I 113th CONGRESS 2d Session H. R. 4090 IN THE HOUSE OF REPRESENTATIVES February 26, 2014 Mr. Becerra (for himself, Mr. Levin , Mr. Rangel , Mr. Doggett , Mr. Thompson of California , Ms. Schwartz , and Mr. Crowley ) introduced the following bill; which was referred to the Committee on Ways and Means , and in addition to the Committee on the Budget , for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To amend title II of the Social Security Act to improve the Social Security Administration’s ability to fight fraud, prevent errors, and protect the Social Security Trust Fund, and for other purposes.

1. Short title This Act may be cited as the Social Security Fraud and Error Prevention Act of 2014 . 2. Fraud and error prevention (a) In general Section 201 of the Social Security Act ( 42 U.S.C. 401 et seq. ) is amended by striking subsection (n) and inserting the following: (n) Fraud and error prevention (1) Subject to paragraph (4), there is hereby appropriated from any one or all of the Trust Funds to the Social Security Administration for each fiscal year beginning with fiscal year 2015 for fraud and error prevention activities described in paragraph (3), in addition to any other amounts otherwise appropriated for such fiscal year, an amount equal to the sum of— (A) the applicable dollar amount (determined under paragraph (2)), plus (B) an amount equal to the sum of any fines or other monetary penalties recovered in the previous fiscal year pursuant to sections 208(a), 1129(a), 1140 (to the extent that such penalties are imposed for misuse of words, letters, symbols, or emblems relating to the Social Security Administration), and 1632(a). (2) The applicable dollar amount determined under this clause is— (A) for fiscal year 2015, $1,750,000,000; (B) for each of fiscal years 2016 through 2020, $1,800,000,000; and (C) for each fiscal year thereafter, $1,800,000,000 multiplied by the ratio (not less than 1) of— (i) the Consumer Price Index for all Urban Consumers (CPI–U, published by the Bureau of Labor Statistics of the Department of Labor) for the 1st full calendar year preceding such fiscal year, to (ii) the CPI–U for 2018. (3) The Commissioner of Social Security may use funds appropriated under paragraph (1) for the following purposes: (A) Medical continuing disability reviews conducted pursuant to section 221(i) and section 1614(a)(3)(H). (B) SSI redeterminations conducted pursuant to section 1611(c). (C) Work-related continuing disability reviews conducted pursuant to section 223(f). (D) Establishment or expansion of cooperative disability investigations (CDI) units. (E) Pre-effectuation reviews conducted pursuant to section 221(c) and section 1633(e). (F) Quality reviews of decisions made by an administrative law judge under this title or title XVI in accordance with section 221(n). (G) Recovery of overpayments under sections 204 and 1631(b). (H) Recovery of civil penalties imposed under sections 1129 and 1140. (I) Supporting prosecution of felonies under section 208. (4) Funds appropriated under paragraph (1) for a fiscal year shall not be available for obligation until the report required to be submitted under paragraph (5) 60 days prior to the beginning of such fiscal year has been submitted. (5) Not later than 60 days prior to the beginning of each fiscal year after 2014, the Commissioner of Social Security shall submit a report to the Committee on Ways and Means of the House of Representatives, the Committee on Finance of the Senate, and the Office of Management and Budget that includes the following: (A) A plan for conducting the fraud and error prevention activities described in paragraph (3) in such fiscal year, including— (i) an itemized statement of the dollar amounts expected to be spent on each such activity during such fiscal year; (ii) an itemized statement of the estimated long-term savings to the Trust Funds and the Treasury expected to be obtained as a result of each such activity, and a statement of the estimated total value of benefits paid under this title solely as a result of such activities; (iii) performance targets for each such activity; and (iv) a certification from the Chief Actuary of the Social Security Administration that the plan will improve the actuarial status of the Trust Funds. (B) An assessment of the fraud and error prevention activities described in paragraph (3) conducted in the previous fiscal year, including— (i) an itemized statement of the dollar amounts spent on each such activity during such fiscal year; (ii) an itemized statement of the estimated long-term savings to the Trust Funds and the Treasury obtained as a result of each such activity, and a statement of the estimated total value of benefits paid under this title solely as a result of such activities; (iii) an assessment of the extent to which performance targets set in the applicable plan for such fiscal year were met; (iv) an explanation and a corrective action plan for any failure to meet such performance targets; and (v) an assessment of whether funds made available under paragraph (1) for such fiscal year were adequate to protect the Trust Funds from fraud and errors, an explanation of any such funds that remained unobligated at the end of the fiscal year, and recommendations for needed adjustments to future funding in order to protect the Trust Funds from fraud and errors and any additional cost-effective strategies for improving the actuarial status of the Trust Funds. (6) Of the discretionary amounts made available for Social Security Administration—Limitation on Administrative Expenses for each fiscal year beginning with fiscal year 2015, the amount obligated for the activities described in paragraph (3) shall be not less than the sum of— (A) $273,000,000; plus (B) the amount obligated from funds made available for Social Security Administration—Limitation on Administrative Expenses for fiscal year 2013 for the activities described in subparagraphs (C) through (I) of paragraph (3). . 3. Expansion of cooperative disability investigations units Not later than October 1, 2017, the Commissioner of Social Security shall take any necessary actions to ensure that cooperative disability investigations (CDI) units have been established for each of the 50 States, the District of Columbia, Puerto Rico, Guam, the Northern Mariana Islands, the Virgin Islands, and American Samoa. 4. Codification of requirement to conduct quality reviews Section 221 of the Social Security Act is amended by adding at the end the following: (n) (1) The Commissioner of Social Security shall conduct quality reviews in accordance with section 969 of part 404 of title 20, Code of Federal Regulations, in cases described in section 970(a) of such part (as such sections were in effect on January 1, 2014) with respect to decisions in connection with applications for benefits under this title and title XVI, in a sufficient number to ensure compliance with laws, regulations, and other guidance issued by the Commissioner of Social Security. (2) The Commissioner of Social Security shall annually submit to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate a report that includes— (A) the total number of cases selected for a quality review as described in paragraph (1); (B) the number of such cases in which a decision is remanded; and (C) the number of such cases in which a decision is modified or reversed. . 5. Report on work-related continuing disability reviews Section 223 of the Social Security Act is amended by adding at the end the following: (k) Report on work-Related continuing disability reviews The Commissioner of Social Security shall annually submit to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate a report on the number of work-related continuing disability reviews conducted pursuant to subsection (f). Such report shall include— (1) the total number of reports of earnings received by the Commissioner in the previous calendar year from individuals receiving benefits on account of disability under this title or title XVI; (2) the number of such reports that resulted in a determination by the Commissioner to conduct a work-related continuing disability review with respect to the beneficiary to whom such report pertains, and the basis on which such determinations were made; (3) in the case of a beneficiary selected for a work-related continuing disability review on the basis of a report of earnings— (A) the average number of days between the submission of the report and the initiation of the review, and the average number of days between the initiation and the completion of the review; (B) the number of such reviews completed during such calendar year, and the number of such reviews that result in a suspension or termination of benefits; and (C) the number of such reviews that had not been completed as of the end of such calendar year; (4) the total savings to the Trust Funds and the Treasury generated from benefits terminated as a result of such reviews; and (5) with respect to individuals for whom a work-related continuing disability review was completed during such calendar year— (A) the number who participated in the Ticket to Work program under section 1148 during such calendar year; (B) the number who used any program work incentives during such calendar year; and (C) the number who received vocational rehabilitation services during such calendar year with respect to which the Commissioner of Social Security reimbursed a State agency under section 222(d). . 6. Coordination of reports relating to disability benefits Section 221(i)(3) of the Social Security Act ( 42 U.S.C. 421(i)(3) ) is amended by adding at the end the following: To the extent the Commissioner of Social Security determines to be necessary for maximum efficiency, the Commissioner may submit a combined report consisting of the information required to be submitted under this paragraph, subsection (c)(3)(C), subsection (n)(2), section 201(n)(5), and section 223(k). . 7. Increased penalties in certain cases of fraud (a) Conspiracy To commit Social Security fraud Section 208(a) of the Social Security Act ( 42 U.S.C. 408(a) ) is amended— (1) in paragraph (7)(C), by striking or at the end; (2) in paragraph (8), by adding or at the end; and (3) by inserting after paragraph (8) the following: (9) conspires to commit any offense described in any of paragraphs (1) through (4), . (b) Increased criminal penalties for certain individuals in positions of trust Section 208(a) of such Act ( 42 U.S.C. 408(a) ), as amended by subsection (a), is further amended by striking the period at the end and inserting , except that in the case of a person who receives a fee or other income for services performed in connection with any determination with respect to benefits under this title, or who is a physician or other health care provider who submits medical evidence in connection with any such determination, such person shall be guilty of a felony and upon conviction thereof shall be fined under title 18, United States Code, or imprisoned for not more than ten years, or both. . (c) Increased civil penalties for certain individuals in positions of trust Section 1129(a)(1) of such Act ( 42 U.S.C. 1320a–8(a)(1) ) is amended, in the matter following subparagraph (C), by inserting after withholding disclosure of such fact the following: , except that in the case of such a person who receives a fee or other income for services performed in connection with any such determination or who is a physician or other health care provider who submits medical evidence in connection with any such determination, the amount of such penalty shall be not more than $7,500 . (d) References to Social Security and Medicare in electronic communications Section 1140(a)(1) of the Social Security Act ( 42 U.S.C. 1320b–10(a)(1) ) is amended by inserting (including any electronic communication) after or other communication . (e) Inflation adjustment of certain civil penalties Title XI of the Social Security Act is amended by inserting after section 1129B the following: 1129C. Civil penalty inflation adjustment (a) Adjustment by regulation The Commissioner of Social Security shall, not later than 180 days after the date of enactment of the Social Security Fraud and Error Prevention Act of 2014 , and at least once every 4 years thereafter— (1) by regulation adjust the maximum amount of each civil monetary penalty by the inflation adjustment described under subsection (b); and (2) publish each such regulation in the Federal Register. (b) Amount of adjustment The inflation adjustment under subsection (a) shall be determined by increasing the maximum amount of each civil monetary penalty by the cost-of-living adjustment. Any increase determined under this subsection shall be rounded to the nearest— (1) multiple of $1,000 in the case of penalties greater than $1,000 but less than or equal to $10,000; and (2) multiple of $5,000 in the case of penalties greater than $10,000 but less than or equal to $100,000. (c) Definitions For purposes of this section— (1) the term civil monetary penalty means— (A) a penalty imposed by paragraph (1) or (3) of section 1129(a); and (B) a penalty imposed by paragraph (1) or (2) of section 1140(b). (2) the term cost-of-living adjustment means the percentage (if any) for each civil monetary penalty by which— (A) the Consumer Price Index for the month of June of the calendar year preceding the adjustment, exceeds (B) the Consumer Price Index for the month of June of the calendar year in which the amount of such civil monetary penalty was last set or adjusted pursuant to law. (d) Application of increase Any increase under this Act in a civil monetary penalty shall apply only to violations which occur after the date the increase takes effect. . 8. Exclusion of certain medical evidence in disability cases (a) In general Section 223(d)(5) of the Social Security Act ( 42 U.S.C. 423(d)(5) ) is amended by adding at the end the following: (C) In making any determination with respect to whether an individual is under a disability or continues to be under a disability, the Commissioner of Social Security may not consider, except for good cause as determined by the Commissioner, any evidence furnished by a physician or other health care provider who— (i) has been barred from practice in any State; or (ii) has been assessed a penalty under section 1128 or 1129 for the submission of false evidence. . (b) Regulations Not later than 1 year after the date of the enactment of this Act, the Commissioner of Social Security shall issue regulations to carry out the amendment made by subsection (a). (c) Effective date The amendment made by subsection (a) shall apply with respect to determinations of disability made on or after the date that is 1 year after the date of enactment of this Act. 9. Repeal of program integrity adjustments to discretionary spending limits Section 251(b)(2)(B)(i) of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended— (1) in subclause (II), by adding and at the end; (2) in subclause (III), by striking the semicolon at the end and inserting a period; and (3) by striking subclauses (IV) through (X).