To amend title XI of the Social Security Act to provide for enhanced program and provider protections under the Medicare, Medicaid, and Children's Health Insurance programs.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Medicare and Medicaid Fraud 
Prevention and Control Act of 2009''.

SEC. 2. ENHANCED CMS PROGRAM PROTECTION AUTHORITY.

    (a) In General.--Title XI of the Social Security Act (42 U.S.C. 
1301 et seq.) is amended by inserting after section 1128F the following 
new section:

``SEC. 1128G. ENHANCED PROGRAM AND PROVIDER PROTECTIONS IN THE 
              MEDICARE, MEDICAID, AND CHIP PROGRAMS.

    ``(a) Certain Authorized Screening, Enhanced Oversight Periods, 
Enrollment Moratoria, and Periodic Validations.--
            ``(1) Authorization.--
                    ``(A) In general.--In which the Secretary has 
                determined that there is a significant risk of 
                fraudulent activity (as determined by the Secretary 
                based on relevant complaints, reports, referrals by law 
                enforcement or other sources, data analysis, trending 
                information, or claims submissions by providers of 
                services and suppliers) with respect to a category of 
                provider of services or supplier of items or services, 
                which may be a category within a geographic area, under 
                title XVIII, XIX, or XXI, the Secretary may impose, 
                subject to subparagraph (B), with respect to a program 
                under title XVIII, XIX, or XXI, the Secretary impose 
                any of the following requirements with respect to a 
                provider of services or a supplier (whether such 
                provider or supplier is initially enrolling in the 
                program or is renewing such enrollment):
                            ``(i) Screening under paragraph (2).
                            ``(ii) Enhanced oversight periods under 
                        paragraph (3).
                            ``(iii) Enrollment moratoria under 
                        paragraph (4).
                            ``(iv) Periodic validations of 
                        authorizations under paragraph (5).
                    ``(B) State requirement.--In applying this 
                subsection for purposes of title XIX and XXI, the 
                Secretary may require a State to carry out the 
                provisions of this subsection (and subsection (b)) as a 
                requirement of the State plan under title XIX or the 
                child health plan under title XXI. Actions taken and 
                determinations made under this subsection and 
                subsection (b) shall not be subject to review by a 
                judicial tribunal.
            ``(2) Screening.--For purposes of paragraph (1), the 
        Secretary shall establish procedures under which screening is 
        conducted with respect to providers of services and suppliers 
        described in such paragraph. Such screening may include at 
        least--
                    ``(A) licensing board checks;
                    ``(B) screening against the list of individuals and 
                entities excluded from the program under title XVIII, 
                XIX, or XXI;
                    ``(C) the excluded provider list system;
                    ``(D) background checks;
                    ``(E) unannounced pre-enrollment or other site 
                visits; and
                    ``(F) heightened disclosure of affiliations.
            ``(3) Enhanced oversight period.--For purposes of paragraph 
        (1), the Secretary shall establish procedures to provide for a 
        period of not less than 30 days and not more than 365 days 
        during which providers of services and suppliers described in 
        such paragraph, as the Secretary determines appropriate, would 
        be subject to enhanced oversight, such as required or 
        unannounced (or required and unannounced) site visits or 
        inspections, prepayment review, enhanced review of claims, and 
        such other actions as specified by the Secretary, under the 
        programs under titles XVIII, XIX, and XXI. Under such 
        procedures, the Secretary may extend such period for more than 
        365 days if the Secretary determines that after the initial 
        period such additional period of oversight is necessary.
            ``(4) Enhanced oversight for claims of dme suppliers.--If 
        the Secretary determines under paragraph (1) that there is a 
        significant risk of fraudulent activity among suppliers of 
        durable medical equipment, in the case of a supplier of durable 
        medical equipment who is within a category or geographic area 
        under title XVIII identified pursuant to such determination, 
        whether at the time of initial enrollment under such title or 
        otherwise, the Secretary shall, notwithstanding section 
        1842(c)(2), withhold payment under such title with respect to 
        durable medical equipment furnished by such supplier during a 
        period specified by the Secretary.
            ``(5) Periodic review of physician authorizations.--For 
        purposes of paragraph (1), the Secretary shall establish a 
        program under which, in cases in which the Secretary (or an 
        administrative contractor) determines under a program described 
        in paragraph (1) that there may have been a pattern of 
        excessive prescribing or authorization of items or services by 
        a physician or other health care professional--
                    ``(A) the Secretary (or contractor) submits to the 
                physician or professional on a quarterly basis a list 
                of the claims submitted under the program based on a 
                prescription or authorization by the physician or 
                professional; and
                    ``(B) if the physician or professional does not 
                validate by the end of the 90-day period beginning on 
                the date of receipt of the list the legitimacy of the 
                previously identified claims for items and services 
                prescribed or authorized by the physician or 
                professional, claims relating to such items and 
                services prescribed or authorized by such physician or 
                professional for subsequent periods shall be denied 
                until such validation is made.
            ``(6) Moratorium on enrollment of providers and 
        suppliers.--For purposes of paragraph (1), the Secretary, based 
        upon a finding of a risk of serious ongoing fraud within a 
        program under title XVIII, XIX, or XXI, may impose a moratorium 
        on the enrollment of providers of services and suppliers within 
        a category of providers of services and suppliers (including a 
        category within a specific geographic area) under such title. 
        Such a moratorium may only be imposed if the Secretary makes a 
        determination that the moratorium would not adversely impact 
        access of individuals to care under such program.
            ``(7) Clarification.--Nothing in this subsection shall be 
        interpreted to preclude or limit the ability of a State to 
        engage in provider screening or enhanced provider oversight 
        activities beyond those required by the Secretary.
    ``(b) Probationary Period To Determine Legitimacy of New Providers 
and Suppliers.--The Secretary shall establish procedures (without 
regard to section 1874A(h)) under which at the time a provider or 
supplier is first approved for participation in the program under title 
XVIII, XIX, or XXI, there shall be a probationary period of heightened 
review (specified by the Secretary, but in no case longer than 1 year) 
under which--
            ``(1) the Secretary (or an administrative contractor) shall 
        review a random or other appropriate sample of claims to 
        determine the legitimacy of the operations of the provider or 
        supplier;
            ``(2) the Secretary (or such contractor) shall validate the 
        legitimacy of physician prescriptions or other authorizations 
        for the items and services furnished by such provider or 
        supplier; and
            ``(3) if the Secretary, on the basis of such a review of 
        such claims or such validation, makes a preliminary finding 
        that a significant or disproportionate number of such claims 
        are not legitimate (as determined by the Secretary), the 
        Secretary may suspend or terminate the participation of the 
        provider or supplier with notice to the provider or supplier.
The provisions of subsections (c) through (g) of section 1128 shall 
apply to a suspension or termination under paragraph (3) in the same 
manner as such provisions apply to an exclusion under subsection (a) or 
(b) of such section. In the case of a physician or other professional 
that fails to cooperate with the Secretary (or a contractor) in the 
validation of prescriptions or authorizations described in paragraph 
(2), the Secretary may impose a civil monetary penalty of not to exceed 
$10,000 with respect to the validation of items and services furnished 
by any particular provider or supplier. The provisions of section 1128A 
(other than subsections (a) and (b)) shall apply to a civil money 
penalty under the previous sentence in the same manner as such 
provisions apply to a penalty or proceeding under section 1128A(a).''.
    (b) Revision of Prompt Pay Provisions.--Sections 1816(c)(2) and 
1842(c)(2) of such Act (42 U.S.C. 1395h(c)(2), 1395u(c)(2)) are each 
amended--
            (1) in subparagraph (A), by striking ``Each contract'' and 
        inserting ``Subject to subparagraph (C), each contract''; and
            (2) by adding at the end the following new subparagraph:
    ``(C) Subparagraph (A) shall not apply to claims of providers or 
suppliers in cases in which the Secretary identifies a pattern or 
practice of claim submission that appear to be suspicious or otherwise 
indicative of a higher likelihood of being fraudulent.''.
    (c) Conforming Amendments.--
            (1) Medicaid.--Section 1902(a) of the Social Security Act 
        (42 U.S.C. 1396a(a)) is amended--
                    (A) in paragraph (23), by inserting before the 
                semicolon at the end the following: ``or by a person to 
                whom or entity to which a moratorium under section 
                1128G(a)(4) is applied during the period of such 
                moratorium'';
                    (B) in paragraph (72); by striking at the end 
                ``and'';
                    (C) in paragraph (73), by striking the period at 
                the end and inserting ``; and''; and
                    (D) by adding after paragraph (73) the following 
                new paragraph:
            ``(74) provide that the State will enforce any 
        determination made by the Secretary under subsection (a) 
        (relating to a significant risk of fraudulent activity with 
        respect to a category of provider or supplier described in such 
        subsection through use of the appropriate procedures described 
        in such subsection) or subsection (b) section 1128G and that 
        the State will carry out any activities as required by the 
        Secretary for purposes of such subsection (a).''.
            (2) CHIP.--Section 2102 of such Act (42 U.S.C. 1397bb) is 
        amended by adding at the end the following new subsection:
    ``(d) Program Integrity.--A State child health plan shall include a 
description of the procedures to be used by the State--
            ``(1) to enforce any determination made by the Secretary 
        under subsection (a) (relating to a significant risk of 
        fraudulent activity with respect to a category of provider or 
        supplier described in such subsection through use of the 
        appropriate procedures described in such subsection) or 
        subsection (b) section 1128G; and
            ``(2) to carry out any activities as required by the 
        Secretary for purposes of such subsection.''.
            (3) Medicare.--Section 1866(j) of such Act (42 U.S.C. 
        1395cc(j)) is amended by adding at the end the following new 
        paragraph:
            ``(3) Program integrity.--The provisions of subsections (a) 
        and (b) of section 1128G apply to enrollments and renewals of 
        enrollments of providers of services and suppliers under this 
        title.''.
    (d) Consultation With OIG.--In implementing the amendments made by 
this section and determining under paragraph (1) of section 1128G(a) of 
the Social Security Act, as inserted by subsection (a), that a 
provider, supplier, or type of service, for an area, is a significant 
risk of fraudulent activity, the Secretary of Health and Human Services 
shall consult with the Inspector General of the Department of Health 
and Human Services in order to identify classes of providers and 
suppliers or types of items and services, or such a type of provider, 
supplier, or service for a specific geographic area, as being 
particularly subject to fraud or abuse under Medicare, Medicaid, or the 
State children's health insurance program.
    (e) Additional Funding.--There are authorized to be appropriated 
such sums as may be appropriate to carry out this section (and the 
amendments made by this section). Such sums shall be in addition to any 
amounts that may be available from the Health Care Fraud and Abuse 
Control Account under section 1817(k) of the Social Security Act (42 
U.S.C. 1395i(k)).
    (f) Effective Date; Expedited Implementation.--
            (1) Effective date.--The amendments made by this section 
        shall take effect upon the date of the enactment of this Act 
        and section 1128G(b) of the Social Security Act shall apply to 
        providers and suppliers that are first approved for 
        participation on and after the date that is 6 months after the 
        date of the enactment of this Act.
            (2) Expedited implementation.--The Secretary of Health and 
        Human Services shall promulgate regulations not later than 6 
        months after the date of the enactment of this Act to carry out 
        this section, which regulations shall be effective and final 
        immediately on an interim basis as of the date of publication 
        of the interim final regulation. With respect to such an 
        interim final regulation, the Secretary shall provide for a 
        period of public comments on such regulation after the date of 
        publication. The Secretary may change or revise such regulation 
        after completion of the period of public comment.

Summary: Medicare and Medicaid Fraud Prevention and Control Act of 2009 - Amends title XI of the Social Security Act (SSA) to establish specified enhanced program and provider protections against fraud under the Medicare, Medicaid, and Children's Health Insurance programs under SSA titles XVIII, XIX, and XXI.