I

103D CONGRESS

1ST SESSION H. R. 1255

To amend title XI of the Social Security Act to extend the penalties for

fraud and abuse assessed against providers under the medicare program

and State health care programs to providers under all health care plans,

and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

MARCH 9, 1993

Mr. STARK (for himself, Mr. LEVIN, Mr. MCDERMOTT, and Mr. CARDIN) introduced the following bill; which was referred jointly to the Committees

on Ways and Means and Energy and Commerce

APRIL 28, 1993

Additional sponsors: Mr. OWENS, and Mr. MILLER of California

A BILL

To amend title XI of the Social Security Act to extend

the penalties for fraud and abuse assessed against providers under the medicare program and State health

care programs to providers under all health care plans,

and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
2

•HR 1255 SC

1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

3 ‘‘National Health Care Anti-Fraud and Abuse Act of

4 1993’’.

5 (b) TABLE OF CONTENTS.—The table of contents of

6 this Act is as follows:

Section 1. Short title; table of contents.

TITLE I—ALL-PAYER FRAUD AND ABUSE PROGRAM

Sec. 101. All-payer fraud and abuse control program

Sec. 102. Application of Federal health anti-fraud and abuse sanctions to all

fraud and abuse against any health benefit plan.

Sec. 103. Public reporting of fraudulent actions.

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. Civil monetary penalties.

Sec. 205. Actions subject to criminal penalties.

Sec. 206. Sanctions against practitioners and persons for failure to follow corrective action plan of peer review organization.

Sec. 207. Restrictions on certain durable medical equipment marketing and

sales activities.

Sec. 208. Intermediate sanctions for medicare health maintenance organizations.

Sec. 209. Effective date.

TITLE III—ADMINISTRATIVE AND MISCELLANEOUS PROVISIONS

Sec. 301. Requirements for uniform claims and electronic claims data set.

Sec. 302. Quarterly publication of adverse actions taken.

Sec. 303. Study of electronic reporting of ownership information.
3

•HR 1255 SC

1 TITLE I—ALL-PAYER FRAUD AND

2 ABUSE PROGRAM

3 SEC. 101. ALL-PAYER FRAUD AND ABUSE CONTROL PRO4 GRAM

5 (a) ESTABLISHMENT OF PROGRAM.—

6 (1) ESTABLISHMENT.—Not later than January

7 1, 1995, the Secretary shall establish in the Office

8 of the Inspector General of the Department of

9 Health and Human Services a program—

10 (A) to coordinate Federal, State, and local

11 law enforcement programs to control fraud and

12 abuse with respect to the delivery of and pay13 ment for health care in the United States,

14 (B) to conduct investigations, audits, eval15 uations, and inspections relating to the delivery

16 of and payment for health care in the United

17 States, and

18 (C) to facilitate the enforcement of the

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

20 of the Social Security Act and other statutes

21 applicable to health care fraud and abuse.

22 (2) COORDINATION WITH LAW ENFORCEMENT

23 AGENCIES.—In carrying out the program established

24 under paragraph (1), the Secretary shall consult

25 with, and arrange for the sharing of data and re-
4

•HR 1255 SC

1 sources with the Attorney General, State law en2 forcement agencies, State medicaid fraud and abuse

3 units, and State agencies responsible for the licens4 ing and certification of health care providers.

5 (3) COORDINATION WITH THIRD PARTY INSUR6 ERS.—In carrying out the program established

7 under paragraph (1), the Secretary shall consult

8 with, and arrange for the sharing of data with rep9 resentatives of private sponsors of health benefit

10 plans and other providers of health insurance.

11 (4) REGULATIONS.—

12 (A) IN GENERAL.—The Secretary shall by

13 regulation establish standards to carry out the

14 program under paragraph (1).

15 (B) INFORMATION STANDARDS.—

16 (i) IN GENERAL.—Such standards

17 shall include standards relating to the fur18 nishing of information by health insurers

19 (including self-insured health benefit

20 plans), providers, and others to enable the

21 Secretary to carry out the program (in22 cluding coordination with law enforcement

23 agencies under paragraph (2) and third

24 party insurers under paragraph (3)).
5

•HR 1255 SC

1 (ii) CONFIDENTIALITY.—Such stand2 ards shall include procedures to assure

3 that such information is provided and uti4 lized in a manner that protects the con5 fidentiality of the information and the pri6 vacy of individuals receiving health care

7 services.

8 (iii) QUALIFIED IMMUNITY FOR PRO9 VIDING INFORMATION.—The provisions of

10 section 1157(a) of the Social Security Act

11 (relating to limitation on liability) shall

12 apply to a person providing information to

13 the Secretary under the program under

14 this section, with respect to the Secretary’s

15 performance of duties under the program,

16 in the same manner as such section applies

17 to information provided to organizations

18 with a contract under part B of title XI of

19 such Act, with respect to the performance

20 of such a contract.

21 (C) DISCLOSURE OF OWNERSHIP INFOR22 MATION.—

23 (i) IN GENERAL.—Such standards

24 shall include standards relating to the dis-
6

•HR 1255 SC

1 closure of ownership information described

2 in clause (ii).

3 (ii) OWNERSHIP INFORMATION DE4 SCRIBED.—The ownership information de5 scribed in this clause includes—

6 (I) covered items and services

7 provided by an entity;

8 (II) the names and unique physi9 cian identification numbers of all phy10 sicians with an ownership or invest11 ment interest in the entity (as de12 scribed in section 1877(a)(2)(A) of

13 the Social Security Act) or whose im14 mediate relatives have such an owner15 ship or investment interest;

16 (III) the names of all other indi17 viduals with such an ownership or in18 vestment interest in the entity; and

19 (IV) any other ownership and re20 lated information required to be dis21 closed by the entity under section

22 1124 or section 1124A of the Social

23 Security Act.

24 (D) INTEGRITY OF ISSUANCE OF PRO25 VIDER IDENTIFICATION CODES.—Such stand-
7

•HR 1255 SC

1 ards shall, insofar as they relate to the issuance

2 of unique provider codes (described in section

3 301(c)(4))—

4 (i) include standards relating to the

5 information (including ownership informa6 tion described in subparagraph (C)(ii) and

7 other information needed in the adminis8 tration of the program) to be required for

9 the issuance of such codes, and

10 (ii) provide for the issuance of such a

11 code upon the presentation of such infor12 mation as would be sufficient to provide

13 for the issuance of similar codes under the

14 medicare program.

15 (5) AUTHORIZATION OF APPROPRIATIONS FOR

16 INVESTIGATORS AND OTHER PERSONNEL.—

17 (A) IN GENERAL.—In addition to any

18 other amounts authorized to be appropriated to

19 the Secretary for health care anti-fraud and

20 abuse activities for a fiscal year, there are au21 thorized to be appropriated additional amounts

22 described in subparagraph (B) to enable the

23 Secretary to conduct investigations of allega24 tions of health care fraud and otherwise carry
8

•HR 1255 SC

1 out the program established under paragraph

2 (1) in a fiscal year.

3 (B) AMOUNTS DESCRIBED.—The amounts

4 referred to in subparagraph (A) are as follows:

5 (i) For fiscal year 1995,

6 $300,000,000.

7 (ii) For fiscal year 1996,

8 $350,000,000.

9 (iii) For fiscal year 1997,

10 $400,000,000.

11 (iv) For fiscal year 1998,

12 $450,000,000.

13 (6) ENSURING ACCESS TO DOCUMENTATION.—

14 (A) The Inspector General of the Department of

15 Health and Human Services is authorized to exercise

16 the authority described in paragraphs (4) and (5) of

17 section 6 of the Inspector General Act of 1978 (re18 lating to subpoenas and administration of oaths)

19 with respect to the activities under the all-payor

20 fraud and abuse control program established under

21 this subsection to the same extent as such Inspector

22 General may exercise such authorities to perform the

23 functions assigned to such official by such Act.
9

•HR 1255 SC

1 (B) Section 1128(b) of the Social Security Act

2 (42 U.S.C. 1320a–7(b)) is amended by adding at

3 the end the following new paragraph:

4 ‘‘(15) FAILURE TO SUPPLY REQUESTED

5 INFORMATION TO THE INSPECTOR GENERAL.—

6 Any individual or entity that fails fully and ac7 curately to provide, upon request of the Inspec8 tor General of the Department of Health and

9 Human Services, records, documents, and other

10 information necessary for the purposes of carry11 ing out activities under the all-payor fraud and

12 abuse control program established under section

13 101 of the National Health Care Anti-Fraud

14 and Abuse Act of 1993.’’.

15 (b) ESTABLISHMENT OF ANTI-FRAUD AND ABUSE

16 TRUST FUND.—

17 (1) ESTABLISHMENT.—

18 (A) IN GENERAL.—There is hereby created

19 on the books of the Treasury of the United

20 States a trust fund to be known as the ‘‘Anti21 Fraud and Abuse Trust Fund’’ (in this section

22 referred to as the ‘‘Trust Fund’’). The Trust

23 Fund shall consist of such gifts and bequests as

24 may be made as provided in subparagraph (B)

25 and such amounts as may be deposited in, or
10

•HR 1255 SC

1 appropriated to, such Trust Fund as provided

2 in this subtitle, section 143(b), and title XI of

3 the Social Security Act.

4 (B) AUTHORIZATION TO ACCEPT GIFTS.—

5 The Managing Trustee of the Trust Fund is

6 authorized to accept on behalf of the United

7 States money gifts and bequests made uncondi8 tionally to the Trust Fund, for the benefit of

9 the Trust Fund, or any activity financed

10 through the Trust Fund.

11 (2) MANAGEMENT.—

12 (A) IN GENERAL.—The Trust Fund shall

13 be managed by the Secretary through a Manag14 ing Trustee designated by the Secretary.

15 (B) INVESTMENT OF FUNDS.—It shall be

16 the duty of the Managing Trustee to invest

17 such portion of the Trust Fund as is not, in the

18 trustee’s judgment, required to meet current

19 withdrawals. Such investments may be made

20 only in interest-bearing obligations of the Unit21 ed States or in obligations guaranteed as to

22 both principal and interest by the United

23 States. For such purpose such obligations may

24 be acquired (i) on original issue at the issue

25 price, or (ii) by purchase of outstanding obliga-
11

•HR 1255 SC

1 tions at market price. The purposes for which

2 obligations of the United States may be issued

3 under chapter 31 of title 31, United States

4 Code, are hereby extended to authorize the issu5 ance at par of public-debt obligations for pur6 chase by the Trust Fund. Such obligations is7 sued for purchase by the Trust Fund shall have

8 maturities fixed with due regard for the needs

9 of the Trust Fund and shall bear interest at a

10 rate equal to the average market yield (com11 puted by the Managing Trustee on the basis of

12 market quotations as of the end of the calendar

13 month next preceding the date of such issue) on

14 all marketable interest-bearing obligations of

15 the United States then forming a part of the

16 public debt which are not due or callable until

17 after the expiration of 4 years from the end of

18 such calendar month, except that where such

average is not a multiple of 1 19 ⁄8 of 1 percent, the

20 rate of interest on such obligations shall be the

multiple of 1 21 ⁄8 of 1 percent nearest such market

22 yield. The Managing Trustee may purchase

23 other interest-bearing obligations of the United

24 States or obligations guaranteed as to both

25 principal and interest by the United States, on
12

•HR 1255 SC

1 original issue or at the market price, only where

2 the Trustee determines that the purchase of

3 such other obligations is in the public interest.

4 (C) Any obligations acquired by the Trust

5 Fund (except public-debt obligations issued ex6 clusively to the Trust Fund) may be sold by the

7 Managing Trustee at the market price, and

8 such public-debt obligations may be redeemed

9 at par plus accrued interest.

10 (D) The interest on, and the proceeds from

11 the sale or redemption of, any obligations held

12 in the Trust Fund shall be credited to and form

13 a part of the Trust Fund.

14 (E) The receipts and disbursements of the

15 Secretary in the discharge of the functions of

16 the Secretary shall not be included in the totals

17 of the budget of the United States Government.

18 For purposes of part C of the Balanced Budget

19 and Emergency Deficit Control Act of 1985,

20 the Secretary and the Trust Fund shall be

21 treated in the same manner as the Federal Re22 tirement Thrift Investment Board and the

23 Thrift Savings Fund, respectively. The United

24 States is not liable for any obligation or liability

25 incurred by the Trust Fund.
13

•HR 1255 SC

1 (3) USE OF FUNDS.—Amounts in the Trust

2 Fund shall be used to assist the Inspector General

3 of the Department of Health and Human Services in

4 carrying out the all-payor fraud and abuse control

5 program established under subsection (a) in the fis6 cal year involved.

7 SEC. 102. APPLICATION OF FEDERAL HEALTH ANTI-FRAUD

8 AND ABUSE SANCTIONS TO ALL FRAUD AND

9 ABUSE AGAINST ANY HEALTH BENEFIT PLAN.

10 (a) CIVIL MONETARY PENALTIES.—Section 1128A

11 of the Social Security Act (42 U.S.C. 1320a–7a) is amend12 ed as follows:

13 (1) In subsection (a)(1), in the matter before

14 subparagraph (A), by inserting ‘‘or of any health

15 benefit plan,’’ after ‘‘subsection (i)(1)),’’.

16 (2) In subsection (b)(1)(A), by inserting ‘‘or

17 under a health benefit plan’’ after ‘‘title XIX’’.

18 (3) In subsection (f)—

19 (A) by redesignating paragraph (3) as

20 paragraph (4); and

21 (B) by inserting after paragraph (2) the

22 following new paragraph:

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

24 out of a claim under a health benefit plan, the por-
14

•HR 1255 SC

1 tion of such amounts as is determined to have been

2 paid by the plan shall be repaid to the plan.’’.

3 (4) In subsection (i)—

4 (A) in paragraph (2), by inserting ‘‘or

5 under a health benefit plan’’ before the period

6 at the end, and

7 (B) in paragraph (5), by inserting ‘‘or

8 under a health benefit plan’’ after ‘‘or XX’’.

9 (b) CRIMES.—

10 (1) SOCIAL SECURITY ACT.—Section 1128B of

11 such Act (42 U.S.C. 1320a–7b) is amended as fol12 lows:

13 (A) In the heading, by adding at the end

14 the following: ‘‘OR HEALTH BENEFIT PLANS’’.

15 (B) In subsection (a)(1)—

16 (i) by striking ‘‘title XVIII or’’ and

17 inserting ‘‘title XVIII,’’, and

18 (ii) by adding at the end the follow19 ing: ‘‘or a health benefit plan (as defined

20 in section 1128(i)),’’.

21 (C) In subsection (a)(5), by striking ‘‘title

22 XVIII or a State health care program’’ and in23 serting ‘‘title XVIII, a State health care pro24 gram, or a health benefit plan’’.
15

•HR 1255 SC

1 (D) In the second sentence of subsection

2 (a)—

3 (i) by inserting after ‘‘title XIX’’ the

4 following: ‘‘or a health benefit plan’’, and

5 (ii) by inserting after ‘‘the State’’ the

6 following: ‘‘or the plan’’.

7 (E) In subsection (b)(1), by striking ‘‘title

8 XVIII or a State health care program’’ each

9 place it appears and inserting ‘‘title XVIII, a

10 State health care program, or a health benefit

11 plan’’.

12 (F) In subsection (b)(2), by striking ‘‘title

13 XVIII or a State health care program’’ each

14 place it appears and inserting ‘‘title XVIII, a

15 State health care program, or a health benefit

16 plan’’.

17 (G) In subsection (b)(3), by striking ‘‘title

18 XVIII or a State health care program’’ each

19 place it appears in subparagraphs (A) and (C)

20 and inserting ‘‘title XVIII, a State health care

21 program, or a health benefit plan’’.

22 (H) In subsection (d)(2)—

23 (i) by striking ‘‘title XIX,’’ and insert24 ing ‘‘title XIX or under a health benefit

25 plan,’’, and
16

•HR 1255 SC

1 (ii) by striking ‘‘State plan,’’ and in2 serting ‘‘State plan or the health benefit

3 plan,’’.

4 (2) TREBLE DAMAGES FOR CRIMINAL SANC5 TIONS.—Section 1128B of such Act (42 U.S.C.

6 1320a–7b) is amended by adding at the end the fol7 lowing new subsection:

8 ‘‘(f) In addition to the fines that may be imposed

9 under subsection (a), (b), or (c), any individual found to

10 have violated the provisions of any of such subsections

11 may be subject to treble damages.’’.

12 (3) IDENTIFICATION OF COMMUNITY SERVICE

13 OPPORTUNITIES.—Section 1128B of such Act (42

14 U.S.C. 1320a–7b) is further amended by adding at

15 the end the following new subsection:

16 ‘‘(g) The Secretary shall—

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

18 care officials, identify opportunities for the satisfac19 tion of community service obligations that a court

20 may impose upon the conviction of an offense under

21 this section, and

22 ‘‘(2) make information concerning such oppor23 tunities available to Federal and State law enforce24 ment officers and State and local health care

25 officials.’’.
17

•HR 1255 SC

1 (c) HEALTH BENEFIT PLAN DEFINED.—Section

2 1128 of such Act (42 U.S.C. 1320a–7) is amended by re3 designating subsection (i) as subsection (j) and by insert4 ing after subsection (h) the following new subsection:

5 ‘‘(i) HEALTH BENEFIT PLAN DEFINED.—For pur6 poses of sections 1128A and 1128B, the term ‘health ben7 efit plan’ means a health benefit program other than the

8 medicare program, the medicaid program, or a State

9 health care program.’’.

10 (d) CONFORMING AMENDMENT.—Section

11 1128(b)(8)(B)(ii) of such Act (42 U.S.C. 1320a–

12 7(b)(8)(B)(ii)) is amended by striking ‘‘1128A’’ and in13 serting ‘‘1128A (other than a penalty arising from a

14 health benefit plan, as defined in subsection (i))’’.

15 (e) EFFECTIVE DATE.—The amendments made by

16 this section shall take effect January 1, 1995.

17 SEC. 103. REPORTING OF FRAUDULENT ACTIONS UNDER

18 MEDICARE.

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

20 1 year after the date of the enactment of this Act, the

21 Secretary of Health and Human Services shall establish

22 a program through which individuals entitled to benefits

23 under the medicare program may report to the Secretary

24 on a confidential basis (at the individual’s request) in25 stances of suspected fraudulent actions arising under the
18

•HR 1255 SC

1 program by providers of items and services under the pro2 gram.

3 (b) NOTICE TO MEDICARE BENEFICIARIES.—

4 (1) INCLUDED IN ANNUAL NOTICE OF BENE5 FITS.—Section 1804 of the Social Security Act (42

6 U.S.C. 1395b–2) is amended—

7 (A) in paragraph (2), by striking ‘‘and’’ at

8 the end;

9 (B) in paragraph (3), by striking the pe10 riod at the end and inserting ‘‘, and’’; and

11 (C) by inserting after paragraph (3) the

12 following new paragraph:

13 ‘‘(4) a description of the Secretary’s program

14 for the reporting by individuals entitled to benefits

15 under this title of suspected instances of fraudulent

16 actions arising under the program by providers of

17 items and services under the program, and of infor18 mation to alert such individuals to the existence of

19 problems of fraud and abuse under the program.’’.

20 (2) EFFECTIVE DATE.—The amendment made

21 by paragraph (1) shall take effect on the first day

22 of the first calendar year that begins after the expi23 ration of the 1-year period that begins on the date

24 of the enactment of this Act.
19

•HR 1255 SC

1 TITLE II—REVISIONS TO CUR2 RENT SANCTIONS FOR FRAUD

3 AND ABUSE

4 SEC. 201. MANDATORY EXCLUSION FROM PARTICIPATION

5 IN MEDICARE AND STATE HEALTH CARE PRO6 GRAMS.

7 (a) INDIVIDUAL CONVICTED OF FELONY RELATING

8 TO FRAUD.—

9 (1) IN GENERAL.—Section 1128(a) of the

10 Social Security Act (42 U.S.C. 1320a–7(a)) is

11 amended by adding at the end the following new

12 paragraph:

13 ‘‘(3) FELONY CONVICTION RELATING TO

14 FRAUD.—Any individual or entity that has been con15 victed, under Federal or State law, in connection

16 with the delivery of a health care item or service or

17 with respect to any act or omission in a program op18 erated by or financed in whole or in part by any

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

20 criminal offense consisting of a felony relating to

21 fraud, theft, embezzlement, breach of fiduciary re22 sponsibility, or other financial misconduct.’’.

23 (2) CONFORMING AMENDMENT.—Section

24 1128(b)(1) of such Act (42 U.S.C. 1320a–7(b)(1))

25 is amended—
20

•HR 1255 SC

1 (A) in the heading, by striking ‘‘CONVIC2 TION’’ and inserting ‘‘MISDEMEANOR CONVIC3 TION’’; and

4 (B) by striking ‘‘criminal offense’’ and in5 serting ‘‘criminal offense consisting of a mis6 demeanor’’.

7 (b) INDIVIDUAL CONVICTED OF FELONY RELATING

8 TO CONTROLLED SUBSTANCE.—

9 (1) IN GENERAL.—Section 1128(a) of the So10 cial Security Act (42 U.S.C. 1320a–7(a)), as amend11 ed by subsection (a), is amended by adding at the

12 end the following new paragraph:

13 ‘‘(4) FELONY CONVICTION RELATING TO CON14 TROLLED SUBSTANCE.—Any individual or entity

15 that has been convicted, under Federal or State law,

16 of a criminal offense consisting of a felony relating

17 to the unlawful manufacture, distribution, prescrip18 tion, or dispensing of a controlled substance.’’.

19 (2) CONFORMING AMENDMENT.—Section

20 1128(b)(3) of such Act (42 U.S.C. 1320a–7(b)(3))

21 is amended—

22 (A) in the heading, by striking ‘‘CONVIC23 TION’’ and inserting ‘‘MISDEMEANOR CONVIC24 TION’’; and
21

•HR 1255 SC

1 (B) by striking ‘‘criminal offense’’ and in2 serting ‘‘criminal offense consisting of a mis3 demeanor’’.

4 SEC. 202. ESTABLISHMENT OF MINIMUM PERIOD OF EX5 CLUSION FOR CERTAIN INDIVIDUALS AND

6 ENTITIES SUBJECT TO PERMISSIVE EXCLU7 SION FROM MEDICARE AND STATE HEALTH

8 CARE PROGRAMS.

9 (a) IN GENERAL.—Section 1128(c)(3) of the Social

10 Security Act (42 U.S.C. 1320a–7(c)(3)) is amended by

11 adding at the end the following new subparagraphs:

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

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

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

15 Secretary determines that a shorter period is appropriate

16 because of mitigating circumstances or that a longer pe17 riod is appropriate because of aggravating circumstances.

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

19 entity under subsection (b)(4) or (b)(5), the period of the

20 exclusion shall not be less than the period during which

21 the individual’s or entity’’s license to provide health care

22 is revoked, suspended, or surrendered.

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.’’.
22

•HR 1255 SC

1 (b) CONFORMING AMENDMENT.—Section

2 1128(c)(3)(A) of such Act (42 U.S.C. 1320a–7(c)(3)(A))

3 is amended by striking ‘‘subsection (b)(12)’’ and inserting

4 ‘‘paragraph (1), (2), (3), (4), (6)(B), or (12) of subsection

5 (b)’’.

6 SEC. 203. PERMISSIVE EXCLUSION OF INDIVIDUALS WITH

7 OWNERSHIP OR CONTROL INTEREST IN

8 SANCTIONED ENTITIES.

9 Section 1128(b) of the Social Security Act (42 U.S.C.

10 1320a–7(b)) is amended by adding at the end the follow11 ing new paragraph:

12 ‘‘(15) INDIVIDUALS CONTROLLING A SANC13 TIONED ENTITY.—Any individual who has a direct

14 or indirect ownership or control interest of 5 percent

15 or more, or an ownership or control interest (as de16 fined in section 1124(a)(3)) in, or who is an officer,

17 director, agent, or managing employee (as defined in

18 section 1126(b)) of, an entity—

19 ‘‘(A) that has been convicted of any of20 fense described in subsection (a) or in para21 graph (1), (2), or (3);

22 ‘‘(B) against which a civil monetary pen23 alty has been assessed under section 1128A; or
23

•HR 1255 SC

1 ‘‘(C) that has been excluded from partici2 pation under a program under title XVIII or

3 under a State health care program.’’.

4 SEC. 204. CIVIL MONETARY PENALTIES.

5 (a) PROHIBITION AGAINST OFFERING INDUCEMENTS

6 TO INDIVIDUALS ENROLLED UNDER OR EMPLOYED BY

7 PROGRAMS OR PLANS.—

8 (1) INDUCEMENTS TO INDIVIDUALS ENROLLED

9 UNDER MEDICARE.—Section 1128A(a) of the Social

10 Security Act (42 U.S.C. 1320a–7a(a)) is amended—

11 (A) by striking ‘‘or’’ at the end of para12 graph (1)(D);

13 (B) by striking ‘‘, or’’ at the end of para14 graph (2) and inserting a semicolon;

15 (C) by striking the semicolon at the end of

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

17 (D) by inserting after paragraph (3) the

18 following new paragraph:

19 ‘‘(4) routinely transfers anything for less than

20 fair market value to (or for the benefit of) an indi21 vidual entitled to benefits under the medicare pro22 gram in order to influence the individual to receive

23 from a particular provider, practitioner, or supplier

24 a covered item or service for which payment may be

25 made under such program, including the routine
24

•HR 1255 SC

1 waiver of the payment of any amounts owed by the

2 individual to the person for an item or service

3 furnished under part B of such program;’’.

4 (2) INDUCEMENTS TO EMPLOYEES.—Section

5 1128A(a) of such Act (42 U.S.C. 1320a–7a(a)), as

6 amended by paragraph (1), is further amended—

7 (A) by striking ‘‘or’’ at the end of para8 graph (3);

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

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

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

12 following new paragraph:

13 ‘‘(5) pays a bonus, reward, or other incentive to

14 an employee to induce the employee to encourage in15 dividuals to seek or obtain covered items or services

16 for which payment may be made under the medicare

17 program, a State health care program, or a health

18 benefit plan where the amount of the incentive is in

19 proportion to the activities of the employee in en20 couraging individuals to seek or obtain covered items

21 or services;’’.

22 (b) EXCLUDED INDIVIDUAL RETAINING OWNERSHIP

23 OR CONTROL INTEREST IN PARTICIPATING ENTITY.—

24 Section 1128A(a) of such Act, as amended by subsection

25 (a), is further amended—
25

•HR 1255 SC

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

2 (4);

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

4 paragraph (5) and inserting ‘‘; or’’; and

5 (C) by inserting after paragraph (5) the follow6 ing new paragraph:

7 ‘‘(6) in the case of a person who is not an orga8 nization, agency, or other entity, is excluded from

9 participating in a program under title XVIII or a

10 State health care program in accordance with this

11 subsection or under section 1128 and who, during

12 the period of exclusion, retains a direct or indirect

13 ownership or control interest of 5 percent or more,

14 or an ownership or control interest (as defined in

15 section 1124(a)(3)) in, or who is an officer, director,

16 agent, or managing employee (as defined in section

17 1126(b)) of, an entity that is participating in a pro18 gram under title XVIII or a State health care

19 program;’’.

20 (c) INCREASE IN MAXIMUM AMOUNT OF PENALTIES

21 AND ASSESSMENTS.—Section 1128A(a) of such Act (42

22 U.S.C. 1320a–7a(a)), as amended by subsections (a) and

23 (b), is amended in the matter following paragraph (6)—

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

25 ‘‘$10,000’’; and
26

•HR 1255 SC

1 (2) by striking ‘‘twice the amount’’ and insert2 ing ‘‘three times the amount’’.

3 (d) CLAIM FOR ITEM OR SERVICE BASED ON INCOR4 RECT CODING.—Section 1128A(a)(1)(A) of such Act (42

5 U.S.C. 1320a–7a(a)(1)(A)) is amended by striking

6 ‘‘claimed,’’ and inserting the following: ‘‘claimed, including

7 any person who on a repeated basis presents or causes

8 to be presented a claim for an item or service that is based

9 on a code (in the case of a physician’s service) or a diag10 nosis-related group (in the case of inpatient hospital serv11 ices) that results in a greater payment to the person than

12 the code or diagnosis-related group that actually applies

13 to the item or service,’’.

14 (e) PERMITTING PARTIES TO BRING ACTIONS ON

15 OWN BEHALF.—Section 1128A of such Act (42 U.S.C.

16 1320a–7a) is amended by adding at the end the following

17 new subsection:

18 ‘‘(m)(1) Subject to paragraphs (2) and (3), any per19 son (including an organization, agency, or other entity,

20 but excluding a beneficiary, as defined in subsection

21 (i)(5)) that suffers harm as a direct result of any activity

22 of an individual or entity which makes the individual or

23 entity subject to a civil monetary penalty under this sec24 tion may, in a civil action against the individual or entity

25 in the United States District Court, obtain damages
27

•HR 1255 SC

1 against the individual or entity and such equitable relief

2 as is appropriate.

3 ‘‘(2) A person may bring a civil action under this sub4 section only if the person provides the Secretary with writ5 ten notice of the person’s intent to bring an action under

6 this subsection, the identities of the individuals or entities

7 the person intends to name as defendants to the action,

8 and all information the person possesses regarding the ac9 tivity that is the subject of the action that may materially

10 affect the Secretary’s decision to initiate a proceeding to

11 impose a civil monetary penalty under this section against

12 the defendants.

13 ‘‘(3) A person may bring a civil action under this sub14 section only if any of the following conditions are met:

15 ‘‘(A) During the 60-day period that begins on

16 the date the Secretary receives the written notice de17 scribed in paragraph (2), the Secretary does not no18 tify the person that the Secretary intends to initiate

19 a proceeding to impose a civil monetary penalty

20 under this section against the defendants.

21 ‘‘(B) If the Secretary notifies the person during

22 the 60-day period described in subparagraph (A)

23 that the Secretary intends to initiate a proceeding to

24 impose a civil monetary penalty under this section

25 against the defendants, the Secretary subsequently
28

•HR 1255 SC

1 notifies the person that the Secretary no longer

2 intends to initiate such a proceeding against the

3 defendants.

4 ‘‘(C) After the expiration of the 2-year period

5 that begins on the date the Secretary notifies the

6 person that the Secretary intends to initiate a pro7 ceeding to impose a civil monetary penalty under

8 this section against the defendants, the Secretary

9 has not made a good faith effort to initiate such a

10 proceeding against the defendants.

11 ‘‘(4) If a person is awarded any amounts in an action

12 brought under this subsection that are in excess of the

13 damages suffered by the person as a result of the defend14 ant’s activities, 10 percent of such amounts shall be with15 held from the person for payment into the Anti-Fraud and

16 Abuse Trust Fund established under section 101(b) of the

17 National Health Care Anti-Fraud and Abuse Act of 1993.

18 ‘‘(5) No action may be brought under this subsection

19 more than 6 years after the date of the activity with re20 spect to which the action is brought.’’.

21 SEC. 205. ACTIONS SUBJECT TO CRIMINAL PENALTIES.

22 (a) ANTI-KICKBACK SANCTIONS.—

23 (1) PERMITTING SECRETARY TO IMPOSE CIVIL

24 MONETARY PENALTY.—Section 1128A(a) of the So25 cial Security Act (42 U.S.C. 1320a–7a(a)), as
29

•HR 1255 SC

1 amended by subsections (a) and (b) of section 204,

2 is further amended—

3 (A) by striking ‘‘or’’ at the end of para4 graph (5);

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

6 paragraph (6) and inserting ‘‘; or’’; and

7 (C) by inserting after paragraph (6) the

8 following new paragraph:

9 ‘‘(7) carries out any activity in violation of

10 paragraph (1) or (2) of section 1128B(b);’’.

11 (2) RESTRICTION ON APPLICATION OF EXCEP12 TION FOR AMOUNTS PAID TO EMPLOYEES.—Section

13 1128B(b)(3)(B) of such Act (42 U.S.C. 1320a–

14 7b(b)(3)(B)) is amended by striking ‘‘services;’’ and

15 inserting the following: ‘‘services, but only if such

16 amount is not contingent upon the employee refer17 ring individuals to the employer for the furnishing

18 (or arranging for the furnishing) of such items or

19 services and is not determined in a manner that

20 takes into account (directly or indirectly) the volume

21 or value of any referrals by the employee to the em22 ployer for the furnishing (or arranging for the

23 furnishing) of such items or services;’’.

24 (b) AUTHORITY TO ENJOIN SANCTIONED INDIVID25 UAL OR ENTITY FROM DISPOSING OF ASSETS REQUIRED
30

•HR 1255 SC

1 TO PAY CRIMINAL PENALTY.—Section 1128B of such Act

2 (42 U.S.C. 1320a–7b), as amended by paragraphs (2) and

3 (3) of section 102(b), is further amended by adding at

4 the end the following new subsection:

5 ‘‘(h) The provisions of section 1128A(k) shall apply

6 to any person subject to a fine under this section in the

7 same manner as such provisions apply to a person subject

8 to a civil monetary penalty under such section.’’.

9 SEC. 206. SANCTIONS AGAINST PRACTITIONERS AND PER10 SONS FOR FAILURE TO FOLLOW CORRECTIVE

11 ACTION PLAN OF PEER REVIEW ORGANIZA12 TION.

13 (a) MINIMUM PERIOD OF EXCLUSION FOR PRACTI14 TIONERS AND PERSONS FAILING TO MEET CORRECTIVE

15 PLAN OF PEER REVIEW ORGANIZATION.—

16 (1) IN GENERAL.—The second sentence of sec17 tion 1156(b)(1) of the Social Security Act (42

18 U.S.C. 1320c–5(b)(1)) is amended by striking ‘‘may

19 prescribe)’’ and inserting ‘‘may prescribe, except

20 that such period may not be less than 1 year)’’.

21 (2) CONFORMING AMENDMENT.—Section

22 1156(b)(2) of such Act (42 U.S.C. 1320c–5(b)(2)) is

23 amended by striking ‘‘shall remain’’ and inserting

24 ‘‘shall (subject to the minimum period specified in

25 the second sentence of paragraph (1))’’.
31

•HR 1255 SC

1 (b) REPEAL OF ‘‘UNWILLING OR UNABLE’’ CONDI2 TION FOR IMPOSITION OF SANCTION.—Section 1156(b)(1)

3 of such Act (42 U.S.C. 1320c–5(b)(1)) is amended—

4 (1) in the second sentence, by striking ‘‘and de5 termines’’ and all that follows through ‘‘such obliga6 tions,’’; and

7 (2) by striking the third sentence.

8 (c) AMOUNT OF CIVIL MONEY PENALTY.—Section

9 1156(b)(3) of such Act (42 U.S.C. 1320c–5(b)(3)) is

10 amended by striking ‘‘the actual or estimated cost’’ and

11 inserting the following: ‘‘$10,000 for each instance’’.

12 SEC. 207. RESTRICTIONS ON CERTAIN DURABLE MEDICAL

13 EQUIPMENT MARKETING AND SALES ACTIVI14 TIES.

15 (a) PROHIBITING UNSOLICITED TELEPHONE CON16 TACTS FROM SUPPLIERS OF DURABLE MEDICAL EQUIP17 MENT TO MEDICARE BENEFICIARIES.—

18 (1) IN GENERAL.—Section 1834(a) of the So19 cial Security Act (42 U.S.C. 1395m(a)) is amended

20 by adding at the end the following new paragraph:

21 ‘‘(17) PROHIBITION AGAINST UNSOLICITED

22 TELEPHONE CONTACTS BY SUPPLIERS.—

23 ‘‘(A) IN GENERAL.—A supplier of a cov24 ered item under this subsection may not contact

25 an individual enrolled under this part by tele-
32

•HR 1255 SC

1 phone regarding the furnishing of a covered

2 item to the individual (other than a covered

3 item the supplier has already furnished to the

4 individual) unless—

5 ‘‘(i) the individual gives permission to

6 the supplier to make contact by telephone

7 for such purpose; or

8 ‘‘(ii) the supplier has furnished a cov9 ered item under this subsection to the indi10 vidual during the 15-month period preced11 ing the date on which the supplier contacts

12 the individual for such purpose.

13 ‘‘(B) PROHIBITING PAYMENT FOR ITEMS

14 FURNISHED SUBSEQUENT TO UNSOLICITED

15 CONTACTS.—If a supplier knowingly contacts

16 an individual in violation of subparagraph (A),

17 no payment may be made under this part for

18 any item subsequently furnished to the individ19 ual by the supplier.

20 ‘‘(C) EXCLUSION FROM PROGRAM FOR

21 SUPPLIERS ENGAGING IN PATTERN OF UNSO22 LICITED CONTACTS.—If a supplier knowingly

23 contacts individuals in violation of subpara24 graph (A) to such an extent that the supplier’s

25 conduct establishes a pattern of contacts in vio-
33

•HR 1255 SC

1 lation of such subparagraph, the Secretary shall

2 exclude the supplier from participation in the

3 programs under this Act, in accordance with

4 the procedures set forth in subsections (c), (f),

5 and (g) of section 1128.’’.

6 (2) REQUIRING REFUND OF AMOUNTS COL7 LECTED FOR DISALLOWED ITEMS.—Section 1834(a)

8 of such Act (42 U.S.C. 1395m(a)), as amended by

9 paragraph (1), is amended by adding at the end the

10 following new paragraph:

11 ‘‘(18) REFUND OF AMOUNTS COLLECTED FOR

12 CERTAIN DISALLOWED ITEMS.—

13 ‘‘(A) IN GENERAL.—If a nonparticipating

14 supplier furnishes to an individual enrolled

15 under this part a covered item for which no

16 payment may be made under this part by rea17 son of paragraph (17)(B), the supplier shall re18 fund on a timely basis to the patient (and shall

19 be liable to the patient for) any amounts col20 lected from the patient for the item, unless—

21 ‘‘(i) the supplier establishes that the

22 supplier did not know and could not rea23 sonably have been expected to know that

24 payment may not be made for the item by

25 reason of paragraph (17)(B), or
34

•HR 1255 SC

1 ‘‘(ii) before the item was furnished,

2 the patient was informed that payment

3 under this part may not be made for that

4 item and the patient has agreed to pay for

5 that item.

6 ‘‘(B) SANCTIONS.—If a supplier knowingly

7 and willfully fails to make refunds in violation

8 of subparagraph (A), the Secretary may apply

9 sanctions against the supplier in accordance

10 with section 1842(j)(2).

11 ‘‘(C) NOTICE.—Each carrier with a con12 tract in effect under this part with respect to

13 suppliers of covered items shall send any notice

14 of denial of payment for covered items by rea15 son of paragraph (17)(B) and for which pay16 ment is not requested on an assignment-related

17 basis to the supplier and the patient involved.

18 ‘‘(D) TIMELY BASIS DEFINED.—A refund

19 under subparagraph (A) is considered to be on

20 a timely basis only if—

21 ‘‘(i) in the case of a supplier who does

22 not request reconsideration or seek appeal

23 on a timely basis, the refund is made with24 in 30 days after the date the supplier re-
35

•HR 1255 SC

1 ceives a denial notice under subparagraph

2 (C), or

3 ‘‘(ii) in the case in which such a re4 consideration or appeal is taken, the re5 fund is made within 15 days after the date

6 the supplier receives notice of an adverse

7 determination on reconsideration or ap8 peal.’’.

9 (b) CONFORMING AMENDMENT.—Section 1834(h)(3)

10 (42 U.S.C. 1395m(h)(3)) of such Act is amended by strik11 ing ‘‘Paragraph (12)’’ and inserting ‘‘Paragraphs (12)

12 and (17)’’.

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

14 subsections (a) and (b) shall apply to items furnished after

15 the expiration of the 60-day period that begins on the date

16 of the enactment of this Act.

17 SEC. 208. INTERMEDIATE SANCTIONS FOR MEDICARE

18 HEALTH MAINTENANCE ORGANIZATIONS.

19 (a) APPLICATION OF INTERMEDIATE SANCTIONS FOR

20 ANY PROGRAM VIOLATIONS.—

21 (1) IN GENERAL.—Section 1876(i)(1) of the

22 Social Security Act (42 U.S.C. 1395mm(i)(1)) is

23 amended by striking ‘‘the Secretary may terminate’’

24 and all that follows and inserting the following: ‘‘in

25 accordance with procedures established under para-
36

•HR 1255 SC

1 graph (9), the Secretary may at any time terminate

2 any such contract or may impose the intermediate

3 sanctions described in paragraph (6)(B) or (6)(C)

4 (whichever is applicable) on the eligible organization

5 if the Secretary determines that the organization—

6 ‘‘(A) has failed substantially to carry out the

7 contract;

8 ‘‘(B) is carrying out the contract in a manner

9 inconsistent with the efficient and effective adminis10 tration of this section;

11 ‘‘(C) is operating in a manner that is not in the

12 best interests of the individuals covered under the

13 contract; or

14 ‘‘(D) no longer substantially meets the applica15 ble conditions of subsections (b), (c), (e), and (f).’’.

16 (2) OTHER INTERMEDIATE SANCTIONS FOR

17 MISCELLANEOUS PROGRAM VIOLATIONS.—Section

18 1876(i)(6) of such Act (42 U.S.C. 1395mm(i)(6)) is

19 amended by adding at the end the following new

20 subparagraph:

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

22 the Secretary makes a determination under paragraph (1)

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

24 the Secretary may apply the following intermediate sanc25 tions:
37

•HR 1255 SC

1 ‘‘(i) civil money penalties of not more than

2 $25,000 for each determination under paragraph (1)

3 if the deficiency that is the basis of the determina4 tion has directly adversely affected (or has the sub5 stantial likelihood of adversely affecting) an individ6 ual covered under the organization’s contract;

7 ‘‘(ii) civil money penalties of not more than

8 $10,000 for each week beginning after the initiation

9 of procedures by the Secretary under paragraph (9)

10 during which the deficiency that is the basis of a de11 termination under paragraph (1) exists; and

12 ‘‘(iii) suspension of enrollment of individuals

13 under this section after the date the Secretary noti14 fies the organization of a determination under para15 graph (1) and until the Secretary is satisfied that

16 the deficiency that is the basis for the determination

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

18 (3) PROCEDURES FOR IMPOSING SANCTIONS.—

19 Section 1876(i) of such Act (42 U.S.C. 1395mm(i))

20 is amended by adding at the end the following new

21 paragraph:

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

23 eligible organization under this section or may impose the

24 intermediate sanctions described in paragraph (6) on the

25 organization in accordance with formal investigation and
38

•HR 1255 SC

1 compliance procedures established by the Secretary under

2 which—

3 ‘‘(A) the Secretary provides the organization

4 with the opportunity to develop and implement a

5 corrective action plan to correct the deficiencies that

6 were the basis of the Secretary’s determination

7 under paragraph (1);

8 ‘‘(B) the Secretary shall impose more severe

9 sanctions on organizations that have a history of de10 ficiencies or that have not taken steps to correct de11 ficiencies the Secretary has brought to their atten12 tion;

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

14 delays between the finding of a deficiency and the

15 imposition of sanctions; and

16 ‘‘(D) the Secretary provides the organization

17 with reasonable notice and opportunity for hearing

18 (including the right to appeal an initial decision) be19 fore imposing any sanction or terminating the con20 tract.’’.

21 (4) CONFORMING AMENDMENTS.—(A) Section

22 1876(i)(6)(B) of such Act (42 U.S.C.

23 1395mm(i)(6)(B)) is amended by striking the sec24 ond sentence.
39

•HR 1255 SC

1 (B) Section 1876(i)(6) of such Act (42 U.S.C.

2 1395mm(i)(6)) is further amended by adding at the

3 end the following new subparagraph:

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

5 subsections (a) and (b)) shall apply to a civil money pen6 alty under subparagraph (A) or (B) in the same manner

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

8 section 1128A(a).’’.

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

11 (1) REQUIREMENT FOR WRITTEN AGREE12 MENT.—Section 1876(i)(7)(A) of the Social Security

13 Act (42 U.S.C. 1395mm(i)(7)(A)) is amended by

14 striking ‘‘an agreement’’ and inserting ‘‘a written

15 agreement’’.

16 (2) DEVELOPMENT OF MODEL AGREEMENT.—

17 Not later than July 1, 1994, the Secretary of Health

18 and Human Services shall develop a model of the

19 agreement that an eligible organization with a risk20 sharing contract under section 1876 of the Social

21 Security Act must enter into with an entity provid22 ing peer review services with respect to services pro23 vided by the organization under section

24 1876(i)(7)(A) of such Act.

25 (3) REPORT BY GAO.—
40

•HR 1255 SC

1 (A) STUDY.—The Comptroller General

2 shall conduct a study of the costs incurred by

3 eligible organizations with risk-sharing con4 tracts under section 1876(b) of such Act of

5 complying with the requirement of entering into

6 a written agreement with an entity providing

7 peer review services with respect to services pro8 vided by the organization, together with an

9 analysis of how information generated by such

10 entities is used by the Secretary of Health and

11 Human Services to assess the quality of

12 services provided by such eligible organizations.

13 (B) REPORT TO CONGRESS.—Not later

14 than July 1, 1996, the Comptroller General

15 shall submit a report to the Committee on

16 Ways and Means and the Committee on Energy

17 and Commerce of the House of Representatives

18 and the Committee on Finance of the Senate on

19 the study conducted under subparagraph (A).

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

21 this section shall apply with respect to contract years be22 ginning on or after January 1, 1995.
41

•HR 1255 SC

1 SEC. 209. EFFECTIVE DATE.

2 Except as otherwise provided in section 207(c), the

3 amendments made by this title shall take effect January

4 1, 1995.

5 TITLE III—ADMINISTRATIVE

6 AND MISCELLANEOUS PROVI7 SIONS

8 SEC. 301. REQUIREMENTS FOR UNIFORM CLAIMS AND

9 ELECTRONIC CLAIMS DATA SET.

10 (a) REQUIREMENTS.—

11 (1) SUBMISSION OF CLAIMS.—Each health serv12 ice provider that furnishes services in the United

13 States for which payment may be made under a

14 health benefit plan shall submit any claim for pay15 ment for such services only in a form and manner

16 consistent with standards established under sub17 section (c).

18 (2) ACCEPTANCE OF CLAIMS.—A health benefit

19 plan may not reject a claim for payment under the

20 plan on the basis of the form or manner in which

21 the claim is submitted if the claim is submitted in

22 accordance with the standards established under

23 subsection (c).

24 (3) EFFECTIVE DATE.—This subsection shall

25 apply to claims for services furnished on or after the
42

•HR 1255 SC

1 date that is 6 months after the date standards are

2 established under subsection (c).

3 (b) ENFORCEMENT THROUGH CIVIL MONEY PEN4 ALTIES.—

5 (1) IN GENERAL.—

6 (A) PROVIDERS.—In the case of a health

7 service provider that submits a claim in viola8 tion of subsection (a)(1), the provider is subject

9 to a civil money penalty of not to exceed $100

10 (or, if greater, the amount of the claim) for

11 each such violation.rejects a claim in violation

12 of subsection (a)(2), the plan is subject to a

13 civil money penalty of not to exceed $100 (or,

14 if greater, the amount of the claim) for each

15 such violation.

16 (B) PLANS.—In the case of a health bene17 fit plan that rejects a claim in violation of sub18 section (a)(2), the plan is subject to a civil

19 monetary penalty of not to exceed $100 (or, if

20 greater, the amount of the claim) for each such

21 violation.

22 (2) PROCESS.—The provisions of section 1128A

23 of the Social Security Act (other than subsections

24 (a) and (b)) shall apply to a civil money penalty

25 under paragraph (1) in the same manner as such
43

•HR 1255 SC

1 provisions apply to a penalty or proceeding under

2 section 1128A(a) of such Act.

3 (3) SUNSET FOR PENALTY.—No civil money

4 penalty may be imposed under this subsection for

5 submission (or rejection) of any claim on or after

6 the date that is 36 months after the effective date

7 specified in subsection (a)(3).

8 (c) STANDARDS RELATING TO UNIFORM CLAIMS.—

9 (1) ESTABLISHMENT OF STANDARDS.—The

10 Secretary of Health and Human Services shall es11 tablish standards that relate to the form and man12 ner of submission of claims for benefits under a

13 health benefit plan.

14 (2) SCOPE OF INFORMATION.—

15 (A) IN GENERAL.—The standards under

16 this subsection are intended to cover substan17 tially most claims that are filed under health

18 benefit plans. Such information need not in19 clude all elements that may potentially be re20 quired to be reported under utilization review

21 provisions of plans.

22 (B) ENSURING ACCOUNTABILITY FOR

23 CLAIMS SUBMITTED ELECTRONICALLY.—In es24 tablishing such standards, the Secretary, in

25 consultation with appropriate agencies, shall in-
44

•HR 1255 SC

1 clude such methods of ensuring provider re2 sponsibility and accountability for claims sub3 mitted electronically that are designed to con4 trol fraud and abuse in the submission of such

5 claims.

6 (C) COMPONENTS.—In establishing such

7 standards the Secretary shall—

8 (i) with respect to data elements, de9 fine data fields, formats, and medical no10 menclature, and plan benefit and insurance

11 information; and

12 (ii) develop a single, uniform coding

13 system for diagnostic and procedure codes.

14 (3) USE OF TASK FORCES.—In adopting stand15 ards under this subsection, the Secretary shall take

16 into account the recommendations of current task

17 forces, including at least the Workgroup on Elec18 tronic Data Interchange, National Uniform Billing

19 Committee, the Uniform Claim Task Force, and the

20 Computer-based Patient Record Institute.

21 (4) UNIFORM, UNIQUE PROVIDER IDENTIFICA22 TION CODES.—In establishing standards under this

23 subsection—

24 (A) the Secretary shall provide for a

25 unique identifier code for each health service
45

•HR 1255 SC

1 provider that furnishes services for which a

2 claim may be submitted under a health benefit

3 plan, and

4 (B) in the case of a provider that has a

5 unique identifier issued for purposes of the

6 medicare program, the code provided under

7 subparagraph (A) shall be the same as such

8 unique identifier.

9 (5) DEADLINE.—The Secretary shall first pro10 vide for the standards for the uniform claims under

11 this subsection by not later than 1 year after the

12 date of the enactment of this Act.

13 (d) USE UNDER MEDICARE AND MEDICAID PRO14 GRAMS.—

15 (1) REQUIREMENT FOR PROVIDERS.—In the

16 case of a health service provider that submits a

17 claim for services furnished under the medicare pro18 gram or medicaid program in violation of subsection

19 (a)(1), no payment shall be made under such pro20 gram for such services.

21 (2) REQUIREMENTS OF INTERMEDIARIES AND

22 CARRIERS UNDER MEDICARE PROGRAM.—The Sec23 retary shall provide, in regulations promulgated to

24 carry out title XVIII of the Social Security Act, that

25 the claims process provided under that title is modi-
46

•HR 1255 SC

1 fied to the extent required to conform to the stand2 ards established under subsection (c).

3 (3) REQUIREMENTS OF STATE MEDICAID

4 PLANS.—As a condition for the approval of State

5 plans under the medicaid program, effective as of

6 the effective date specified in subsection (a)(3), each

7 such plan shall provide, in accordance with regula8 tions of the Secretary, that the claims process pro9 vided under the plan is modified to the extent re10 quired to conform to the standards established under

11 subsection (c).

12 (e) DEFINITIONS.—

13 (1) HEALTH BENEFIT PLAN.—In this section:

14 (A) IN GENERAL.—The term ‘‘health bene15 fit plan’’ means, except as provided in subpara16 graphs (B) through (D), any public or private

17 entity or program that provides for payments

18 for health care services, including—

19 (i) a group health plan (as defined in

20 section 5000(b)(1) of the Internal Revenue

21 Code of 1986), and

22 (ii) any other health insurance ar23 rangement, including any arrangement

24 consisting of a hospital or medical expense

25 incurred policy or certificate, hospital or
47

•HR 1255 SC

1 medical service plan contract, or health

2 maintenance organization subscriber con3 tract.

4 (B) PLANS EXCLUDED.—Such term does

5 not include—

6 (i) accident-only, credit, or disability

7 income insurance;

8 (ii) coverage issued as a supplement

9 to liability insurance;

10 (iii) an individual making payment on

11 the individual’s own behalf (or on behalf of

12 a relative or other individual) for

13 deductibles, coinsurance, or services not

14 covered under a health benefit plan; and

15 (iv) such other plans as the Secretary

16 may determine, because of the limitation of

17 benefits to a single type or kind of health

18 care, such as dental services, or other rea19 sons should not be subject to the require20 ments of this section.

21 (C) PLANS INCLUDED.—Such term in22 cludes—

23 (i) worker’s compensation or similar

24 insurance, and
48

•HR 1255 SC

1 (ii) automobile medical-payment in2 surance.

3 (D) TREATMENT OF DIRECT FEDERAL

4 PROVISION OF SERVICES.—Such term does not

5 include a Federal program that provides di6 rectly for the provision of health services to

7 beneficiaries.

8 (2) HEALTH SERVICE PROVIDER.—In this sec9 tion, the term ‘‘health service provider’’ includes a

10 provider of services (as defined in section 1861(u) of

11 the Social Security Act), physician, supplier, and

12 other person furnishing health care services.

13 (3) SECRETARY.—In this section, the term

14 ‘‘Secretary’’ means the secretary of health and

15 human services.

16 SEC. 302. QUARTERLY PUBLICATION OF ADVERSE ACTIONS

17 TAKEN.

18 (a) IN GENERAL.—Part A of title XI of the Social

19 Security Act (42 U.S.C. 1301 et seq.) is amended by add20 ing at the end the following new section:

21 ‘‘QUARTERLY PUBLICATION OF ADVERSE ACTIONS TAKEN

22 ‘‘SEC. 1144. Not later than 30 days after the end

23 of each calendar quarter, the Secretary shall publish in

24 the Federal Register a listing of all final adverse actions

25 taken during the quarter under this part (including pen26 alties imposed under section 1107, exclusions under sec-
49

•HR 1255 SC

1 tion 1128, the imposition of civil monetary penalties under

2 section 1128A, and the imposition of criminal penalties

3 under section 1128B) and under section 1156.’’.

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

5 subsection (a) shall apply to calendar quarters beginning

6 on or after January 1, 1995.

7 SEC. 303. STUDY OF ELECTRONIC REPORTING OF OWNER8 SHIP INFORMATION.

9 (a) STUDY.—The Secretary of Health and Human

10 Services shall conduct a study on the feasibility and desir11 ability of establishing a method by which the information

12 required to be reported under the all-payer anti-fraud pro13 gram established under section 101 on the ownership of

14 entities providing health care services may be reported

15 electronically.

16 (b) REPORT.—Not later than 1 year after the date

17 of the enactment of this Act, the Secretary shall submit

18 a report on the study conducted under subsection (a) to

19 the Committee on Ways and Means and the Committee

20 on Energy and Commerce of the House of Representatives

21 and the Committee on Finance of the Senate.

Æ

HR 1255 SC——2

HR 1255 SC——3

HR 1255 SC——4