Additional measures for improving Medicaid payment integrity

(a) Annual reports regarding State payment integrity reviews Section 1903(cc) of the Social Security Act (42 U.S.C. 1396b), as added by section 2(a) of this Act, is amended by adding at the end the following new paragraph: (4) Annual reports regarding State payment integrity reviews (A) State reports Not later than 1 year after the date of enactment of this paragraph, and annually thereafter, each State shall submit, separate from the information reported under paragraph (2)(C), a report to the Secretary, in such standard form and manner as the Secretary shall specify, that identifies the reviewing entity (including any recovery audit contractor or other program integrity entity) for each payment stream (including a non-State funded payment and capitation or other payments made to a medicaid managed care organization (as defined in section 1903(m)(1)(A)), prepaid inpatient health plan (as defined in section 1903(m)(9)(D)(iii)(I)), or prepaid ambulatory health plan (as defined in section 1903(m)(9)(D)(iii)(II))) under the State plan or under a waiver of such State plan with respect to all items and services for which payment is made for the applicable reporting period. (B) Reports to Congress Not later than 180 days after the date of each annual State reporting deadline under subparagraph (A), the Secretary shall prepare and submit to Congress a report detailing the information contained in such State reports, together with recommendations for such legislation and administrative action as the Secretary determines appropriate.. (b) Identifying and testing barriers to State participation in Medicaid RAC programs Section 1903(cc) of the Social Security Act, as amended by subsection (a), is amended by adding at the end the following new paragraphs: (5) Study on barriers to State participation in Medicaid RAC programs (A) In general The Secretary shall conduct a study on barriers to State establishment and implementation of Medicaid RAC programs as required under section 1902(a)(42)(B)(i). Such study shall examine— (i) the contingency fee payment structure for recovery audit contractors, including— (I) whether such payment structure ensures a healthy and competitive marketplace for States to establish and implement Medicaid RAC programs; and (II) the effectiveness of such payment structure based on the population of a State that participates in the State Medicaid program; (ii) alternative arrangements for engaging recovery audit contractors, including the viability of multi-State contracts; and (iii) the start up costs associated with establishing a new Medicaid RAC program in a State, including— (I) the amount of time before a recovery audit contractor starts recouping overpayments to the extent that the recovery audit contractor recovers such start up costs; and (II) recommendations for a payment structure that could include initial funding to a recovery audit contractor. (B) Report Not later than 1 year after the date of enactment of this paragraph, the Secretary shall submit to Congress a report containing the results of the study conducted under subparagraph (A), together with recommendations for such legislation and administrative action as the Secretary determines appropriate. (6) Demonstration project to improve State participation in Medicaid RAC programs (A) In general Not later than 2 years after the date of enactment of this paragraph, based on the study conducted under paragraph (5), the Secretary shall conduct a 5-year demonstration project designed to increase the number of States that establish and implement a Medicaid RAC program in accordance with section 1902(a)(42)(B)(i). (B) Reports to Congress The Secretary shall submit an interim report to Congress on the demonstration project conducted under this paragraph not later than 90 days after the initiation of the demonstration project, and a final report not later than 180 days after the demonstration project ends. The final report shall include an evaluation of the project and recommendations for such legislation and administrative action as the Secretary determines appropriate.. (c) Audit and recovery periods Section 1902(a)(42) of the Social Security Act (42 U.S.C. 1396a(a)(42)), as amended by section 3, is amended by adding at the end the following new subparagraph: (D) notwithstanding clause (i) of subparagraph (B), beginning 120 days after the date of enactment of this subparagraph, each contract entered into by the State with a recovery audit contractor under the program described in subparagraph (B), including any contract with a recovery audit contractor applying to a medicaid managed care organization (as defined in section 1903(m)(1)(A)), prepaid inpatient health plan (as defined in section 1903(m)(9)(D)(iii)(I)), or prepaid ambulatory health plan (as defined in section 1903(m)(9)(D)(iii)(II)), shall provide that audit and recovery activities shall be conducted during a fiscal year with respect to payments made under the State plan and under any waiver of the State plan, or, if applicable, payments made by such an organization or health plan, during such fiscal year and retrospectively for a period of 4 fiscal years prior to such fiscal year;.