1.This Act may be cited as
the Medicaid Fraud Reduction Act of
2008
.
2.Asset verification
through access to information held by financial institutions
(a)Title XIX of the Social Security Act is amended by
inserting after section 1939 the following new section:
1940.Asset verification through access to information held by
financial institutions(a)
(1)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.
(2)In order to meet the requirement of paragraph (1), each
State shall—
(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; and
(B)provide for
implementation of such program for eligibility determinations and
redeterminations made on or after July 1, 2009.
(b)Asset
verification program
(1)For purposes of this section, an asset verification
program means a program described in paragraph (2) under which a State—
(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; and
(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.
(2)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).
(c)Duration of
authorizationNotwithstanding 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—
(1)the rendering of a final adverse decision
on the applicant’s application for medical assistance under the State’s plan
under this title;
(2)the cessation of
the recipient’s eligibility for such medical assistance; or
(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.
(d)Treatment of
right to financial privacy act requirements
(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.
(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).
(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.
(e)The State shall inform any person who provides
authorization pursuant to subsection (b)(1)(A) of the duration and scope of the
authorization.
(f)Refusal or
revocation of authorizationIf 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.
(g)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.
(h)The Secretary shall provide States with technical
assistance to aid in implementation of an asset verification program under this
section.
(i)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.
(j)
(1)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.
(2)Recovery of
payments for programs not implemented by July 1, 2009In 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.
(k)Treatment of
program expensesNotwithstanding 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.
.
(b)Section 1902(a) of such Act (42 U.S.C. 1396a(a)) is
amended—
(1)in
paragraph (69) by striking and
at the end;
(2)in paragraph (70)
by striking the period at the end and inserting ; and
;
and
(3)by inserting after
paragraph (70), as so amended, the following new paragraph:
(71)provide that the
State will implement an asset verification program under section
1940.
.
(c)Withholding of
federal matching payments for noncompliant statesSection 1903(i)
of such Act (42 U.S.C. 1396b(i)) is amended—
(1)in paragraph (22)
by striking or
at the end;
(2)in paragraph (23)
by striking the period at the end and inserting ; or
; and
(3)by adding after
paragraph (23) the following new paragraph:
(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—
(A)the State demonstrates to the Secretary’s
satisfaction that the State made a good faith effort to comply;
(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; and
(C)not later than 12
months after the date of such submission (and approval), the State fulfills the
terms of such corrective action
plan.
.
(d)Section
4 of Public Law 110–90 is repealed.
3.Funds for States
to reduce Medicaid fraudSection 1903 of the Social Security Act (42
U.S.C. 1396b) is amended by adding at the end the following new
subsection:
(aa)
(1)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.
(2)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.
(3)The
Secretary shall provide for a payment to a State under paragraph (1) if such
State—
(A)demonstrates to
the satisfaction of the Secretary a need for assistance to reduce fraud under
the State Medicaid program;
(B)provides an
effective proposal to reduce such fraud; and
(C)satisfies any
other criteria specified by the Secretary.
(4)Form and manner
of paymentPayment 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.
(5)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.
(6)Availability of
payments to States
(A)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).
(B)Recovery and
reuse of misspent fundsAmounts 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.
(7)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.
.
4.Funds to reduce
Medicaid fraud and abuse
(a)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.
(b)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.
5.Electronic
verification of property transfers
(a)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—
(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)); and
(2)estimates the
potential savings to the Medicaid program under such title from requiring
States to implement such a system.
(b)Authorized
implementationIf 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.
6.Disallowance of
expenses associated with certain consultants
(a)Withholding of
federal matching payments for noncompliant statesSection 1903(i)
of the Social Security Act (42 U.S.C. 1396b(i)), as amended by section 2(c) of
this Act, is amended—
(1)in paragraph (23)
by striking or
at the end;
(2)in paragraph (24)
by striking the period at the end and inserting ; or
; and
(3)by
adding after paragraph (24) the following new paragraph:
(25)with respect to
amounts expended by such State—
(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; and
(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).
.
(b)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.
7.State
Internet-based Transparency Programs under MedicaidTitle XIX of the Social Security Act, as
amended by section 2(a) is further amended by inserting after section 1940 the
following new section:
1941.State
Internet-based Transparency Programs
(a)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.
(b)Eligible State
plan amendmentA State plan amendment described in this
subsection is a State plan amendment that provides for the following:
(1)A program under which the State discloses through a
publicly accessible Internet site the following information:
(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.
(B)The total amount
of payments made under this title to each entity described in subparagraph
(A).
(C)The amount of
dollars paid per patient to each such entity.
(2)The implementation of such a program described in paragraph
(1) by January 1, 2010.
(c)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.
(d)Bonus payment
for timely submission of State plan amendments
(1)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.
(2)Recovery of
payments for programs not implemented by January 1, 2010In 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.
(e)Incentives for
ImplementationIf 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—
(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;
(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; and
(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.
(f)The Secretary
shall provide States with technical assistance to aid in implementation of an
Internet-based transparency program.
(g)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.
(h)Treatment of
commonwealths and territoriesA 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.
(i)Internet-based
transparency program definedFor purposes of this section, the
term Internet-based transparency program means the program
described in subsection
(b)(1).
.
8.Permitting
limitations, restrictions, and suspensions of Medicaid eligibility in cases of
fraud
(a)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.
.
(b)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.
9.Extended period
to recover Medicaid overpayments in cases of fraud and abuse
(a)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.
.
(b)The amendments made by
subsection (a) shall apply to overpayments discovered on or after the date of
the enactment of this Act.