1.This Act may be cited as the
Prevent Health Care Fraud Act of
2009
.
2.Establishment of
Office of Deputy Secretary for Health Care Fraud Prevention in the Department
of Health and Human Services; appointment and powers of Deputy
Secretary
(a)There is hereby established in the Department of Health
and Human Services the Office of the Deputy Secretary for Health Care Fraud
Prevention (referred to in this section as the Office
).
(b)The Office shall—
(1)direct the
appropriate implementation within the Department of Health and Human Services
of health care fraud prevention and detection recommendations made by Federal
Government and private sector antifraud and oversight entities;
(2)routinely consult
with the Office of the Inspector General for the Department of Health and Human
Services, the Attorney General, and private sector health care antifraud
entities to identify emerging health care fraud issues requiring immediate
action by the Office;
(3)through a contract
entered into with an entity that has experience in designing and implementing
antifraud systems in the financial sector, provide for the design, development,
and operation of a predictive model antifraud system (in accordance with
subsection (d)) to analyze health care claims data in real-time to identify
high risk claims activity, develop appropriate rules, processes, and procedures
and investigative research approaches, in coordination with the Office of the
Inspector General for the Department of Health and Human Services, based on the
risk level assigned to claims activity, and develop a comprehensive antifraud
database for health care activities carried out or managed by Federal health
agencies;
(4)promulgate and
enforce regulations relating to the reporting of data claims to the health care
antifraud system developed under paragraph (3) by all Federal health
agencies;
(5)establish
thresholds, in consultation with the Office of the Inspector General of the
Department of Health and Human Services and the Department of Justice—
(A)for the amount and
extent of claims verified and designated as fraudulent, wasteful, or abusive
through the fraud prevention system developed under paragraph (3) for excluding
providers or suppliers from participation in Federal health programs;
and
(B)for the referral
of claims identified through the health care fraud prevention system developed
under paragraph (3) to law enforcement entities (such as the Office of the
Inspector General, Medicaid Fraud Control Units, and the Department of
Justice); and
(6)share antifraud
information and best practices with Federal health agencies, health insurance
issuers, health care providers, antifraud organizations, antifraud databases,
and Federal, State, and local law enforcement and regulatory agencies.
(c)Deputy Secretary
for Health Care Fraud Prevention
(1)There
is established within the Department of Health and Human Services the position
of Deputy Secretary for Health Care Fraud Prevention (referred to in this
section as the Deputy Secretary
). The Deputy Secretary shall
serve as the head of the Office, shall act as the chief health care fraud
prevention and detection officer of the United States, and shall consider and
direct the appropriate implementation of recommendations to prevent and detect
health care fraud, waste, and abuse activities and initiatives within the
Department.
(2)The
Deputy Secretary shall be appointed by the President, by and with the advice
and consent of the Senate, and serve for a term of 5 years, unless removed
prior to the end of such term for cause by the President.
(3)Subject
to oversight by the Secretary, the Deputy Secretary shall exercise all powers
necessary to carry out this section, including the hiring of staff, entering
into contracts, and the delegation of responsibilities to any employee of the
Department of Health and Human Services or the Office appropriately designated
for such responsibility.
(4)
(A)The Deputy Secretary shall—
(i)establish and
manage the operation of the predictive modeling system developed under
subsection (b)(3) to analyze Federal health claims in real-time to identify
high risk claims activity and refer risky claims for appropriate verification
and investigative research;
(ii)consider and
order the appropriate implementation of fraud prevention and detection
activities, such as those recommended by the Office of the Inspector General of
the Department of Health and Human Services, the Government Accountability
Office, MedPac, and private sector health care antifraud entities;
(iii)not later than 6
months after the date on which he or she is initially appointed, submit to
Congress an implementation plan for the health care fraud prevention systems
under subsection (d); and
(iv)submit annual
performance reports to the Secretary and Congress that, at minimum, shall
provide an estimate of the return on investment with respect to the system, for
all recommendations made to the Deputy Secretary under this section, a
description of whether such recommendations are implemented or not implemented,
and contain other relevant performance metrics.
(B)Analysis and
recommendationsThe Deputy Secretary shall provide required
strategies and treatments for claims identified as high risk (including a
system of designations for claims, such as approve
,
decline
, research
, and educate and
pay
) to the Centers for Medicare & Medicaid Services, other Federal
and State entities responsible for verifying whether claims identified as high
risk are payable, should be automatically denied, or require further research
and investigation.
(C)The
Deputy Secretary shall not have any criminal or civil enforcement authority
otherwise delegated to the Office of Inspector General of the Department of
Health and Human Services or the Attorney General.
(5)The
Deputy Secretary shall promulgate and enforce such rules, regulations, orders,
and interpretations as the Deputy Secretary determines to be necessary to carry
out the purposes of this section. Such authority shall be exercised as provided
under section 553 of title 5, United States Code.
(d)Health care
fraud prevention system
(1)The fraud prevention system established under subsection
(b)(3) shall be designed as follows:
(A)The fraud prevention system shall—
(i)be
holistic;
(ii)be able to view
all provider and patient activities across all Federal health program
payers;
(iii)be able to
integrate into the existing health care claims flow with minimal effort, time,
and cost;
(iv)be modeled after
systems used in the Financial Services industry; and
(v)utilize integrated
real-time transaction risk scoring and referral strategy capabilities to
identify claims that are statistically unusual.
(B)The fraud prevention system shall be designed from
an end-to-end modularized perspective to allow for ease of integration into
multiple points along a health care claim flow (pre- or post-adjudication),
which shall—
(i)utilize a single
entity to host, support, manage, and maintain software-based services,
predictive models, and solutions from a central location for the customers who
access the fraud prevention system;
(ii)allow access
through a secure private data connection rather than the installation of
software in multiple information technology infrastructures (and data
facilities);
(iii)provide access
to the best and latest software without the need for upgrades, data security,
and costly installations;
(iv)permit
modifications to the software and system edits in a rapid and timely
manner;
(v)ensure that all
technology and decision components reside within the module; and
(vi)ensure that the
third party host of the modular solution is not a party, payer, or stakeholder
that reports claims data, accesses the results of the fraud prevention systems
analysis, or is otherwise required under this section to verify, research, or
investigate the risk of claims.
(C)Processing,
scoring, and storageThe platform of the fraud prevention system
shall be a high volume, rapid, real-time information technology solution, which
includes data pooling, data storage, and scoring capabilities to quickly and
accurately capture and evaluate data from millions of claims per day. Such
platform shall be secure and have (at a minimum) data centers that comply with
Federal and State privacy laws.
(D)The fraud prevention system shall provide for the
establishment of a centralized data file (referred to as a
consortium
) that accumulates data from all government health
insurance claims data sources. Notwithstanding any other provision of law,
Federal health care payers shall provide to the consortium existing claims
data, such as Medicare's Common Working File
and Medicaid claims
data, for the purpose of fraud and abuse prevention. Such accumulated data
shall be transmitted and stored in an industry standard secure data environment
that complies with applicable Federal privacy laws for use in building medical
waste, fraud, and abuse prevention predictive models that have a comprehensive
view of provider activity across all payers (and markets).
(E)The fraud prevention system shall ensure that claims data
from Federal health programs and all markets flows through a central source so
the waste, fraud, and abuse system can look across all markets and geographies
in health care to identify fraud and abuse in Medicare, Medicaid, the State
Children's Health Program, TRICARE, and the Department of Veterans Affairs
holistically. Such cross-market visibility shall identify unusual provider and
patient behavior patterns and fraud and abuse schemes that may not be
identified by looking independently at one Federal payer's transactions.
(F)The fraud prevention system shall ensure that the
technology used provides real-time ability to identify high-risk behavior
patterns across markets, geographies, and specialty group providers to detect
waste, fraud, and abuse, and to identify providers that exhibit unusual
behavior patterns. Behavior pattern technology that provides the capability to
compare a provider's current behavior to their own past behavior and to compare
a provider's current behavior to that of other providers in the same specialty
group and geographic location shall be used in order to provide a comprehensive
waste, fraud, and abuse prevention solution.
(G)The fraud prevention system shall involve the
implementation of a statistically sound, empirically derived predictive
modeling technology that is designed to prevent (versus post-payment detect)
waste, fraud, and abuse. Such prevention system shall utilize historical
transaction data, from across all Federal health programs and markets, to build
and re-develop scoring models, have the capability to incorporate external data
and external models from other sources into the health care predictive waste,
fraud, and abuse model, and provide for a feedback loop to provide outcome
information on verified claims so future system enhancements can be developed
based on previous claims experience.
(H)The fraud prevention system platform shall have the
infrastructure to implement new models and attributes in a test environment
prior to moving into a production environment. Capabilities shall be developed
to quickly make changes to models, attributes, or strategies to react to
changing patterns in waste, fraud, and abuse.
(I)The fraud prevention system shall identify high-risk
claims by scoring all such claims on a real-time capacity prior to payment.
Such scores shall then be communicated to the fraud management system provided
for under subparagraph (J).
(J)The fraud prevention system shall utilize a fraud
management system, that contains workflow management and workstation tools to
provide the ability to systematically present scores, reason codes, and
treatment actions for high-risk scored transactions. The fraud prevention
system shall ensure that analysts who review claims have the capability to
access, review, and research claims efficiently, as well as decline or approve
claims (payments) in an automated manner. Workflow management under this
subparagraph shall be combined with the ability to utilize principles of
experimental design to compare and measure prevention and detection rates
between test and control strategies. Such strategy testing shall allow for
continuous improvement and maximum effectiveness in keeping up with ever
changing fraud and abuse patterns. Such system shall provide the capability to
test different treatments or actions randomly (typically through use of random
digit assignments).
(K)The fraud prevention system shall have the capability
to monitor consumer transactions in real-time and monitor provider behavior at
different stages within the transaction flow based upon provider, transaction
and consumer trends. The fraud prevention system shall provide for the
identification of provider and claims excessive usage patterns and trends that
differ from similar peer groups, have the capability to trigger on multiple
criteria, such as predictive model scores or custom attributes, and be able to
segment transaction waste, fraud, and abuse into multiple types for health care
categories and business types.
(L)The fraud prevention system shall have a feedback loop where
all Federal health payers provide pre-payment and post-payment information
about the eventual status of a claim designated as Normal
,
Waste
, Fraud
, Abuse
, or
Education Required
. Such feedback loop shall enable Federal
health agencies to measure the actual amount of waste, fraud, and abuse as well
as the savings in the system and provide the ability to retrain future,
enhanced models. Such feedback loop shall be an industry file that contains
information on previous fraud and abuse claims as well as abuse perpetrated by
consumers, providers, and fraud rings, to be used to alert other payers, as
well as for subsequent fraud and abuse solution development.
(M)The fraud prevention system shall ensure that the
infrastructure exists to ascertain system, strategy, and predictive model
return on investment. Dynamic model validation and strategy validation analysis
and reporting shall be made available to ensure a strategy or predictive model
has not degraded over time or is no longer effective. Queue reporting shall be
established and made available for population estimates of what claims were
flagged, what claims received treatment, and ultimately what results occurred.
The capability shall exist to complete tracking and reporting for prevention
strategies and actions residing farther upstream in the health care payment
flow. The fraud prevention system shall establish a reliable metric to measure
the dollars that are never paid due to identification of fraud and abuse, as
well as a capability to effectively test and estimate the impact from different
actions and treatments utilized to detect and prevent fraud and abuse for
legitimate claims. Measuring results shall include waste and abuse.
(N)The fraud prevention system shall not be designed to deny
health care services or to negatively impact prompt-pay laws because
assessments are late. The database shall be designed to speed up the payment
process. The fraud prevention system shall require the implementation of
constant and consistent test and control strategies by stakeholders, with
results shared with Federal health program leadership on a quarterly basis to
validate improving progress in identifying and preventing waste, fraud, and
abuse. Under such implementation, Federal health care payers shall use standard
industry waste, fraud, and abuse measures of success.
(2)The
Deputy Secretary shall coordinate the operation of the fraud prevention system
with the Department of Justice and other related Federal fraud prevention
systems.
(3)The
Deputy Secretary shall phase-in the implementation of the system under this
subsection beginning not later than 18 months after the date of enactment of
this Act, through the analysis of a limited number of Federal health program
claims. Not later than 5 years after such date of enactment, the Deputy
Secretary shall ensure that such system is fully phased-in and applicable to
all Federal health program claims.
(4)The Deputy Secretary shall promulgate regulations to
prohibit the payment of any health care claim that has been identified as
potentially “fraudulent”, “wasteful”, or “abusive” until such time as the claim
has been verified as valid.
(5)The
system under this section shall only apply to all Federal health programs,
including programs established after the date of enactment of this Act.
(6)The
Deputy Secretary shall promulgate regulations providing the maximum appropriate
protection of personal privacy consistent with carrying out the Office’s
responsibilities under this section.
(e)Protecting
participation in health care antifraud programs
(1)Notwithstanding any other provision of law, no person
providing information to the Secretary under this section shall be held, by
reason of having provided such information, to have violated any criminal law,
or to be civilly liable under any law of the United States or of any State (or
political subdivision thereof) unless such information is false and the person
providing it knew, or had reason to believe, that such information was
false.
(2)The
Office shall, through the promulgation of regulations, establish standards
for—
(A)the protection of
confidential information submitted or obtained with regard to suspected or
actual health care fraud;
(B)the protection of
the ability of representatives the Office to testify in private civil actions
concerning any such information; and
(C)the sharing by the
Office of any such information related to the medical antifraud programs
established under this section.
(f)Protecting
legitimate providers and suppliers
(1)Not later than 2 years after the date of enactment
of this Act, the Secretary shall establish procedures for the implementation of
fraud and abuse detection methods under all Federal health programs (including
the programs under titles XVIII, XIX, and XXI of the Social Security Act) with
respect to items and services furnished by providers of services and suppliers
that includes the following:
(A)In the case of a
new applicant to be such a provider or supplier, a background check, and in the
case of a supplier a site visit prior to approval of participation in the
program and random unannounced site visits after such approval.
(B)Not less than 5
years after the date of enactment of this Act, in the case of a provider or
supplier who is not a new applicant, re-enrollment under the program, including
a new background check and, in the case of a supplier, a site-visit as part of
the application process for such re-enrollment, and random unannounced site
visits after such re-enrollment.
(2)Requirement for
participationIn no case may a provider of services or supplier
who does not meet the requirements under paragraph (1) participate in any
Federal health program.
(3)The Secretary shall determine the extent of the background
check conducted under paragraph (1), including whether—
(A)a fingerprint
check is necessary;
(B)a background check
shall be conducted with respect to additional employees, board members,
contractors or other interested parties of the provider or supplier; and
(C)any additional
national background checks regarding exclusion from participation in Federal
health programs (such as the program under titles XVIII, XIX, or XXI of the
Social Security Act), including conviction of any felony, crime that involves
an act of fraud or false statement, adverse actions taken by State licensing
boards, bankruptcies, outstanding taxes, or other indications identified by the
Inspector General of the Department of Health and Human Services are
necessary.
(4)No
payment may be made to a provider of services or supplier under any Federal
health program if such provider or supplier fails to obtain a satisfactory
background check under this subsection.
(5)In this subsection, the term Federal health
program means any program that provides Federal payments or
reimbursements to providers of health-related items or services, or suppliers
of such items, for the provision of such items or services to an individual
patient.
(g)The
term Federal health agency means the Department of Health and
Human Services, the Department of Veterans Affairs, and any Federal agency with
oversight or authority regarding the provision of any medical benefit, item, or
service for which payment may be made under a Federal health care plan or
contract.