# H.R. 3200/Division B/Title VI/Subtitle B
## SUBTITLE B — ENHANCED PENALTIES FOR FRAUD AND ABUSE
### Sec. 1611. Enhanced Penalties for False Statements on Provider or Supplier Enrollment Applications.

    (a) In General.—
       Section 1128A(a) of the Social Security Act (42 U.S.C. 1320a–7a(a)) is amended—
          (1) in paragraph (1)(D), by striking all that follows ``in which the person was excluded´´ and inserting ``under Federal law from the Federal health care program under which the claim was made, or´´;
          (2) by striking ``or´´ at the end of paragraph (6);
          (3) in paragraph (7), by inserting at the end ``or´´;
          (4) by inserting after paragraph (7) the following new paragraph:
             ``(8) knowingly makes or causes to be made any false statement, omission, or misrepresentation of a material fact in any application, agreement, bid, or contract to participate or enroll as a provider of services or supplier under a Federal health care program, including managed care organizations under title XIX, Medicare Advantage organizations under part C of title XVIII, prescription drug plan sponsors under part D of title XVIII, and entities that apply to participate as providers of services or suppliers in such managed care organizations and such plans;´´;
          (5) in the matter following paragraph (8), as inserted by paragraph (4), by striking ``or in cases under paragraph (7), $50,000 for each such act)´´ and inserting ``in cases under paragraph (7), $50,000 for each such act, or in cases under paragraph (8), $50,000 for each false statement, omission, or misrepresentation of a material fact)´´; and
          (6) in the second sentence, by striking ``for a lawful purpose)´´ and inserting ``for a lawful purpose, or in cases under paragraph (8), an assessment of not more than 3 times the amount claimed as the result of the false statement, omission, or misrepresentation of material fact claimed by a provider of services or supplier whose application to participate contained such false statement, omission, or misrepresentation)´´.
    (b) Effective Date.—
       The amendments made by subsection (a) shall apply to acts committed on or after January 1, 2010.

### Sec. 1612. Enhanced Penalties for Submission of False Statements Material to a False Claim.

    (a) In General.—
       Section 1128A(a) of the Social Security Act (42 U.S.C. 1320a–7a(a)), as amended by section 1611, is further amended—
          (1) in paragraph (7), by striking ``or´´ at the end;
          (2) in paragraph (8), by inserting ``or´´ at the end; and
          (3) by inserting after paragraph (8), the following new paragraph:
             ``(9) knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim for payment for items and services furnished under a Federal health care program;´´; and
          (4) in the matter following paragraph (9), as inserted by paragraph (3)—
                (A) by striking ``or in cases under paragraph (8)´´ and inserting ``in cases under paragraph (8)´´; and
                (B) by striking ``a material fact)´´ and inserting ``a material fact, in cases under paragraph (9), $50,000 for each false record or statement)´´.
    (b) Effective Date.—
       The amendments made by subsection (a) shall apply to acts committed on or after January 1, 2010.

### Sec. 1613. Enhanced Penalties for Delaying Inspections.

    (a) In General.—
       Section 1128A(a) of the Social Security Act (42 U.S.C. 1320a–7a(a)), as amended by sections 1611 and 1612, is further amended—
          (1) in paragraph (8), by striking ``or´´ at the end;
          (2) in paragraph (9), by inserting ``or´´ at the end;
          (3) by inserting after paragraph (9) the following new paragraph:
             ``(10) fails to grant timely access, upon reasonable request (as defined by the Secretary in regulations), to the Inspector General of the Department of Health and Human Services, for the purpose of audits, investigations, evaluations, or other statutory functions of the Inspector General of the Department of Health and Human Services;´´; and
          (4) in the matter following paragraph (10), as inserted by paragraph (3)—
                (A) by striking ``or´´ after ``$50,000 for each such act,´´; and
                (B) by inserting ``, or in cases under paragraph (10), $15,000 for each day of the failure described in such paragraph´´ after ``false record or statement´´.
    (b) Ensuring Timely Inspections Relating to Contracts with MA Organizations.—
       Section 1857(d)(2) of such Act (42 U.S.C. 1395w–27(d)(2)) is amended—
          (1) in subparagraph (A), by inserting ``timely´´ before ``inspect´´; and
          (2) in subparagraph (B), by inserting ``timely´´ before ``audit and inspect´´.
    (c) Effective Date.—
       The amendments made by subsection (a) shall apply to violations committed on or after January 1, 2010.

### Sec. 1614. Enhanced Hospice Program Safeguards.

    (a) Medicare.—
       Part A of title XVIII of the Social Security Act is amended by inserting after section 1819 the following new section:

##### ``SEC. 1819A. Assuring Quality of Care in Hospice Care.

       ``(a) In general.—If the Secretary determines on the basis of a survey or otherwise, that a hospice program that is certified for participation under this title has demonstrated a substandard quality of care and failed to meet such other requirements as the Secretary may find necessary in the interest of the health and safety of the individuals who are provided care and services by the agency or organization involved and determines—
          ``(1) that the deficiencies involved immediately jeopardize the health and safety of the individuals to whom the program furnishes items and services, the Secretary shall take immediate action to remove the jeopardy and correct the deficiencies through the remedy specified in subsection (b)(2)(A)(iii) or terminate the certification of the program, and may provide, in addition, for 1 or more of the other remedies described in subsection (b)(2)(A); or
          ``(2) that the deficiencies involved do not immediately jeopardize the health and safety of the individuals to whom the program furnishes items and services, the Secretary may—
             ``(A) impose intermediate sanctions developed pursuant to subsection (b), in lieu of terminating the certification of the program; and
             ``(B) if, after such a period of intermediate sanctions, the program is still not in compliance with such requirements, the Secretary shall terminate the certification of the program.
          ``If the Secretary determines that a hospice program that is certified for participation under this title is in compliance with such requirements but, as of a previous period, was not in compliance with such requirements, the Secretary may provide for a civil money penalty under subsection (b)(2)(A)(i) for the days in which it finds that the program was not in compliance with such requirements.
       ``(b) Intermediate sanctions.—
          ``(1) Development and implementation.—The Secretary shall develop and implement, by not later than July 1, 2012—
             ``(A) a range of intermediate sanctions to apply to hospice programs under the conditions described in subsection (a), and
             ``(B) appropriate procedures for appealing determinations relating to the imposition of such sanctions.
          ``(2) Specified sanctions.—
             ``(A) In general.—The intermediate sanctions developed under paragraph (1) may include—
                ``(i) civil money penalties in an amount not to exceed $10,000 for each day of noncompliance or, in the case of a per instance penalty applied by the Secretary, not to exceed $25,000,
                ``(ii) denial of all or part of the payments to which a hospice program would otherwise be entitled under this title with respect to items and services furnished by a hospice program on or after the date on which the Secretary determines that intermediate sanctions should be imposed pursuant to subsection (a)(2),
                ``(iii) the appointment of temporary management to oversee the operation of the hospice program and to protect and assure the health and safety of the individuals under the care of the program while improvements are made,
                ``(iv) corrective action plans, and
                ``(v) in-service training for staff.
             ``The provisions of section 1128A (other than subsections (a) and (b)) shall apply to a civil money penalty under clause (i) in the same manner as such provisions apply to a penalty or proceeding under section 1128A(a). The temporary management under clause (iii) shall not be terminated until the Secretary has determined that the program has the management capability to ensure continued compliance with all requirements referred to in that clause.
             ``(B) Clarification.—The sanctions specified in subparagraph (A) are in addition to sanctions otherwise available under State or Federal law and shall not be construed as limiting other remedies, including any remedy available to an individual at common law.
             ``(C) Commencement of payment.—A denial of payment under subparagraph (A)(ii) shall terminate when the Secretary determines that the hospice program no longer demonstrates a substandard quality of care and meets such other requirements as the Secretary may find necessary in the interest of the health and safety of the individuals who are provided care and services by the agency or organization involved.
          ``(3) Secretarial authority.—The Secretary shall develop and implement, by not later than July 1, 2011, specific procedures with respect to the conditions under which each of the intermediate sanctions developed under paragraph (1) is to be applied, including the amount of any fines and the severity of each of these sanctions. Such procedures shall be designed so as to minimize the time between identification of deficiencies and imposition of these sanctions and shall provide for the imposition of incrementally more severe fines for repeated or uncorrected deficiencies.´´.
    (b) Application to Medicaid.—
       Section 1905(o) of the Social Security Act (42 U.S.C. 1396d(o)) is amended by adding at the end the following new paragraph:
             ``(4) The provisions of section 1819A shall apply to a hospice program providing hospice care under this title in the same manner as such provisions apply to a hospice program providing hospice care under title XVIII.´´.
    (c) Application to CHIP.—
       Title XXI of the Social Security Act is amended by adding at the end the following new section:

##### ``SEC. 2114. Assuring Quality of Care in Hospice Care.

          ``The provisions of section 1819A shall apply to a hospice program providing hospice care under this title in the same manner such provisions apply to a hospice program providing hospice care under title XVIII.´´.

### Sec. 1615. Enhanced Penalties for Individuals Excluded from Program Participation.

    (a) In General.—
       Section 1128A(a) of the Social Security Act (42 U.S.C. 1320a–7a(a)), as amended by the previous sections, is further amended—
          (1) by striking ``or´´ at the end of paragraph (9);
          (2) by inserting ``or´´ at the end of paragraph (10);
          (3) by inserting after paragraph (10) the following new paragraph:
             ``(11) orders or prescribes an item or service, including without limitation home health care, diagnostic and clinical lab tests, prescription drugs, durable medical equipment, ambulance services, physical or occupational therapy, or any other item or service, during a period when the person has been excluded from participation in a Federal health care program, and the person knows or should know that a claim for such item or service will be presented to such a program;´´; and
          (4) in the matter following paragraph (11), as inserted by paragraph (2), by striking ``$15,000 for each day of the failure described in such paragraph´´ and inserting ``$15,000 for each day of the failure described in such paragraph, or in cases under paragraph (11), $50,000 for each order or prescription for an item or service by an excluded individual´´.
    (b) Effective Date.—
       The amendments made by subsection (a) shall apply to violations committed on or after January 1, 2010.

### Sec. 1616. Enhanced Penalties for Provision of False Information by Medicare Advantage and PART D Plans.

    (a) In General.—
       Section 1857(g)(2)(A) of the Social Security Act (42 U.S.C. 1395w–27(g)(2)(A)) is amended by inserting ``except with respect to a determination under subparagraph (E), an assessment of not more than 3 times the amount claimed by such plan or plan sponsor based upon the misrepresentation or falsified information involved,´´ after ``for each such determination,´´.
    (b) Effective Date.—
       The amendment made by subsection (a) shall apply to violations committed on or after January 1, 2010.

### Sec. 1617. Enhanced Penalties for Medicare Advantage and PART D Marketing Violations.

    (a) In General.—
       Section 1857(g)(1) of the Social Security Act (42 U.S.C. 1395w–27(g)(1)), as amended by section 1221(b), is amended—
          (1) in subparagraph (G), by striking ``or´´ at the end;
          (2) by inserting after subparagraph (H) the following new subparagraphs:
             ``(I) except as provided under subparagraph (C) or (D) of section 1860D–1(b)(1), enrolls an individual in any plan under this part without the prior consent of the individual or the designee of the individual;
             ``(J) transfers an individual enrolled under this part from one plan to another without the prior consent of the individual or the designee of the individual or solely for the purpose of earning a commission;
             ``(K) fails to comply with marketing restrictions described in subsections (h) and (j) of section 1851 or applicable implementing regulations or guidance; or
             ``(L) employs or contracts with any individual or entity who engages in the conduct described in subparagraphs (A) through (K) of this paragraph;´´; and
          (3) by adding at the end the following new sentence: ``The Secretary may provide, in addition to any other remedies authorized by law, for any of the remedies described in paragraph (2), if the Secretary determines that any employee or agent of such organization, or any provider or supplier who contracts with such organization, has engaged in any conduct described in subparagraphs (A) through (L) of this paragraph.´´
    (b) Effective Date.—
       The amendments made by subsection (a) shall apply to violations committed on or after January 1, 2010.

### Sec. 1618. Enhanced Penalties for Obstruction of Program Audits.

    (a) In General.—
       Section 1128(b)(2) of the Social Security Act (42 U.S.C. 1320a–7(b)(2)) is amended—
          (1) in the heading, by inserting ``or audit´´ after ``investigation´´; and
          (2) by striking ``investigation into´´ and all that follows through the period and inserting ``investigation or audit related to—´´
             ``(i) any offense described in paragraph (1) or in subsection (a); or
             ``(ii) the use of funds received, directly or indirectly, from any Federal health care program (as defined in section 1128B(f)).´´.
    (b) Effective Date.—
       The amendments made by subsection (a) shall apply to violations committed on or after January 1, 2010.

### Sec. 1619. Exclusion of Certain Individuals and Entities from Participation in Medicare and State Health Care Programs.

    (a) In General.—
       Section 1128(c) of the Social Security Act, as previously amended by this division, is further amended—
          (1) in the heading, by striking ``and period´´ and inserting ``, period, and effect´´; and
          (2) by adding at the end the following new paragraph:
             ``(4)(A) For purposes of this Act, subject to subparagraph (C), the effect of exclusion is that no payment may be made by any Federal health care program (as defined in section 1128B(f)) with respect to any item or service furnished—
                   ``(i) by an excluded individual or entity; or
                   ``(ii) at the medical direction or on the prescription of a physician or other authorized individual when the person submitting a claim for such item or service knew or had reason to know of the exclusion of such individual.
                ``(B) For purposes of this section and sections 1128A and 1128B, subject to subparagraph (C), an item or service has been furnished by an individual or entity if the individual or entity directly or indirectly provided, ordered, manufactured, distributed, prescribed, or otherwise supplied the item or service regardless of how the item or service was paid for by a Federal health care program or to whom such payment was made.
                ``(C)(i) Payment may be made under a Federal health care program for emergency items or services (not including items or services furnished in an emergency room of a hospital) furnished by an excluded individual or entity, or at the medical direction or on the prescription of an excluded physician or other authorized individual during the period of such individual’s exclusion.
                   ``(ii) In the case that an individual eligible for benefits under title XVIII or XIX submits a claim for payment for items or services furnished by an excluded individual or entity, and such individual eligible for such benefits did not know or have reason to know that such excluded individual or entity was so excluded, then, notwithstanding such exclusion, payment shall be made for such items or services. In such case the Secretary shall notify such individual eligible for such benefits of the exclusion of the individual or entity furnishing the items or services. Payment shall not be made for items or services furnished by an excluded individual or entity to an individual eligible for such benefits after a reasonable time (as determined by the Secretary in regulations) after the Secretary has notified the individual eligible for such benefits of the exclusion of the individual or entity furnishing the items or services.
                   ``(iii) In the case that a claim for payment for items or services furnished by an excluded individual or entity is submitted by an individual or entity other than an individual eligible for benefits under title XVIII or XIX or the excluded individual or entity, and the Secretary determines that the individual or entity that submitted the claim took reasonable steps to learn of the exclusion and reasonably relied upon inaccurate or misleading information from the relevant Federal health care program or its contractor, the Secretary may waive repayment of the amount paid in violation of the exclusion to the individual or entity that submitted the claim for the items or services furnished by the excluded individual or entity. If a Federal health care program contractor provided inaccurate or misleading information that resulted in the waiver of an overpayment under this clause, the Secretary shall take appropriate action to recover the improperly paid amount from the contractor.´´.