Directs the Secretary of HHS to establish procedures and rules to restrict access to the National Provider Identifier Registry in order to deter fraudulent use of it.

Amends SSA title XIX (Medicaid), for any state that has established a State Prescription Drug Monitoring Program meeting certain requirements, to decrease by 10% the federal medical assistance percentage (FMAP) with respect to any amounts recovered by or paid to the state related to an overpayment due to fraud, waste, or abuse. Allows the state to use such amounts to support its State Prescription Drug Monitoring Program.

Directs the Secretary of HHS and the Attorney General jointly to establish a Commission to examine interoperability and other issues related to State Prescription Drug Monitoring Programs.

Directs the Attorney General to: (1) update daily the Drug Enforcement Administration (DEA) database of persons registered to manufacture, distribute, or dispense a controlled substance under the Controlled Substances Act to reflect any changes in the information in the Death Master File of the Social Security Administration; (2) agree with the Commissioner of Social Security to obtain death information in order to update such database; (3) establish procedures and rules to restrict access to the database to deter its fraudulent use; and (4) establish procedures and rules to review and investigate pharmacy claims under Medicare part D that contain a registration number not assigned to a practitioner by the Attorney General under the Controlled Substances Act.

Amends SSA title XVIII to require certain annual reports to describe the types and financial costs to the Medicare program of improper payment vulnerabilities identified by Recovery Audit Contractors (RACs).

Requires the Secretary of HHS to develop a plan to revise the beneficiary incentive program under the Health Instance Portability and Accountability Act of 1996 (HIPAA) to encourage greater participation by individuals in reporting fraud and abuse in the Medicare program.

Requires the Secretary of HHS to: (1) establish and implement procedures to eliminate the unnecessary collection, use, and display of Social Security account numbers of Medicare beneficiaries; and (2) ensure that each newly issued Medicare identification card meets specified requirements.

Directs the Secretary of HHS to establish a pilot program utilizing smart card technology to evaluate its applicability to the Medicare program and whether such cards would be effective in preventing Medicare fraud.

Directs the Secretary of HHS to establish policies and procedures for prepayment review, which may include pre-certification, for all claims for reimbursement for durable medical equipment (DME) at high risk of waste, fraud, and abuse, including power wheelchairs.

Requires the Secretary of HHS, the HHS Inspector General, and the Attorney General to increase coordination and data sharing.

Directs the Secretary of HHS to establish: (1) automated prepayment review of all Medicare claims, (2) a plan to facilitate the inclusion of states in the Medicare-Medicaid Data Match Program, and (3) a plan that allows each state Medicaid agency access to relevant data on improper or erroneous Medicare payments for items or services for dual eligible individuals.

Prohibits Medicaid payments as well as payments under SSA title XXI (State Children's Health Insurance Program) (CHIP) unless a claim contains a valid beneficiary identification number and a valid National Provider Identifier.

Directs the Secretary to establish Medicare administrative contractor error reduction incentives.

Requires the provider enrollment process and provider screening to be separate from any contract to serve as a Medicare administrative contractor.

Directs the Secretary of HHS to report to Congress on measurable metrics for improving Medicare contractor performance.

Amends SSA title XI to establish penalties for the illegal distribution of a Medicare, Medicaid, or CHIP beneficiary identification number or billing privileges.