PRIME Act: Are Healthcare Providers Ready for an Increase in Costs and Compliance Burdens?


In late March 2015, a group of US Senators, having received motivation from the US House of Representatives, restored the introduction of the PRIME Act (Preventing and Reducing Improper Medicare and Medicaid Expenditures). The PRIME Act, which looks to amend the Social Security Act and harden securities against Medicare and Medi-Cal fraud and abuse and raise fraud detection measures across the board, could prove to be a double-edged sword for the healthcare industry. While it would certainly improve the Medicare and Medi-Cal programs, the magnitude of the act would place intensified requirements and restrictions on healthcare providers, potentially hindering those who actually provide care to Medicare and Medi-Cal beneficiaries.

Although the act has died in Senate committees twice, in 2011 and 2013, the newest introduction of the amended act could have a good chance of getting passed, with the current political climate on its side. The opposition of the bill is asking all healthcare providers to write their US Senator’s and describe to them the detriment of the bill, and the overarching effect it will have on the healthcare industry. So, the question is - what effect will the PRIME Act have on you as a provider? Well, if the bill were to pass, it would effectively:

  • Require the Centers for Medicare & Medicaid Services (“CMS”) to establish new procedures for verifying NPIs;

  • Prohibit prescription drug plan sponsors from paying Medicare or Medicaid claims for prescription drugs without a valid national provider number (“NPI”)

  • Increase penalties for intentional fraud relating to Medicare, Medicaid, or Children's Health Insurance Plan (“CHIP”) beneficiary identification numbers or billing privileges to imprisonment for not more than 10 years and/or a monetary fine of not more than $500,000;

  • Provide bonuses for Medicare administrative contractors (“MACs”) that reduce improper payment errors to certain levels and penalties for MACs that reach an upper-end error threshold; and

  • Prohibit reimbursement on a claim for medical services under Medicaid without a valid beneficiary identification number, as determined by a state Medicaid agency.

Many fear that the PRIME Act will raise scrutiny on billing practices, creating additional administrative burdens that will increase costs for health care providers and lengthen the amount of time that it takes for providers to receive reimbursement. So, what can you do? Well, as mentioned above, if you are looking to oppose the PRIME Act, write to your US Senator and explain the burden that it will place your organization. If you are of the small minority of providers that support the PRIME Act, please tell us why in the comments so that we can see both sides of the argument.

If you would like to read more on the PRIME Act, please visit the full article at Epstein, Becker, and Green. If you would like more details, you can also read the full text of the PRIME Act.