Excerpts of the report follow:
I. SUMMARY AND BACKGROUND
A. Purpose and Summary
The bill, H.R. 6690, the "Fighting Fraud to Protect Care for Seniors Act of 2018," as ordered reported by the
B. Background and Need for Legislation
The Government Accountability Office (GAO) has designated the Medicare program as high-risk for waste, fraud, and abuse. One type of fraud scheme in Medicare occurs when a federal health care program is billed by a third party (whether a legitimate provider or not) using a beneficiary's or provider's identification without the beneficiary's or provider's knowledge. Experience in the financial services sector has shown that smart card technology can help to combat credit card fraud. As such, vendors of smart card technology have suggested that one way to help limit this type of fraud in the Medicare program would be to use smart card technology--credit card-like devices that use integrated circuit chips to store and process data--to authenticate the beneficiary at the point of service. In 2016, the GAO performed an analysis of 739 health care fraud cases and found that the use of smart cards could have affected the entire case or the part of the case in about 165 cases, or 22 percent of the cases reviewed, which included schemes that involved the lack of verification of the beneficiary or provider at the point of service.
C. Legislative History
H.R. 6690 was introduced on
On June, 10, 2015, the full Committee held a hearing on The President's Fiscal year 2016 Budget to review the President's budget proposals during which this policy was discussed.
II. EXPLANATION OF THE BILL
A. Fighting Fraud to Protect Care for Seniors Act of 2018
Currently, Medicare beneficiary identification cards are paper and are not required to contain smart card technology. While the Medicare program has several programs in place to combat fraud including the Fraud Prevention System, the
REASONS FOR CHANGE
The pilot program established under H.R. 6690 aims to evaluate the feasibility of using smart card technology in the Medicare program, including such technology's ability to reduce fraud, waste and abuse.
EXPLANATION OF PROVISIONS
Section 2: Medicare Smart Card Pilot Program.
Implementation: Not later than 36 months after the date of enactment, the Secretary shall establish a pilot program to evaluate smart card technology as a cost-effective fraud tool in Medicare.
Smart Card Technology Defined: A beneficiary smart card is defined as a machine-readable and tamper-resistant card that includes an embedded integrated circuit chip with a secure microcontroller, as defined by the
The card reader technology must enable a supplier and provider to authenticate the identity of a Medicare beneficiary through presentation of a smart card. The authentication may occur through the use of a claim form modifier or in another manner specified by the Secretary.
Program Design Elements:
Supplier and Provider Hardship Exemption: Providers and suppliers may be exempt from the pilot program if the provider or supplier does not have access to card reader technology, does not have sufficient internet access, or has a low volume of Medicare claims.
Smart Card and Smart Card Reader Issuance: At the request of a supplier or provider, the Secretary is required to provide, at no cost, smart card hardware and software necessary to participate in the pilot program. The Secretary is required to issue smart cards to beneficiaries residing in the geographic area in which the pilot is operating, as well as information on the operation of the pilot program, including privacy protections. If lost, beneficiary smart cards shall be replaced at no cost to the beneficiary.
Access to Services Outside of the Pilot Program: Nothing in this bill prevents a beneficiary from receiving services from a non-participating suppliers or providers or prevents a nonparticipating supplier or provider from submitting Medicare claims without the use of the smart card technology to beneficiaries issued smart cards. Further, this bill does not prevent a participating supplier or provider from providing services to non-participating beneficiaries. If a beneficiary does not present a smart card at the point of service to a participating provider or supplier, the beneficiary cannot be denied access to care, nor is the provider or supplier prohibited from submitting a claim for the care provided.
Private Sector Implementation: The Secretary is required to operate the pilot program through a competitive procurement process. The Secretary is required to ensure that the pilot program complies with existing privacy protections.
Mandatory Participation: Providers and suppliers in the geographic areas chosen for the pilot program implementation are required to participate if not exempted under the three hardship exemptions contained in the legislation. Transaction, utilization, or other fees are prohibited from being imposed on Medicare beneficiaries or participating suppliers and providers.
Stakeholder Input: The Secretary is required to convene a stakeholder panel consisting of providers, suppliers, claims- process contractors, and beneficiaries prior to the implementation of the pilot.
Pilot implementation: Not later than 36 months after the date of enactment, the Secretary shall establish a pilot program to evaluate smart card technology as a cost-effective fraud tool in Medicare.
Stakeholder Input: Not later than 6 months after the date of enactment, the Secretary is required to convene a panel consisting of stakeholders (including representatives of providers, suppliers, technology vendors, Medicare beneficiaries, and claims processing contractors selected by the Secretary for the purpose of providing input on the implementation of the pilot program.
Interim Report: Not later than 2 years after the date of the pilot program is implemented.
Final Report: Not later than 18 months after the date of the completion of the pilot program.
III. VOTES OF THE COMMITTEE
In compliance with the Rules of the
The vote on
In compliance with clause 3(b) of rule XIII of the Rules of the
The Chairman's amendment in the nature of a substitute was adopted by a voice vote (with a quorum being present).
The bill, H.R. 6690, was ordered favorably reported as amended by voice vote (with a quorum being present).
IV. BUDGET EFFECTS OF THE BILL
A. Committee Estimate of Budgetary Effects
In compliance with clause 3(d) of rule XIII of the Rules of the
In compliance with clause 3(c)(2) of rule XIII of the Rules of the
C. Cost Estimate Prepared by the
In compliance with clause 3(c)(3) of rule XIII of the Rules of the
Dear Mr. Chairman: The
If you wish further details on this estimate, we will be pleased to provide them. The CBO staff contact is
H.R. 6690--Fighting Fraud to Protect Care for Seniors Act of 2018
Summary: H.R. 6690 would direct the Secretary of
Enacting the bill would not affect direct spending or revenues; therefore, pay-as-you-go procedures do not apply.
CBO estimates that enacting H.R. 6690 would not increase net direct spending or on-budget deficits in any of the four consecutive 10-year periods beginning in 2029.
H.R. 6690 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA).
Estimated cost to the Federal Government: The estimated budgetary effect of H.R. 6690 is shown in the following table. The costs of the legislation fall within budget function 570 (Medicare).
Basis of estimate: Cards that include integrated computer circuitry are called smart cards and have many uses, including banking, identification, and data storage. Smart cards also can be used for health care coverage and payment purposes. In
When individuals begin Medicare coverage, whether through age or disability, they receive an identification card, which is presented when receiving medical services and has an identification number unique to the beneficiary. Medicare cards are not smart cards and do not have any sort of technology, like a computer chip, to furnish additional information about the beneficiary, such as identity verification or previous medical care.
H.R. 6690 would direct the Secretary of HHS to conduct a pilot project for smart cards within the Medicare program. Within 36 months, the Secretary would be required to select at least three geographic areas in which to conduct the test. The pilot would include no more than 2,000 suppliers and providers, who would be selected partly because the category of services provided is at high risk of fraud, waste, or abuse. Providers could apply for a hardship exemption if participation was not feasible because--for example, they lack Internet access. All beneficiaries in the designated geographic areas would receive a smart card, but could continue to receive services from providers and suppliers not enrolled in the demonstration.
Based on discussions with and data from representatives of the smart-card industry, CBO estimates that the demonstration would cost about
H.R. 6690 would give the Secretary considerable latitude in implementing the demonstration within a relatively short timeframe. CBO anticipates that the demonstration would be designed in a way to allow implementation within 36 months and to minimize any burden on providers or beneficiaries. CBO also expects that the pilot program would focus on providers who have a face-to-face interaction with beneficiaries for primary or routine care--for example, general practitioners and internists who see beneficiaries for scheduled office visits.
CBO aims to produce estimates that generally reflect the middle of a range of the most likely budgetary outcomes that would result if the legislation was enacted. Because H.R. 6690 gives the HHS Secretary considerable flexibility in designing the smart card pilot program, it is possible that implementation--and therefore costs--could be different from what CBO estimates.
Pay-As-You-Go considerations: None.
Increase in long-term direct spending and deficits: CBO estimates that enacting H.R. 6690 would not increase net direct spending or on-budget deficits in any of the four consecutive 10-year periods beginning in 2029.
Mandates: H.R. 6690 contains no intergovernmental or private-sector mandates as defined in UMRA.
Estimate prepared by: Federal costs:
Estimate reviewed by:
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE
A. Committee Oversight Findings and Recommendations
With respect to clause 3(c)(1) of rule XIII of the Rules of the
B. Statement of General Performance Goals and Objectives
With respect to clause 3(c)(4) of rule XIII of the Rules of the
C. Information Relating to Unfunded Mandates
This information is provided in accordance with section 423 of the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104- 4).
The Committee has determined that the bill does not contain Federal mandates on the private sector. The Committee has determined that the bill does not impose a Federal intergovernmental mandate on State, local, or tribal governments.
D. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff Benefits
With respect to clause 9 of rule XXI of the Rules of the
E. Duplication of Federal Programs
In compliance with Sec. 3(g)(2) of
F. Disclosure of Directed Rule Makings
In compliance with Sec. 3(i) of
VII. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
A. Changes in Existing Law Proposed by the Bill, as Reported
In compliance with clause 3(e)(1)(B) of rule XIII of the Rules of the
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of the
SOCIAL SECURITY ACT
VIII. ADDITIONAL VIEWS
H.R. 6690 establishes a three-year pilot program to test the use of smart card technology--credit card-like devices that use integrated circuit chips to store and process data in the Medicare program. The pilot program would be tested in at least three geographic areas; is limited to no more than 2,000 providers and suppliers; and must take into account the risk of fraud, waste, and abuse when choosing providers or suppliers to participate in the pilot.
Smart card technology would not have affected schemes in which the beneficiary was not present or the verification of the beneficiary and provider was not relevant to the scheme. For example, the
Smart cards have not been shown to be more cost effective in fighting fraud than current fraud-fighting activities and would increase provider burden in a time when providers already raise issues around electronic health records and other technology-adoption burdens.
The return on investment (ROI) for the Health Care Fraud and Abuse Control (HCFAC) program over the last three years (2015-2017) is
As a result of sequestration of mandatory funding in 2017, there were fewer resources for the DOJ, the
The bill does not provide any funding for CMS to conduct this demonstration, so the agency would need to take money currently being used on existing activities and redirect it to this demonstration. There is no estimate of the cost to implement this demonstration, but it would include the cost of purchasing and mailing smart cards (and replacement cards) to beneficiaries, the cost of purchasing smart card readers for providers, as well as potential transaction costs.
If this smart card demonstration was implemented on a broad scale, there are a number of beneficiary access concerns. If the beneficiary protections included in the pilot were not continued, beneficiaries could potentially be denied or delayed access to care. For example, if a beneficiary can only receive services with a smart card present, a frail elder that forgets or loses his/her card could potentially be denied services. Cards could get misplaced as a beneficiary transfers between home, a hospital, and post-acute care settings, which could further delay access to necessary care.
The Republican agenda is directly attacking seniors and the programs they depend on for health care. The Republican bill to repeal the ACA cut
The full text of the report is found at: https://www.congress.gov/congressional-report/115th-congress/house-report/936/1?r=1