S 454

112th CONGRESS
1st Session

S. 454

To amend titles XVIII and XIX of the Social Security Act to prevent fraud, waste, and abuse under Medicare, Medicaid, and CHIP, and for other purposes.

IN THE SENATE OF THE UNITED STATES

March 2, 2011

Mr. GRASSLEY introduced the following bill; which was read twice and referred to the Committee on Finance


A BILL

To amend titles XVIII and XIX of the Social Security Act to prevent fraud, waste, and abuse under Medicare, Medicaid, and CHIP, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title- This Act may be cited as the `Strengthening Program Integrity and Accountability in Health Care Act of 2011'.

    (b) Table of Contents- The table of contents of this title is as follows:

      Sec. 1. Short title; table of contents.

      Sec. 2. Enhanced Medicare and Medicaid program integrity provisions.

      Sec. 3. Requirements for the transmission of management implication reports by the HHS OIG.

      Sec. 4. Medical ID theft information sharing program and clearinghouse.

      Sec. 5. Permissive exclusion from Federal health care programs expanded to individuals and entities affiliated with sanctioned entities.

      Sec. 6. Public availability of Medicare claims data.

      Sec. 7. Medicaid exclusion from participation relating to certain ownership, control, and management affiliations.

      Sec. 8. Payment for illegal unapproved drugs.

      Sec. 9. Requiring individuals or entities that participate in or conduct activities under Federal health care programs to comply with certain Congressional requests.

SEC. 2. ENHANCED MEDICARE AND MEDICAID PROGRAM INTEGRITY PROVISIONS.

    (a) Mandatory Suspension of Medicare and Medicaid Payments Pending Investigation of Credible Allegations of Fraud- Section 1862(o)(1) of the Social Security Act (42 U.S.C. 1395y(o)(1)) is amended by striking `may' and inserting `shall'.

    (b) Extension of Number of Days in Which Medicare Claims Are Required To Be Paid in Order To Prevent or Combat Fraud, Waste, or Abuse-

      (1) PART A CLAIMS- Section 1816(c)(2) of the Social Security Act (42 U.S.C. 1395h(c)(2)) is amended--

        (A) in subparagraph (B)(ii)(V), by striking `with respect' and inserting `subject to subparagraph (D), with respect'; and

        (B) by adding at the end the following new subparagraph:

        `(D)(i) Upon a determination by the Secretary that there is a likelihood of fraud, waste, or abuse involving a particular category of providers of services or suppliers, categories of providers of services or suppliers in a certain geographic area, or individual providers of services or suppliers, the Secretary shall extend the number of calendar days described in subparagraph (B)(ii)(V) to--

          `(I) up to 365 calendar days with respect to claims submitted by--

            `(aa) categories of providers of services or suppliers; or

            `(bb) categories of providers of services or suppliers in a certain geographic area; or

          `(II) such time that the Secretary determines is necessary to ensure that the claims with respect to individual providers of services or suppliers are clean claims.

        `(ii) During the extended period of time under subclauses (I) and (II) of clause (ii), the Secretary shall engage in heightened scrutiny of claims, such as prepayment review and other methods the Secretary determines to be appropriate.

        `(iii) Not later than 90 days after the date of enactment of this subparagraph and not less than annually thereafter, the Inspector General of the Department of Health and Human Services shall submit to the Secretary a report containing recommendations with respect to the application of this subparagraph and section 1842(c)(2)(D). Not later than 60 days after receiving such a report, the Secretary shall submit to the Inspector General a written response to the recommendations contained in the report.

        `(iv) There shall be no administrative or judicial review under section 1869, section 1878, or otherwise of the implementation of this subparagraph by the Secretary.'.

      (2) PART B CLAIMS- Section 1842(c)(2) of the Social Security Act (42 U.S.C. 1395u(c)(2)) is amended--

        (A) in subparagraph (B)(ii)(V), by striking `with respect' and inserting `subject to subparagraph (D), with respect'; and

        (B) by adding at the end the following new subparagraph:

        `(D)(i) Upon a determination by the Secretary that there is a likelihood of fraud, waste, or abuse involving a particular category of providers of services or suppliers, categories of providers of services or suppliers in a certain geographic area, or individual providers of services or suppliers, the Secretary shall extend the number of calendar days described in subparagraph (B)(ii)(V) to--

          `(I) up to 365 calendar days with respect to claims submitted by--

            `(aa) categories of providers of services or suppliers; or

            `(bb) categories of providers of services or suppliers in a certain geographic area; or

          `(II) such time that the Secretary determines is necessary to ensure that the claims with respect to individual providers of services or suppliers are clean claims.

        `(ii) During the extended period of time under subclauses (I) and (II) of clause (ii), the Secretary shall engage in heightened scrutiny of claims, such as prepayment review and other methods the Secretary determines to be appropriate.

        `(iii) There shall be no administrative or judicial review under section 1869, section 1878, or otherwise of the implementation of this subparagraph by the Secretary.'.

      (3) EFFECTIVE DATE-

        (A) IN GENERAL- The amendments made by this subsection shall take effect on the date that is 6 months after the date of the enactment of this Act.

        (B) EXPEDITING IMPLEMENTATION- The Secretary shall promulgate regulations to carry out the amendments made by this subsection which may be effective and final immediately on an interim basis as of the date of publication of the interim final regulation. If the Secretary provides for an interim final regulation, the Secretary shall provide for a period of public comment on such regulation after the date of publication. The Secretary may change or revise such regulation after completion of the period of public comment.

SEC. 3. REQUIREMENTS FOR THE TRANSMISSION OF MANAGEMENT IMPLICATION REPORTS BY THE HHS OIG.

    Section 1128J of the Social Security Act (42 U.S.C. 1320a-7k) is amended by adding at the end the following new subsection:

    `(f) Transmission of Management Implication Reports by the HHS OIG-

      `(1) CONGRESSIONAL NOTIFICATION- Not later than 30 days after the transmission by the Inspector General of the Department of Health and Human Services to another agency of the Department of Health and Human Services of a management implication report, the Inspector General shall notify the relevant committees of Congress of such transmission.

      `(2) SECRETARIAL RESPONSE- The Secretary shall respond to a management implication report transmitted under paragraph (1) not later than 90 days after such transmission.

      `(3) RELEVANT COMMITTEES OF CONGRESS DEFINED- In this subsection, the term `relevant committees of Congress' means the Committees on Ways and Means and Energy and Commerce of the House of Representatives and the Committee on Finance of the Senate.'.

SEC. 4. MEDICAL ID THEFT INFORMATION SHARING PROGRAM AND CLEARINGHOUSE.

    (a) Establishment- Not later than 24 months after the date of enactment of this Act, the Secretary of Health and Human Services (in this section referred to as the `Secretary'), acting through the Administrator of the Centers for Medicare & Medicaid Services and in coordination with the Chairman of the Federal Trade Commission, shall establish an information sharing program regarding beneficiary medical ID theft under the programs under titles XVIII, XIX, and XXI of the Social Security Act (in this section referred to as the `program').

    (b) Contents of Program- The program shall include--

      (1) the establishment of methods to identify and detect relevant warning signs of medical ID theft;

      (2) the establishment of appropriate responses to such warning signs that would mitigate and prevent beneficiary medical ID theft; and

      (3) the development of a detailed plan to update the program as appropriate, taking into consideration such warning signs and appropriate responses.

    (c) Establishment of Clearinghouse- The Secretary, in coordination with the Chairman of the Federal Trade Commission, shall establish a clearinghouse at the Centers for Medicare & Medicaid Services that collects reports of ID theft against beneficiaries under the programs under titles XVIII, XIX, and XXI of the Social Security Act from the Federal Trade Commission and other sources determined appropriate by the Secretary. Such clearinghouse shall be used to fight medical ID theft against beneficiaries and to prevent the improper payment of claims under such programs.

SEC. 5. PERMISSIVE EXCLUSION FROM FEDERAL HEALTH CARE PROGRAMS EXPANDED TO INDIVIDUALS AND ENTITIES AFFILIATED WITH SANCTIONED ENTITIES.

    Section 1128(b)(15) of the Social Security Act (42 U.S.C. 1320a-7(b)(15)) is amended to read as follows:

      `(15) INDIVIDUALS OR ENTITIES AFFILIATED WITH A SANCTIONED ENTITY- (A) Any of the following:

        `(i) Any individual who--

          `(I) is a person with an ownership or control interest (as defined in section 1124(a)(3)) in a sanctioned entity or an affiliated entity of such sanctioned entity (or was a person with such an interest at the time of any of the conduct that formed a basis for the conviction or exclusion described in subparagraph (B)); and

          `(II) knows or should know (as defined in section 1128A(i)(7)) (or knew or should have known) of such conduct.

        `(ii) Any individual who is an officer or managing employee (as defined in section 1126(b)) of a sanctioned entity or affiliated entity of such sanctioned entity (or was such an officer or managing employee at the time of any of the conduct that formed a basis for the conviction or exclusion described in subparagraph (B)).

        `(iii) Any affiliated entity of a sanctioned entity.

      `(B) For purposes of this paragraph, the term `sanctioned entity' means an entity--

        `(i) that has been convicted of any offense described in subsection (a) or in paragraph (1), (2), or (3) of this subsection; or

        `(ii) that has been excluded from participation under a program under title XVIII or under a State health care program.

      `(C)(i) For purposes of this paragraph, the term `affiliated entity' means, with respect to a sanctioned entity--

        `(I) an entity affiliated with such sanctioned entity; and

        `(II) an entity that was so affiliated at the time of any of the conduct that formed the basis for the conviction or exclusion described in subparagraph (B).

        `(ii) For purposes of clause (i), an entity shall be treated as affiliated with another entity if--

          `(I) one of the entities is a person with an ownership or control interest (as defined in section 1124(a)(3)) in the other entity (or had such an interest at the time of any of the conduct that formed a basis for the conviction or exclusion described in subparagraph (B));

          `(II) there is a person with an ownership or control interest (as defined in section 1124(a)(3)) in both entities (or had such an interest at the time of any of the conduct that formed a basis for the conviction or exclusion described in subparagraph (B)); or

          `(III) there is a person who is an officer or managing employee (as defined in section 1126(b)) of both entities (or was such an officer or managing employee at the time of any of the conduct that formed a basis for the conviction or exclusion described in subparagraph (B)).'.

SEC. 6. PUBLIC AVAILABILITY OF MEDICARE CLAIMS DATA.

    Section 1128J of the Social Security Act (42 U.S.C. 1320a-7k), as amended by section 3, is amended by adding at the end the following new subsection:

    `(g) Public Availability of Medicare Claims Data-

      `(1) IN GENERAL- The Secretary shall, to the extent consistent with applicable information, privacy, security, and disclosure laws, including the regulations promulgated under the Health Insurance Portability and Accountability Act of 1996 and section 552a of title 5, United States Code, make available to the public claims and payment data of the Department of Health and Human Services related to title XVIII, including data on payments made to any provider of services or supplier under such title.

      `(2) IMPLEMENTATION- Not later than December 31, 2012, the Secretary shall promulgate regulations to carry out this subsection.'.

SEC. 7. MEDICAID EXCLUSION FROM PARTICIPATION RELATING TO CERTAIN OWNERSHIP, CONTROL, AND MANAGEMENT AFFILIATIONS.

    Section 1902(a) of the Social Security Act (42 U.S.C. 1396a(a)) is amended--

      (1) by striking `and' at the end of paragraph (82);

      (2) by striking the period at the end of paragraph (83) and inserting `; and'; and

      (3) by inserting after paragraph (83) the following new paragraph:

      `(84) provide that the State agency described in paragraph (9) exclude, with respect to a period, any individual or entity from participation in the program under the State plan if such individual or entity owns, controls, or manages an entity that (or if such entity is owned, controlled, or managed by an individual or entity that)--

        `(A) has unpaid overpayments (as defined by the Secretary) under this title during such period determined by the Secretary or the State agency to be delinquent;

        `(B) is suspended or excluded from participation under or whose participation is terminated under this title during such period; or

        `(C) is affiliated with an individual or entity that has been suspended or excluded from participation under this title or whose participation is terminated under this title during such period.'.

SEC. 8. PAYMENT FOR ILLEGAL UNAPPROVED DRUGS.

    (a) Findings- Congress finds that each year, the Medicaid program under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) pays millions of dollars in reimbursement for covered outpatient drugs that are not approved by the Food and Drug Administration under a new drug application under section 505(b) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(b)) or an abbreviated new drug application under section 505(j) of such Act, or that such drug is not subject to such section or section 512 due to the application of section 201(p) of such Act (21 U.S.C. 321(p)).

    (b) Listing of Drugs and Devices- Section 510 of the Federal Food, Drug and Cosmetic Act (21 U.S.C. 360) is amended--

      (1) in subsection (j)(1)(B)--

        (A) in clause (i), by inserting `in the case of a drug, the authority under this Act that does not require such drug to be subject to section 505 and section 512,' after `labeling for such drug or device,'; and

        (B) in clause (ii), by inserting `, in the case of a drug, the authority under this Act that does not require such drug to be subject to section 505 and section 512,' after `the label and package insert for such drug or device'; and

      (2) in subsection (f)--

        (A) by striking `(f) The Secretary' and inserting the following:

    `(f) Inspection by Public of Registration-

      `(1) IN GENERAL- The Secretary'; and

        (B) by adding at the end the following new paragraph:

      `(2) LIST OF DRUGS THAT ARE NOT APPROVED UNDER SECTION 505 OR 512- Not later than January 1, 2012, the Secretary shall make available to the public on the Internet Web site of the Food and Drug Administration a list that includes, for each drug described in subsection (j)(1)(B)--

        `(A) the drug;

        `(B) the person who listed such drug; and

        `(C) the authority under this Act that does not require such drug to be subject to section 505 and section 512, as provided by such person in such list.'.

    (c) Payment for Covered Outpatient Drugs- Section 1927 of the Social Security Act (42 U.S.C. 1396r-8) is amended by inserting at the end the following new subsection:

    `(l) Condition- Beginning January 1, 2012, no State shall make any payment under this section for any covered outpatient drug unless such State first verifies with the Food and Drug Administration that such covered outpatient drug has been approved by the Food and Drug Administration under a new drug application under section 505(b) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(b)) or an abbreviated new drug application under section 505(j) of such Act, or that such drug is not subject to such section or section 512 due to the application of section 201(p) of such Act (21 U.S.C. 321(p)). The Secretary shall have the authority to proscribe regulations to create an information sharing protocol to allow States to verify that a covered outpatient drug has been approved by the Food and Drug Administration.'.

SEC. 9. REQUIRING INDIVIDUALS OR ENTITIES THAT PARTICIPATE IN OR CONDUCT ACTIVITIES UNDER FEDERAL HEALTH CARE PROGRAMS TO COMPLY WITH CERTAIN CONGRESSIONAL REQUESTS.

    (a) In General- Section 1128J of the Social Security Act (42 U.S.C. 1320a-7k), as amended by section 6, is amended by adding at the end the following new subsection:

    `(h) Compliance With Certain Requests by Individuals and Entities That Participate in or Conduct Activities Under Federal Health Care Programs-

      `(1) IN GENERAL- Any individual or entity that participates in or conducts activities under a Federal health care program (as defined in section 1128B(f)) shall, as a condition of such participation or such conduct, comply (at a time and in a manner specified by the Chairman or ranking member) with any request submitted by the Chairman or the ranking member of a relevant committee of Congress to the individual or entity for the following:

        `(A) Documents.

        `(B) Information.

        `(C) Interviews.

      `(2) RELEVANT COMMITTEE OF CONGRESS DEFINED- In this subsection, the term `relevant committee of Congress' means the Committees on Ways and Means and Energy and Commerce of the House of Representatives and the Committee on Finance of the Senate.'.

    (b) Effective Date- The amendments made by this section shall take effect on the date that is 2 years after the date of enactment of this Act.

END