Short title; table of contents

(a)

Short Title

This Act may be cited as the Medicare Fraud Prevention and Enforcement Act of 2006. (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.

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:

1898.

Site inspections for DME suppliers, community mental health centers, and other provider groups

(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:

1899.

Background checks

(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— (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 one year after the date of the 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 for a provider number received by the Secretary of Health and Human Services on or after the first day of the first year beginning after the date of the enactment of this Act. (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 1898 and 1899 of that Act (as added by subsections (a) and (b)).

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:

1899A.

Registration of billing agencies and individuals

(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 1899A(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

Effective date

The amendments made by subsections (a) and (b) shall take effect on the first day of the first year beginning after the date of the enactment of this Act.

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 one 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 three 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 the enactment of this Act.

Liability of Medicare administrative contractors for claims submitted by excluded providers

(a)

Reimbursement to the Secretary for amounts paid to excluded providers

Section 1874A(b) of the Social Security Act (42 U.S.C. 1395kk(b)) is amended by adding at the end the following new paragraph:

(6)

Reimbursements to Secretary for amounts paid to excluded providers

The Secretary shall not enter into a contract with a medicare administrative contractor under this section unless the contractor agrees to reimburse the Secretary for any amounts paid by the contractor 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 contractor, 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 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 entered into, renewed, or extended prior to the date of enactment of this Act to conform such contracts to the provisions of this section.

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 on or after the first day of the the sixth month that begins after the date of the enactment of this Act.

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:

(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 the enactment of this Act.

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 two or more medicare or medicaid beneficiary identification numbers or provider numbers shall be imprisoned for not more than three 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.

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 the enactment of this Act and apply to acts committed on or after the date of the enactment of this Act.

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.

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, 2008, 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:

1899B.

Use of universal product numbers

(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, 2008. (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 six months after the date of the enactment of this Act, the Secretary of Health and Human Services shall submit to Congress a report 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 the enactment of this Act, and annually thereafter for three years, the Secretary of Health and Human Services shall submit to Congress a report 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 1899B(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 1899B(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 1899B of the Social Security Act (as added by subsection (a)(2)).