I 

114TH CONGRESS 

1ST SESSION H. R. 776 

To amend title XVIII of the Social Security Act to create alternative sanctions 

for technical noncompliance with the Stark rule under Medicare, and 

for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 5, 2015 

Mr. BOUSTANY (for himself, Mr. KIND, Mr. BURGESS, Mr. YOUNG of Indiana, 

Mr. GUTHRIE, Mr. POMPEO, Mr. VEASEY, Mrs. BROOKS of Indiana, and 

Mr. BUCSHON) introduced the following bill; which was referred to the 

Committee on Energy and Commerce, and in addition to the Committee 

on Ways and Means, for a period to be subsequently determined by the 

Speaker, in each case for consideration of such provisions as fall within 

the jurisdiction of the committee concerned 

A BILL 

To amend title XVIII of the Social Security Act to create 

alternative sanctions for technical noncompliance with 

the Stark rule under Medicare, 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, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Stark Administrative 

5 Simplification Act of 2015’’. 


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1 SEC. 2. ALTERNATIVE SANCTIONS FOR TECHNICAL NON2 COMPLIANCE WITH STARK RULE UNDER 

3 MEDICARE. 

4 Section 1877(g) of the Social Security Act (42 U.S.C. 

5 1395nn(g)) is amended— 

6 (1) in paragraph (1), by striking ‘‘No’’ and in7 serting ‘‘Subject to paragraph (7), no’’; 

8 (2) in paragraph (2), by striking ‘‘If’’ and in9 serting ‘‘Subject to paragraph (7), if’’; 

10 (3) in paragraph (3), by striking ‘‘Any’’ and in11 serting ‘‘Subject to paragraph (7), any’’; and 

12 (4) by adding at the end the following new 

13 paragraph: 

14 ‘‘(7) ALTERNATIVE SANCTIONS FOR TECHNICAL

15 NONCOMPLIANCE.— 

16 ‘‘(A) SINGLE PENALTY FOR COMPENSA17 TION ARRANGEMENTS IN TECHNICAL NON18 COMPLIANCE.—In the case of a compensation 

19 arrangement between a physician (or an imme20 diate family member of such physician) and a 

21 person or entity that is in violation of sub22 section (a)(1) solely due to technical noncompli23 ance, instead of the sanctions described in para24 graphs (1), (2), and (3) for any such violation, 

25 the person or entity with respect to such ar26 rangement shall be subject to a single civil monVerDate Sep 11 2014 03:31 Feb 13, 2015 Jkt 049200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H776.IH H776

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1 etary penalty under this paragraph in an 

2 amount that does not exceed— 

3 ‘‘(i) in the case where the disclosure 

4 of the violation is submitted to the Sec5 retary not later than the date that is one 

6 year after the initial date of noncompli7 ance, $5,000; and 

8 ‘‘(ii) in the case where the disclosure 

9 of the violation is submitted to the Sec10 retary after the date that is one year after 

11 the initial date of noncompliance, $10,000. 

12 ‘‘(B) ACCEPTANCE OF VOLUNTARY DIS13 CLOSURES.— 

14 ‘‘(i) IN GENERAL.—Effective on the 

15 date of the enactment of this paragraph, 

16 the Secretary shall accept the voluntary 

17 disclosure of a technically noncompliant 

18 compensation arrangement if such vol19 untary disclosure is made as described in 

20 clause (iii). The Secretary may accept and 

21 reasonably rely on information provided by 

22 a person or entity that is in violation of 

23 subsection (a)(1) only because of a com24 pensation arrangement that is technically 

25 noncompliant. 


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1 ‘‘(ii) ACCEPTANCE OF DISCLOSURE.— 

2 The Secretary may reject any voluntary 

3 disclosure submitted under clause (iii) 

4 within 90 days after the receipt of the dis5 closure only if the Secretary determines 

6 that the disclosure does not conform to the 

7 requirements described in clause (iii). If 

8 the Secretary fails to reject a voluntary 

9 disclosure within such 90-day period, the 

10 voluntary disclosure is deemed to be ac11 cepted. 

12 ‘‘(iii) VOLUNTARY DISCLOSURE.—A 

13 voluntary disclosure described in this 

14 clause, with respect to a compensation ar15 rangement, is a disclosure submitted to the 

16 Secretary, by a party to such arrangement 

17 that contains the following: 

18 ‘‘(I) The identification of the dis19 closing party and all other parties to 

20 the disclosed compensation arrange21 ment. 

22 ‘‘(II) A description of the com23 pensation paid under the arrangement 

24 and the dates of noncompliance. 


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1 ‘‘(III) A certification by the dis2 closing party that the compensation 

3 arrangement— 

4 ‘‘(aa) is technically non5 compliant (as defined by sub6 paragraph (C)); 

7 ‘‘(bb) has been cured of the 

8 technical noncompliance, or is 

9 otherwise terminated; and 

10 ‘‘(cc) is, in the case of tech11 nical noncompliance under sub12 paragraph (C)(i), a valid contract 

13 under State law, an arrangement 

14 consistent with fair market value, 

15 and one in which remuneration 

16 under the arrangement is not de17 termined in a manner that takes 

18 into account directly or indirectly 

19 the volume or value of any refer20 rals. 

21 ‘‘(IV) Payment for the full 

22 amount of the civil monetary penalty 

23 under clause (i) or (ii), as applicable, 

24 of subparagraph (A). 


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1 ‘‘(C) DEFINITION TECHNICAL NONCOMPLI2 ANCE.—For purposes of this paragraph, the 

3 term ‘technical noncompliance’ means an ar4 rangement that is in violation of subsection 

5 (a)(1) only because— 

6 ‘‘(i) the arrangement is not set forth 

7 in writing; 

8 ‘‘(ii) the arrangement is not signed by 

9 1 or more parties to the arrangement; or 

10 ‘‘(iii) a prior arrangement expired and 

11 services continued without the execution of 

12 an amendment to such arrangement or a 

13 new arrangement. 

14 ‘‘(D) APPLICABILITY TO PRE-ENACTMENT

15 DISCLOSURES TO RELIEVE BACKLOG.—The Sec16 retary shall provide for the application of this 

17 paragraph to any technically noncompliant com18 pensation arrangement that has been disclosed, 

19 and to which there has not been a final settle20 ment as of the date of enactment of this para21 graph. 

22 ‘‘(E) REPORT.—Not later than 24 months 

23 after the date of enactment of this paragraph, 

24 the Inspector General of the Department of 

25 Health and Human Services shall submit to 


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1 Congress a report on the implementation of this 

2 paragraph. Such report shall include— 

3 ‘‘(i) the number of persons or entities 

4 making disclosures of technical noncompli5 ance under this paragraph; 

6 ‘‘(ii) the amount and type of alter7 native sanctions collected or imposed for 

8 technical noncompliance; 

9 ‘‘(iii) the types of violations disclosed; 

10 and 

11 ‘‘(iv) such other information as the 

12 Inspector General determines may be nec13 essary to evaluate the impact of this para14 graph.’’. 

Æ 


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