To amend title XVIII of the Social Security Act to establish additional provisions to combat waste, fraud, and abuse within the Medicare Program, and for other purposes.

January 7, 2003

Mrs. BIGGERT introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committees on Energy and Commerce, and the Judiciary, 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

To amend title XVIII of the Social Security Act to establish additional provisions to combat waste, fraud, and abuse within the Medicare Program, 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 `Medicare Fraud Prevention and Enforcement Act of 2003'.

(b) TABLE OF CONTENTS- The table of contents for this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Site inspections and background checks.

Sec. 3. Registration of billing agencies.

Sec. 4. Expanded access to the health integrity protection database (HIPDB).

Sec. 5. Liability of medicare carriers and fiscal intermediaries for claims submitted by excluded providers.

Sec. 6. Community mental health centers.

Sec. 7. Limiting the use of discharge in bankruptcy proceedings for provider liability for health care fraud.

Sec. 8. Illegal distribution of a medicare or medicaid beneficiary identification or provider number.

Sec. 9. Treatment of certain Social Security Act crimes as Federal health care offenses.

Sec. 10. Authority of Office of Inspector General of the Department of Health and Human Services.

Sec. 11. Universal product numbers on claims forms for reimbursement under the medicare program.

SEC. 2. SITE INSPECTIONS AND BACKGROUND CHECKS.

(a) SITE INSPECTIONS FOR DME SUPPLIERS, COMMUNITY MENTAL HEALTH CENTERS, AND OTHER PROVIDER GROUPS- Title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) is amended by adding at the end the following:

`SITE INSPECTIONS FOR DME SUPPLIERS, COMMUNITY MENTAL HEALTH CENTERS, AND OTHER PROVIDER GROUPS

`SEC. 1897. (a) SITE INSPECTIONS-

`(1) IN GENERAL- The Secretary shall conduct a site inspection for each applicable provider (as defined in paragraph (2)) that applies for a provider number in order to provide items or services under this title. Such site inspection shall be in addition to any other site inspection that the Secretary would otherwise conduct with regard to an applicable provider.

`(2) APPLICABLE PROVIDER DEFINED-

`(A) IN GENERAL- Except as provided in subparagraph (B), in this section the term `applicable provider' means--

`(i) a supplier of durable medical equipment (including items described in section 1834(a)(13));

`(ii) a supplier of prosthetics, orthotics, or supplies (including items described in paragraphs (8) and (9) of section 1861(s));

`(iii) a community mental health center; or

`(iv) any other provider group, as determined by the Secretary.

`(B) EXCEPTION- In this section, the term `applicable provider' does not include--

`(i) a physician that provides durable medical equipment (as described in subparagraph (A)(i)) or prosthetics, orthotics, or supplies (as described in subparagraph (A)(ii)) to an individual as incident to an office visit by such individual; or

`(ii) a hospital that provides durable medical equipment (as described in subparagraph (A)(i)) or prosthetics, orthotics, or supplies (as described in subparagraph (A)(ii)) to an individual as incident to an emergency room visit by such individual.

`(b) STANDARDS AND REQUIREMENTS- In conducting the site inspection pursuant to subsection (a), the Secretary shall ensure that the site being inspected is in full compliance with all the conditions and standards of participation and requirements for obtaining medicare billing privileges under this title.

`(c) TIME- The Secretary shall conduct the site inspection for an applicable provider prior to the issuance of a provider number to such provider.

`(d) TIMELY REVIEW- The Secretary shall provide for procedures to ensure that the site inspection required under this section does not unreasonably delay the issuance of a provider number to an applicable provider.'.

(b) BACKGROUND CHECKS- Title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) (as amended by subsection (a)) is amended by adding at the end the following:

`BACKGROUND CHECKS

`SEC. 1898. (a) BACKGROUND CHECK REQUIRED- Except as provided in subsection (b), the Secretary shall conduct a background check on any individual or entity that applies to the Secretary for a provider number for the purpose of furnishing any item or service under this

title. In performing the background check, the Secretary shall--

`(1) conduct the background check before issuing a provider number to an individual or entity;

`(2) include a search of criminal records in the background check; and

`(3) provide for procedures that ensure the background check does not unreasonably delay the issuance of a provider number to an eligible individual or entity.

`(b) USE OF STATE LICENSING PROCEDURE- The Secretary may use the results of a State licensing procedure as a background check under subsection (a) if the State licensing procedure meets the requirements of subsection (a).

`(c) ATTORNEY GENERAL REQUIRED TO PROVIDE INFORMATION-

`(1) IN GENERAL- Upon request of the Secretary, the Attorney General shall provide the criminal background check information referred to in subsection (a)(2) to the Secretary.

`(2) RESTRICTION ON USE OF DISCLOSED INFORMATION- The Secretary may only use the information disclosed under subsection (a) for the purpose of carrying out the Secretary's responsibilities under this title.

`(d) REFUSAL TO ISSUE PROVIDER NUMBER-

`(1) AUTHORITY- In addition to any other remedy available to the Secretary, the Secretary may refuse to issue a provider number to an individual or entity if the Secretary determines, after a background check conducted under this section, that such individual or entity has a history of acts that indicate issuance of a provider number to such individual or entity would be detrimental to the best interests of the program or program beneficiaries. Such acts may include, but are not limited to--

`(A) any bankruptcy;

`(B) any act resulting in a civil judgment against such individual or entity; or

`(C) any felony conviction under Federal or State law.

`(2) REPORTING OF REFUSAL TO ISSUE PROVIDER NUMBER TO THE HEALTH INTEGRITY PROTECTION DATABASE (HIPDB)- A determination to refuse to issue a provider number to an individual or entity as a result of a background check conducted under this section shall be reported to the health integrity protection database established under section 1128E in accordance with the procedures for reporting final adverse actions taken against a health care provider, supplier, or practitioner under that section.'.

(c) REGULATIONS; EFFECTIVE DATE-

(1) REGULATIONS- Not later than 1 year after the date of enactment of this Act, the Secretary of Health and Human Services shall promulgate such regulations as are necessary to implement the amendments made by subsections (a) and (b).

(2) EFFECTIVE DATE- The amendments made by subsections (a) and (b) shall apply to applications received by the Secretary of Health and Human Services on or after January 1, 2004.

(d) USE OF MEDICARE INTEGRITY PROGRAM FUNDS- The Secretary of Health and Human Services may use funds appropriated or transferred for purposes of carrying out the medicare integrity program established under section 1893 of the Social Security Act (42 U.S.C. 1395ddd) to carry out the provisions of sections 1897 and 1898 of that Act (as added by subsections (a) and (b)).

SEC. 3. REGISTRATION OF BILLING AGENCIES.

(a) REGISTRATION OF BILLING AGENCIES AND INDIVIDUALS- Title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) (as amended by section 2(b)) is amended by adding at the end the following:

`REGISTRATION OF BILLING AGENCIES AND INDIVIDUALS

`SEC. 1899. (a) REGISTRATION- The Secretary shall establish procedures for the registration of all applicable persons.

`(b) REQUIRED APPLICATION- Each applicable person shall submit a registration application to the Secretary at such time, in such manner, and accompanied by such information as the Secretary may require.

`(c) IDENTIFICATION NUMBER- If the Secretary approves an application submitted under subsection (b), the Secretary shall assign a unique identification number to the applicable person.

`(d) REQUIREMENT- Every claim for reimbursement under this title that is compiled and submitted by an applicable person shall contain the identification number that is assigned to the applicable person pursuant to subsection (c).

`(e) TIMELY REVIEW- The Secretary shall provide for procedures that ensure the timely consideration and determination regarding approval of applications under this section.

`(f) DEFINITION OF APPLICABLE PERSON- In this section, the term `applicable person' means an individual or an entity that compiles and submits claims for reimbursement under this title to the Secretary on behalf of any individual or entity.'.

(b) PERMISSIVE EXCLUSION- Section 1128(b) of the Social Security Act (42 U.S.C. 1320a-7(b)) is amended by adding at the end the following:

`(16) FRAUD BY APPLICABLE PERSON- An applicable person (as defined in section 1899(f)) that the Secretary determines knowingly submitted or caused to be submitted a claim for reimbursement under title XVIII that the applicable person knows or should know is false or fraudulent.'.

(c) REGULATIONS; EFFECTIVE DATE-

(1) REGULATIONS- Not later than 1 year after the date of enactment of this Act, the Secretary of Health and Human Services shall promulgate such regulations as are necessary to implement the amendment made by subsections (a) and (b).

(2) EFFECTIVE DATE- The amendment made by subsections (a) and (b) shall take effect on January 1, 2004.

SEC. 4. EXPANDED ACCESS TO THE HEALTH INTEGRITY PROTECTION DATABASE (HIPDB).

(a) IN GENERAL- Section 1128E(d)(1) of the Social Security Act (42 U.S.C. 1320a-7e(d)(1)) is amended to read as follows:

`(1) AVAILABILITY- The information in the database maintained under this section shall be available to--

`(A) Federal and State government agencies and health plans, and any health care provider, supplier, or practitioner entering an employment or contractual relationship with an individual or entity who could potentially be the subject of a final adverse action, where the contract involves the furnishing of items or services reimbursed by 1 or more Federal health care programs (regardless of whether the individual or entity is paid by the programs directly, or whether the items or services are reimbursed directly or indirectly through the claims of a direct provider); and

`(B) utilization and quality control peer review organizations and accreditation entities as defined by the Secretary, including but not limited to organizations described in part B of this title and in section 1154(a)(4)(C).'.

(b) CRIMINAL PENALTY FOR MISUSE OF INFORMATION- Section 1128B(b) of the Social Security Act (42 U.S.C. 1320a-7b(b)) is amended by adding at the end the following:

`(4) Whoever knowingly uses information maintained in the health integrity protection database maintained in accordance with section 1128E for a purpose other than a purpose authorized under that section shall be imprisoned for not more than 3 years or fined under title 18, United States Code, or both.'.

(c) EFFECTIVE DATE- The amendments made by this section shall take effect on the date of enactment of this Act.

SEC. 5. LIABILITY OF MEDICARE CARRIERS AND FISCAL INTERMEDIARIES FOR CLAIMS SUBMITTED BY EXCLUDED PROVIDERS.

(a) REIMBURSEMENT TO THE SECRETARY FOR AMOUNTS PAID TO EXCLUDED PROVIDERS-

(1) REQUIREMENTS FOR FISCAL INTERMEDIARIES-

(A) IN GENERAL- Section 1816 of the Social Security Act (42 U.S.C. 1395h) is amended by adding at the end the following:

`(m) An agreement with an agency or organization under this section shall require that such agency or organization reimburse the Secretary for any amounts paid by the agency or organization for a service under this title which is furnished by an individual or entity during any period for which the individual or entity is excluded, pursuant to section 1128, 1128A, or 1156, from participation in the health care program under this title if the amounts are paid after the 60-day period beginning on the date the Secretary provides notice of the exclusion to the agency or organization, unless the payment was made as a result of incorrect information provided by the Secretary or the individual or entity excluded from participation has concealed or altered their identity.'.

(B) CONFORMING AMENDMENT- Section 1816(i) of the Social Security Act (42 U.S.C. 1395h(i)) is amended by adding at the end the following:

`(4) Nothing in this subsection shall be construed to prohibit reimbursement by an agency or organization pursuant to subsection (m).'.

(2) REQUIREMENTS FOR CARRIERS- Section 1842(b)(3) of the Social Security Act (42 U.S.C. 1395u(b)(3)) is amended--

(A) by striking `and' at the end of subparagraph (I); and

(B) by inserting after subparagraph (I) the following:

`(J) will reimburse the Secretary for any amounts paid by the carrier for an item or service under this part which is furnished by an individual or entity during any period for which the individual or entity is excluded, pursuant to section 1128, 1128A, or 1156, from participation in the health care program under this title if the amounts are paid after the 60-day period beginning on the date the Secretary provides notice of the exclusion to the carrier, unless the payment was made as a result of incorrect information provided by the Secretary or the individual or entity excluded from participation has concealed or altered their identity; and'.

(b) CONFORMING REPEAL OF MANDATORY PAYMENT RULE- Section 1862(e) of the Social Security Act (42 U.S.C. 1395y(e)) is amended--

(1) in paragraph (1)(B), by striking `and when the person' and all that follows through `person)'; and

(2) by amending paragraph (2) to read as follows:

`(2) No individual or entity may bill (or collect any amount from) any individual for any item or service for which payment is denied under paragraph (1). No individual is liable for payment of any amounts billed for such an item or service in violation of the preceding sentence.'.

(c) EFFECTIVE DATE-

(1) IN GENERAL- The amendments made by this section shall apply to claims for payment submitted on or after the date of enactment of this Act.

(2) CONTRACT MODIFICATION- The Secretary of Health and Human Services shall take such steps as may be necessary to modify contracts and agreements entered into, renewed, or extended prior to the date of enactment of this Act to conform such contracts or agreements to the provisions of this section.

SEC. 6. COMMUNITY MENTAL HEALTH CENTERS.

(a) IN GENERAL- Section 1861(ff)(3)(B) of the Social Security Act (42 U.S.C. 1395x(ff)(3)(B)) is amended by striking `entity that--' and all that follows and inserting the following: `entity that--

`(i) provides the community mental health services specified in paragraph (1) of section 1913(c) of the Public Health Service Act;

`(ii) meets applicable certification or licensing requirements for community mental health centers in the State in which it is located;

`(iii) provides a significant share of its services to individuals who are not eligible for benefits under this title; and

`(iv) meets such additional standards or requirements for obtaining medicare billing privileges as the Secretary may specify to ensure--

`(I) the health and safety of beneficiaries receiving such services; or

`(II) the furnishing of such services in an effective and efficient manner.'.

(b) RESTRICTION- Section 1861(ff)(3)(A) of such Act (42 U.S.C. 1395x(ff)(3)(A)) is amended by inserting `other than in an individual's home or in an inpatient or residential setting' before the period.

(c) EFFECTIVE DATE- The amendments made by this section shall apply to items and services furnished after the sixth month that begins after the date of enactment of this Act.

SEC. 7. LIMITING THE DISCHARGE OF DEBTS IN BANKRUPTCY PROCEEDINGS IN CASES WHERE A HEALTH CARE PROVIDER OR A SUPPLIER ENGAGES IN FRAUDULENT ACTIVITY.

(a) IN GENERAL-

(1) CIVIL MONETARY PENALTIES- Section 1128A(a) of the Social Security Act (42 U.S.C. 1320a-7a(a)) is amended by adding at the end the following: `Notwithstanding any other provision of law, amounts made payable under this section are not dischargeable under section 727, 944, 1141, 1228, or 1328 of title 11, United States Code, or any other provision of such title.'.

(2) RECOVERY OF OVERPAYMENT TO PROVIDERS OF SERVICES UNDER PART A OF MEDICARE- Section 1815(d) of the Social Security Act (42 U.S.C. 1395g(d)) is amended--

(A) by inserting `(1)' after `(d)'; and

(B) by adding at the end the following:

`(2) Notwithstanding any other provision of law, amounts due to the Secretary under this section are not dischargeable under section 727, 944, 1141, 1228, or 1328 of title 11, United States Code, or any other provision of such title if the overpayment was the result of fraudulent activity, as may be defined by the Secretary.'.

(3) RECOVERY OF OVERPAYMENT OF BENEFITS UNDER PART B OF MEDICARE- Section 1833(j) of the Social Security Act (42 U.S.C. 1395l(j)) is amended--

(A) by inserting `(1)' after `(j)'; and

(B) by adding at the end the following:

`(2) Notwithstanding any other provision of law, amounts due to the Secretary under this section are not dischargeable under section 727, 944, 1141, 1228, or 1328 of title 11, United States Code, or any other provision of such title if the overpayment was the result of fraudulent activity, as may be defined by the Secretary.'.

(4) COLLECTION OF PAST-DUE OBLIGATIONS ARISING FROM BREACH OF SCHOLARSHIP AND LOAN CONTRACT- Section 1892(a) of the Social Security Act (42 U.S.C. 1395ccc(a)) is amended by adding at the end the following:

`(5) Notwithstanding any other provision of law, amounts due to the Secretary under this section are not dischargeable under section 727, 944, 1141, 1228, or 1328 of title 11, United States Code, or any other provision of such title.'.

(b) EFFECTIVE DATE- The amendments made by subsection (a) shall apply to bankruptcy petitions filed after the date of enactment of this Act.

SEC. 8. ILLEGAL DISTRIBUTION OF A MEDICARE OR MEDICAID BENEFICIARY IDENTIFICATION OR PROVIDER NUMBER.

Section 1128B(b) of the Social Security Act (42 U.S.C. 1320a-7b(b)), as amended by section 4(b), is amended by adding at the end the following:

`(5) Whoever knowingly, intentionally, and with the intent to defraud purchases, sells or distributes, or arranges for the purchase, sale, or distribution of 2 or more medicare or medicaid beneficiary identification numbers or provider numbers shall be imprisoned for not more than 3 years or fined under title 18, United States Code (or, if greater, an amount equal to the monetary loss to the Federal and any State government as a result of such acts), or both.'.

SEC. 9. TREATMENT OF CERTAIN SOCIAL SECURITY ACT CRIMES AS FEDERAL HEALTH CARE OFFENSES.

(a) IN GENERAL- Section 24(a) of title 18, United States Code, is amended--

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

(2) by adding at the end the following:

`(3) section 1128B of the Social Security Act (42 U.S.C. 1320a-7b).'.

(b) EFFECTIVE DATE- The amendment made by subsection (a) shall take effect on the date of enactment of this Act and apply to acts committed on or after the date of enactment of this Act.

SEC. 10. AUTHORITY OF OFFICE OF INSPECTOR GENERAL OF THE DEPARTMENT OF HEALTH AND HUMAN SERVICES.

(a) AUTHORITY- Notwithstanding any other provision of law, upon designation by the Inspector General of the Department of Health and Human Services, any criminal investigator of the Office of Inspector General of such department may, in accordance with guidelines issued by the Secretary of Health and Human Services and approved by the Attorney General, while engaged in activities within the lawful jurisdiction of such Inspector General--

(1) obtain and execute any warrant or other process issued under the authority of the United States;

(2) make an arrest without a warrant for--

(A) any offense against the United States committed in the presence of such investigator; or

(B) any felony offense against the United States, if such investigator has reasonable cause to believe that the person to be arrested has committed or is committing that felony offense; and

(3) exercise any other authority necessary to carry out the authority described in paragraphs (1) and (2).

(b) FUNDS- The Office of Inspector General of the Department of Health and Human Services may receive and expend funds that represent the equitable share from the forfeiture of property in investigations in which the Office of Inspector General participated, and that are transferred to the Office of Inspector General by the Department of Justice, the Department of the Treasury, or the United States Postal Service. Such equitable sharing funds shall be deposited in a separate account and shall remain available until expended.

SEC. 11. UNIVERSAL PRODUCT NUMBERS ON CLAIMS FORMS FOR REIMBURSEMENT UNDER THE MEDICARE PROGRAM.

(a) UPNS ON CLAIMS FORMS FOR REIMBURSEMENT UNDER THE MEDICARE PROGRAM-

(1) ACCOMMODATION OF UPNS ON MEDICARE CLAIMS FORMS- Not later than February 1, 2005, all claims forms developed or used by the Secretary of Health and Human Services for reimbursement under the medicare program under title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) shall accommodate the use of universal product numbers for a UPN covered item.

(2) REQUIREMENT FOR PAYMENT OF CLAIMS- Title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) is amended by adding at the end the following:

`USE OF UNIVERSAL PRODUCT NUMBERS

`SEC. 1899A. (a) IN GENERAL- No payment shall be made under this title for any claim for reimbursement for any UPN covered item unless the claim contains the universal product number of the UPN covered item.

`(b) DEFINITIONS- In this section:

`(1) UPN COVERED ITEM-

`(A) IN GENERAL- Except as provided in subparagraph (B), the term `UPN covered item' means--

`(i) a covered item as that term is defined in section 1834(a)(13);

`(ii) an item described in paragraph (8) or (9) of section 1861(s);

`(iii) an item described in paragraph (5) of section 1861(s); and

`(iv) any other item for which payment is made under this title that the Secretary determines to be appropriate.

`(B) EXCLUSION- The term `UPN covered item' does not include a customized item for which payment is made under this title.

`(2) UNIVERSAL PRODUCT NUMBER- The term `universal product number' means a number that is--

`(A) affixed by the manufacturer to each individual UPN covered item that uniquely identifies the item at each packaging level; and

`(B) based on commercially acceptable identification standards such as, but not limited to, standards established by the Uniform Code Council-International Article Numbering System or the Health Industry Business Communication Council.'.

(3) DEVELOPMENT AND IMPLEMENTATION OF PROCEDURES-

(A) INFORMATION INCLUDED IN UPN- The Secretary of Health and Human Services, in consultation with manufacturers and entities with appropriate expertise, shall determine the relevant descriptive information appropriate for inclusion in a universal product number for a UPN covered item.

(B) REVIEW OF PROCEDURE- From the information obtained by the use of universal product numbers on claims for reimbursement under the medicare program, the Secretary of Health and Human Services, in consultation with interested parties, shall periodically review the UPN covered items billed under the Health Care Financing Administration Common Procedure Coding System and adjust such coding system to ensure that functionally equivalent UPN covered items are billed and reimbursed under the same codes.

(4) EFFECTIVE DATE- The amendment made by paragraph (2) shall apply to claims for reimbursement submitted on and after February 1, 2005.

(b) STUDY AND REPORTS TO CONGRESS-

(1) STUDY- The Secretary of Health and Human Services shall conduct a study on the results of the implementation of the provisions in paragraph (1) and (3) of subsection (a) and the amendment to the Social Security Act in paragraph (2) of that subsection.

(2) REPORTS-

(A) PROGRESS REPORT- Not later than 6 months after the date of enactment of this Act, the Secretary of Health and Human Services shall submit a report to Congress that contains a detailed description of the progress of the matters studied pursuant to paragraph (1).

(B) IMPLEMENTATION- Not later than 18 months after the date of enactment of this Act, and annually thereafter for 3 years, the Secretary of Health and Human Services shall submit a report to Congress that contains a detailed description of the results of the study conducted pursuant to paragraph (1), together with the Secretary's recommendations regarding the use of universal product numbers and the use of data obtained from the use of such numbers.

(c) DEFINITIONS- In this section:

(1) UPN COVERED ITEM- The term `UPN covered item' has the meaning given such term in section 1899A(b)(1) of the Social Security Act (as added by subsection (a)(2)).

(2) UNIVERSAL PRODUCT NUMBER- The term `universal product number' has the meaning given such term in section 1899A(b)(2) of the Social Security Act (as added by subsection (a)(2)).

(d) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated such sums as may be necessary for the purpose of carrying out the provisions in paragraphs (1) and (3) of subsection (a), subsection (b), and section 1899A of the Social Security Act (as added by subsection (a)(2)).

END