CAT Act of 2025
- Bill Number
- H.R. 6863
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Health
- Status
- Introduced
- Latest Action
- 2025-12-18: Referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- Last Updated
- 2026-01-22T15:07:05Z
AI-Generated Summary
Purpose
The Centers for Medicare & Medicaid Services Auditor Transparency Act of 2025 (CAT Act of 2025) aims to increase transparency and due process in the suspension of Medicare payments when there is a credible allegation of fraud. It seeks to protect legitimate healthcare providers from undue financial harm while maintaining safeguards against fraud in the Medicare program, which serves millions and costs billions annually.
Key Provisions
- Time Limits on Suspensions: Medicare payment suspensions pending a fraud investigation are generally limited to 180 days, unless the Secretary of Health and Human Services (Secretary) determines there is "good cause" (a justified reason based on evidence) to extend them.
- Expanded Definition of Credible Allegations: The law clarifies that a "credible allegation of fraud" can include not just fraud hotline tips but also "mere error" (simple mistakes) or billing errors due to human error identified during audits.
- Pre-Suspension Notification: At least 30 days before suspending payments, the Centers for Medicare & Medicaid Services (CMS) must notify the provider or supplier (e.g., doctors, hospitals, or medical equipment suppliers) with details about the allegation, including:
- The specific nature of the alleged fraud.
- The date of the alleged fraud.
- The basis for the allegation (e.g., a hotline complaint, data analysis of claims, or patterns from audits).
- Ongoing Updates During Suspension: Every 30 days while payments are suspended, CMS must provide:
- A detailed, current list of investigation findings.
- An expected timeline for completing the investigation.
- An opportunity for the provider to ask CMS questions about the suspension and investigation.
- Exception for Sensitive Cases: CMS can withhold details if sharing them would risk compromising the investigation, as decided by the Secretary in consultation with the Department of Health and Human Services Inspector General and state auditors.
- Consequences for Non-Compliance: If CMS fails to provide the required notifications or updates, it must immediately resume payments, including any withheld amounts plus interest.
- Annual Reporting to Congress: Starting in fiscal year 2025, CMS must submit an annual report detailing:
- The number of payment suspensions due to fraud allegations.
- The basis for each allegation.
- Average durations of suspensions and investigations.
- Time between investigation completion and payment reinstatement (if applicable).
- Independent Appeals Process: Within 180 days of enactment, CMS must create a neutral appeals system for providers to challenge suspensions quickly. The Secretary must consult stakeholders like providers under Medicare, Medicaid, and the Children's Health Insurance Program (CHIP) when developing this process.
The changes apply to fraud investigations started after the law's enactment.
Significant Changes to Existing Law
- Added Transparency Requirements: Current law allows CMS and its contractors (Unified Program Integrity Contractors, or UPICs, who audit for fraud) broad discretion to suspend payments for up to a year without detailed explanations or regular updates. The CAT Act mandates specific disclosures and periodic communication to ensure providers understand the allegations.
- Due Process Enhancements: Previously, there was no required pre-suspension notice or independent appeal for suspensions. The new law introduces these protections and limits extensions without justification, addressing concerns that routine delays harm innocent providers.
- Broader Scope for Allegations: Expands what qualifies as a "credible allegation" to include non-fraudulent errors, potentially reducing suspensions for minor issues but requiring CMS to handle them more carefully.
Potential Impacts
- On Government Agencies: CMS and UPICs will face stricter procedural rules, increasing administrative workload for notifications, updates, and appeals. This could improve program integrity by focusing resources on real fraud but might slow investigations if exceptions are overused. Annual reports will enhance congressional oversight of fraud prevention efforts.
- On Citizens: Medicare providers acting in good faith (e.g., hospitals, clinics) may avoid financial ruin from prolonged suspensions, helping them stay operational and maintain access to care for over 139 million Medicare and Medicaid beneficiaries. However, if transparency delays fraud probes, it could temporarily allow more fraudulent activity, affecting taxpayer funds (Medicare fraud cost $3.1 billion in 2020).
- On International Relations: No direct impacts, as the law focuses on domestic U.S. healthcare programs.
Main Stakeholders Affected
- Healthcare Providers and Suppliers: Primary beneficiaries of increased protections, including doctors, hospitals, nursing homes, and medical suppliers who bill Medicare, as they gain notice, updates, and appeal rights to challenge unfair suspensions.
- CMS and UPICs: Government entities responsible for fraud detection; they must adapt operations for more transparency and accountability, potentially reducing their discretion.
- Medicare Beneficiaries: Elderly and disabled individuals relying on Medicare; better provider stability could prevent service disruptions, but any fraud lapses might strain program funding.
- Taxpayers and Congress: Indirectly affected through improved fraud safeguards and required reporting, ensuring efficient use of the $1.5 trillion annual Medicare/Medicaid budget.
- State Auditors and the HHS Inspector General: Involved in exceptions and consultations, gaining a role in oversight.
Notable Legal, Constitutional, or Political Implications
- Legal and Due Process: The law strengthens procedural fairness under the Social Security Act by mandating notice and appeals, aligning with constitutional due process principles (e.g., the Fifth Amendment's protection against deprivation of property without fair procedures). It could reduce lawsuits from providers claiming wrongful suspensions but might invite challenges if CMS's "good cause" extensions are seen as arbitrary.
- Constitutional: No major conflicts, but the emphasis on transparency and appeals reinforces property rights for providers, balancing government anti-fraud powers with individual protections.
- Political: Highlights bipartisan concerns (introduced by a Democrat and Republican) over healthcare fraud amid rising program costs. It promotes accountability in federal spending without weakening enforcement, potentially appealing to fiscal conservatives and provider advocacy groups, while encouraging stakeholder input to build support.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (1)
Recent Actions
- 2025-12-18: Referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- 2025-12-18: Referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- 2025-12-18: Introduced in House
- 2025-12-18: Introduced in House
Bill Versions
- Centers for Medicare & Medicaid Services Auditor Transparency Act of 2025 — issued 2025-12-18 — PDF (10 pages)