Detection of fraud, waste, and abuse in programs of the Veterans Health Administration

(a) In general Subsection (f) Subchapter I of section 1703D chapter 17 of title 38, United States Code, is amended— (1) in paragraph (1)— (A) by striking paragraph (1) each place it appears and inserting subparagraph (A); (B) amended by inserting (A) before The Secretary; and (C) by redesignating paragraphs (2) and (3) as subparagraphs (B) and (C), respectively; and (2) by adding at the end after section 1706A the following new paragraph: (2) (A) The section (and amending the table of sections at the beginning of such chapter accordingly): 1706B. Management of health care: detection of fraud, waste, and abuse (a) In general To detect fraud, waste, and abuse in programs of the Veterans Health Administration, the Secretary shall use an processes and systems, including the information technology system described in subsection (b), to— (i) (1) analyze a claim submitted to the Secretary— (I) Secretary by a health care entity or provider that furnishes hospital care, medical services, or extended care services under this chapter; and (II) through (2) reanalyze a claim, described in paragraph (1) that the health care claims enterprise solution (ii) detect whether Secretary determines may be fraudulent, after paying such claim is a fraudulent claim, an overpayment, or other fraud, waste, or abuse. (B) claim. (b) Information technology system The information technology system under described in this paragraph subsection shall include the following functions: (i) (1) Continuous monitoring of claims to detect patterns that may indicate fraud, waste, or abuse. (ii) (2) Analysis of historical and real-time claims data to identify and predict potential fraudulent claims. (iii) (3) Ready-made analytic models to identify and analyze fraudulent claims. (iv) (4) Post-payment analysis for overuse of services or other practices that create unnecessary costs to the Department. (v) (5) Integration with existing claims processing systems and technologies of the Department. (vi) (6) Logging, storage, analysis, and reports regarding the nature, frequency, and financial impact of detected fraudulent claims. (vii) (7) Identification of, and machine learning that is based on, patterns of fraudulent claims in order to reduce false positives and predict new forms of fraud. (viii) (8) Updates to detect new models of fraud, waste and abuse. (ix) (9) Any other function determined necessary by the Secretary. (C) (c) Use of franchise fund To carry out this paragraph, section, the Secretary shall use funds from the Department of Veterans Affairs franchise fund established under title I of Public Law 104–204 (38 U.S.C. 301 note). (D) (d) Report Not later than two years after the date of the enactment of the FRAUD Act of 2025 2025, and annually thereafter through the day described in subparagraph (E), for five additional years, the Secretary shall submit to the Committees on Veterans' Affairs of the Senate and House of Representatives a report regarding the operation of such information technology system the processes and systems under subsection (a) during the preceding year. Each such report shall include the determination of the Secretary regarding the following elements: (i) (1) The effectiveness of the information technology system such processes and systems in performing the functions detecting fraud, waste, and abuse described in subparagraph (B). (ii) subsection (a). (2) The estimated savings to the Department arising from the use of the information technology system. (iii) such processes and systems. (3) Any plans to enhance, modify, or add new capabilities to the information technology system. (E) This paragraph shall cease to be effective on the day that is seven years after the date of the enactment of the FRAUD Act of 2025. (F) In this paragraph: (i) The term Community Care Network means a network established under section 1703(h) of this title. (ii) The term health care claims enterprise solution means the information technology used by the Secretary to process a claim submitted under this chapter by a health care entity or provider that is not part of a Community Care Network.. such processes and systems.. (b) Implementation date The Secretary of Veterans Affairs shall carry out the amendments made section 1706B of such title, as added by this section subsection (a), not later than one year after the date of the enactment of this Act.