To amend title II of the Social Security Act to prohibit the inclusion of Social Security account numbers on Medicare cards.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Medicare Identity Theft Prevention 
Act of 2012''.

SEC. 2. PROHIBITION OF INCLUSION OF SOCIAL SECURITY ACCOUNT NUMBERS ON 
              MEDICARE CARDS.

    (a) In General.--Section 205(c)(2)(C) of the Social Security Act 
(42 U.S.C. 405(c)(2)(C)) is amended--
            (1) by moving clause (x), as added by section 1414(a)(2) of 
        the Patient Protection and Affordable Care Act, 2 ems to the 
        left;
            (2) by redesignating clause (x), as added by section 
        2(a)(1) of the Social Security Number Protection Act of 2010, 
        and clause (xi) as clauses (xi) and (xii), respectively; and
            (3) by adding at the end the following new clause:
    ``(xiii) The Secretary of Health and Human Services, in 
consultation with the Commissioner of Social Security, shall establish 
cost-effective procedures to ensure that a Social Security account 
number (or derivative thereof) is not displayed, coded, or embedded on 
the Medicare card issued to an individual who is entitled to benefits 
under part A of title XVIII or enrolled under part B of title XVIII and 
that any other identifier displayed on such card is not identifiable as 
a Social Security account number (or derivative thereof).''.
    (b) Implementation.--In implementing clause (xiii) of section 
205(c)(2)(C) of the Social Security Act (42 U.S.C. 405(c)(2)(C)), as 
added by subsection (a)(3), the Secretary of Health and Human Services 
shall establish a cost-effective process that involves the least amount 
of disruption to Medicare beneficiaries and health care providers. The 
Secretary shall consider implementing a process, similar to the process 
involving Railroad Retirement Board beneficiaries, under which a 
Medicare beneficiary identifier which is not a Social Security account 
number (or derivative thereof) is used external to the Department of 
Health and Human Services and is convertible over to a Social Security 
account number (or derivative thereof) for use internal to such 
Department and the Social Security Administration.
    (c) Effective Date.--
            (1) In general.--Clause (xiii) of section 205(c)(2)(C) of 
        the Social Security Act (42 U.S.C. 405(c)(2)(C)), as added by 
        subsection (a)(3), shall apply with respect to Medicare cards 
        issued on and after an effective date specified by the 
        Secretary of Health and Human Services, but in no case shall 
        such effective date be later than the date that is 3 years 
        after the date of the enactment of this Act.
            (2) Reissuance.--The Secretary--
                    (A) shall provide for the reissuance of Medicare 
                cards that comply with the requirements of such clause 
                not later than 3 years after the effective date 
                specified by the Secretary under paragraph (1); and
                    (B) may permit an individual to apply for the 
                reissuance of a Medicare card that complies with such 
                requirements before the date of reissuance otherwise 
                provided under subparagraph (A) in such exceptional 
                circumstances as the Secretary may specify.
    (d) Funding.--
            (1) Offset from mif.--Amounts in the Medicare Improvement 
        Fund under section 1898 of the Social Security Act (42 U.S.C. 
        1395iii) that are available for expenditures from the Fund for 
        services furnished in a fiscal year (through fiscal year 2020) 
        shall be available for transfer to the Centers for Medicare & 
        Medicaid Services Program Management Account as the Secretary 
        of Health and Human Services determines necessary to offset the 
        costs incurred by the Secretary (including costs under the 
        agreement described in paragraph (2)(A)) in such fiscal year 
        (or a previous fiscal year) in implementing clause (xiii) of 
        section 205(c)(2)(C) of such Act (42 U.S.C. 405(c)(2)(C)), as 
        added by subsection (a)(3), and this section.
            (2) Availability of funding for the social security 
        administration.--
                    (A) Funding under agreement.--The Commissioner of 
                Social Security and the Secretary of Health and Human 
                Services shall enter into and maintain an agreement 
                which shall--
                            (i) provide funds to the Commissioner, at 
                        scheduled intervals as specified in the 
                        agreement, for the full costs of the 
                        responsibilities of the Commissioner under this 
                        section; and
                            (ii) require an annual accounting and 
                        reconciliation of the actual costs incurred and 
                        the funds provided under the agreement.
                    (B) Availability of funds.--Amounts transferred to 
                the Centers for Medicare & Medicaid Services Program 
                Management Account under paragraph (1) shall be 
                available to the Secretary of Health and Human Services 
                to carry out the agreement under subparagraph (A) and 
                the Secretary shall provide funds to the Commissioner 
                as required under such agreement.
    (e) Accountability.--
            (1) Accounting of expenditures.--The Secretary of Health 
        and Human Services and the Commissioner of Social Security 
        shall--
                    (A) keep a detailed accounting of expenditures 
                associated with the implementation of such clause and 
                this section; and
                    (B) submit a report on such expenditures to the 
                Committee on Ways and Means of the House of 
                Representatives, the Committee on Finance of the 
                Senate, and the Comptroller General of the United 
                States, on a semi-annual basis, in each of fiscal years 
                2013 through 2021.
            (2) Audit.--The Comptroller General shall conduct a semi-
        annual financial audit of the expenditures of the Department of 
        Health and Human Services and of the Social Security 
        Administration during such fiscal years in implementing such 
        clause and this section. Each such audit shall include an 
        examination of whether funds made available under subsection 
        (d) are used solely for the purpose described in such 
        subsection.

SEC. 3. MEDICARE SMART CARD TECHNOLOGY STUDY AND REPORT.

    (a) Study.--The Comptroller General of the United States shall 
conduct a study that examines whether the Medicare program should use 
smart card technology for Medicare beneficiary cards and for provider 
membership cards.
    (b) Details of Study.--Such study shall include an examination of 
the following:
            (1) Potential levels of provider investment required to use 
        cards with such technology in various care settings.
            (2) Systems-related and implementation-related costs to the 
        Medicare program to use such technology.
            (3) The extent to which private insurance companies have 
        adopted or considered such technology and their reasons for 
        adoption or non-adoption of such technology.
            (4) The extent to which use of cards with such technology 
        would--
                    (A) reduce the potential for identity theft and 
                other unlawful use of Medicare beneficiary and provider 
                identifying information;
                    (B) increase the quality of care furnished to 
                Medicare beneficiaries;
                    (C) improve the accuracy and efficiency in the 
                billing for Medicare items and services furnished by 
                Medicare providers;
                    (D) reduce waste, fraud, and abuse in the Medicare 
                program; and
                    (E) impact the ability of Medicare beneficiaries to 
                access services.
    (c) Report.--Not later than 2 years after the date of the enactment 
of this Act, the Comptroller General 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 on the study 
conducted under this section. Such report may include recommendations 
regarding the use of smart card technology under the Medicare program.

            Passed the House of Representatives December 20, 2012.

            Attest:

                                                 KAREN L. HAAS,

                                                                 Clerk.

Summary: Medicare Identity Theft Prevention Act of 2012 - Directs the Secretary of Health and Human Services (HHS) to establish cost-effective procedures to ensure that: (1) a Social Security account number (or any derivative) is not displayed, coded, or embedded on the Medicare card issued to an individual entitled to benefits under part A (Hospital Insurance) of title XVIII (Medicare) of the Social Security Act or enrolled under Medicare part B (Supplementary Medical Insurance); and (2) any other identifier displayed on such card is easily identifiable as not being the Social Security account number (or a derivative).

Requires the Secretary, in implementing this Act, to: (1) establish a cost-effective process that involves the least amount of disruption to Medicare beneficiaries and health care providers; and (2) consider implementing a process similar to the one involving Railroad Retirement Board beneficiaries under which the Medicare beneficiary identifier used is not a Social Security account number (or derivative), is external to HHS, and is convertible over to a Social Security account number (or derivative) for use internal to HHS and the Social Security Administration.

Applies these requirements to Medicare cards issued on and after an effective date, specified by the Secretary, which shall not be later than three years after enactment of this Act. Requires reissuance of existing Medicare cards within those three years to comply with this Act, but also permits individuals to apply for reissuance earlier than the official reissuance date. Makes amounts from the Medicare Improvement Fund available for transfer to the Centers for Medicare & Medicaid Services (CMS) Program Management Account to offset the costs of implementing this Act. Requires the Commissioner of Social Security and the Secretary to enter into an agreement for such funding, and keep a detailed accounting for submission to Congress. Directs the Comptroller General (GAO) to examine whether the Medicare program should use smart card technology for Medicare beneficiary cards and provider membership cards.