Text: H.R.4053 — 112th Congress (2011-2012)All Bill Information (Except Text)

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Public Law No: 112-248 (01/10/2013)




[112th Congress Public Law 248]
[From the U.S. Government Printing Office]



[[Page 2389]]

   IMPROPER PAYMENTS ELIMINATION AND RECOVERY IMPROVEMENT ACT OF 2012

[[Page 126 STAT. 2390]]

Public Law 112-248
112th Congress

                                 An Act


 
 To intensify efforts to identify, prevent, and recover payment error, 
   waste, fraud, and abuse within Federal spending. <<NOTE: Jan. 10, 
                         2013 -  [H.R. 4053]>> 

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress 
assembled, <<NOTE: Improper Payments Elimination and 
Recovery Improvement Act of 2012. 31 USC 3321 note.>> 
SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Improper Payments Elimination and 
Recovery Improvement Act of 2012''.
SEC. 2. DEFINITIONS.

    In this Act--
            (1) the term ``agency'' means an executive agency as that 
        term is defined under section 102 of title 31, United States 
        Code;
            (2) the term ``improper payment'' has the meaning given that 
        term in section 2(g) of the Improper Payments Information Act of 
        2002 (31 U.S.C. 3321 note), as redesignated by section 3(a)(1) 
        of this Act; and
            (3) the term ``State'' means each State of the United 
        States, the District of Columbia, each territory or possession 
        of the United States, and each federally recognized Indian 
        tribe.
SEC. 3. IMPROVING THE DETERMINATION OF IMPROPER PAYMENTS BY 
                    FEDERAL AGENCIES.

    (a) In General.--Section 2 of the Improper Payments Information Act 
of 2002 (31 U.S.C. 3321 note) is amended--
            (1) by redesignating subsections (b) through (g) as 
        subsections (c) through (h), respectively;
            (2) by inserting after subsection (a) the following:

    ``(b) Improving the Determination of Improper Payments.--
            ``(1) In general.--The <<NOTE: Deadline.>> Director of the 
        Office of Management and Budget shall on an annual basis--
                    ``(A) identify a list of high-priority Federal 
                programs for greater levels of oversight and review--
                          ``(i) in which the highest dollar value or 
                      highest rate of improper payments occur; or
                          ``(ii) for which there is a higher risk of 
                      improper payments; and
                    ``(B) in coordination with the agency responsible 
                for administering the high-priority program, establish 
                annual targets and semi-annual or quarterly actions for 
                reducing improper payments associated with each high-
                priority program.
            ``(2) Report on high-priority improper payments.--

[[Page 126 STAT. 2391]]

                    ``(A) <<NOTE: Public information. Web posting.>>  In 
                general.--Subject to Federal privacy policies and to the 
                extent permitted by law, each agency with a program 
                identified under paragraph (1)(A) on an annual basis 
                shall submit to the Inspector General of that agency, 
                and make available to the public (including availability 
                through the Internet), a report on that program.
                    ``(B) Contents.--Each report under this paragraph--
                          ``(i) shall describe--
                                    ``(I) any action the agency--
                                            ``(aa) has taken or plans to 
                                        take to recover improper 
                                        payments; and
                                            ``(bb) intends to take to 
                                        prevent future improper 
                                        payments; and
                          ``(ii) shall not include any referrals the 
                      agency made or anticipates making to the 
                      Department of Justice, or any information provided 
                      in connection with such referrals.
                    ``(C) Public availability on central website.--The 
                Office of Management and Budget shall make each report 
                submitted under this paragraph available on a central 
                website.
                    ``(D) Availability of information to inspector 
                general.--Subparagraph (B)(ii) shall not prohibit any 
                referral or information being made available to an 
                Inspector General as otherwise provided by law.
                    ``(E) Assessment and recommendations.--The Inspector 
                General of each agency that submits a report under this 
                paragraph shall, for each program of the agency that is 
                identified under paragraph (1)(A)--
                          ``(i) review--
                                    ``(I) the assessment of the level of 
                                risk associated with the program, and 
                                the quality of the improper payment 
                                estimates and methodology of the agency 
                                relating to the program; and
                                    ``(II) the oversight or financial 
                                controls to identify and prevent 
                                improper payments under the program; and
                          ``(ii) submit to Congress recommendations, 
                      which may be included in another report submitted 
                      by the Inspector General to Congress, for 
                      modifying any plans of the agency relating to the 
                      program, including improvements for improper 
                      payments determination and estimation 
                      methodology.'';
            (3) in subsection (d) (as redesignated by paragraph (1) of 
        this subsection), by striking ``subsection (b)'' each place that 
        term appears and inserting ``subsection (c)'';
            (4) in subsection (e) (as redesignated by paragraph (1) of 
        this subsection), by striking ``subsection (b)'' and inserting 
        ``subsection (c)''; and
            (5) in subsection (g)(3) (as redesignated by paragraph (1) 
        of this subsection), by inserting ``or a Federal employee'' 
        after ``non-Federal person or entity''.

    (b) Improved Estimates.--
            (1) <<NOTE: Deadline. Guidance.>>  In general.--Not later 
        than 180 days after the date of enactment of this Act, the 
        Director of the Office of Management and Budget shall provide 
        guidance to agencies for improving the estimates of improper 
        payments under the

[[Page 126 STAT. 2392]]

        Improper Payments Information Act of 2002 (31 U.S.C. 3321 note).
            (2) Guidance.--Guidance under this subsection shall--
                    (A) strengthen the estimation process of agencies by 
                setting standards for agencies to follow in determining 
                the underlying validity of sampled payments to ensure 
                amounts being billed, paid, or obligated for payment are 
                proper;
                    (B) instruct agencies to give the persons or 
                entities performing improper payments estimates access 
                to all necessary payment data, including access to 
                relevant documentation;
                    (C) explicitly bar agencies from relying on self-
                reporting by the recipients of agency payments as the 
                sole source basis for improper payments estimates;
                    (D) require agencies to include all identified 
                improper payments in the reported estimate, regardless 
                of whether the improper payment in question has been or 
                is being recovered;
                    (E) include payments to employees, including salary, 
                locality pay, travel pay, purchase card use, and other 
                employee payments, as subject to risk assessment and, 
                where appropriate, improper payment estimation; and
                    (F) require agencies to tailor their corrective 
                actions for the high-priority programs identified under 
                section 2(b)(1)(A) of the Improper Payments Information 
                Act of 2002 (31 U.S.C. 3321 note) to better reflect the 
                unique processes, procedures, and risks involved in each 
                specific program.

    (c) Technical and Conforming Amendments.--The Improper Payments 
Elimination and Recovery Act of 2010 (Public Law 111-204; 31 U.S.C. 3321 
note) is amended--
            (1) in section 2(h)(1), by striking ``section 2(f)'' and all 
        that follows and inserting ``section 2(g) of the Improper 
        Payments Information Act of 2002 (31 U.S.C. 3321 note).''; and
            (2) in section 3(a)--
                    (A) in paragraph (1), by striking ``section 2(f)'' 
                and all that follows and inserting ``section 2(g) of the 
                Improper Payments Information Act of 2002 (31 U.S.C. 
                3321 note).''; and
                    (B) in paragraph (3)--
                          (i) by striking ``section 2(b)'' each place it 
                      appears and inserting ``section 2(c)''; and
                          (ii) by striking ``section 2(c)'' each place 
                      it appears and inserting ``section 2(d)''.
SEC. 4. IMPROPER PAYMENTS INFORMATION.

    Section 2(a)(3)(A)(ii) of the Improper Payments Information Act of 
2002 (31 U.S.C. 3321 note) is amended by striking ``with respect to 
fiscal years following September 30th of a fiscal year beginning before 
fiscal year 2013 as determined by the Office of Management and Budget'' 
and inserting ``with respect to fiscal year 2014 and each fiscal year 
thereafter''.
SEC. 5. DO NOT PAY INITIATIVE.

    (a) Prepayment and Preaward Procedures.--
            (1) <<NOTE: Review.>>  In general.--Each agency shall review 
        prepayment and preaward procedures and ensure that a thorough 
        review

[[Page 126 STAT. 2393]]

        of available databases with relevant information on eligibility 
        occurs to determine program or award eligibility and prevent 
        improper payments before the release of any Federal funds.
            (2) Databases.--At a minimum and before issuing any payment 
        and award, each agency shall review as appropriate the following 
        databases to verify eligibility of the payment and award:
                    (A) The Death Master File of the Social Security 
                Administration.
                    (B) The General Services Administration's Excluded 
                Parties List System.
                    (C) The Debt Check Database of the Department of the 
                Treasury.
                    (D) The Credit Alert System or Credit Alert 
                Interactive Voice Response System of the Department of 
                Housing and Urban Development.
                    (E) The List of Excluded Individuals/Entities of the 
                Office of Inspector General of the Department of Health 
                and Human Services.

    (b) Do Not Pay Initiative.--
            (1) Establishment.--There is established the Do Not Pay 
        Initiative which shall include--
                    (A) use of the databases described under subsection 
                (a)(2); and
                    (B) use of other databases designated by the 
                Director of the Office of Management and Budget in 
                consultation with agencies and in accordance with 
                paragraph (2).
            (2) Other databases.--In making designations of other 
        databases under paragraph (1)(B), the Director of the Office of 
        Management and Budget shall--
                    (A) consider any database that substantially assists 
                in preventing improper payments; and
                    (B) <<NOTE: Public information.>>  provide public 
                notice and an opportunity for comment before designating 
                a database under paragraph (1)(B).
            (3) Access and review by agencies.--For purposes of 
        identifying and preventing improper payments, each agency shall 
        have access to, and use of, the Do Not Pay Initiative to verify 
        payment or award eligibility in accordance with subsection (a) 
        when the Director of the Office of Management and Budget 
        determines the Do Not Pay Initiative is appropriately 
        established for the agency.
            (4) Payment otherwise required.--When using the Do Not Pay 
        Initiative, an agency shall recognize that there may be 
        circumstances under which the law requires a payment or award to 
        be made to a recipient, regardless of whether that recipient is 
        identified as potentially ineligible under the Do Not Pay 
        Initiative.
            (5) Annual report.--The Director of the Office of Management 
        and Budget shall submit to Congress an annual report, which may 
        be included as part of another report submitted to Congress by 
        the Director, regarding the operation of the Do Not Pay 
        Initiative, which shall--
                    (A) <<NOTE: Evaluation.>>  include an evaluation of 
                whether the Do Not Pay Initiative has reduced improper 
                payments or improper awards; and
                    (B) provide the frequency of corrections or 
                identification of incorrect information.

[[Page 126 STAT. 2394]]

    (c) <<NOTE: Deadline.>>  Database Integration Plan.--Not later than 
60 days after the date of enactment of this Act, the Director of the 
Office of Management and Budget shall provide to the Congress a plan 
for--
            (1) inclusion of other databases on the Do Not Pay 
        Initiative;
            (2) to the extent permitted by law, agency access to the Do 
        Not Pay Initiative; and
            (3) the data use agreements described under subsection 
        (e)(2)(D).

    (d) <<NOTE: Deadlines.>>  Initial Working System.--
            (1) Establishment.--Not later than 90 days after the date of 
        enactment of this Act, the Director of the Office of Management 
        and Budget shall establish a working system for prepayment and 
        preaward review that includes the Do Not Pay Initiative as 
        described under this section.
            (2) Working system.--The working system established under 
        paragraph (1)--
                    (A) may be located within an appropriate agency;
                    (B) shall include not less than 3 agencies as users 
                of the system; and
                    (C) shall include investigation activities for fraud 
                and systemic improper payments detection through 
                analytic technologies and other techniques, which may 
                include commercial database use or access.
            (3) <<NOTE: Review.>>  Application to all agencies.--Not 
        later than June 1, 2013, each agency shall review all payments 
        and awards for all programs of that agency through the system 
        established under this subsection.

    (e) Facilitating Data Access by Federal Agencies and Offices of 
Inspectors General for Purposes of Program Integrity.--
            (1) Definition.--In this subsection, the term ``Inspector 
        General'' means any Inspector General described in subparagraph 
        (A), (B), or (I) of section 11(b)(1) of the Inspector General 
        Act of 1978 (5 U.S.C. App.) and any successor Inspector General.
            (2) Computer matching by federal agencies for purposes of 
        investigation and prevention of improper payments and fraud.--
                    (A) In general.--Except as provided in this 
                paragraph, in accordance with section 552a of title 5, 
                United States Code (commonly known as the Privacy Act of 
                1974), each Inspector General and the head of each 
                agency may enter into computer matching agreements with 
                other inspectors general and agency heads that allow 
                ongoing data matching (which shall include automated 
                data matching) in order to assist in the detection and 
                prevention of improper payments.
                    (B) <<NOTE: Deadline.>>  Review.--Not later than 60 
                days after a proposal for an agreement under 
                subparagraph (A) has been presented to a Data Integrity 
                Board established under section 552a(u) of title 5, 
                United States Code, for consideration, the Data 
                Integrity Board shall respond to the proposal.
                    (C) Termination date.--An agreement under 
                subparagraph (A)--

[[Page 126 STAT. 2395]]

                          (i) shall have a termination date of less than 
                      3 years; and
                          (ii) <<NOTE: Time period.>>  during the 3-
                      month period ending on the date on which the 
                      agreement is scheduled to terminate, may be 
                      renewed by the agencies entering the agreement for 
                      not more than 3 years.
                    (D) <<NOTE: Applicability.>>  Multiple agencies.--
                For purposes of this paragraph, section 552a(o)(1) of 
                title 5, United States Code, shall be applied by 
                substituting ``between the source agency and the 
                recipient agency or non-Federal agency or an agreement 
                governing multiple agencies'' for ``between the source 
                agency and the recipient agency or non-Federal agency'' 
                in the matter preceding subparagraph (A).
                    (E) Cost-benefit analysis.--A justification under 
                section 552a(o)(1)(B) of title 5, United States Code, 
                relating to an agreement under subparagraph (A) is not 
                required to contain a specific estimate of any savings 
                under the computer matching agreement.
            (3) Guidance by the office of management and budget.--Not 
        later than <<NOTE: Deadline.>> 6 months after the date of 
        enactment of this Act, and in consultation with the Council of 
        the Inspectors General on Integrity and Efficiency, the 
        Secretary of Health and Human Services, the Commissioner of 
        Social Security, and the head of any other relevant agency, the 
        Director of the Office of Management and Budget shall--
                    (A) issue guidance for agencies regarding 
                implementing this subsection, which shall include 
                standards for--
                          (i) reimbursement of costs, when necessary, 
                      between agencies;
                          (ii) retention and timely destruction of 
                      records in accordance with section 552a(o)(1)(F) 
                      of title 5, United States Code; and
                          (iii) prohibiting duplication and redisclosure 
                      of records in accordance with section 
                      552a(o)(1)(H) of title 5, United States Code;
                    (B) <<NOTE: Review.>>  review the procedures of the 
                Data Integrity Boards established under section 552a(u) 
                of title 5, United States Code, and develop new guidance 
                for the Data Integrity Boards to--
                          (i) improve the effectiveness and 
                      responsiveness of the Data Integrity Boards;
                          (ii) ensure privacy protections in accordance 
                      with section 552a of title 5, United States Code 
                      (commonly known as the Privacy Act of 1974); and
                          (iii) establish standard matching agreements 
                      for use when appropriate; and
                    (C) <<NOTE: Regulations. Public information. Web 
                posting.>>  establish and clarify rules regarding what 
                constitutes making an agreement entered under paragraph 
                (2)(A) available upon request to the public for purposes 
                of section 552a(o)(2)(A)(ii) of title 5, United States 
                Code, which shall include requiring publication of the 
                agreement on a public website.
            (4) <<NOTE: Procedures.>>  Corrections.--The Director of the 
        Office of Management and Budget shall establish procedures 
        providing for the correction of data in order to ensure--
                    (A) compliance with section 552a(p) of title 5, 
                United States Code; and

[[Page 126 STAT. 2396]]

                    (B) that corrections are made in any Do Not Pay 
                Initiative database and in any relevant source databases 
                designated by the Director of the Office of Management 
                and Budget under subsection (b)(1).
            (5) Compliance.--The head of each agency, in consultation 
        with the Inspector General of the agency, shall ensure that any 
        information provided to an individual or entity under this 
        subsection is provided in accordance with protocols established 
        under this subsection.
            (6) Rule of construction.--Nothing in this subsection shall 
        be construed to affect the rights of an individual under section 
        552a(p) of title 5, United States Code.

    (f) Development and Access to a Database of Incarcerated 
Individuals.--Not later than <<NOTE: Deadline. Recommenda- tions.>> 1 
year after the date of enactment of this Act, the Attorney General shall 
submit to Congress recommendations for increasing the use of, access to, 
and the technical feasibility of using data on the Federal, State, and 
local conviction and incarceration status of individuals for purposes of 
identifying and preventing improper payments by Federal agencies and 
programs and fraud.

    (g) Plan To Curb Federal Improper Payments to Deceased Individuals 
by Improving the Quality and Use by Federal Agencies of the Social 
Security Administration Death Master File.--
            (1) Establishment.--In conjunction with the Commissioner of 
        Social Security and in consultation with relevant stakeholders 
        that have an interest in or responsibility for providing the 
        data, and the States, the Director of the Office of Management 
        and Budget shall establish a plan for improving the quality, 
        accuracy, and timeliness of death data maintained by the Social 
        Security Administration, including death information reported to 
        the Commissioner under section 205(r) of the Social Security Act 
        (42 U.S.C. 405(r)).
            (2) Additional actions under plan.--The plan established 
        under this subsection shall include recommended actions by 
        agencies to--
                    (A) increase the quality and frequency of access to 
                the Death Master File and other death data;
                    (B) achieve a goal of at least daily access as 
                appropriate;
                    (C) provide for all States and other data providers 
                to use improved and electronic means for providing data;
                    (D) identify improved methods by agencies for 
                determining ineligible payments due to the death of a 
                recipient through proactive verification means; and
                    (E) address improper payments made by agencies to 
                deceased individuals as part of Federal retirement 
                programs.
            (3) Report.--Not later than 120 days after the date of 
        enactment of this Act, the Director of the Office of Management 
        and Budget shall submit a report to Congress on the plan 
        established under this subsection, including recommended 
        legislation.
SEC. 6. IMPROVING RECOVERY OF IMPROPER PAYMENTS.

    (a) Definition.--In this section, the term ``recovery audit'' means 
a recovery audit described under section 2(h) of the Improper

[[Page 126 STAT. 2397]]

Payments Elimination and Recovery Act of 2010 (31 U.S.C. 3301 note).
    (b) <<NOTE: Determination.>>  Review.--The Director of the Office of 
Management and Budget shall determine--
            (1) current and historical rates and amounts of recovery of 
        improper payments (or, in cases in which improper payments are 
        identified solely on the basis of a sample, recovery rates and 
        amounts estimated on the basis of the applicable sample), 
        including a list of agency recovery audit contract programs and 
        specific information of amounts and payments recovered by 
        recovery audit contractors; and
            (2) targets for recovering improper payments, including 
        specific information on amounts and payments recovered by 
        recovery audit contractors.

    Approved January 10, 2013.

LEGISLATIVE HISTORY--H.R. 4053 (S. 1409):
---------------------------------------------------------------------------

HOUSE REPORTS: No. 112-698 (Comm. on Oversight and Government Reform).
SENATE REPORTS: No. 112-181 (Comm. on Homeland Security and Governmental 
Affairs) accompanying S. 1409.
CONGRESSIONAL RECORD, Vol. 158 (2012):
            Dec. 13, considered and passed House.
            Dec. 20, considered and passed Senate.

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