S.Amdt. 3677

1. Adds SEC. 1305. HEALTH CARE FRAUD PREVENTION SYSTEM at the end of subtitle D of title I

   Adds a section

   In H.R. 4872 · Placed on Calendar Senate

   "(4) 90-day period of enhanced oversight for initial claims of dme suppliers.--For periods beginning after January 1, 2011, if the Secretary determines that there is a significant risk of fraudulent activity among suppliers of durable medical equipment, in the case of a supplier of durable medical equipment who is within a category or geographic area under title XVIII identified pursuant to such determination and who is initially enrolling under such title, the Secretary shall, notwithstanding sections 1816(c), 1842(c), and 1869(a)(2), withhold payment under such title with respect to durable medical equipment furnished by such supplier during the 90-day period beginning on the date of the first submission of a claim under such title for durable medical equipment furnished by such supplier.".

   Inserted: SEC. 1305. HEALTH CARE FRAUD PREVENTION SYSTEM.

   Inserted: (a) Health Care Fraud Prevention System.--

   Inserted: (1) In general.--The Secretary of Health and Human Services (referred to in this section as the "Secretary") shall establish a fraud prevention system which shall be designed as follows:

   Inserted: (A) In general.--The fraud prevention system shall--

   Inserted: (i) be holistic;

   Inserted: (ii) be able to view all provider and patient activities across all Federal health program payers;

   Inserted: (iii) be able to integrate into the existing health care claims flow with minimal effort, time, and cost;

   Inserted: (iv) be modeled after systems used in the Financial Services industry; and

   Inserted: (v) utilize integrated real-time transaction risk scoring and referral strategy capabilities to identify claims that are statistically unusual.

   Inserted: (B) Modularized architecture.--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--

   Inserted: (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;

   Inserted: (ii) allow access through a secure private data connection rather than the installation of software in multiple information technology infrastructures (and data facilities);

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   Inserted: (iii) provide access to the best and latest software without the need for upgrades, data security, and costly installations;

   Inserted: (iv) permit modifications to the software and system edits in a rapid and timely manner;

   Inserted: (v) ensure that all technology and decision components reside within the module; and

   Inserted: (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.

   Inserted: (C) Processing, scoring, and storage.--The 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.

   Inserted: (D) Data consortium.--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).

   Inserted: (E) Market view.--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.

   Inserted: (F) Behavior engine.--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.

   Inserted: (G) Predictive model.--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.

   Inserted: (H) Change control.--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.

   Inserted: (I) Scoring engine.--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).

   Inserted: (J) Fraud management system.--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).

   Inserted: (K) Decision technology.--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.

   Inserted: (L) Feedback loop.--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.

   Inserted: (M) Tracking and reporting.--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.

   Inserted: (N) Operating tenet.--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.

   Inserted: (2) Coordination.--The Secretary shall coordinate the operation of the fraud prevention system with the Department of Justice and other related Federal fraud prevention systems.

   Inserted: (3) Operation.--The 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 Secretary shall ensure that such system is fully phased-in and applicable to all Federal health program claims.

   Inserted: (4) Non-payment of claims.--The 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.

   Inserted: (5) Application.--The system under this section shall only apply to Federal health programs (all such programs), including programs established after the date of enactment of this Act.

   Inserted: (6) Regulations.--The Secretary shall promulgate regulations providing the maximum appropriate protection of personal privacy.

   Inserted: (b) Protecting Participation in Health Care Antifraud Programs.--

   Inserted: (1) In general.--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.

   Inserted: (2) Confidentiality.--The Secretary shall, through the promulgation of regulations, establish standards for--

   Inserted: (A) the protection of confidential information submitted or obtained with regard to suspected or actual health care fraud;

   Inserted: (B) the protection of the ability of representatives the Department of Health and Human Services to testify in private civil actions concerning any such information; and

   Inserted: (C) the sharing by the Department of Health and Human Services of any such information related to the medical antifraud programs established under this section.

   Inserted: (c) Use of Savings.--Notwithstanding any other provision of law, amounts remaining at the end of a fiscal year in the account for any Federal health program to which this section applies that the Secretary of Health and Human Services determines are remaining as a result of the fraud prevention activities applied under this section shall remain in such account and be used for such program for the next fiscal year.

   Inserted: (d) Definition.--In this section, 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.

   Inserted: (e) Recission of Certain Stimulus Funds.--Notwithstanding section 5 of the American Recovery and Reinvestment Act of 2009 (Public Law 111-5; 123 Stat. 116), from the amounts appropriated or made available under division A of such Act (other than under title X of such division A), there is rescinded, of the remaining unobligated amounts as of the date of the enactment of this Act, funds in the amount as may be necessary to carry out this section. The Director of the Office of Management and Budget shall report to each congressional committee the amounts so rescinded within the jurisdiction of such committee.

   Original wording

   At the end of subtitle D of title I, add the following:

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As printed