HR 5757 IHCommentsClose CommentsPermalink

To amend title XIX of the Social Security Act to require asset verification through access to information held by financial institutions, to reduce fraud and abuse in State Medicaid programs, and for other purposes.CommentsClose CommentsPermalink

April 10, 2008

Mr. DEAL of Georgia (for himself, Mr. BURGESS, Mrs. BLACKBURN, Mr. SHADEGG, Mr. SULLIVAN, Mr. TERRY, Mr. HALL of Texas, Mr. WESTMORELAND, Mr. UPTON, and Mr. GINGREY) introduced the following bill; which was referred to the Committee on Energy and CommerceCommentsClose CommentsPermalink

To amend title XIX of the Social Security Act to require asset verification through access to information held by financial institutions, to reduce fraud and abuse in State Medicaid programs, and for other purposes.CommentsClose CommentsPermalink

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

SECTION 1. SHORT TITLE.

This Act may be cited as the `Medicaid Fraud Reduction Act of 2008'.CommentsClose CommentsPermalink

SEC. 2. ASSET VERIFICATION THROUGH ACCESS TO INFORMATION HELD BY FINANCIAL INSTITUTIONS.

(a) Addition of Authority- Title XIX of the Social Security Act is amended by inserting after section 1939 the following new section:CommentsClose CommentsPermalink

`ASSET VERIFICATION THROUGH ACCESS TO INFORMATION HELD BY FINANCIAL INSTITUTIONS

`Sec. 1940. (a) Implementation-CommentsClose CommentsPermalink





`(1) IN GENERAL- Subject to the provisions of this section, each State shall implement an asset verification program described in subsection (b), for purposes of determining or redetermining the eligibility of an individual for medical assistance under the State plan under this title.CommentsClose CommentsPermalink





`(2) PLAN SUBMITTAL- In order to meet the requirement of paragraph (1), each State shall--CommentsClose CommentsPermalink





`(A) submit not later than January 1, 2009, a State plan amendment under this title that describes how the State intends to implement the asset verification program; andCommentsClose CommentsPermalink





`(B) provide for implementation of such program for eligibility determinations and redeterminations made on or after July 1, 2009.CommentsClose CommentsPermalink





`(b) Asset Verification Program-CommentsClose CommentsPermalink





`(1) IN GENERAL- For purposes of this section, an asset verification program means a program described in paragraph (2) under which a State--CommentsClose CommentsPermalink





`(A) requires each applicant for, or recipient of, medical assistance under the State plan under this title to provide authorization by such applicant or recipient (and any other person whose income or resources are material to the determination of the eligibility of the applicant or recipient for such assistance) for the State to obtain (subject to the cost reimbursement requirements of section 1115(a) of the Right to Financial Privacy Act) from any financial institution (within the meaning of section 1101(1) of such Act) any financial record (within the meaning of section 1101(2) of such Act) held by the institution with respect to the applicant or recipient (and such other person, as applicable), to permit the State to obtain such record whenever the State determines the record is needed in connection with a determination with respect to such eligibility for (or the amount or extent of) such medical assistance; andCommentsClose CommentsPermalink





`(B) uses the authorization provided under subparagraph (A) to verify the financial resources of such applicant or recipient (and such other person, as applicable), in order to determine or redetermine the eligibility of such applicant or recipient for medical assistance under the State plan.CommentsClose CommentsPermalink





`(2) PROGRAM DESCRIBED- A program described in this paragraph is a program for verifying individual assets in a manner consistent with the approach used by the Commissioner of Social Security under section 1631(e)(1)(B)(ii).CommentsClose CommentsPermalink





`(c) Duration of Authorization- Notwithstanding section 1104(a)(1) of the Right to Financial Privacy Act, an authorization provided to a State under subsection (b)(1) shall remain effective until the earliest of--CommentsClose CommentsPermalink





`(1) the rendering of a final adverse decision on the applicant's application for medical assistance under the State's plan under this title;CommentsClose CommentsPermalink





`(2) the cessation of the recipient's eligibility for such medical assistance; orCommentsClose CommentsPermalink





`(3) the express revocation by the applicant or recipient (or such other person described in subsection (b)(1), as applicable) of the authorization, in a written notification to the State.CommentsClose CommentsPermalink





`(d) Treatment of Right to Financial Privacy Act Requirements-CommentsClose CommentsPermalink





`(1) An authorization obtained by the State under subsection (b)(1) shall be considered to meet the requirements of the Right to Financial Privacy Act for purposes of section 1103(a) of such Act, and need not be furnished to the financial institution, notwithstanding section 1104(a) of such Act.CommentsClose CommentsPermalink





`(2) The certification requirements of section 1103(b) of the Right to Financial Privacy Act shall not apply to requests by the State pursuant to an authorization provided under subsection (b)(1).CommentsClose CommentsPermalink





`(3) A request by the State pursuant to an authorization provided under subsection (b)(1) is deemed to meet the requirements of section 1104(a)(3) of the Right to Financial Privacy Act and of section 1102 of such Act, relating to a reasonable description of financial records.CommentsClose CommentsPermalink





`(e) Required Disclosure- The State shall inform any person who provides authorization pursuant to subsection (b)(1)(A) of the duration and scope of the authorization.CommentsClose CommentsPermalink





`(f) Refusal or Revocation of Authorization- If an applicant for, or recipient of, medical assistance under the State plan under this title (or such other person described in subsection (b)(1), as applicable) refuses to provide, or revokes, any authorization made by the applicant or recipient (or such other person, as applicable) for the State to obtain from any financial institution any financial record, the State shall, on that basis, determine that the applicant or recipient is ineligible for medical assistance.CommentsClose CommentsPermalink





`(g) Use of Contractor- For purposes of implementing an asset verification program under this section, a State may select and enter into a contract with a public or private entity meeting such criteria and qualifications as the State determines appropriate.CommentsClose CommentsPermalink





`(h) Technical Assistance- The Secretary shall provide States with technical assistance to aid in implementation of an asset verification program under this section.CommentsClose CommentsPermalink





`(i) Reports- A State implementing an asset verification program under this section shall furnish to the Secretary such reports concerning the program, at such times, in such format, and containing such information as the Secretary determines appropriate.CommentsClose CommentsPermalink





`(j) Payment Adjustment-CommentsClose CommentsPermalink





`(1) IN GENERAL- In the case of a State that submits the State plan amendment required under subsection (a)(2)(A) by January 1, 2009, in addition to any other amounts payable to the State under this title (and notwithstanding the limitations of subsections (f) and (g) of section 1108), there shall be paid to the State under section 1903(a) for the calendar quarter beginning on such date, the amount of $1,000,000.CommentsClose CommentsPermalink





`(2) RECOVERY OF PAYMENTS FOR PROGRAMS NOT IMPLEMENTED BY JULY 1, 2009- In the case of a State that received an additional payment under paragraph (1) and fails to implement the asset verification program by July 1, 2009, the amount paid to the State under such paragraph shall be subject to disallowance and recovery.CommentsClose CommentsPermalink





`(k) Treatment of Program Expenses- Notwithstanding any other provision of law, reasonable expenses of States in carrying out the program under this section shall be treated, for purposes of section 1903(a), in the same manner as State expenditures specified in paragraph (7) of such section.'.CommentsClose CommentsPermalink





(b) State Plan Requirements- Section 1902(a) of such Act (42 U.S.C. 1396a(a)) is amended--CommentsClose CommentsPermalink





(1) in paragraph (69) by striking `and' at the end;CommentsClose CommentsPermalink





(2) in paragraph (70) by striking the period at the end and inserting `; and'; andCommentsClose CommentsPermalink





(3) by inserting after paragraph (70), as so amended, the following new paragraph:CommentsClose CommentsPermalink





`(71) provide that the State will implement an asset verification program under section 1940.'.CommentsClose CommentsPermalink





(c) Withholding of Federal Matching Payments for Noncompliant States- Section 1903(i) of such Act (42 U.S.C. 1396b(i)) is amended--CommentsClose CommentsPermalink





(1) in paragraph (22) by striking `or' at the end;CommentsClose CommentsPermalink





(2) in paragraph (23) by striking the period at the end and inserting `; or'; andCommentsClose CommentsPermalink





(3) by adding after paragraph (23) the following new paragraph:CommentsClose CommentsPermalink





`(24) if a State fails to implement an asset verification program in accordance with the requirements of section 1940, with respect to amounts expended by such State for medical assistance for individuals subject to asset verification under such section, unless--CommentsClose CommentsPermalink





`(A) the State demonstrates to the Secretary's satisfaction that the State made a good faith effort to comply;CommentsClose CommentsPermalink





`(B) not later than 60 days after the date of a finding of that the State is in noncompliance, the State submits to the Secretary (and the Secretary approves) a corrective action plan to remedy such noncompliance; andCommentsClose CommentsPermalink





`(C) not later than 12 months after the date of such submission (and approval), the State fulfills the terms of such corrective action plan.'.CommentsClose CommentsPermalink





(d) Repeal- Section 4 of Public Law 110-90 is repealed.CommentsClose CommentsPermalink

SEC. 3. FUNDS FOR STATES TO REDUCE MEDICAID FRAUD.

Section 1903 of the Social Security Act (42 U.S.C. 1396b) is amended by adding at the end the following new subsection:CommentsClose CommentsPermalink





`(aa) Payments To Reduce Fraud-CommentsClose CommentsPermalink





`(1) PAYMENTS- In addition to the payments otherwise provided under subsection (a), subject to paragraph (2), the Secretary shall provide for payments to eligible States under such subsection to establish and carry out practices to reduce fraud under the State Medicaid program under this title.CommentsClose CommentsPermalink





`(2) LIMITATION- The total amount of payments under this subsection shall not exceed $250,000,000, and shall be available to the Secretary for payments under this subsection during fiscal years 2009 and 2010 and during subsequent fiscal years in the case described in paragraph (6)(B). This subsection constitutes budget authority in advance of appropriations Acts and represents the obligation of the Secretary to provide for the payment of amounts provided under this subsection.CommentsClose CommentsPermalink





`(3) ELIGIBILITY- The Secretary shall provide for a payment to a State under paragraph (1) if such State--CommentsClose CommentsPermalink





`(A) demonstrates to the satisfaction of the Secretary a need for assistance to reduce fraud under the State Medicaid program;CommentsClose CommentsPermalink





`(B) provides an effective proposal to reduce such fraud; andCommentsClose CommentsPermalink





`(C) satisfies any other criteria specified by the Secretary.CommentsClose CommentsPermalink





`(4) FORM AND MANNER OF PAYMENT- Payment to a State under this subsection shall be made only upon the submission to the Secretary of such application in such form and in such manner as the Secretary shall specify. Payment to a State under this subsection shall be made in the same manner as other payments under subsection (a). There is no requirement for State matching funds to receive payments under this subsection.CommentsClose CommentsPermalink





`(5) NOTIFICATION- The Secretary shall provide for States to be notified of the opportunity to receive payments under this subsection as soon as feasible after the date of the enactment of this subsection, but not later than April 1, 2009.CommentsClose CommentsPermalink





`(6) AVAILABILITY OF PAYMENTS TO STATES-CommentsClose CommentsPermalink





`(A) IN GENERAL- Payment to a State under this subsection shall be available to the State during the period provided in the approved proposal of the State provided under paragraph (3).CommentsClose CommentsPermalink





`(B) RECOVERY AND REUSE OF MISSPENT FUNDS- Amounts paid to a State under this subsection that are expended in a manner inconsistent with the approved proposal of the State under paragraph (3) are subject to disallowance and recovery. Insofar as such amounts are so disallowed and recovered such amounts shall be made available to other States under this subsection.CommentsClose CommentsPermalink





`(7) REPORTS- Each State receiving payment under this subsection shall submit to the Secretary a reports on the impact of the practices carried out with such payment on the reduction of fraud under the State Medicaid program, as specified by the Secretary.'.CommentsClose CommentsPermalink

SEC. 4. FUNDS TO REDUCE MEDICAID FRAUD AND ABUSE.

(a) In General- For purposes of reducing fraud and abuse in the Medicaid program under title XIX of the Social Security Act, there is appropriated to the Secretary of Health and Human Services, out of any money in the Treasury not otherwise appropriated, $25,000,000, for fiscal year 2009 and each subsequent fiscal year, to be equally divided between the Office of the Inspector General of the Department of Health and Human Services and the Center for Medicaid and State Operations of the Centers for Medicare & Medicaid Services. Amounts appropriated under this section shall remain available for expenditure until expended and shall be in addition to any other amounts appropriated or made available to the Office of Inspector General or the Center for Medicaid and State Operations for activities of such Office or Center, respectively, with respect to the Medicaid program.CommentsClose CommentsPermalink





(b) Annual Report- Not later than September 30 of 2009 and of each subsequent year, the Secretary of Health and Human Services shall submit to the Committee on Energy and Commerce of the House of Representatives and the Committee on Finance of the Senate a report on the activities (and the results of such activities) funded under subsection (a) to reduce fraud and abuse in the Medicaid program under title XIX of the Social Security Act during the previous 12 month period, including the amount of funds appropriated under such subsection (a) for each such activity and an estimate of the savings to the Medicaid program resulting from each such activity.CommentsClose CommentsPermalink

SEC. 5. ELECTRONIC VERIFICATION OF PROPERTY TRANSFERS.

(a) Report- Not later than July 1, 2009, the Secretary of Health and Human Services shall submit to the Committee on Energy and Commerce of the House of Representatives and the Committee on Finance of the Senate a report that--CommentsClose CommentsPermalink





(1) examines the feasibility of implementing a system under which transfers of assets, particularly real property, of applicants and recipients of medical assistance under State plans under title XIX of the Social Security Act are verified electronically for purposes of carrying out section 1917(c) of such Act (42 U.S.C. 1396p(c)); andCommentsClose CommentsPermalink





(2) estimates the potential savings to the Medicaid program under such title from requiring States to implement such a system.CommentsClose CommentsPermalink





(b) Authorized Implementation- If the Secretary of Health and Human Services determines, based on the report under subsection (a), that it would be feasible and cost-effective to implement a system described in paragraph (1) of such subsection, the Secretary is authorized to require States in their State plans under title XIX of the Social Security Act to implement such a system. For purposes of meeting such requirement, a State may select and enter into a contract with a public or private entity.CommentsClose CommentsPermalink

SEC. 6. DISALLOWANCE OF EXPENSES ASSOCIATED WITH CERTAIN CONSULTANTS.

(a) Withholding of Federal Matching Payments for Noncompliant States- Section 1903(i) of the Social Security Act (42 U.S.C. 1396b(i)), as amended by section 2(c) of this Act, is amended--CommentsClose CommentsPermalink





(1) in paragraph (23) by striking `or' at the end;CommentsClose CommentsPermalink





(2) in paragraph (24) by striking the period at the end and inserting `; or'; andCommentsClose CommentsPermalink





(3) by adding after paragraph (24) the following new paragraph:CommentsClose CommentsPermalink





`(25) with respect to amounts expended by such State--CommentsClose CommentsPermalink





`(A) other than for compensation of a State employee or payment to an entity that is part of a State government, for the purpose of increasing the amount of payments made to the State under this title; andCommentsClose CommentsPermalink





`(B) for some or all (as determined by the Secretary) of any additional amounts of Federal payments to the State that the Secretary determines are attributable to expenditures described in subparagraph (A).'.CommentsClose CommentsPermalink





(b) Effective Date- The amendments made by subsection (a) shall apply with respect to expenditures described in subparagraph (A) of section 1903(i)(25) of the Social Security Act, as added by subsection (a), made on or after October 1, 2008, regardless of whether such expenditures were pursuant to contracts or arrangements entered into before, on, or after such date.CommentsClose CommentsPermalink

SEC. 7. STATE INTERNET-BASED TRANSPARENCY PROGRAMS UNDER MEDICAID.

Title XIX of the Social Security Act, as amended by section 2(a) is further amended by inserting after section 1940 the following new section:CommentsClose CommentsPermalink

`SEC. 1941. STATE INTERNET-BASED TRANSPARENCY PROGRAMS.

`(a) In General- Not later than July 1, 2009, subject to subsection (h), each of the 50 States and the District of Columbia shall submit a State plan amendment described in subsection (b) to create an Internet-based transparency program for purposes of improving public disclosure of information relating to payments made under the State plan under this title.CommentsClose CommentsPermalink





`(b) Eligible State Plan Amendment- A State plan amendment described in this subsection is a State plan amendment that provides for the following:CommentsClose CommentsPermalink





`(1) PROGRAM DESCRIBED- A program under which the State discloses through a publicly accessible Internet site the following information:CommentsClose CommentsPermalink





`(A) The name of each hospital, nursing facility, outpatient surgery center, intermediate care facility for the mentally retarded, institution for mental diseases, that receives payment under this title for the provision of health care items and services, and, at the option of the State, such other health care provider (such as a physician) that receives payment under this title for the provision of health care items and services.CommentsClose CommentsPermalink





`(B) The total amount of payments made under this title to each entity described in subparagraph (A).CommentsClose CommentsPermalink





`(C) The amount of dollars paid per patient to each such entity.CommentsClose CommentsPermalink





`(2) IMPLEMENTATION DATE- The implementation of such a program described in paragraph (1) by January 1, 2010.CommentsClose CommentsPermalink





`(c) Use of Contractor- For purposes of implementing an Internet-based transparency program, a State or the District of Columbia may select and enter into a contract with a public or private entity meeting such criteria and qualifications as the State determines appropriate.CommentsClose CommentsPermalink





`(d) Bonus Payment for Timely Submission of State Plan Amendments-CommentsClose CommentsPermalink





`(1) IN GENERAL- In the case of a State that submits the State plan amendment under subsection (a) by July 1, 2009, in addition to any other amounts payable to the State under this title there shall be paid to the State under section 1903(a) for the calendar quarter beginning on such date the amount of $1,000,000.CommentsClose CommentsPermalink





`(2) RECOVERY OF PAYMENTS FOR PROGRAMS NOT IMPLEMENTED BY JANUARY 1, 2010- In the case of a State that received an additional payment under paragraph (1) and that fails to implement an Internet-based transparency program by January 1, 2010, the amount paid to the State under such paragraph shall be subject to disallowance and recovery.CommentsClose CommentsPermalink





`(e) Incentives for Implementation- If the Secretary determines that one of the 50 State or the District of Columbia has not implemented an Internet-based transparency program for any day after January 1, 2010, the Secretary shall reduce the amount paid to the State or the District of Columbia, respectively, under section 1903(a) by $25,000 for each such day. Such reduction shall be made unless--CommentsClose CommentsPermalink





`(1) the State or the District of Columbia, respectively, demonstrates to the Secretary's satisfaction that the State made a good faith effort to have such a program implemented;CommentsClose CommentsPermalink





`(2) not later than 60 days after the date of a finding that the State or the District of Columbia, respectively, has not implemented such a program, the State or the District of Columbia, respectively, submits to the Secretary (and the Secretary approves) a corrective action plan to implement such a program; andCommentsClose CommentsPermalink





`(3) not later than 12 months after the date of such submission (and approval), the State or the District of Columbia, respectively, fulfills the terms of such corrective action plan.CommentsClose CommentsPermalink





`(f) Technical Assistance- The Secretary shall provide States with technical assistance to aid in implementation of an Internet-based transparency program.CommentsClose CommentsPermalink





`(g) Reports- A State implementing an Internet-based transparency program under this section shall furnish to the Secretary such reports concerning the program, at such times, in such format, and containing such information as the Secretary determines appropriate.CommentsClose CommentsPermalink





`(h) Treatment of Commonwealths and Territories- A commonwealth or territory may, but is not required to, submit a State plan amendment described in subsection (b) to create an Internet-based transparency program under this section. Payment under subsection (e) shall not be counted against payment limitations imposed under subsection (f) and (g) of section 1108.CommentsClose CommentsPermalink





`(i) Internet-Based Transparency Program Defined- For purposes of this section, the term `Internet-based transparency program' means the program described in subsection (b)(1).'.CommentsClose CommentsPermalink

SEC. 8. PERMITTING LIMITATIONS, RESTRICTIONS, AND SUSPENSIONS OF MEDICAID ELIGIBILITY IN CASES OF FRAUD.

(a) In General- Section 1128B(a) of the Social Security Act (42 U.S.C. 1320a-7b(a)) is amended by adding at the end the following sentence: `In addition, in any case where an individual who is otherwise eligible for medical assistance under a State Medicaid program under title XIX is convicted of an offense of fraud or abuse, relating to such program, under State law or is the subject of a Federal or State civil court judgment or administrative agency decision based on fraud or abuse relating to such program, the Director of the State Medicaid program may at the option of the Director (notwithstanding any other provision of such program) limit, restrict, or suspend the eligibility of that individual, with respect to such program, for such period (not exceeding 10 years) as the Director deems appropriate and the Administrator of the Centers of Medicare & Medicaid Services may at the option of the Administrator (notwithstanding any other provision of such program) deny payment under section 1903(a) for any amounts expended as medical assistance with respect to such individual for such period (not exceeding 10 years) as the Administrator deems appropriate; but the imposition of a limitation, restriction, suspension, or denial with respect to the eligibility of any individual under this sentence shall not affect the eligibility of any other person for assistance under the program, regardless of the relationship between that individual and such other person.'.CommentsClose CommentsPermalink





(b) Effective Date- The amendment made by subsection (a) shall apply to convictions, judgments, and decisions occurring on or after the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 9. EXTENDED PERIOD TO RECOVER MEDICAID OVERPAYMENTS IN CASES OF FRAUD AND ABUSE.

(a) In General- Section 1903(d)(2)(C) of the Social Security Act (42 U.S.C. 1396b(d)(2)(C)) is amended by adding at the end the following new sentence: `Notwithstanding the previous provisions of this subparagraph, the Secretary may extend the period of recovery and payment adjustment from 60 days to a period of 1 year in the case of an overpayment that was the result of fraud or abuse.'.CommentsClose CommentsPermalink





(b) Effective Date- The amendments made by subsection (a) shall apply to overpayments discovered on or after the date of the enactment of this Act.CommentsClose CommentsPermalink