II

104TH CONGRESS

2D SESSION S. 1858

To provide for improved coordination, communication, and enforcement

related to health care fraud, waste, and abuse.

IN THE SENATE OF THE UNITED STATES

JUNE 11, 1996

Mr. GRAHAM (for himself, Mr. BAUCUS, and Mr. PRYOR) introduced the following bill; which was read twice and referred to the Committeee on Finance

A BILL

To provide for improved coordination, communication, and

enforcement related to health care fraud, waste, and abuse.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE; REFERENCES IN ACT; TABLE OF

4 CONTENTS.

5 (a) SHORT TITLE.—This Act may be cited as the

6 ‘‘Medicare Antifraud Act of 1996’’.

7 (b) AMENDMENTS TO SOCIAL SECURITY ACT.—Ex8 cept as otherwise specifically provided, whenever in this

9 Act an amendment is expressed in terms of an amendment

10 to, or repeal of, a section or other provision, the reference
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1 shall be considered to be made to that section or other

2 provision of the Social Security Act.

3 (c) TABLE OF CONTENTS.—The table of contents of

4 this Act is as follows:

Sec. 1. Short title; references in act; table of contents.

TITLE I—FRAUD AND ABUSE CONTROL PROGRAM

Sec. 101. Fraud and abuse control program.

Sec. 102. Medicare benefit integrity system.

Sec. 103. Application of certain health antifraud and abuse sanctions to fraud

and abuse against Federal health programs.

Sec. 104. Health care fraud and abuse provider guidance.

Sec. 105. Medicare/medicaid beneficiary protection program.

Sec. 106. Ensuring the integrity of the Federal Hospital Insurance Trust

Fund.

TITLE II—REVISIONS TO CURRENT SANCTIONS FOR FRAUD AND

ABUSE

Sec. 201. Mandatory exclusion from participation in medicare and State health

care programs.

Sec. 202. Establishment of minimum period of exclusion for certain individuals

and entities subject to permissive exclusion from medicare and

State health care programs.

Sec. 203. Permissive exclusion of individuals with ownership or control interest

in sanctioned entities.

Sec. 204. Sanctions against practitioners and persons for failure to comply with

statutory obligations.

Sec. 205. Sanctions against providers for excessive fees or prices.

Sec. 206. Applicability of the Bankruptcy Code to program sanctions.

Sec. 207. Intermediate sanctions for medicare health maintenance organizations.

Sec. 208. Liability of medicare carriers and fiscal intermediaries and States for

claims submitted by excluded providers.

Sec. 209. Effective date.

TITLE III—ADMINISTRATIVE AND MISCELLANEOUS PROVISIONS

Sec. 301. Establishment of the health care fraud and abuse data collection program.

Sec. 302. Inspector General access to national practitioner data bank.

Sec. 303. Corporate whistleblower program.

Sec. 304. Home health billing, payment, and cost limit calculation to be based

on site where service is furnished.

Sec. 305. Application of inherent reasonableness.

Sec. 306. Clarification of time and filing limitations.

Sec. 307. Clarification of liability of third party administrators.

Sec. 308. Clarification of payment amounts to medicare.

Sec. 309. Increased flexibility in contracting for medicare claims processing.

TITLE IV—CIVIL MONETARY PENALTIES
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Sec. 401. Social Security Act civil monetary penalties.

TITLE V—AMENDMENTS TO CRIMINAL LAW

Sec. 501. Health care fraud.

Sec. 502. Forfeitures for Federal health care offenses.

Sec. 503. Injunctive relief relating to Federal health care offenses.

Sec. 504. Grand jury disclosure.

Sec. 505. False statements.

Sec. 506. Obstruction of criminal investigations, audits, or inspections of Federal health care offenses.

Sec. 507. Theft or embezzlement.

Sec. 508. Laundering of monetary instruments.

Sec. 509. Authorized investigative demand procedures.

TITLE VI—STATE HEALTH CARE FRAUD CONTROL UNITS

Sec. 601. State health care fraud control units.

TITLE VII—MEDICARE/MEDICAID BILLING ABUSE PREVENTION

Sec. 701. Uniform medicare/medicaid application process.

Sec. 702. Standards for uniform claims.

Sec. 703. Unique provider identification code.

Sec. 704. Use of new procedures.

Sec. 705. Nondischargeability of certain medicare debts.

1 TITLE I—FRAUD AND ABUSE

2 CONTROL PROGRAM

3 SEC. 101. FRAUD AND ABUSE CONTROL PROGRAM.

4 (a) ESTABLISHMENT OF PROGRAM.—Title XI (42

5 U.S.C. 1301 et seq.) is amended by inserting after section

6 1128B the following new section:

7 ‘‘FRAUD AND ABUSE CONTROL PROGRAM

8 ‘‘SEC. 1128C. (a) ESTABLISHMENT OF PROGRAM.—

9 ‘‘(1) IN GENERAL.—Not later than January 1,

10 1997, the Secretary, acting through the Office of the

11 Inspector General of the Department of Health and

12 Human Services, and the Attorney General shall es13 tablish a program—
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1 ‘‘(A) to coordinate Federal, State, and

2 local law enforcement programs to control fraud

3 and abuse with respect to health plans,

4 ‘‘(B) to conduct investigations, audits,

5 evaluations, and inspections relating to the de6 livery of and payment for health care in the

7 United States,

8 ‘‘(C) to facilitate the enforcement of the

9 provisions of sections 1128, 1128A, and 1128B

10 and other statutes applicable to health care

11 fraud and abuse,

12 ‘‘(D) to provide for the modification and

13 establishment of safe harbors and to issue advi14 sory opinions and special fraud alerts pursuant

15 to section 104 of the Medicare Antifraud Act of

16 1996, and

17 ‘‘(E) to provide for the reporting and dis18 closure of certain final adverse actions against

19 health care providers, suppliers, or practitioners

20 pursuant to the data collection system estab21 lished under section 301 of such Act.

22 ‘‘(2) COORDINATION WITH HEALTH PLANS.—In

23 carrying out the program established under para24 graph (1), the Secretary and the Attorney General
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1 shall consult with, and arrange for the sharing of

2 data with representatives of health plans.

3 ‘‘(3) GUIDELINES.—

4 ‘‘(A) IN GENERAL.—The Secretary and the

5 Attorney General shall issue guidelines to carry

6 out the program under paragraph (1). The pro7 visions of sections 553, 556, and 557 of title 5,

8 United States Code, shall not apply in the issu9 ance of such guidelines.

10 ‘‘(B) INFORMATION GUIDELINES.—

11 ‘‘(i) IN GENERAL.—Guidelines issued

12 under subparagraph (A) shall include

13 guidelines relating to the furnishing of in14 formation by health plans, providers, and

15 others to enable the Secretary and the At16 torney General to carry out the program

17 (including coordination with health plans

18 under paragraph (2)).

19 ‘‘(ii) CONFIDENTIALITY.—Guidelines

20 issued under subparagraph (A) shall in21 clude procedures to assure that such infor22 mation is provided and utilized in a man23 ner that appropriately protects the con24 fidentiality of the information and the pri-
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1 vacy of individuals receiving health care

2 services and items.

3 ‘‘(iii) QUALIFIED IMMUNITY FOR PRO4 VIDING INFORMATION.—The provisions of

5 section 1157(a) (relating to limitation on

6 liability) shall apply to a person providing

7 information to the Secretary or the Attor8 ney General in conjunction with their per9 formance of duties under this section.

10 ‘‘(4) ENSURING ACCESS TO DOCUMENTATION.—

11 The Inspector General of the Department of Health

12 and Human Services is authorized to exercise such

13 authority described in paragraphs (3) through (9) of

14 section 6 of the Inspector General Act of 1978 (5

15 U.S.C. App.) as necessary with respect to the activi16 ties under the fraud and abuse control program es17 tablished under this subsection.

18 ‘‘(5) AUTHORITY OF INSPECTOR GENERAL.—

19 Nothing in this Act shall be construed to diminish

20 the authority of any Inspector General, including

21 such authority as is provided in the Inspector Gen22 eral Act of 1978 (5 U.S.C. App.).

23 ‘‘(b) ADDITIONAL USE OF FUNDS BY INSPECTOR

24 GENERAL.—
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1 ‘‘(1) REIMBURSEMENTS FOR INVESTIGA2 TIONS.—The Inspector General of the Department

3 of Health and Human Services is authorized to re4 ceive and retain for current use reimbursement for

5 the costs of conducting investigations and audits and

6 for monitoring compliance plans when such costs are

7 ordered by a court, voluntarily agreed to by the

8 payor, or otherwise.

9 ‘‘(2) CREDITING.—Funds received by the In10 spector General under paragraph (1) as reimburse11 ment for costs of conducting investigations shall be

12 deposited to the credit of the appropriation from

13 which initially paid, or to appropriations for similar

14 purposes currently available at the time of deposit,

15 and shall remain available for obligation for 1 year

16 from the date of the deposit of such funds.

17 ‘‘(c) HEALTH PLAN DEFINED.—For purposes of this

18 section, the term ‘health plan’ means a plan or program

19 that provides health benefits, whether directly, through in20 surance, or otherwise, and includes—

21 ‘‘(1) a policy of health insurance;

22 ‘‘(2) a contract of a service benefit organiza23 tion; and
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1 ‘‘(3) a membership agreement with a health

2 maintenance organization or other prepaid health

3 plan.’’.

4 (b) ESTABLISHMENT OF HEALTH CARE FRAUD AND

5 ABUSE CONTROL ACCOUNT IN FEDERAL HOSPITAL IN6 SURANCE TRUST FUND.—Section 1817 (42 U.S.C. 1395i)

7 is amended by adding at the end the following new sub8 section:

9 ‘‘(k) HEALTH CARE FRAUD AND ABUSE CONTROL

10 ACCOUNT.—

11 ‘‘(1) ESTABLISHMENT.—There is hereby estab12 lished in the Trust Fund an expenditure account to

13 be known as the ‘Health Care Fraud and Abuse

14 Control Account’ (in this subsection referred to as

15 the ‘Account’).

16 ‘‘(2) APPROPRIATED AMOUNTS TO TRUST

17 FUND.—

18 ‘‘(A) IN GENERAL.—There are hereby ap19 propriated to the Trust Fund—

20 ‘‘(i) such gifts and bequests as may be

21 made as provided in subparagraph (B);

22 ‘‘(ii) such amounts as may be depos23 ited in the Trust Fund as provided in title

24 XI; and
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1 ‘‘(iii) such amounts as are transferred

2 to the Trust Fund under subparagraph

3 (C).

4 ‘‘(B) AUTHORIZATION TO ACCEPT GIFTS.—

5 The Trust Fund is authorized to accept, on be6 half of the United States, money gifts and be7 quests made unconditionally to the Trust Fund,

8 for the benefit of the Account or any activity fi9 nanced through the Account.

10 ‘‘(C) TRANSFER OF AMOUNTS.—The Man11 aging Trustee shall transfer to the Trust Fund,

12 under rules similar to the rules in section 9601

13 of the Internal Revenue Code of 1986, an

14 amount equal to the sum of the following:

15 ‘‘(i) Criminal fines recovered in cases

16 involving a Federal health care offense (as

17 defined in section 982(a)(6)(B) of title 18,

18 United States Code).

19 ‘‘(ii) Civil monetary penalties and as20 sessments imposed in health care cases, in21 cluding amounts recovered under titles XI,

22 XVIII, and XIX, and chapter 38 of title

23 31, United States Code (except as other24 wise provided by law).
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1 ‘‘(iii) Amounts resulting from the for2 feiture of property by reason of a Federal

3 health care offense.

4 ‘‘(iv) Penalties and damages obtained

5 and otherwise creditable to miscellaneous

6 receipts of the general fund of the Treas7 ury obtained under sections 3729 through

8 3733 of title 31, United States Code

9 (known as the False Claims Act), in cases

10 involving claims related to the provision of

11 health care items and services (other than

12 funds awarded to a relator, for restitution

13 or otherwise authorized by law).

14 ‘‘(3) APPROPRIATED AMOUNTS TO ACCOUNT

15 FOR FRAUD AND ABUSE CONTROL PROGRAM, ETC.—

16 ‘‘(A) DEPARTMENTS OF HEALTH AND

17 HUMAN SERVICES AND JUSTICE.—

18 ‘‘(i) IN GENERAL.—There are hereby

19 appropriated to the Account from the

20 Trust Fund such sums as the Secretary

21 and the Attorney General certify are nec22 essary to carry out the purposes described

23 in subparagraph (C), to be available with24 out further appropriation, in an amount

25 not to exceed—
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1 ‘‘(I) for fiscal year 1997,

2 $104,000,000;

3 ‘‘(II) for each of the fiscal years

4 1998 through 2003, the limit for the

5 preceding fiscal year, increased by 15

6 percent; and

7 ‘‘(III) for each fiscal year after

8 fiscal year 2003, the limit for fiscal

9 year 2003.

10 ‘‘(ii) MEDICARE AND MEDICAID AC11 TIVITIES.—For each fiscal year, of the

12 amount appropriated in clause (i), the fol13 lowing amounts shall be available only for

14 the purposes of the activities of the Office

15 of the Inspector General of the Depart16 ment of Health and Human Services with

17 respect to the medicare and medicaid pro18 grams—

19 ‘‘(I) for fiscal year 1997, not less

20 than $60,000,000 and not more than

21 $70,000,000;

22 ‘‘(II) for fiscal year 1998, not

23 less than $80,000,000 and not more

24 than $90,000,000;
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1 ‘‘(III) for fiscal year 1999, not

2 less than $90,000,000 and not more

3 than $100,000,000;

4 ‘‘(IV) for fiscal year 2000, not

5 less than $110,000,000 and not more

6 than $120,000,000;

7 ‘‘(V) for fiscal year 2001, not

8 less than $120,000,000 and not more

9 than $130,000,000;

10 ‘‘(VI) for fiscal year 2002, not

11 less than $140,000,000 and not more

12 than $150,000,000; and

13 ‘‘(VII) for each fiscal year after

14 fiscal year 2002, not less than

15 $150,000,000 and not more than

16 $160,000,000.

17 ‘‘(B) FEDERAL BUREAU OF INVESTIGA18 TION.—There are hereby appropriated from the

19 general fund of the United States Treasury and

20 hereby appropriated to the Account for transfer

21 to the Federal Bureau of Investigation to carry

22 out the purposes described in subparagraph

23 (C), to be available without further appropria24 tion—

25 ‘‘(i) for fiscal year 1997, $47,000,000;
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1 ‘‘(ii) for fiscal year 1998,

2 $56,000,000;

3 ‘‘(iii) for fiscal year 1999,

4 $66,000,000;

5 ‘‘(iv) for fiscal year 2000,

6 $76,000,000;

7 ‘‘(v) for fiscal year 2001,

8 $88,000,000;

9 ‘‘(vi) for fiscal year 2002,

10 $101,000,000; and

11 ‘‘(vii) for each fiscal year after fiscal

12 year 2002, $114,000,000.

13 ‘‘(C) USE OF FUNDS.—The purposes de14 scribed in this subparagraph are to cover the

15 costs (including equipment, salaries, benefits,

16 travel, and training) of the administration and

17 operation of the health care fraud and abuse

18 control program established under section

19 1128C(a), including the costs of—

20 ‘‘(i) prosecuting health care matters

21 (through criminal, civil, and administrative

22 proceedings);

23 ‘‘(ii) investigations;

24 ‘‘(iii) financial and performance audits

25 of health care programs and operations;
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1 ‘‘(iv) inspections and other evalua2 tions; and

3 ‘‘(v) provider and consumer education

4 regarding compliance with the provisions of

5 title XI.

6 ‘‘(4) APPROPRIATED AMOUNTS TO ACCOUNT

7 FOR MEDICARE BENEFIT INTEGRITY SYSTEM.—

8 ‘‘(A) IN GENERAL.—There are hereby ap9 propriated to the Account from the Trust Fund

10 for each fiscal year such amounts as are nec11 essary to carry out the Medicare Benefit Integ12 rity System under section 1889, subject to sub13 paragraph (B), to be available without further

14 appropriation.

15 ‘‘(B) AMOUNTS SPECIFIED.—The amount

16 appropriated under subparagraph (A) for a fis17 cal year is as follows:

18 ‘‘(i) For fiscal year 1997, such

19 amount shall be not less than

20 $430,000,000 and not more than

21 $440,000,000.

22 ‘‘(ii) For fiscal year 1998, such

23 amount shall be not less than

24 $490,000,000 and not more than

25 $500,000,000.
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1 ‘‘(iii) For fiscal year 1999, such

2 amount shall be not less than

3 $550,000,000 and not more than

4 $560,000,000.

5 ‘‘(iv) For fiscal year 2000, such

6 amount shall be not less than

7 $620,000,000 and not more than

8 $630,000,000.

9 ‘‘(v) For fiscal year 2001, such

10 amount shall be not less than

11 $670,000,000 and not more than

12 $680,000,000.

13 ‘‘(vi) For fiscal year 2002, such

14 amount shall be not less than

15 $690,000,000 and not more than

16 $700,000,000.

17 ‘‘(vii) For each fiscal year after fiscal

18 year 2002, such amount shall be not less

19 than $710,000,000 and not more than

20 $720,000,000.

21 ‘‘(5) ANNUAL REPORT.—The Secretary and the

22 Attorney General shall submit jointly an annual re23 port to Congress on the amount of revenue which is

24 generated and disbursed, and the justification for
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1 such disbursements, by the Account in each fiscal

2 year.’’.

3 SEC. 102. MEDICARE BENEFIT INTEGRITY SYSTEM.

4 Part C of title XVIII (42 U.S.C. 1395 et seq.) is

5 amended by inserting after section 1888 the following new

6 section:

7 ‘‘MEDICARE BENEFIT INTEGRITY CONTRACTS

8 ‘‘SEC. 1889. (a) AUTHORITY TO CONTRACT.—

9 ‘‘(1) IN GENERAL.—In order to improve the ef10 fectiveness of benefit quality assurance activities re11 lating to programs under this title, and to enhance

12 the Secretary’s capability of carrying out program

13 safeguard functions and related education activities

14 to avoid the improper expenditure of assets of the

15 Federal Hospital Insurance Trust Fund and the

16 Federal Supplementary Medical Insurance Trust

17 Fund, the Secretary shall enter into contracts with

18 organizations or other entities having demonstrated

19 the capability to carry out one or more benefit qual20 ity assurance activities. The provisions of sections

21 1816 and 1842 shall be inapplicable to contracts

22 under this section.

23 ‘‘(2) NUMBER OF CONTRACTS.—The Secretary

24 shall determine the number of separate contracts

25 which are necessary to achieve, with the maximum

26 degree of efficiency and cost-effectiveness, the objec-
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1 tives of this section. The Secretary may enter into

2 contracts under this section at such time or times as

3 are appropriate so long as not later than the fiscal

4 year beginning October 1, 1998, and for each fiscal

5 year thereafter, there are in effect contracts that,

6 considered collectively, provide for benefit quality as7 surance activities with respect to all payments under

8 this title.

9 ‘‘(b) CONTRACT REQUIREMENTS.—A benefit quality

10 assurance contract entered into under subsection (a) must

11 provide for one or more benefit quality assurance program

12 activities. Each such contract shall include an agreement

13 by the contractor to cooperate with the Inspector General

14 of the Department of Health and Human Services, and

15 the Attorney General, and other law enforcement agencies,

16 as appropriate, in the investigation and deterrence of

17 fraud and abuse in relation to this title and in other cases

18 arising out of the activities described in such section, and

19 shall contain such other provisions as the Secretary finds

20 necessary or appropriate to achieve the purposes of this

21 part. The provisions of section 1153(e)(1) shall apply to

22 contracts and contracting authority under this section, ex23 cept that competitive procedures must be used when enter24 ing into new contracts under this section, or at any other

25 time when it is in the best interests of the United States.
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1 A contract under this section may be renewed from term

2 to term without regard to any provision of law requiring

3 competition if the contractor has met or exceeded the per4 formance requirements established in the current contract.

5 ‘‘(c) LIMITATIONS.—

6 ‘‘(1) IN GENERAL.—In carrying out this sec7 tion, the Secretary may not enter into a contract

8 with an organization or other entity if the Secretary

9 determines that such organization’s or entity’s finan10 cial holdings, interests, or relationships would inter11 fere with its ability to perform the functions to be

12 required by the contract in an effective and impar13 tial manner.

14 ‘‘(2) LIMITATION OF LIABILITY.—The Sec15 retary shall by regulation provide for the limitation

16 of a contractor’s liability for actions taken to carry

17 out a contract under this section, and such regula18 tions shall, to the extent the Secretary finds appro19 priate, employ the same or comparable standards

20 and other substantive and procedural provisions as

21 are contained in section 1157.’’.
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1 SEC. 103. APPLICATION OF CERTAIN HEALTH ANTIFRAUD

2 AND ABUSE SANCTIONS TO FRAUD AND

3 ABUSE AGAINST FEDERAL HEALTH PRO4 GRAMS.

5 (a) CRIMES.—

6 (1) SOCIAL SECURITY ACT.—Section 1128B (42

7 U.S.C. 1320a–7b) is amended as follows:

8 (A) In the heading, by striking ‘‘MEDICARE

9 OR STATE HEALTH CARE PROGRAMS’’ and in10 serting ‘‘FEDERAL HEALTH CARE PROGRAMS’’.

11 (B) In subsection (a)(1), by striking ‘‘a

12 program under title XVIII or a State health

13 care program (as defined in section 1128(h))’’

14 and inserting ‘‘a Federal health care program

15 (as defined in subsection (f))’’.

16 (C) In subsection (a)(5), by striking ‘‘a

17 program under title XVIII or a State health

18 care program’’ and inserting ‘‘a Federal health

19 care program (as defined in subsection (f))’’.

20 (D) In the second sentence of subsection

21 (a)—

22 (i) by striking ‘‘a State plan approved

23 under title XIX’’ and inserting ‘‘a Federal

24 health care program (as defined in sub25 section (f))’’; and
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1 (ii) by striking ‘‘the State may at its

2 option (notwithstanding any other provi3 sion of that title or of such plan)’’ and in4 serting ‘‘the administrator of such program

5 may at its option (notwithstanding any

6 other provision of such program)’’.

7 (E) In subsection (b)—

8 (i) by striking ‘‘and willfully’’ each

9 place it appears;

10 (ii) by striking ‘‘$25,000’’ each place

11 it appears and inserting ‘‘$50,000’’;

12 (iii) by striking ‘‘title XVIII or a

13 State health care program’’ each place it

14 appears and inserting ‘‘Federal health care

15 program (as defined in subsection (f))’’;

16 (iv) in paragraph (1) in the matter

17 preceding subparagraph (A), by striking

18 ‘‘kind—’’ and inserting ‘‘kind with intent

19 to be influenced—’’;

20 (v) in paragraph (1)(A), by striking

21 ‘‘in return for referring’’ and inserting ‘‘to

22 refer’’;

23 (vi) in paragraph (1)(B), by striking

24 ‘‘in return for purchasing, leasing, order25 ing, or arranging for or recommending’’
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1 and inserting ‘‘to purchase, lease, order, or

2 arrange for or recommend’’;

3 (vii) in paragraph (2) in the matter

4 preceding subparagraph (A), by striking

5 ‘‘to induce such person’’ and inserting

6 ‘‘with intent to influence such person’’;

7 (viii) by adding at the end of para8 graphs (1) and (2) the following sentence:

9 ‘‘A violation exists under this paragraph if

10 one or more purposes of the remuneration

11 is unlawful under this paragraph.’’;

12 (ix) by redesignating paragraph (3) as

13 paragraph (4);

14 (x) in paragraph (4) (as redesignated)

15 in the matter preceding subparagraph (A),

16 by striking ‘‘Paragraphs (1) and (2)’’ and

17 inserting ‘‘Paragraphs (1), (2), and (3)’’;

18 and

19 (xi) by inserting after paragraph (2)

20 the following new paragraph:

21 ‘‘(3)(A) The Attorney General may bring an action

22 in the district courts to impose upon any person who car23 ries out any activity in violation of this subsection a civil

24 penalty of not less than $25,000 and not more than
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1 $50,000 for each such violation, plus three times the total

2 remuneration offered, paid, solicited, or received.

3 ‘‘(B) A violation exists under this paragraph if one

4 or more purposes of the remuneration is unlawful, and the

5 damages shall be the full amount of such remuneration.

6 ‘‘(C) Section 3731 of title 31, United States Code,

7 and the Federal Rules of Civil Procedure shall apply to

8 actions brought under this paragraph.

9 ‘‘(D) The provisions of this paragraph do not affect

10 the availability of other criminal and civil remedies for

11 such violations.’’.

12 (F) In subsection (c), by inserting ‘‘(as de13 fined in section 1128(h))’’ after ‘‘a State health

14 care program’’.

15 (G) By adding at the end the following

16 new subsections:

17 ‘‘(f) For purposes of this section, the term ‘Federal

18 health care program’ means—

19 ‘‘(1) any plan or program that provides health

20 benefits, whether directly, through insurance, or oth21 erwise, which is funded, in whole or in part, by the

22 United States Government; or

23 ‘‘(2) any State health care program, as defined

24 in section 1128(h).
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1 ‘‘(g)(1) The Inspector General of the departments

2 and agencies with a Federal health care program may con3 duct an investigation or audit relating to violations of this

4 section and claims within the jurisdiction of other Federal

5 departments or agencies if the following conditions are

6 satisfied:

7 ‘‘(A) The investigation or audit involves pri8 marily claims submitted to the Federal health care

9 programs of the department or agency conducting

10 the investigation or audit.

11 ‘‘(B) The Inspector General of the department

12 or agency conducting the investigation or audit gives

13 notice and an opportunity to participate in the inves14 tigation or audit to the Inspector General of the de15 partment or agency with primary jurisdiction over

16 the Federal health care programs to which the

17 claims were submitted.

18 ‘‘(2) If the conditions specified in paragraph (1) are

19 fulfilled, the Inspector General of the department or agen20 cy conducting the investigation or audit may exercise all

21 powers granted under the Inspector General Act of 1978

22 (5 U.S.C. App.) with respect to the claims submitted to

23 the other departments or agencies to the same manner

24 and extent as provided in that Act with respect to claims

25 submitted to such departments or agencies.’’.
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1 (2) IDENTIFICATION OF COMMUNITY SERVICE

2 OPPORTUNITIES.—Section 1128B (42 U.S.C.

3 1320a–7b), as amended by paragraph (1), is amend4 ed by adding at the end the following new sub5 section:

6 ‘‘(h) The Secretary may—

7 ‘‘(1) in consultation with State and local health

8 care officials, identify opportunities for the satisfac9 tion of community service obligations that a court

10 may impose upon the conviction of an offense under

11 this section; and

12 ‘‘(2) make information concerning such oppor13 tunities available to Federal and State law enforce14 ment officers and State and local health care offi15 cials.’’.

16 (b) EFFECTIVE DATE.—The amendments made by

17 this section shall take effect on January 1, 1997.

18 SEC. 104. HEALTH CARE FRAUD AND ABUSE PROVIDER

19 GUIDANCE.

20 (a) SOLICITATION AND PUBLICATION OF MODIFICA21 TIONS TO EXISTING SAFE HARBORS AND NEW SAFE

22 HARBORS.—

23 (1) IN GENERAL.—

24 (A) SOLICITATION OF PROPOSALS FOR

25 SAFE HARBORS.—Not later than January 1,
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1 1997, and not less than annually thereafter, the

2 Secretary shall publish a notice in the Federal

3 Register soliciting proposals, which will be ac4 cepted during a 60-day period, for—

5 (i) modifications to existing safe har6 bors issued pursuant to section 14(a) of

7 the Medicare Patient and Program Protec8 tion Act of 1987 (42 U.S.C. 1320a–7b

9 note);

10 (ii) additional safe harbors specifying

11 payment practices that shall not be treated

12 as a criminal offense under section

13 1128B(b) of the Social Security Act (42

14 U.S.C. 1320a–7b(b)) and shall not serve

15 as the basis for an exclusion under section

16 1128(b)(7) of such Act (42 U.S.C. 1320a–

17 7(b)(7));

18 (iii) interpretive rulings to be issued

19 pursuant to subsection (b); and

20 (iv) special fraud alerts to be issued

21 pursuant to subsection (c).

22 (B) PUBLICATION OF PROPOSED MODI23 FICATIONS AND PROPOSED ADDITIONAL SAFE

24 HARBORS.—After considering the proposals de25 scribed in clauses (i) and (ii) of subparagraph
26

•S 1858 IS

1 (A), the Secretary, in consultation with the At2 torney General, shall publish in the Federal

3 Register proposed modifications to existing safe

4 harbors and proposed additional safe harbors, if

5 appropriate, with a 60-day comment period.

6 After considering any public comments received

7 during this period, the Secretary shall issue

8 final rules modifying the existing safe harbors

9 and establishing new safe harbors, as appro10 priate.

11 (C) REPORT.—The Inspector General of

12 the Department of Health and Human Services

13 (in this section referred to as the ‘‘Inspector

14 General’’) shall, in an annual report to Con15 gress or as part of the year-end semiannual re16 port required by section 5 of the Inspector Gen17 eral Act of 1978 (5 U.S.C. App.), describe the

18 proposals received under clauses (i) and (ii) of

19 subparagraph (A) and explain which proposals

20 were included in the publication described in

21 subparagraph (B), which proposals were not in22 cluded in that publication, and the reasons for

23 the rejection of the proposals that were not in24 cluded.
27

•S 1858 IS

1 (2) CRITERIA FOR MODIFYING AND ESTABLISH2 ING SAFE HARBORS.—In modifying and establishing

3 safe harbors under paragraph (1)(B), the Secretary

4 may consider the extent to which providing a safe

5 harbor for the specified payment practice may result

6 in any of the following:

7 (A) An increase or decrease in access to

8 health care services.

9 (B) An increase or decrease in the quality

10 of health care services.

11 (C) An increase or decrease in patient free12 dom of choice among health care providers.

13 (D) An increase or decrease in competition

14 among health care providers.

15 (E) An increase or decrease in the ability

16 of health care facilities to provide services in

17 medically underserved areas or to medically un18 derserved populations.

19 (F) An increase or decrease in the cost to

20 Federal health care programs (as defined in

21 section 1128B(f) of the Social Security Act (42

22 U.S.C. 1320a–7b(f)).

23 (G) An increase or decrease in the poten24 tial overutilization of health care services.
28

•S 1858 IS

1 (H) The existence or nonexistence of any

2 potential financial benefit to a health care pro3 fessional or provider which may vary based on

4 their decisions of—

5 (i) whether to order a health care

6 item or service; or

7 (ii) whether to arrange for a referral

8 of health care items or services to a par9 ticular practitioner or provider.

10 (I) Any other factors the Secretary deems

11 appropriate in the interest of preventing fraud

12 and abuse in Federal health care programs (as

13 so defined).

14 (b) INTERPRETIVE RULINGS.—

15 (1) IN GENERAL.—

16 (A) REQUEST FOR INTERPRETIVE RUL17 ING.—Any person may present, at any time, a

18 request to the Inspector General for a state19 ment of the Inspector General’s current inter20 pretation of the meaning of a specific aspect of

21 the application of sections 1128A and 1128B of

22 the Social Security Act (42 U.S.C. 1320a–7a

23 and 1320a–7b) (in this section referred to as an

24 ‘‘interpretive ruling’’).
29

•S 1858 IS

1 (B) ISSUANCE AND EFFECT OF INTERPRE2 TIVE RULING.—

3 (i) IN GENERAL.—If appropriate, the

4 Inspector General shall in consultation

5 with the Attorney General, issue an inter6 pretive ruling not later than 120 days after

7 receiving a request described in subpara8 graph (A). Interpretive rulings shall not

9 have the force of law and shall be treated

10 as an interpretive rule within the meaning

11 of section 553(b) of title 5, United States

12 Code. All interpretive rulings issued pursu13 ant to this clause shall be published in the

14 Federal Register or otherwise made avail15 able for public inspection.

16 (ii) REASONS FOR DENIAL.—If the In17 spector General does not issue an interpre18 tive ruling in response to a request de19 scribed in subparagraph (A), the Inspector

20 General shall notify the requesting party of

21 such decision not later than 120 days after

22 receiving such a request and shall identify

23 the reasons for such decision.

24 (2) CRITERIA FOR INTERPRETIVE RULINGS.—
30

•S 1858 IS

1 (A) IN GENERAL.—In determining whether

2 to issue an interpretive ruling under paragraph

3 (1)(B), the Inspector General may consider—

4 (i) whether and to what extent the re5 quest identifies an ambiguity within the

6 language of the statute, the existing safe

7 harbors, or previous interpretive rulings;

8 and

9 (ii) whether the subject of the re10 quested interpretive ruling can be ade11 quately addressed by interpretation of the

12 language of the statute, the existing safe

13 harbor rules, or previous interpretive rul14 ings, or whether the request would require

15 a substantive ruling (as defined in section

16 552 of title 5, United States Code) not au17 thorized under this subsection.

18 (B) NO RULINGS ON FACTUAL ISSUES.—

19 The Inspector General shall not give an inter20 pretive ruling on any factual issue, including

21 the intent of the parties or the fair market

22 value of particular leased space or equipment.

23 (c) SPECIAL FRAUD ALERTS.—

24 (1) IN GENERAL.—
31

•S 1858 IS

1 (A) REQUEST FOR SPECIAL FRAUD

2 ALERTS.—Any person may present, at any

3 time, a request to the Inspector General for a

4 notice which informs the public of practices

5 which the Inspector General considers to be

6 suspect or of particular concern under section

7 1128B(b) of the Social Security Act (42 U.S.C.

8 1320a–7b(b)) (in this subsection referred to as

9 a ‘‘special fraud alert’’).

10 (B) ISSUANCE AND PUBLICATION OF SPE11 CIAL FRAUD ALERTS.—Upon receipt of a re12 quest described in subparagraph (A), the In13 spector General shall investigate the subject

14 matter of the request to determine whether a

15 special fraud alert should be issued. If appro16 priate, the Inspector General shall issue a spe17 cial fraud alert in response to the request. All

18 special fraud alerts issued pursuant to this sub19 paragraph shall be published in the Federal

20 Register.

21 (2) CRITERIA FOR SPECIAL FRAUD ALERTS.—

22 In determining whether to issue a special fraud alert

23 upon a request described in paragraph (1), the In24 spector General may consider—
32

•S 1858 IS

1 (A) whether and to what extent the prac2 tices that would be identified in the special

3 fraud alert may result in any of the con4 sequences described in subsection (a)(2); and

5 (B) the volume and frequency of the con6 duct that would be identified in the special

7 fraud alert.

8 SEC. 105. MEDICARE/MEDICAID BENEFICIARY PROTECTION

9 PROGRAM.

10 (a) ESTABLISHMENT OF PROGRAM.—Not later than

11 January 1, 1997, the Secretary (through the Adminis12 trator of the Health Care Financing Administration and

13 the Inspector General of the Department of Health and

14 Human Services) shall establish the Medicare/Medicaid

15 Beneficiary Protection Program. Under such program the

16 Secretary shall—

17 (1) educate medicare and medicaid beneficiaries

18 regarding—

19 (A) medicare and medicaid program cov20 erage;

21 (B) fraudulent and abusive practices;

22 (C) medically unnecessary health care

23 items and services; and

24 (D) substandard health care items and

25 services;
33

•S 1858 IS

1 (2) identify and publicize fraudulent and abu2 sive practices with respect to the delivery of health

3 care items and services; and

4 (3) establish a procedure for the reporting of

5 fraudulent and abusive health care providers, practi6 tioners, claims, items, and services to appropriate

7 law enforcement and payer agencies.

8 (b) RECOGNITION AND PUBLICATION OF CONTRIBU9 TIONS.—The program established by the Secretary under

10 this section shall recognize and publicize significant con11 tributions made by individual health care patients toward

12 the combating of health care fraud and abuse.

13 (c) DISSEMINATION OF INFORMATION.—The Sec14 retary shall provide for the broad dissemination of infor15 mation regarding the Medicare/Medicaid Beneficiary Pro16 tection Program.

17 SEC. 106. ENSURING THE INTEGRITY OF THE FEDERAL

18 HOSPITAL INSURANCE TRUST FUND.

19 (a) DETERMINATION.—Prior to the end of each fiscal

20 year, the Secretary of Health and Human Services (in this

21 section referred to as the ‘‘Secretary’’) and the Attorney

22 General shall jointly determine—

23 (1) the portion of the costs charged during such

24 fiscal year to any account established within the

25 Federal Hospital Insurance Trust Fund under title
34

•S 1858 IS

1 XVIII of the Social Security Act (42 U.S.C. 1395 et

2 seq.) to combat health care waste, fraud, and abuse,

3 which do not relate to the administration of the

4 medicare program; and

5 (2) the amount of funds deposited into such ac6 count of such trust fund during such fiscal year that

7 were attributable to enforcement activities that were

8 intended to combat health care waste, fraud, and

9 abuse, which do not relate to the administration of

10 the medicare program.

11 (b) CERTIFICATION.—If the portion determined

12 under paragraph (1) of subsection (a) exceeds the amount

13 determined under paragraph (2) of such subsection, the

14 Secretary and the Attorney General shall certify to the

15 Secretary of the Treasury the amount, which shall be

16 equal to the amount of such excess, which should be trans17 ferred from the General Fund of the Treasury to such

18 trust fund, in order to ensure that such trust fund is fully

19 reimbursed for any expenditures made from the account

20 described in subsection (a) that are not related to the ad21 ministration of the medicare program under title XVIII

22 of the Social Security Act.

23 (c) TRANSFER OF FUNDS.—The Secretary of the

24 Treasury shall transfer to such trust fund from the Gen25 eral Fund of the Treasury, out of any funds in the General
35

•S 1858 IS

1 Fund that are not otherwise appropriated, an amount

2 equal to the amount certified under subsection (b).

3 TITLE II—REVISIONS TO CUR4 RENT SANCTIONS FOR FRAUD

5 AND ABUSE

6 SEC. 201. MANDATORY EXCLUSION FROM PARTICIPATION

7 IN MEDICARE AND STATE HEALTH CARE PRO8 GRAMS.

9 (a) INDIVIDUAL CONVICTED OF FELONY RELATING

10 TO HEALTH CARE FRAUD.—

11 (1) IN GENERAL.—Section 1128(a) (42 U.S.C.

12 1320a–7(a)) is amended by adding at the end the

13 following new paragraph:

14 ‘‘(3) FELONY CONVICTION RELATING TO

15 HEALTH CARE FRAUD.—Any individual or entity

16 that has been convicted after the date of the enact17 ment of the Medicare Antifraud Act of 1996, under

18 Federal or State law, in connection with the delivery

19 of a health care item or service or with respect to

20 any act or omission in a health care program (other

21 than those specifically described in paragraph (1))

22 operated by or financed in whole or in part by any

23 Federal, State, or local government agency, of a

24 criminal offense consisting of a felony relating to
36

•S 1858 IS

1 fraud, theft, embezzlement, breach of fiduciary re2 sponsibility, or other financial misconduct.’’.

3 (2) CONFORMING AMENDMENT.—Paragraph (1)

4 of section 1128(b) (42 U.S.C. 1320a–7(b)) is

5 amended to read as follows:

6 ‘‘(1) CONVICTION RELATING TO FRAUD.—Any

7 individual or entity that has been convicted after the

8 date of the enactment of the Medicare Antifraud Act

9 of 1996, under Federal or State law—

10 ‘‘(A) of a criminal offense consisting of a

11 misdemeanor relating to fraud, theft, embezzle12 ment, breach of fiduciary responsibility, or

13 other financial misconduct—

14 ‘‘(i) in connection with the delivery of

15 a health care item or service, or

16 ‘‘(ii) with respect to any act or omis17 sion in a health care program (other than

18 those specifically described in subsection

19 (a)(1)) operated by or financed in whole or

20 in part by any Federal, State, or local gov21 ernment agency; or

22 ‘‘(B) of a criminal offense relating to

23 fraud, theft, embezzlement, breach of fiduciary

24 responsibility, or other financial misconduct

25 with respect to any act or omission in a pro-
37

•S 1858 IS

1 gram (other than a health care program) oper2 ated by or financed in whole or in part by any

3 Federal, State, or local government agency.’’.

4 (b) INDIVIDUAL CONVICTED OF FELONY RELATING

5 TO CONTROLLED SUBSTANCE.—

6 (1) IN GENERAL.—Section 1128(a) (42 U.S.C.

7 1320a–7(a)), as amended by subsection (a), is

8 amended by adding at the end the following new

9 paragraph:

10 ‘‘(4) FELONY CONVICTION RELATING TO CON11 TROLLED SUBSTANCE.—Any individual or entity

12 that has been convicted after the date of the enact13 ment of the Medicare Antifraud Act of 1996, under

14 Federal or State law, of a criminal offense consisting

15 of a felony relating to the unlawful manufacture,

16 distribution, prescription, or dispensing of a con17 trolled substance.’’.

18 (2) CONFORMING AMENDMENT.—Section

19 1128(b)(3) (42 U.S.C. 1320a–7(b)(3)) is amended—

20 (A) in the heading, by striking ‘‘CONVIC21 TION’’ and inserting ‘‘MISDEMEANOR CONVIC22 TION’’; and

23 (B) by striking ‘‘criminal offense’’ and in24 serting ‘‘criminal offense consisting of a mis25 demeanor’’.
38

•S 1858 IS

1 SEC. 202. ESTABLISHMENT OF MINIMUM PERIOD OF EX2 CLUSION FOR CERTAIN INDIVIDUALS AND

3 ENTITIES SUBJECT TO PERMISSIVE EXCLU4 SION FROM MEDICARE AND STATE HEALTH

5 CARE PROGRAMS.

6 Section 1128(c)(3) (42 U.S.C. 1320a–7(c)(3)) is

7 amended by adding at the end the following new subpara8 graphs:

9 ‘‘(D) In the case of an exclusion of an individual or

10 entity under paragraph (1), (2), or (3) of subsection (b),

11 the period of the exclusion shall be 3 years, unless the

12 Secretary determines in accordance with published regula13 tions that a shorter period is appropriate because of miti14 gating circumstances or that a longer period is appro15 priate because of aggravating circumstances.

16 ‘‘(E) In the case of an exclusion of an individual or

17 entity under paragraph (4) or (5) of subsection (b), the

18 period of the exclusion shall not be less than the period

19 during which the individual’s or entity’s license to provide

20 health care is revoked, suspended, or surrendered, or the

21 individual or the entity is excluded or suspended from a

22 Federal or State health care program.

23 ‘‘(F) In the case of an exclusion of an individual or

24 entity under subsection (b)(6)(B), the period of the exclu25 sion shall be not less than 1 year.’’.
39

•S 1858 IS

1 SEC. 203. PERMISSIVE EXCLUSION OF INDIVIDUALS WITH

2 OWNERSHIP OR CONTROL INTEREST IN

3 SANCTIONED ENTITIES.

4 Section 1128(b) (42 U.S.C. 1320a–7(b)) is amended

5 by adding at the end the following new paragraph:

6 ‘‘(15) INDIVIDUALS CONTROLLING A SANC7 TIONED ENTITY.—Any individual who has a direct

8 or indirect ownership or control interest of 5 percent

9 or more, or an ownership or control interest (as de10 fined in section 1124(a)(3)) in, or who is an officer

11 or managing employee (as defined in section

12 1126(b)) of, an entity—

13 ‘‘(A) that has been convicted of any of14 fense described in subsection (a) or in para15 graph (1), (2), or (3) of this subsection; or

16 ‘‘(B) that has been excluded from partici17 pation under a program under title XVIII or

18 under a State health care program (as defined

19 in subsection (h)).’’.

20 SEC. 204. SANCTIONS AGAINST PRACTITIONERS AND PER21 SONS FOR FAILURE TO COMPLY WITH STATU22 TORY OBLIGATIONS.

23 (a) MINIMUM PERIOD OF EXCLUSION FOR PRACTI24 TIONERS AND PERSONS FAILING TO MEET STATUTORY

25 OBLIGATIONS.—
40

•S 1858 IS

1 (1) IN GENERAL.—The second sentence of sec2 tion 1156(b)(1) (42 U.S.C. 1320c–5(b)(1)) is

3 amended by striking ‘‘may prescribe)’’ and inserting

4 ‘‘may prescribe, except that such period may not be

5 less than 1 year)’’.

6 (2) CONFORMING AMENDMENT.—Section

7 1156(b)(2) (42 U.S.C. 1320c–5(b)(2)) is amended

8 by striking ‘‘shall remain’’ and inserting ‘‘shall (sub9 ject to the minimum period specified in the second

10 sentence of paragraph (1)) remain’’.

11 (b) REPEAL OF ‘‘UNWILLING OR UNABLE’’ CONDI12 TION FOR IMPOSITION OF SANCTION.—Section 1156(b)(1)

13 (42 U.S.C. 1320c–5(b)(1)) is amended—

14 (1) in the second sentence, by striking ‘‘and de15 termines’’ and all that follows through ‘‘such obliga16 tions,’’; and

17 (2) by striking the third sentence.

18 SEC. 205. SANCTIONS AGAINST PROVIDERS FOR EXCESSIVE

19 FEES OR PRICES.

20 Section 1128(b)(6)(A) (42 U.S.C. 1320a–7(b)(6)(A))

21 is amended—

22 (1) by inserting ‘‘(as specified by the Secretary

23 in regulations)’’ after ‘‘substantially in excess of

24 such individual’s or entity’s usual charges’’; and
41

•S 1858 IS

1 (2) by striking ‘‘(or, in applicable cases, sub2 stantially in excess of such individual’s or entity’s

3 costs)’’ and inserting ‘‘, costs or fees’’.

4 SEC. 206. APPLICABILITY OF THE BANKRUPTCY CODE TO

5 PROGRAM SANCTIONS.

6 (a) EXCLUSION OF INDIVIDUALS AND ENTITIES

7 FROM PARTICIPATION IN FEDERAL HEALTH CARE PRO8 GRAMS.—Section 1128 (42 U.S.C. 1320a–7) is amended

9 by adding at the end the following new subsection:

10 ‘‘(j) APPLICABILITY OF BANKRUPTCY PROVISIONS.—

11 An exclusion imposed under this section is not subject to

12 the automatic stay imposed under section 362 of title 11,

13 United States Code.’’.

14 (b) CIVIL MONETARY PENALTIES.—Section

15 1128A(a) (42 U.S.C. 1320a–7a(a)) is amended by adding

16 at the end the following sentence: ‘‘An exclusion imposed

17 under this subsection is not subject to the automatic stay

18 imposed under section 362 of title 11, United States Code,

19 and any penalties and assessments imposed under this sec20 tion shall be nondischargeable under the provisions of such

21 title.’’.

22 (c) OFFSET OF PAYMENTS TO INDIVIDUALS.—Sec23 tion 1892(a)(4) (42 U.S.C. 1395ccc(a)(4)) is amended by

24 adding at the end the following sentence: ‘‘An exclusion

25 imposed under paragraph (2)(C)(ii) or paragraph (3)(B)
42

•S 1858 IS

1 is not subject to the automatic stay imposed under section

2 362 of title 11, United States Code.’’.

3 SEC. 207. INTERMEDIATE SANCTIONS FOR MEDICARE

4 HEALTH MAINTENANCE ORGANIZATIONS.

5 (a) APPLICATION OF INTERMEDIATE SANCTIONS FOR

6 PROGRAM VIOLATIONS.—

7 (1) IN GENERAL.—Section 1876(i)(1) (42

8 U.S.C. 1395mm(i)(1)) is amended by striking ‘‘the

9 Secretary may terminate’’ and all that follows and

10 inserting ‘‘in accordance with procedures established

11 under paragraph (9), the Secretary may at any time

12 terminate any such contract or may impose the in13 termediate sanctions described in paragraph (6)(B)

14 or (6)(C) (whichever is applicable) on the eligible or15 ganization if the Secretary determines that the orga16 nization—

17 ‘‘(A) has failed substantially to carry out

18 the contract;

19 ‘‘(B) is carrying out the contract in a man20 ner substantially inconsistent with the efficient

21 and effective administration of this section; or

22 ‘‘(C) no longer substantially meets the ap23 plicable conditions of subsections (b), (c), (e),

24 and (f).’’.
43

•S 1858 IS

1 (2) OTHER INTERMEDIATE SANCTIONS FOR

2 MISCELLANEOUS PROGRAM VIOLATIONS.—Section

3 1876(i)(6) (42 U.S.C. 1395mm(i)(6)) is amended by

4 adding at the end the following new subparagraph:

5 ‘‘(C) In the case of an eligible organization for which

6 the Secretary makes a determination under paragraph (1),

7 the basis of which is not described in subparagraph (A),

8 the Secretary may apply the following intermediate sanc9 tions:

10 ‘‘(i) Civil money penalties of not more than

11 $25,000 for each determination under paragraph (1)

12 if the deficiency that is the basis of the determina13 tion has directly adversely affected (or has the sub14 stantial likelihood of adversely affecting) an individ15 ual covered under the organization’s contract.

16 ‘‘(ii) Civil money penalties of not more than

17 $10,000 for each week beginning after the initiation

18 of procedures by the Secretary under paragraph (9)

19 during which the deficiency that is the basis of a de20 termination under paragraph (1) exists.

21 ‘‘(iii) Suspension of enrollment of individuals

22 under this section after the date the Secretary noti23 fies the organization of a determination under para24 graph (1) and until the Secretary is satisfied that
44

•S 1858 IS

1 the deficiency that is the basis for the determination

2 has been corrected and is not likely to recur.’’.

3 (3) PROCEDURES FOR IMPOSING SANCTIONS.—

4 Section 1876(i) (42 U.S.C. 1395mm(i)) is amended

5 by adding at the end the following new paragraph:

6 ‘‘(9) The Secretary may terminate a contract with an

7 eligible organization under this section or may impose the

8 intermediate sanctions described in paragraph (6) on the

9 organization in accordance with formal investigation and

10 compliance procedures established by the Secretary under

11 which—

12 ‘‘(A) the Secretary first provides the organiza13 tion with the reasonable opportunity to develop and

14 implement a corrective action plan to correct the de15 ficiencies that were the basis of the Secretary’s de16 termination under paragraph (1) and the organiza17 tion fails to develop or implement such a plan;

18 ‘‘(B) in deciding whether to impose sanctions,

19 the Secretary considers aggravating factors such as

20 whether an entity has a history of deficiencies or has

21 not taken action to correct deficiencies the Secretary

22 has brought to their attention;

23 ‘‘(C) there are no unreasonable or unnecessary

24 delays between the finding of a deficiency and the

25 imposition of sanctions; and
45

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1 ‘‘(D) the Secretary provides the organization

2 with reasonable notice and opportunity for hearing

3 (including the right to appeal an initial decision) be4 fore imposing any sanction or terminating the con5 tract.’’.

6 (4) CONFORMING AMENDMENTS.—Section

7 1876(i)(6)(B) (42 U.S.C. 1395mm(i)(6)(B)) is

8 amended by striking the second sentence.

9 (b) AGREEMENTS WITH PEER REVIEW ORGANIZA10 TIONS.—

11 (1) REQUIREMENT FOR WRITTEN AGREE12 MENT.—Section 1876(i)(7)(A) (42 U.S.C.

13 1395mm(i)(7)(A)) is amended by striking ‘‘an agree14 ment’’ and inserting ‘‘a written agreement’’.

15 (2) DEVELOPMENT OF MODEL AGREEMENT.—

16 Not later than July 1, 1997, the Secretary shall de17 velop a model of the agreement that an eligible orga18 nization with a risk-sharing contract under section

19 1876 of the Social Security Act (42 U.S.C.

20 1395mm) must enter into with an entity providing

21 peer review services with respect to services provided

22 by the organization under section 1876(i)(7)(A) of

23 such Act (42 U.S.C. 1395mm(i)(7)(A)).

24 (3) REPORT BY GAO.—
46

•S 1858 IS

1 (A) STUDY.—The Comptroller General of

2 the United States shall conduct a study of the

3 costs incurred by eligible organizations with

4 risk-sharing contracts under section 1876 of

5 such Act (42 U.S.C. 1395mm(b)) of complying

6 with the requirement of entering into a written

7 agreement with an entity providing peer review

8 services with respect to services provided by the

9 organization, together with an analysis of how

10 information generated by such entities is used

11 by the Secretary to assess the quality of serv12 ices provided by such eligible organizations.

13 (B) REPORT TO CONGRESS.—Not later

14 than July 1, 1998, the Comptroller General

15 shall submit a report to the Committee on

16 Ways and Means and the Committee on Com17 merce of the House of Representatives and the

18 Committee on Finance and the Special Commit19 tee on Aging of the Senate on the study con20 ducted under subparagraph (A).

21 SEC. 208. LIABILITY OF MEDICARE CARRIERS AND FISCAL

22 INTERMEDIARIES AND STATES FOR CLAIMS

23 SUBMITTED BY EXCLUDED PROVIDERS.

24 (a) REIMBURSEMENT TO THE SECRETARY FOR

25 AMOUNTS PAID TO EXCLUDED PROVIDERS.—
47

•S 1858 IS

1 (1) REQUIREMENTS FOR FISCAL

2 INTERMEDIARIES.—

3 (A) IN GENERAL.—Section 1816 (42

4 U.S.C. 1395h), is amended by adding at the

5 end the following new subsection:

6 ‘‘(l) An agreement with an agency or organization

7 under this section shall require that such agency or orga8 nization reimburse the Secretary for any amounts paid for

9 a service under this title which is furnished, directed, or

10 prescribed by an individual or entity during any period

11 for which the individual or entity is excluded pursuant to

12 section 1128, 1128A, or 1156, from participation in the

13 program under this title, if the amounts are paid after

14 the Secretary notifies the agency or organization of the

15 exclusion.’’.

16 (B) CONFORMING AMENDMENT.—Section

17 1816(i) (42 U.S.C. 1395h(i)) is amended by

18 adding at the end the following new paragraph:

19 ‘‘(4) Nothing in this subsection shall be con20 strued to prohibit reimbursement by an agency or

21 organization under subsection (l).’’.

22 (2) REQUIREMENTS FOR CARRIERS.—Section

23 1842(b)(3) (42 U.S.C. 1395u(b)(3)) is amended—

24 (A) by striking ‘‘and’’ at the end of sub25 paragraph (I); and
48

•S 1858 IS

1 (B) by inserting after subparagraph (I) the

2 following new subparagraph:

3 ‘‘(J) will reimburse the Secretary for any

4 amounts paid for an item or service under this part

5 which is furnished, directed, or prescribed by an in6 dividual or entity during any period for which the in7 dividual or entity is excluded pursuant to section

8 1128, 1128A, or 1156 from participation in the pro9 gram under this title, if the amounts are paid after

10 the Secretary notifies the carrier of the exclusion;

11 and’’.

12 (3) REQUIREMENTS FOR STATES.—Section

13 1902(a)(39) (42 U.S.C. 1396a(a)(39)) is amended

14 by striking the semicolon at the end and inserting ‘‘,

15 and provide further for reimbursement to the Sec16 retary of any payments made under the plan for any

17 item or service furnished, directed, or prescribed by

18 the excluded individual or entity during such period,

19 after the Secretary notifies the State of such exclu20 sion;’’.

21 (b) CONFORMING REPEAL OF MANDATORY PAYMENT

22 RULE.—Section 1862(e)(2) (42 U.S.C. 1395y(e)(2)) is

23 amended to read as follows:

24 ‘‘(2) No individual or entity may bill (or collect any

25 amount from) any individual for any item or service for
49

•S 1858 IS

1 which payment is denied under paragraph (1). No person

2 is liable for payment of any amounts billed for such an

3 item or service in violation of the previous sentence.’’.

4 SEC. 209. EFFECTIVE DATE.

5 The amendments made by this title shall take effect

6 January 1, 1997.

7 TITLE III—ADMINISTRATIVE

8 AND MISCELLANEOUS PROVI9 SIONS

10 SEC. 301. ESTABLISHMENT OF THE HEALTH CARE FRAUD

11 AND ABUSE DATA COLLECTION PROGRAM.

12 (a) GENERAL PURPOSE.—Not later than January 1,

13 1997, the Secretary shall establish a national health care

14 fraud and abuse data collection program for the reporting

15 of final adverse actions (not including settlements in which

16 no findings of liability have been made) against health

17 care providers, suppliers, or practitioners as required by

18 subsection (b), with access as set forth in subsection (c),

19 and shall maintain a database of the information collected

20 under this section.

21 (b) REPORTING OF INFORMATION.—

22 (1) IN GENERAL.—Each Government agency

23 and health plan shall report any final adverse action

24 (not including settlements in which no findings of li-
50

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1 ability have been made) taken against a health care

2 provider, supplier, or practitioner.

3 (2) INFORMATION TO BE REPORTED.—The in4 formation to be reported under paragraph (1) in5 cludes the following:

6 (A) The name and TIN (as defined in sec7 tion 7701(a)(41) of the Internal Revenue Code

8 of 1986) of any health care provider, supplier,

9 or practitioner who is the subject of a final ad10 verse action.

11 (B) The name (if known) of any health

12 care entity with which a health care provider,

13 supplier, or practitioner, who is the subject of

14 a final adverse action, is affiliated or associated.

15 (C) The nature of the final adverse action

16 and whether such action is on appeal.

17 (D) A description of the acts or omissions

18 and injuries upon which the final adverse action

19 was based, and such other information as the

20 Secretary determines by regulation is required

21 for appropriate interpretation of information re22 ported under this section.

23 (3) CONFIDENTIALITY.—In determining what

24 information is required, the Secretary shall include

25 procedures to assure that the privacy of individuals
51

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1 receiving health care services is appropriately pro2 tected.

3 (4) TIMING AND FORM OF REPORTING.—The

4 information required to be reported under this sub5 section shall be reported regularly (but not less often

6 than monthly) and in such form and manner as the

7 Secretary of Health and Human Services (in this

8 section referred to as the ‘‘Secretary’’) prescribes.

9 Such information shall first be required to be re10 ported on a date specified by the Secretary.

11 (5) TO WHOM REPORTED.—The information re12 quired to be reported under this subsection shall be

13 reported to the Secretary.

14 (c) DISCLOSURE AND CORRECTION OF INFORMA15 TION.—

16 (1) DISCLOSURE.—With respect to the informa17 tion about final adverse actions (not including settle18 ments in which no findings of liability have been

19 made) reported to the Secretary under this section

20 with respect to a health care provider, supplier, or

21 practitioner, the Secretary shall, by regulation, pro22 vide for—

23 (A) disclosure of the information, upon re24 quest, to the health care provider, supplier, or

25 licensed practitioner, and
52

•S 1858 IS

1 (B) procedures in the case of disputed ac2 curacy of the information.

3 (2) CORRECTIONS.—Each Government agency

4 and health plan shall report corrections of informa5 tion already reported about any final adverse action

6 taken against a health care provider, supplier, or

7 practitioner, in such form and manner that the Sec8 retary prescribes by regulation.

9 (d) ACCESS TO REPORTED INFORMATION.—

10 (1) AVAILABILITY.—The information in the

11 database maintained under this section shall be

12 available to Federal and State government agencies,

13 health plans, and the public pursuant to procedures

14 that the Secretary shall provide by regulation.

15 (2) FEES FOR DISCLOSURE.—The Secretary

16 may establish or approve reasonable fees for the dis17 closure of information in such database (other than

18 with respect to requests by Federal agencies). The

19 amount of such a fee may be sufficient to recover

20 the full costs of carrying out the provisions of this

21 section, including reporting, disclosure, and adminis22 tration. Such fees shall be available to the Secretary

23 or, in the Secretary’s discretion to the agency des24 ignated under this section to cover such costs.
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1 (e) PROTECTION FROM LIABILITY FOR REPORT2 ING.—No person or entity shall be held liable in any civil

3 action with respect to any report made as required by this

4 section, without knowledge of the falsity of the informa5 tion contained in the report.

6 (f) DEFINITIONS AND SPECIAL RULES.—For pur7 poses of this section:

8 (1) FINAL ADVERSE ACTION.—

9 (A) IN GENERAL.—The term ‘‘final ad10 verse action’’ includes the following:

11 (i) Civil judgments against a health

12 care provider or practitioner in Federal or

13 State court related to the delivery of a

14 health care item or service.

15 (ii) Federal or State criminal convic16 tions related to the delivery of a health

17 care item or service.

18 (iii) Actions by Federal or State agen19 cies responsible for the licensing and cer20 tification of health care providers, suppli21 ers, and licensed health care practitioners,

22 including—

23 (I) formal or official actions,

24 such as revocation or suspension of a

25 license (and the length of any such
54

•S 1858 IS

1 suspension), reprimand, censure, or

2 probation,

3 (II) any other loss of license, or

4 the right to apply for or renew a li5 cense of the provider, supplier, or

6 practitioner, whether by operation of

7 law, voluntary surrender, nonrenew8 ability, or otherwise, or

9 (III) any other negative action or

10 finding by such Federal or State

11 agency that is publicly available infor12 mation.

13 (iv) Exclusion from participation in

14 Federal or State health care programs (as

15 defined in section 1128B(f) and 1128(h),

16 respectively).

17 (v) Any other adjudicated actions or

18 decisions that the Secretary shall establish

19 by regulation.

20 (B) EXCLUSION.—The term does not in21 clude any action with respect to a malpractice

22 claim.

23 (C) SPECIAL RULE.—For purposes of this

24 paragraph, the existence of a conviction shall be
55

•S 1858 IS

1 determined under section 1128(i) of the Social

2 Security Act (42 U.S.C. 1320a–7(i)).

3 (2) LICENSED HEALTH CARE PRACTITIONER.—

4 The terms ‘‘licensed health care practitioner’’, ‘‘li5 censed practitioner’’, and ‘‘practitioner’’ mean, with

6 respect to a State, an individual who is licensed or

7 otherwise authorized by the State to provide health

8 care services (or any individual who, without author9 ity holds himself or herself out to be so licensed or

10 authorized).

11 (3) HEALTH CARE PROVIDER.—The term

12 ‘‘health care provider’’ means a provider of services

13 as defined in section 1861(u) of the Social Security

14 Act (42 U.S.C. 1395x(u)), and any person or entity,

15 including a health maintenance organization, group

16 medical practice, or any other entity listed by the

17 Secretary in regulation, that provides health care

18 services.

19 (4) SUPPLIER.—The term ‘‘supplier’’ means a

20 supplier of health care items and services described

21 in subsections (a) and (b) of section 1819, and sec22 tion 1861 of the Social Security Act (42 U.S.C.

23 1395i–3 (a) and (b), and 1395x).

24 (5) GOVERNMENT AGENCY.—The term ‘‘Gov25 ernment agency’’ shall include the following:
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•S 1858 IS

1 (A) The Department of Justice.

2 (B) The Department of Health and

3 Human Services.

4 (C) Any other Federal agency that either

5 administers or provides payment for the deliv6 ery of health care services, including, but not

7 limited to the Department of Defense and the

8 Veterans’ Administration.

9 (D) State law enforcement agencies.

10 (E) State medicaid fraud and abuse units.

11 (F) Federal or State agencies responsible

12 for the licensing and certification of health care

13 providers and licensed health care practitioners.

14 (6) HEALTH PLAN.—The term ‘‘health plan’’

15 has the meaning given such term by section

16 1128C(c) of the Social Security Act, as added by

17 section 101(a) of this Act.

18 (g) CONFORMING AMENDMENT.—Section 1921(d)

19 (42 U.S.C. 1396r–2(d)) is amended by inserting ‘‘and sec20 tion 301 of the Medicare Antifraud Act of 1996’’ after

21 ‘‘section 422 of the Health Care Quality Improvement Act

22 of 1986’’.
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1 SEC. 302. INSPECTOR GENERAL ACCESS TO NATIONAL

2 PRACTITIONER DATA BANK.

3 Section 427 of the Health Care Quality Improvement

4 Act of 1986 (42 U.S.C. 11137) is amended—

5 (1) in subsection (a), by adding at the end the

6 following sentence: ‘‘Information reported under this

7 part shall also be made available, upon request, to

8 the Inspector General of the Departments of Health

9 and Human Services, Defense, and Labor, the Office

10 of Personnel Management, and the Railroad Retire11 ment Board.’’; and

12 (2) by amending subsection (b)(4) to read as

13 follows:

14 ‘‘(4) FEES.—The Secretary may impose fees for

15 the disclosure of information under this part suffi16 cient to recover the full costs of carrying out the

17 provisions of this part, including reporting, disclo18 sure, and administration, except that a fee may not

19 be imposed for requests made by the Inspector Gen20 eral of the Department of Health and Human Serv21 ices. Such fees shall remain available to the Sec22 retary (or, in the Secretary’s discretion, to the agen23 cy designated in section 424(b)) until expended.’’.
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1 SEC. 303. CORPORATE WHISTLEBLOWER PROGRAM.

2 Title XI (42 U.S.C. 1301 et seq.), as amended by

3 section 101(a), is amended by inserting after section

4 1128C the following new section:

5 ‘‘CORPORATE WHISTLEBLOWER PROGRAM

6 ‘‘SEC. 1128D. (a) ESTABLISHMENT OF PROGRAM.—

7 The Secretary, through the Inspector General of the De8 partment of Health and Human Services, shall establish

9 a procedure whereby corporations, partnerships, and other

10 legal entities specified by the Secretary, may voluntarily

11 disclose instances of unlawful conduct and seek to resolve

12 liability for such conduct through means specified by the

13 Secretary.

14 ‘‘(b) LIMITATION.—No person may bring an action

15 under section 3730(b) of title 31, United States Code, if,

16 on the date of filing—

17 ‘‘(1) the matter set forth in the complaint has

18 been voluntarily disclosed to the United States by

19 the proposed defendant and the defendant has been

20 accepted into the voluntary disclosure program es21 tablished pursuant to subsection (a); and

22 ‘‘(2) any new information provided in the com23 plaint under such section does not add substantial

24 grounds for additional recovery beyond those encom25 passed within the scope of the voluntary disclo26 sure.’’.
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1 SEC. 304. HOME HEALTH BILLING, PAYMENT, AND COST

2 LIMIT CALCULATION TO BE BASED ON SITE

3 WHERE SERVICE IS FURNISHED.

4 (a) CONDITIONS OF PARTICIPATION.—Section 1891

5 (42 U.S.C. 1395bbb) is amended by adding at the end

6 the following new subsection:

7 ‘‘(g) A home health agency shall submit claims for

8 payment of home health services under this title only on

9 the basis of the geographic location at which the service

10 is furnished, as determined by the Secretary.’’.

11 (b) WAGE ADJUSTMENT.—Section 1861(v)(1)(L)(iii)

12 (42 U.S.C. 1395x(v)(1)(L)(iii)) is amended by striking

13 ‘‘agency is located’’ and inserting ‘‘service is furnished’’.

14 SEC. 305. APPLICATION OF INHERENT REASONABLENESS.

15 (a) IN GENERAL.—Section 1834(a)(10)(B) (42

16 U.S.C. 1395m(a)(10)(B)) is amended—

17 (1) in the first sentence, by striking ‘‘apply the

18 provisions’’ and all that follows through the period

19 and inserting ‘‘describe by regulation the factors to

20 be used in determining the cases (or particular

21 items) in which the application of this subsection re22 sults in the determination of an amount that, by

23 reason of its being grossly excessive or grossly defi24 cient, is not inherently reasonable, and to provide in

25 such cases for the factors that will be considered in
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1 establishing an amount that is realistic and equi2 table.’’; and

3 (2) in the second sentence, by striking ‘‘apply4 ing such provisions’’ and inserting ‘‘applying the

5 previous provisions of this subsection’’.

6 (b) CONFORMING AMENDMENT.—Section 1834(i)

7 (42 U.S.C. 1395m(i)) is amended by adding at the end

8 the following new paragraph:

9 ‘‘(3) ADJUSTMENT FOR INHERENT REASON10 ABLENESS.—The provisions of subsection (a)(10)(B)

11 shall apply to payment for surgical dressings under

12 this subsection.’’.

13 SEC. 306. CLARIFICATION OF TIME AND FILING LIMITA14 TIONS.

15 (a) IN GENERAL.—Section 1862(b)(2)(B) (42 U.S.C.

16 1395y(b)(2)(B)) is amended by adding at the end the fol17 lowing new clause:

18 ‘‘(v) TIME, FILING, AND RELATED

19 PROVISIONS UNDER PRIMARY PLAN.—Re20 quirements under a primary plan as to the

21 filing of a claim, time limitations for the

22 filing of a claim, information not main23 tained by the Secretary, or notification or

24 pre-admission review, shall not apply to a
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1 claim by the United States under clause

2 (ii) or (iii).’’.

3 (b) EFFECTIVE DATE.—The amendment made by

4 subsection (a) applies to items and services furnished after

5 1990.

6 SEC. 307. CLARIFICATION OF LIABILITY OF THIRD PARTY

7 ADMINISTRATORS.

8 (a) IN GENERAL.—Section 1862(b)(2)(B)(ii) (42

9 U.S.C. 1395y(b)(2)(B)(ii)) is amended by inserting ‘‘, or

10 which determines claims under the primary plan’’ after

11 ‘‘primary plan’’.

12 (b) CLAIMS BETWEEN PARTIES OTHER THAN THE

13 UNITED STATES.—Section 1862(b)(2)(B) (42 U.S.C.

14 1395y(b)(2)(B)), as amended by section 306(a) of this

15 Act, is amended by adding at the end the following new

16 clause:

17 ‘‘(vi) CLAIMS BETWEEN PARTIES

18 OTHER THAN THE UNITED STATES.—A

19 claim by the United States under clause

20 (ii) or (iii) shall not preclude claims be21 tween other parties.’’.

22 (c) EFFECTIVE DATE.—The amendments made by

23 this section shall apply to items and services furnished

24 after 1990.
62

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1 SEC. 308. CLARIFICATION OF PAYMENT AMOUNTS TO MEDI2 CARE.

3 (a) IN GENERAL.—Section 1862(b)(2)(B)(i) (42

4 U.S.C. 1395y(b)(2)(B)(i)) is amended to read as follows:

5 ‘‘(i) REPAYMENT REQUIRED.—

6 ‘‘(I) IN GENERAL.—Any payment

7 under this title, with respect to any

8 item or service for which payment by

9 a primary plan is required under the

10 preceding provisions of this sub11 section, shall be conditioned on reim12 bursement to the appropriate Trust

13 Fund established by this title when

14 notice or other information is received

15 that payment for that item or service

16 has been or should have been made

17 under those provisions. If reimburse18 ment is not made to the appropriate

19 Trust Fund before the expiration of

20 the 60-day period that begins on the

21 date such notice or other information

22 is received, the Secretary may charge

23 interest (beginning with the date on

24 which the notice or other information

25 is received) on the amount of the re26 imbursement until reimbursement is
63

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1 made (at a rate determined by the

2 Secretary in accordance with regula3 tions of the Secretary of the Treasury

4 applicable to charges for late pay5 ments).

6 ‘‘(II) DETERMINATION OF

7 AMOUNT OWED.—The amount owed

8 by a primary plan under the first sen9 tence of subclause (I) is the lesser of

10 the full primary payment required (if

11 that amount is readily determinable)

12 and the amount paid under this title

13 for that item or service.’’.

14 (b) CONFORMING AND TECHNICAL AMENDMENTS.—

15 (1) Subparagraphs (A)(i)(I) and (B)(i) of sec16 tion 1862(b)(1) (42 U.S.C. 1395y(b)(1)) are each

17 amended by inserting ‘‘(or eligible to be covered)’’

18 after ‘‘covered’’.

19 (2) Section 1862(b)(1)(C)(ii) (42 U.S.C.

20 1395y(b)(1)(C)(ii)) is amended by striking ‘‘covered

21 by such plan’’.

22 (3) The matter in section 1862(b)(2)(A) (42

23 U.S.C. 1395y(b)(2)(A)) preceding clause (i) is

24 amended by striking ‘‘, except as provided in sub25 paragraph (B),’’.
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1 (c) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to items and services furnished

3 after 1990.

4 SEC. 309. INCREASED FLEXIBILITY IN CONTRACTING FOR

5 MEDICARE CLAIMS PROCESSING.

6 (a) CARRIERS TO INCLUDE ENTITIES THAT ARE

7 NOT INSURANCE COMPANIES.—The matter in section

8 1842(a) (42 U.S.C. 1395u(a)) preceding paragraph (1) is

9 amended by striking ‘‘with carriers’’ and inserting ‘‘with

10 agencies and organizations (referred to as carriers)’’.

11 (b) REPEAL.—Section 1842(f) (42 U.S.C. 1395u(f))

12 is repealed.

13 TITLE IV—CIVIL MONETARY

14 PENALTIES

15 SEC. 401. SOCIAL SECURITY ACT CIVIL MONETARY PEN16 ALTIES.

17 (a) GENERAL CIVIL MONETARY PENALTIES.—Sec18 tion 1128A (42 U.S.C. 1320a–7a) is amended as follows:

19 (1) In the third sentence of subsection (a), by

20 striking ‘‘programs under title XVIII’’ and inserting

21 ‘‘Federal health care programs (as defined in section

22 1128B(f))’’.

23 (2) In subsection (f)—

24 (A) by redesignating paragraph (3) as

25 paragraph (4); and
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1 (B) by inserting after paragraph (2) the

2 following new paragraph:

3 ‘‘(3) With respect to amounts recovered arising

4 out of a claim under a Federal health care program

5 (as defined in section 1128B(f)), the portion of such

6 amounts as is determined to have been paid by the

7 program shall be repaid to the program, and the

8 portion of such amounts attributable to the amounts

9 recovered under this section by reason of the amend10 ments made by the Medicare Antifraud Act of 1996

11 (as estimated by the Secretary) shall be deposited

12 into the Health Care Fraud and Abuse Control Ac13 count established under section 101(b) of such

14 Act.’’.

15 (3) In subsection (i)—

16 (A) in paragraph (2), by striking ‘‘title V,

17 XVIII, XIX, or XX of this Act’’ and inserting

18 ‘‘a Federal health care program (as defined in

19 section 1128B(f))’’;

20 (B) in paragraph (4), by striking ‘‘a health

21 insurance or medical services program under

22 title XVIII or XIX of this Act’’ and inserting

23 ‘‘a Federal health care program (as so de24 fined)’’; and
66

•S 1858 IS

1 (C) in paragraph (5), by striking ‘‘title V,

2 XVIII, XIX, or XX’’ and inserting ‘‘a Federal

3 health care program (as so defined)’’.

4 (4) By adding at the end the following new sub5 section:

6 ‘‘(m)(1) For purposes of this section, with respect to

7 a Federal health care program not contained in this Act,

8 references to the Secretary in this section shall be deemed

9 to be references to the Secretary or Administrator of the

10 department or agency with jurisdiction over such program

11 and references to the Inspector General of the Department

12 of Health and Human Services in this section shall be

13 deemed to be references to the Inspector General of the

14 applicable department or agency.

15 ‘‘(2)(A) The Secretary and Administrator of the de16 partments and agencies referred to in paragraph (1) may

17 include in any action pursuant to this section, claims with18 in the jurisdiction of other Federal departments or agen19 cies as long as the following conditions are satisfied:

20 ‘‘(i) The case primarily involves claims submit21 ted to the Federal health care programs of the de22 partment or agency initiating the action.

23 ‘‘(ii) The Secretary or Administrator of the de24 partment or agency initiating the action gives notice

25 and an opportunity to participate in the investiga-
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1 tion to the Inspector General of the department or

2 agency with primary jurisdiction over the Federal

3 health care programs to which the claims were sub4 mitted.

5 ‘‘(B) If the conditions specified in subparagraph (A)

6 are fulfilled, the Inspector General of the department or

7 agency initiating the action is authorized to exercise all

8 powers granted under the Inspector General Act of 1978

9 (5 U.S.C. App.) with respect to the claims submitted to

10 the other departments or agencies to the same manner

11 and extent as provided in that Act with respect to claims

12 submitted to such departments or agencies.’’.

13 (b) EXCLUDED INDIVIDUAL RETAINING OWNERSHIP

14 OR CONTROL INTEREST IN PARTICIPATING ENTITY.—

15 Section 1128A(a) (42 U.S.C. 1320a–7a(a)) is amended—

16 (1) by striking ‘‘or’’ at the end of paragraph

17 (1)(D);

18 (2) by striking ‘‘, or’’ at the end of paragraph

19 (2) and inserting a semicolon;

20 (3) by striking the semicolon at the end of

21 paragraph (3) and inserting ‘‘; or’’; and

22 (4) by inserting after paragraph (3) the follow23 ing new paragraph:

24 ‘‘(4) in the case of a person who is not an orga25 nization, agency, or other entity, is excluded from
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1 participating in a program under title XVIII or a

2 State health care program in accordance with this

3 subsection or under section 1128 and who, at the

4 time of a violation of this subsection, retains a direct

5 or indirect ownership or control interest of 5 percent

6 or more, or an ownership or control interest (as de7 fined in section 1124(a)(3)) in, or who is an officer

8 or managing employee (as defined in section

9 1126(b)) of, an entity that is participating in a pro10 gram under title XVIII or a State health care pro11 gram;’’.

12 (c) EMPLOYER BILLING FOR SERVICES FURNISHED,

13 DIRECTED, OR PRESCRIBED BY AN EXCLUDED EM14 PLOYEE.—Section 1128A(a)(1) (42 U.S.C. 1320a–

15 7a(a)(1)), as amended by subsection (b), is amended—

16 (1) by striking ‘‘or’’ at the end of subparagraph

17 (C);

18 (2) by striking the semicolon at the end of sub19 paragraph (D) and inserting ‘‘, or’’; and

20 (3) by adding at the end the following new sub21 paragraph:

22 ‘‘(E) is for a medical or other item or serv23 ice furnished, directed, or prescribed by an indi24 vidual who is an employee or agent of the per25 son during a period in which such employee or
69

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1 agent was excluded from the program under

2 which the claim was made on any of the

3 grounds for exclusion described in subpara4 graph (D);’’.

5 (d) CIVIL MONEY PENALTIES FOR ITEMS OR SERV6 ICES FURNISHED, DIRECTED, OR PRESCRIBED BY AN EX7 CLUDED INDIVIDUAL.—Section 1128A(a)(1)(D) (42

8 U.S.C. 1320a–7a(a)(1)(D)) is amended by inserting ‘‘, di9 rected, or prescribed’’ after ‘‘furnished’’.

10 (e) MODIFICATIONS OF AMOUNTS OF PENALTIES

11 AND ASSESSMENTS.—Section 1128A(a) (42 U.S.C.

12 1320a–7a(a)), as amended by subsection (b), is amended

13 in the matter following paragraph (4)—

14 (1) by striking ‘‘$2,000’’ and inserting

15 ‘‘$10,000’’;

16 (2) by inserting ‘‘; in cases under paragraph

17 (4), $10,000 for each day the prohibited relationship

18 occurs’’ after ‘‘false or misleading information was

19 given’’; and

20 (3) by striking ‘‘twice the amount’’ and insert21 ing ‘‘3 times the amount’’.

22 (f) CLAIM FOR ITEM OR SERVICE BASED ON INCOR23 RECT CODING OR MEDICALLY UNNECESSARY SERV24 ICES.—Section 1128A(a)(1) (42 U.S.C. 1320a–7a(a)(1)),

25 as amended by subsection (c), is amended—
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1 (1) in subparagraph (A) by striking ‘‘claimed,’’

2 and inserting ‘‘claimed, including any person who

3 engages in a pattern or practice of presenting or

4 causing to be presented a claim for an item or serv5 ice that is based on a code that the person knows

6 or has reason to know will result in a greater pay7 ment to the person than the code the person knows

8 or has reason to know is applicable to the item or

9 service actually provided,’’;

10 (2) in subparagraph (D), by striking ‘‘or’’ at

11 the end;

12 (3) in subparagraph (E), by striking the semi13 colon and inserting ‘‘, or’’; and

14 (4) by inserting after subparagraph (E) the fol15 lowing new subparagraph:

16 ‘‘(F) is for a medical or other item or serv17 ice that a person knows or has reason to know

18 is not medically necessary;’’.

19 (g) PERMITTING SECRETARY TO IMPOSE CIVIL MON20 ETARY PENALTY FOR KICKBACK VIOLATIONS.—Section

21 1128A(b) (42 U.S.C. 1320a–7a(a)) is amended by adding

22 the following new paragraph:

23 ‘‘(3) Any person (including any organization,

24 agency, or other entity, but excluding a beneficiary

25 as defined in subsection (i)(5)) who the Secretary
71

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1 determines has violated section 1128B(b) of this

2 title shall be subject to a civil monetary penalty of

3 not more than $10,000 for each such violation. In

4 addition, such person shall be subject to an assess5 ment of not more than twice the total amount of the

6 remuneration offered, paid, solicited, or received in

7 violation of section 1128B(b). The total amount of

8 remuneration subject to an assessment shall be cal9 culated without regard to whether some portion

10 thereof also may have been intended to serve a pur11 pose other than one proscribed by section

12 1128B(b).’’.

13 (h) SANCTIONS AGAINST PRACTITIONERS AND PER14 SONS FOR FAILURE TO COMPLY WITH STATUTORY OBLI15 GATIONS.—Section 1156(b)(3) (42 U.S.C. 1320c–5(b)(3))

16 is amended by striking ‘‘the actual or estimated cost’’ and

17 inserting ‘‘up to $10,000 for each instance’’.

18 (i) PROCEDURAL PROVISIONS.—Section 1876(i)(6)

19 (42 U.S.C. 1395mm(i)(6)), as amended by section

20 207(a)(2), is amended by adding at the end the following

21 new subparagraph:

22 ‘‘(D) The provisions of section 1128A (other than

23 subsections (a) and (b)) shall apply to a civil money pen24 alty under subparagraph (A) or (B) in the same manner
72

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1 as they apply to a civil money penalty or proceeding under

2 section 1128A(a).’’.

3 (j) PROHIBITION AGAINST OFFERING INDUCEMENTS

4 TO INDIVIDUALS ENROLLED UNDER PROGRAMS OR

5 PLANS.—

6 (1) OFFER OF REMUNERATION.—Section

7 1128A(a) (42 U.S.C. 1320a–7a(a)), as amended by

8 subsection (b), is amended—

9 (A) by striking ‘‘, or’’ at the end of para10 graph (3) and inserting a semicolon;

11 (B) by striking the semicolon at the end of

12 paragraph (4) and inserting ‘‘; or’’; and

13 (C) by inserting after paragraph (4) the

14 following new paragraph:

15 ‘‘(5) offers to or transfers remuneration to any

16 individual eligible for benefits under title XVIII of

17 this Act, or under a State health care program (as

18 defined in section 1128(h)) that such person knows

19 or should know is likely to influence such individual

20 to order or receive from a particular provider, practi21 tioner, or supplier any item or service for which pay22 ment may be made, in whole or in part, under title

23 XVIII, or a State health care program (as so de24 fined);’’.
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1 (2) REMUNERATION DEFINED.—Section

2 1128A(i) (42 U.S.C. 1320a–7a(i)) is amended by

3 adding the following new paragraph:

4 ‘‘(6) The term ‘remuneration’ includes the waiv5 er of coinsurance and deductible amounts (or any

6 part thereof), and transfers of items or services for

7 free or for other than fair market value. The term

8 ‘remuneration’ does not include—

9 ‘‘(A) the waiver of coinsurance and deduct10 ible amounts by a person, if—

11 ‘‘(i) the waiver is not offered as part

12 of any advertisement or solicitation;

13 ‘‘(ii) the person does not routinely

14 waive coinsurance or deductible amounts;

15 and

16 ‘‘(iii) the person—

17 ‘‘(I) waives the coinsurance and

18 deductible amounts after determining

19 in good faith that the individual is in

20 financial need;

21 ‘‘(II) fails to collect coinsurance

22 or deductible amounts after making

23 reasonable collection efforts; or

24 ‘‘(III) provides for any permis25 sible waiver as specified in section
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1 1128B(b)(3) or in regulations issued

2 by the Secretary;

3 ‘‘(B) differentials in coinsurance and de4 ductible amounts as part of a benefit plan de5 sign as long as the differentials have been dis6 closed in writing to all beneficiaries, third party

7 payors, and providers, to whom claims are pre8 sented and as long as the differentials meet the

9 standards as defined in regulations promulgated

10 by the Secretary not later than 180 days after

11 the date of the enactment of the Medicare Anti12 fraud Act of 1996; or

13 ‘‘(C) incentives given to individuals to pro14 mote the delivery of preventive care as deter15 mined by the Secretary in regulations so pro16 mulgated.’’.

17 (k) EFFECTIVE DATE.—The amendments made by

18 this section shall take effect January 1, 1997.

19 TITLE V—AMENDMENTS TO

20 CRIMINAL LAW

21 SEC. 501. HEALTH CARE FRAUD.

22 (a) IN GENERAL.—

23 (1) FINES AND IMPRISONMENT FOR HEALTH

24 CARE FRAUD VIOLATIONS.—Chapter 63 of title 18,
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1 United States Code, is amended by adding at the

2 end the following new section:

3 ‘‘§ 1347. Health care fraud

4 ‘‘(a) Whoever knowingly and willfully executes, or at5 tempts to execute, a scheme or artifice—

6 ‘‘(1) to defraud any health plan or other per7 son, in connection with the delivery of or payment

8 for health care benefits, items, or services; or

9 ‘‘(2) to obtain, by means of false or fraudulent

10 pretenses, representations, or promises, any of the

11 money or property owned by, or under the custody

12 or control of, any health plan, or person in connec13 tion with the delivery of or payment for health care

14 benefits, items, or services;

15 shall be fined under this title or imprisoned not more than

16 10 years, or both. If the violation results in serious bodily

17 injury (as defined in section 1365(g)(3) of this title), such

18 person may be imprisoned for any term of years.

19 ‘‘(b) For purposes of this section, the term ‘health

20 plan’ has the same meaning given such term in section

21 1128C(c) of the Social Security Act.’’.

22 (2) CLERICAL AMENDMENT.—The table of sec23 tions at the beginning of chapter 63 of title 18,

24 United States Code, is amended by adding at the

25 end the following:

‘‘1347. Health care fraud.’’.
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1 (b) CRIMINAL FINES DEPOSITED IN THE HEALTH

2 CARE FRAUD AND ABUSE CONTROL ACCOUNT.—The Sec3 retary of the Treasury shall deposit into the Health Care

4 Fraud and Abuse Control Account established under sec5 tion 101(b) an amount equal to the criminal fines imposed

6 under section 1347 of title 18, United States Code (relat7 ing to health care fraud).

8 SEC. 502. FORFEITURES FOR FEDERAL HEALTH CARE OF9 FENSES.

10 (a) IN GENERAL.—Section 982(a) of title 18, United

11 States Code, is amended by adding after paragraph (5)

12 the following new paragraph:

13 ‘‘(6)(A) The court, in imposing sentence on a person

14 convicted of a Federal health care offense, shall order the

15 person to forfeit property, real or personal, that con16 stitutes or is derived, directly or indirectly, from proceeds

17 traceable to the commission of the offense.

18 ‘‘(B) For purposes of this paragraph, the term ‘Fed19 eral health care offense’ means a violation of, or a criminal

20 conspiracy to violate—

21 ‘‘(i) section 1347 of this title;

22 ‘‘(ii) section 1128B of the Social Security Act;

23 ‘‘(iii) section 287, 371, 664, 666, 1001, 1027,

24 1341, 1343, 1920, or 1954 of this title if the viola25 tion or conspiracy relates to health care fraud; and
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1 ‘‘(iv) section 501 or 511 of the Employee Re2 tirement Income Security Act of 1974, if the viola3 tion or conspiracy relates to health care fraud.’’.

4 (b) PROPERTY FORFEITED DEPOSITED IN HEALTH

5 CARE FRAUD AND ABUSE CONTROL ACCOUNT.—The Sec6 retary of the Treasury shall deposit into the Health Care

7 Fraud and Abuse Control Account established under sec8 tion 101(b) an amount equal to amounts resulting from

9 forfeiture of property by reason of a Federal health care

10 offense pursuant to section 982(a)(6) of title 18, United

11 States Code.

12 SEC. 503. INJUNCTIVE RELIEF RELATING TO FEDERAL

13 HEALTH CARE OFFENSES.

14 (a) IN GENERAL.—Section 1345(a)(1) of title 18,

15 United States Code, is amended—

16 (1) by striking ‘‘or’’ at the end of subparagraph

17 (A);

18 (2) by inserting ‘‘or’’ at the end of subpara19 graph (B); and

20 (3) by adding at the end the following new sub21 paragraph:

22 ‘‘(C) committing or about to commit a

23 Federal health care offense (as defined in sec24 tion 982(a)(6)(B) of this title);’’.
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1 (b) FREEZING OF ASSETS.—Section 1345(a)(2) of

2 title 18, United States Code, is amended by inserting ‘‘or

3 a Federal health care offense (as defined in section

4 982(a)(6)(B))’’ after ‘‘title)’’.

5 SEC. 504. GRAND JURY DISCLOSURE.

6 Section 3322 of title 18, United States Code, is

7 amended—

8 (1) by redesignating subsections (c) and (d) as

9 subsections (d) and (e), respectively; and

10 (2) by inserting after subsection (b) the follow11 ing new subsection:

12 ‘‘(c) A person who is privy to grand jury information

13 concerning a Federal health care offense (as defined in

14 section 982(a)(6)(B))—

15 ‘‘(1) received in the course of duty as an attor16 ney for the Government; or

17 ‘‘(2) disclosed under rule 6(e)(3)(A)(ii) of the

18 Federal Rules of Criminal Procedure;

19 may disclose that information to an attorney for the Gov20 ernment to use in any investigation or civil proceeding re21 lating to health care fraud.’’.

22 SEC. 505. FALSE STATEMENTS.

23 (a) IN GENERAL.—Chapter 47, of title 18, United

24 States Code, is amended by adding at the end the follow25 ing new section:
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1 ‘‘§ 1035. False statements relating to health care mat2 ters

3 ‘‘(a) Whoever, in any matter involving a health plan,

4 knowingly and willfully falsifies, conceals, or covers up by

5 any trick, scheme, or device a material fact, or makes any

6 false, fictitious, or fraudulent statements or representa7 tions, or makes or uses any false writing or document

8 knowing the same to contain any false, fictitious, or fraud9 ulent statement or entry, shall be fined under this title

10 or imprisoned not more than 5 years, or both.

11 ‘‘(b) For purposes of this section, the term ‘health

12 plan’ has the same meaning given such term in section

13 1128C(c) of the Social Security Act.’’.

14 (b) CLERICAL AMENDMENT.—The table of sections

15 at the beginning of chapter 47 of title 18, United States

16 Code, in amended by adding at the end the following:

‘‘1035. False statements relating to health care matters.’’.

17 SEC. 506. OBSTRUCTION OF CRIMINAL INVESTIGATIONS,

18 AUDITS, OR INSPECTIONS OF FEDERAL

19 HEALTH CARE OFFENSES.

20 (a) IN GENERAL.—Chapter 73 of title 18, United

21 States Code, is amended by adding at the end the follow22 ing new section:
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1 ‘‘§ 1518. Obstruction of criminal investigations, au2 dits, or inspections of Federal health care

3 offenses

4 ‘‘(a) IN GENERAL.—Whoever willfully prevents, ob5 structs, misleads, delays or attempts to prevent, obstruct,

6 mislead, or delay the communication of information or

7 records relating to a Federal health care offense to a Fed8 eral agent or employee involved in an investigation, audit,

9 inspection, or other activity related to such an offense,

10 shall be fined under this title or imprisoned not more than

11 5 years, or both.

12 ‘‘(b) FEDERAL HEALTH CARE OFFENSE.—As used

13 in this section the term ‘Federal health care offense’ has

14 the same meaning given such term in section 982(a)(6)(B)

15 of this title.

16 ‘‘(c) CRIMINAL INVESTIGATOR.—As used in this sec17 tion the term ‘criminal investigator’ means any individual

18 duly authorized by a department, agency, or armed force

19 of the United States to conduct or engage in investigations

20 for prosecutions for violations of health care offenses.’’.

21 (b) CLERICAL AMENDMENT.—The table of sections

22 at the beginning of chapter 73 of title 18, United States

23 Code, is amended by adding at the end the following:

‘‘1518. Obstruction of criminal investigations, audits, or inspections of Federal

health care offenses.’’.
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1 SEC. 507. THEFT OR EMBEZZLEMENT.

2 (a) IN GENERAL.—Chapter 31 of title 18, United

3 States Code, is amended by adding at the end the follow4 ing new section:

5 ‘‘§ 669. Theft or embezzlement in connection with

6 health care

7 ‘‘(a) IN GENERAL.—Whoever willfully embezzles,

8 steals, or otherwise without authority willfully and unlaw9 fully converts to the use of any person other than the

10 rightful owner, or intentionally misapplies any of the mon11 eys, funds, securities, premiums, credits, property, or

12 other assets of a health plan, shall be fined under this

13 title or imprisoned not more than 10 years, or both.

14 ‘‘(b) HEALTH PLAN.—As used in this section the

15 term ‘health plan’ has the same meaning given such term

16 in section 1128C(c) of the Social Security Act.’’.

17 (b) CLERICAL AMENDMENT.—The table of sections

18 at the beginning of chapter 31 of title 18, United States

19 Code, is amended by adding at the end the following:

‘‘669. Theft or embezzlement in connection with health care.’’.

20 SEC. 508. LAUNDERING OF MONETARY INSTRUMENTS.

21 Section 1956(c)(7) of title 18, United States Code,

22 is amended by adding at the end the following new sub23 paragraph:

24 ‘‘(F) Any act or activity constituting an of25 fense involving a Federal health care offense as
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1 that term is defined in section 982(a)(6)(B) of

2 this title.’’.

3 SEC. 509. AUTHORIZED INVESTIGATIVE DEMAND PROCE4 DURES.

5 (a) IN GENERAL.—Chapter 233 of title 18, United

6 States Code, is amended by adding after section 3485 the

7 following new section:

8 ‘‘§ 3486. Authorized investigative demand procedures

9 ‘‘(a) AUTHORIZATION.—

10 ‘‘(1) In any investigation relating to functions

11 set forth in paragraph (2), the Attorney General or

12 designee may issue in writing and cause to be served

13 a subpoena compelling production of any records (in14 cluding any books, papers, documents, electronic

15 media, or other objects or tangible things), which

16 may be relevant to an authorized law enforcement

17 inquiry, that a person or legal entity may possess or

18 have care, custody, or control. A custodian of

19 records may be required to give testimony concern20 ing the production and authentication of such

21 records. The production of records may be required

22 from any place in any State or in any territory or

23 other place subject to the jurisdiction of the United

24 States at any designated place, except that such pro25 duction shall not be required more than 500 miles
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1 distant from the place where the subpoena is served.

2 Witnesses summoned under this section shall be paid

3 the same fees and mileage that are paid witnesses

4 in the courts of the United States. A subpoena re5 quiring the production of records shall describe the

6 objects required to be produced and prescribe a re7 turn date within a reasonable period of time within

8 which the objects can be assembled and made avail9 able.

10 ‘‘(2) Investigative demands utilizing an admin11 istrative subpoena are authorized for any investiga12 tion with respect to any act or activity constituting

13 or involving health care fraud, including a scheme or

14 artifice—

15 ‘‘(A) to defraud any health plan or other

16 person, in connection with the delivery of or

17 payment for health care benefits, items, or serv18 ices; or

19 ‘‘(B) to obtain, by means of false or fraud20 ulent pretenses, representations, or promises,

21 any of the money or property owned by, or

22 under the custody or control or, any health

23 plan, or person in connection with the delivery

24 of or payment for health care benefits, items, or

25 services.
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1 ‘‘(b) SERVICE.—A subpoena issued under this section

2 may be served by any person designated in the subpoena

3 to serve it. Service upon a natural person may be made

4 by personal delivery of the subpoena to such person. Serv5 ice may be made upon a domestic or foreign association

6 which is subject to suit under a common name, by deliver7 ing the subpoena to an officer, to a managing or general

8 agent, or to any other agent authorized by appointment

9 or by law to receive service of process. The affidavit of

10 the person serving the subpoena entered on a true copy

11 thereof by the person serving it shall be proof of service.

12 ‘‘(c) ENFORCEMENT.—In the case of contumacy by

13 or refusal to obey a subpoena issued to any person, the

14 Attorney General may invoke the aid of any court of the

15 United States within the jurisdiction of which the inves16 tigation is carried on or of which the subpoenaed person

17 is an inhabitant, or in which such person carries on busi18 ness or may be found, to compel compliance with the sub19 poena. The court may issue an order requiring the subpoe20 naed person to appear before the Attorney General to

21 produce records, if so ordered, or to give testimony touch22 ing the matter under investigation. Any failure to obey

23 the order of the court may be punished by the court as

24 a contempt thereof. All process in any such case may be
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1 served in any judicial district in which such person may

2 be found.

3 ‘‘(d) IMMUNITY FROM CIVIL LIABILITY.—Notwith4 standing any Federal, State, or local law, any person, in5 cluding officers, agents, and employees, receiving a sub6 poena under this section, who complies in good faith with

7 the subpoena and thus produces the materials sought,

8 shall not be liable in any court of any State or the United

9 States to any customer or other person for such produc10 tion or for nondisclosure of that production to the cus11 tomer.

12 ‘‘(e) USE IN ACTION AGAINST INDIVIDUALS.—

13 ‘‘(1) Health information about an individual

14 that is disclosed under this section may not be used

15 in, or disclosed to any person for use in, any admin16 istrative, civil, or criminal action or investigation di17 rected against the individual who is the subject of

18 the information unless the action or investigation

19 arises out of and is directly related to receipt of

20 health care or payment for health care or action in21 volving a fraudulent claim related to health, or if au22 thorized by an appropriate order of a court of com23 petent jurisdiction, granted after application showing

24 good cause therefore.
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1 ‘‘(2) In assessing good cause, the court shall

2 weigh the public interest and the need for disclosure

3 against the injury to the patient, to the physician4 patient relationship, and to the treatment services.

5 ‘‘(3) Upon the granting of such order, the

6 court, in determining the extent to which any disclo7 sure of all or any part of any record is necessary,

8 shall impose appropriate safeguards against unau9 thorized disclosure.

10 ‘‘(f) HEALTH PLAN.—As used in this section, the

11 term ‘health plan’ has the same meaning given such term

12 in section 1128C(c) of the Social Security Act.’’.

13 (b) CLERICAL AMENDMENT.—The table of sections

14 for chapter 223 of title 18, United States Code, is amend15 ed by inserting after the item relating to section 3485 the

16 following new item:

‘‘3486. Authorized investigative demand procedures.’’.

17 (c) CONFORMING AMENDMENT.—Section

18 1510(b)(3)(B) of title 18, United States Code, is amended

19 by inserting ‘‘or a Department of Justice subpoena (issued

20 under section 3486),’’ after ‘‘subpoena’’.

21 TITLE VI—STATE HEALTH CARE

22 FRAUD CONTROL UNITS

23 SEC. 601. STATE HEALTH CARE FRAUD CONTROL UNITS.

24 (a) EXTENSION OF CONCURRENT AUTHORITY TO IN25 VESTIGATE AND PROSECUTE FRAUD IN OTHER FEDERAL
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1 PROGRAMS.—Section 1903(q)(3) (42 U.S.C. 1396b(q)(3))

2 is amended—

3 (1) by inserting ‘‘(A)’’ after ‘‘in connection

4 with’’; and

5 (2) by striking ‘‘title.’’ and inserting ‘‘title; and

6 (B) in cases where the entity’s function is also de7 scribed by subparagraph (A), and upon the approval

8 of the relevant Federal agency, any aspect of the

9 provision of health care services and activities of

10 providers of such services under any Federal health

11 care program (as defined in section 1128B(b)(1)).’’.

12 (b) EXTENSION OF AUTHORITY TO INVESTIGATE

13 AND PROSECUTE PATIENT ABUSE IN NON-MEDICAID

14 BOARD AND CARE FACILITIES.—Section 1903(q)(4) (42

15 U.S.C. 1396b(q)(4)) is amended to read as follows:

16 ‘‘(4)(A) The entity has—

17 ‘‘(i) procedures for reviewing complaints of

18 abuse or neglect of patients in health care fa19 cilities which receive payments under the State

20 plan under this title;

21 ‘‘(ii) at the option of the entity, procedures

22 for reviewing complaints of abuse or neglect of

23 patients residing in board and care facilities;

24 and
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1 ‘‘(iii) procedures for acting upon such com2 plaints under the criminal laws of the State or

3 for referring such complaints to other State

4 agencies for action.

5 ‘‘(B) For purposes of this paragraph, the term

6 ‘board and care facility’ means a residential setting

7 which receives payment from or on behalf of two or

8 more unrelated adults who reside in such facility,

9 and for whom one or both of the following is pro10 vided:

11 ‘‘(i) Nursing care services provided by, or

12 under the supervision of, a registered nurse, li13 censed practical nurse, or licensed nursing as14 sistant.

15 ‘‘(ii) Personal care services that assist resi16 dents with the activities of daily living, includ17 ing personal hygiene, dressing, bathing, eating,

18 toileting, ambulation, transfer, positioning, self19 medication, body care, travel to medical serv20 ices, essential shopping, meal preparation, laun21 dry, and housework.’’.
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1 TITLE VII—MEDICARE/MEDICAID

2 BILLING ABUSE PREVENTION

3 SEC. 701. UNIFORM MEDICARE/MEDICAID APPLICATION

4 PROCESS.

5 Not later than 1 year after the date of the enactment

6 of this Act, the Secretary of Health and Human Services

7 (in this title referred to as the ‘‘Secretary’’) shall establish

8 procedures and a uniform application form for use by any

9 individual or entity that seeks to participate in the pro10 grams under titles XVIII and XIX of the Social Security

11 Act (42 U.S.C. 1395 et seq.; 42 U.S.C. 1396 et seq.). The

12 procedures established shall include the following:

13 (1) Execution of a standard authorization form

14 by all individuals and entities prior to submission of

15 claims for payment which shall include the social se16 curity number of the beneficiary and the TIN (as

17 defined in section 7701(a)(41) of the Internal Reve18 nue Code of 1986) of any health care provider, sup19 plier, or practitioner providing items or services

20 under the claim.

21 (2) Assumption of responsibility and liability

22 for all claims submitted.

23 (3) A right of access by the Secretary to pro24 vider records relating to items and services rendered

25 to beneficiaries of such programs.
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1 (4) Retention of source documentation.

2 (5) Provision of complete and accurate docu3 mentation to support all claims for payment.

4 (6) A statement of the legal consequences for

5 the submission of false or fraudulent claims for pay6 ment.

7 SEC. 702. STANDARDS FOR UNIFORM CLAIMS.

8 (a) ESTABLISHMENT OF STANDARDS.—Not later

9 than 1 year after the date of the enactment of this Act,

10 the Secretary shall establish standards for the form and

11 submission of claims for payment under the medicare pro12 gram under title XVIII of the Social Security Act (42

13 U.S.C. 1395 et seq.) and the medicaid program under title

14 XIX of such Act (42 U.S.C. 1396 et seq.).

15 (b) ENSURING PROVIDER RESPONSIBILITY.—In es16 tablishing standards under subsection (a), the Secretary,

17 in consultation with appropriate agencies including the

18 Department of Justice, shall include such methods of en19 suring provider responsibility and accountability for claims

20 submitted as necessary to control fraud and abuse.

21 (c) USE OF ELECTRONIC MEDIA.—The Secretary

22 shall develop specific standards which govern the submis23 sion of claims through electronic media in order to control

24 fraud and abuse in the submission of such claims.
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1 SEC. 703. UNIQUE PROVIDER IDENTIFICATION CODE.

2 (a) ESTABLISHMENT OF SYSTEM.—Not later than 1

3 year after the date of the enactment of this Act, the Sec4 retary shall establish a system which provides for the issu5 ance of a unique identifier code for each individual or en6 tity furnishing items or services for which payment may

7 be made under title XVIII or XIX of the Social Security

8 (42 U.S.C. 1395 et seq.; 1396 et seq.), and the notation

9 of such unique identifier codes on all claims for payment.

10 (b) APPLICATION FEE.—The Secretary shall require

11 an individual applying for a unique identifier code under

12 subsection (a) to submit a fee in an amount determined

13 by the Secretary to be sufficient to cover the cost of inves14 tigating the information on the application and the indi15 vidual’s suitability for receiving such a code.

16 SEC. 704. USE OF NEW PROCEDURES.

17 No payment may be made under either title XVIII

18 or XIX of the Social Security Act (42 U.S.C. 1395 et seq.;

19 42 U.S.C. 1396 et seq.) for any item or service furnished

20 by an individual or entity unless the requirements of sec21 tions 702 and 703 are satisfied.

22 SEC. 705. NONDISCHARGEABILITY OF CERTAIN MEDICARE

23 DEBTS.

24 (a) PAYMENT TO PROVIDERS.—Section 1815(d) (42

25 U.S.C. 1395g(d)) is amended by adding at the end thereof

26 the following new sentence: ‘‘Notwithstanding any other
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1 provision of law, amounts due to the program under this

2 subsection are not dischargeable under any provision of

3 title 11, United States Code.’’.

4 (b) PAYMENT OF BENEFITS.—Section 1833(j) (42

5 U.S.C. 1395l(j)) is amended by adding at the end thereof

6 the following new sentence: ‘‘Notwithstanding any other

7 provision of law, amounts due to the program under this

8 subsection are not dischargeable under any provision of

9 title 11, United States Code.’’.

Æ