```

[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 1944 Placed on Calendar Senate (PCS)]

                                                       Calendar No. 405

103d CONGRESS

  2d Session

                                S. 1944

_______________________________________________________________________

                                 A BILL

  To increase and extend criminal and other penalties for health care 
                fraud and abuse, and for other purposes.

_______________________________________________________________________

                             April 11, 1994

            Read the second time and placed on the calendar

                                                       Calendar No. 405
103d CONGRESS
  2d Session
                                S. 1944

  To increase and extend criminal and other penalties for health care 
                fraud and abuse, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

             March 17 (legislative day, February 22), 1994

 Mr. Kohl introduced the following bill; which was read the first time

                             April 11, 1994

            Read the second time and placed on the calendar

_______________________________________________________________________

                                 A BILL

 
  To increase and extend criminal and other penalties for health care 
                fraud and abuse, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Health Care Fraud and Abuse Act of 
1994''.

SEC. 2. EXPANSION OF CIVIL AND CRIMINAL MONETARY SANCTIONS.

    (a) Civil Sanctions.--Section 1128A of the Social Security Act (42 
U.S.C. 1320a-7a) is amended--
            (1) in subsections (a) and (b), by striking ``$2,000'' each 
        place it appears and inserting ``$5,000'',
            (2) in the second sentence of subsection (a), by striking 
        ``not more than twice'' and inserting ``not more than three 
        times'', and
            (3) by adding at the end the following new subsection:
    ``(m)(1) The maximum civil monetary penalty amounts specified in 
subsections (a) and (b) shall be adjusted for inflation as provided in 
this subsection.
    ``(2) Not later than December 1, 1999, and December 1 of each fifth 
calendar year thereafter, the Secretary shall prescribe and publish in 
the Federal Register a schedule of maximum authorized penalties that 
shall apply for violations that occur after January 1 of the year 
immediately following such publication.
    ``(3) The schedule of maximum authorized penalties shall be 
prescribed by increasing each of the amounts specified in subsections 
(a) and (b) by the cost-of-living adjustment for the preceding five 
years. Any increase determined under the preceding sentence shall be 
rounded to the nearest multiple of $1,000.
    ``(4) For purposes of this subsection:
                    ``(A) The term `cost-of-living adjustment for the 
                preceding five years' means the percentage by which--
                            ``(i) the Consumer Price Index for the 
                        month of June of the calendar year preceding 
                        the adjustment, exceeds
                            ``(ii) the Consumer Price Index for the 
                        month of June preceding the date on which the 
                        maximum authorized penalty was last adjusted 
                        under this subsection.
                    ``(B) The term `Consumer Price Index' means the 
                Consumer Price Index for all urban consumers published 
                by the Department of Labor.''.
    (b) Treble Damages for Criminal Sanctions.--Section 1128B of the 
Social Security Act (42 U.S.C. 1320a-7b) is amended by adding at the 
end the following new subsection:
    ``(f) In addition to the fines that may be imposed under subsection 
(a), (b), or (c), any individual found to have violated the provisions 
of any of such subsections may be subject to treble damages.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on January 1, 1995.

SEC. 3. APPLICATION OF FEDERAL HEALTH ANTI-FRAUD AND ABUSE SANCTIONS TO 
              ALL FRAUD AND ABUSE AGAINST ANY HEALTH BENEFIT PLAN.

    (a) Civil Monetary Penalties.--Section 1128A of the Social Security 
Act (42 U.S.C. 1320a-7a) is amended as follows:
            (1) In subsection (a)(1), in the matter before subparagraph 
        (A), by inserting ``or of any health benefit plan,'' after 
        ``subsection (i)(1)),''.
            (2) In subsection (b)(1)(A), by inserting ``or under a 
        health benefit plan'' after ``title XIX''.
            (3) In subsection (f)--
                    (A) by redesignating paragraph (3) as paragraph 
                (4); and
                    (B) by inserting after paragraph (2) the following 
                new paragraph:
            ``(3) With respect to amounts recovered arising out of a 
        claim under a health benefit plan, the portion of such amounts 
        as is determined to have been paid by the plan shall be repaid 
        to the plan.''.
            (4) In subsection (i)--
                    (A) in paragraph (2), by inserting ``or under a 
                health benefit plan'' before the period at the end, and
                    (B) in paragraph (5), by inserting ``or under a 
                health benefit plan'' after ``or XX''.
    (b) Crimes.--Section 1128B of the Social Security Act (42 U.S.C. 
1320a-7b) is amended as follows:
            (1) In the heading, by adding at the end the following: 
        ``or health benefit plans''.
            (2) In subsection (a)(1)--
                    (A) by striking ``title XVIII or'' and inserting 
                ``title XVIII,'', and
                    (B) by adding at the end the following: ``or a 
                health benefit plan (as defined in section 1128(i)),''.
            (3) In subsection (a)(5), by striking ``title XVIII or a 
        State health care program'' and inserting ``title XVIII, a 
        State health care program, or a health benefit plan''.
            (4) In the second sentence of subsection (a)--
                    (A) by inserting after ``title XIX'' the following: 
                ``or a health benefit plan'', and
                    (B) by inserting after ``the State'' the following: 
                ``or the plan''.
            (5) In subsection (b)(1), by striking ``title XVIII or a 
        State health care program'' each place it appears and inserting 
        ``title XVIII, a State health care program, or a health benefit 
        plan''.
            (6) In subsection (b)(2), by striking ``title XVIII or a 
        State health care program'' each place it appears and inserting 
        ``title XVIII, a State health care program, or a health benefit 
        plan''.
            (7) In subsection (b)(3), by striking ``title XVIII or a 
        State health care program'' each place it appears in 
        subparagraphs (A) and (C) and inserting ``title XVIII, a State 
        health care program, or a health benefit plan''.
            (8) In subsection (d)(2)--
                    (A) by striking ``title XIX,'' and inserting 
                ``title XIX or under a health benefit plan,'', and
                    (B) by striking ``State plan,'' and inserting 
                ``State plan or the health benefit plan,''.
    (c) Health Benefit Plan Defined.--Section 1128 of the Social 
Security Act (42 U.S.C. 1320a-7) is amended by redesignating subsection 
(i) as subsection (j) and by inserting after subsection (h) the 
following new subsection:
    ``(i) Health Benefit Plan Defined.--For purposes of sections 1128A 
and 1128B, the term `health benefit plan' means a health benefit 
program other than the medicare program, the medicaid program, or a 
State health care program.''.
    (d) Conforming Amendment.--Section 1128(b)(8)(B)(ii) of the Social 
Security Act (42 U.S.C. 1320a-7(b)(8)(B)(ii)) is amended by striking 
``1128A'' and inserting ``1128A (other than a penalty arising from a 
health benefit plan, as defined in subsection (i))''.
    (e) Effective Date.--The amendments made by this section shall take 
effect January 1, 1995.

SEC. 4. CIVIL MONETARY PENALTIES INCLUDED IN ANTI-KICKBACK SANCTIONS.

    (a) In General.--Section 1128A(a) of the Social Security Act (42 
U.S.C. 1320a-7a(a)), as amended by section 2(a), is amended--
            (1) by striking ``or'' at the end of paragraph (1)(D);
            (2) by striking ``, or'' at the end of paragraph (2) and 
        inserting a semicolon;
            (3) by striking the semicolon at the end of paragraph (3) 
        and inserting ``; or'';
            (4) by inserting after paragraph (3) the following new 
        paragraph:
            ``(4) carries out any activity in violation of paragraph 
        (1) or (2) of section 1128B(b);'';
            (5) by striking ``than $5,000'' and all that follows 
        through the period and inserting ``than, in cases under 
        paragraph (1) or (2), $5,000 for each item or service, in cases 
        under paragraph (3), $15,000 for each individual with respect 
        to whom false or misleading information is given, and in cases 
        under paragraph (4), $10,000 for each violation.''; and
            (6) by striking ``than three times'' and all that follows 
        through the period and inserting ``than, in cases under 
        paragraph (1) or (2), three times the amount claimed for each 
        such item or service in lieu of damages sustained by the United 
        States or a State agency because of such claim, and in cases 
        under paragraph (4), twice the total amount of the remuneration 
        offered, paid, solicited, or received in violation of paragraph 
        (1) or (2) of section 1128B(b).''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
take effect January 1, 1995.

SEC. 5. VOLUNTARY DISCLOSURE PROGRAM.

    In consultation with the Attorney General of the United States, the 
Secretary of Health and Human Services shall publish proposed 
regulations no later than 9 months after the date of the enactment of 
this Act, and final regulations no later than 18 months after such date 
of enactment, establishing a program of voluntary disclosure that would 
facilitate enforcement of sections 1128A and 1128B of the Social 
Security Act (42 U.S.C. 1320a-7a and 1320a-7b) and other relevant 
provisions of Federal law relating to health care fraud and abuse. Such 
program should promote and provide incentives for disclosures of 
potential violations of such sections and provisions by providing that, 
under certain circumstances, the voluntary disclosure of wrongdoing 
would result in the imposition of penalties and punishments less 
substantial than those that would be assessed for the same wrongdoing 
if voluntary disclosure did not occur.

SEC. 6. EXPANSION OF HEALTH CARE FRAUD INVESTIGATIVE RESOURCES.

    There are authorized to be appropriated for the hiring of 
additional personnel in the Department of Health and Human Services 
Office of the Inspector General $25,000,000 for each of fiscal years 
1994, 1995, 1996, and 1997 to sustain and expand the investigation of 
health care fraud.
```