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, the Department of
Veterans Affairs, and private payers 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 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.