the Chairman of the 
Federal Trade Commission, and affected parties (in-
cluding prescription drug plans under part D of title 
XVIII of the Social Security Act (42 U.S.C. 1395w– 
101 et seq.), MA–PD plans under part C of title 
XVIII of the Social Security Act (42 U.S.C. 1395w– 
21 et seq.), pharmacies, physicians, and pharmacy 
computer vendors), shall establish procedures and 
rules to restrict access to the National Provider 
Identifier Registry in order to deter the fraudulent 
use of National Provider Identifiers for purposes of 
making claims under titles XVIII and XIX of the 
Social Security Act. 
(2) ACCESS.— 
(A) IN GENERAL.—The procedures estab-
lished under paragraph (1) shall provide gov-
ernmental and nongovernmental entities with 
appropriate (as determined by the Secretary) 
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access to the National Provider Identifier Reg-
istry. 
(B) DATA USE AGREEMENTS.—In order to 
receive such access, each such governmental 
and nongovernmental entity shall enter into a 
data use agreement with the Secretary and 
agree to use the data in such registry in accord-
ance with rules established by the Secretary 
pursuant such paragraph. 
SEC. 6. ENCOURAGING THE ESTABLISHMENT OF STATE 
PRESCRIPTION 
DRUG 
MONITORING 
PRO-
GRAMS. 
(a) IN GENERAL.—Section 1905 of the Social Secu-
rity Act is amended by adding at the end the following: 
‘‘(ee) INCENTIVES FOR STATES TO IDENTIFY FRAUD 
THROUGH STATE PRESCRIPTION DRUG MONITORING 
PROGRAMS.— 
‘‘(1) IN GENERAL.—With respect to a calendar 
quarter, the Federal medical assistance percentage 
for the amounts under clauses (i) and (II) of sub-
paragraph (C) shall be decreased by 10 percent for 
such quarter, if— 
‘‘(A) a State is receiving a grant for a 
State controlled substance monitoring program 
under section 399O of the Public Health Serv-
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ice Act (or the Secretary determines that the 
State meets the requirements for such a grant); 
‘‘(B) through such program, the State 
identifies fraud, waste, or abuse in connection 
the provision of prescription drug coverage 
under the State plan; and 
‘‘(C) the State or a political subdivision of 
the State— 
‘‘(i) is reimbursed an amount by a 
third party (pursuant to the provisions of 
the State plan in compliance with section 
1902(a)(25)) for expenditures related to 
such fraud, waste, or abuse; or 
‘‘(ii) recovered (as such term is used 
under section 1903(d)(3)(A)) an amount. 
‘‘(2) USE OF FUNDS.—A State may use the 
amounts received as a result of the increased Fed-
eral medical assistance percentage under paragraph 
(1) to support the State controlled substance moni-
toring program established by the State.’’. 
(b) CONFORMING AMENDMENTS.—Section 1905(b) 
of the Social Security Act is amended by striking ‘‘Subject 
to subsections (y), (z), and (aa)’’ and inserting ‘‘Subject 
to subsections (y), (z), (aa), and (ee)’’. 
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(c) EFFECTIVE DATE.—The amendments made by 
this subsection shall apply to calendar quarters beginning 
on or after the end of the 30-day period after the date 
of the enactment of this Act. 
SEC. 7. PROHIBITING THE DISPLAY OF SOCIAL SECURITY 
ACCOUNT 
NUMBERS 
ON 
NEWLY 
ISSUED 
MEDICARE 
IDENTIFICATION 
CARDS 
AND 
COMMUNICATIONS PROVIDED TO MEDICARE 
BENEFICIARIES. 
(a) IN GENERAL.—Not later than 2 years after the 
date of enactment of this Act, the Secretary of Health and 
Human Services (referred to in this section as the ‘‘Sec-
retary’’), acting in consultation with the Commissioner of 
Social Security, shall establish and implement procedures 
to eliminate the unnecessary collection, use, and display 
of Social Security account numbers of Medicare bene-
ficiaries under the Medicare program under title XVIII 
of the Social Security Act (42 U.S.C. 1395 et seq.). 
(b) NEWLY ISSUED MEDICARE CARDS AND COMMU-
NICATIONS PROVIDED
TO BENEFICIARIES.—Not later 
than 4 years after the date of the enactment of this Act, 
the Secretary shall do the following: 
(1) NEWLY
ISSUED
CARDS.—Acting in con-
sultation with the Commissioner of Social Security, 
ensure that each newly issued Medicare identifica-
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