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[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 2153 Placed on Calendar Senate (PCS)]

                                                       Calendar No. 457
103d CONGRESS
  2d Session
                                S. 2153

To improve access to quality health care, to reform medical malpractice 
liability standards, to reduce paperwork and simplify administration of 
 health care claims, to establish safe harbors from the application of 
 the antitrust laws for certain activities of providers of health care 
   services, to prevent fraud and abuse in the health care delivery 
                    system, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                 May 25 (legislative day, May 16), 1994

Mr. Kempthorne (for himself, Mr. Craig, and Mr. Wallop) introduced the 
             following bill; which was read the first time

                              June 7, 1994

            Read the second time and placed on the calendar

_______________________________________________________________________

                                 A BILL

 
To improve access to quality health care, to reform medical malpractice 
liability standards, to reduce paperwork and simplify administration of 
 health care claims, to establish safe harbors from the application of 
 the antitrust laws for certain activities of providers of health care 
   services, to prevent fraud and abuse in the health care delivery 
                    system, 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; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Advancement of 
Health Care Reform Act of 1994''.
    (b) Table of Contents.--The table of contents is as follows:

Sec. 1. Short title; table of contents.
Sec. 101. Amendments to COBRA.
Sec. 102. Penalty-free withdrawals from qualified retirement plans for 
                            COBRA coverage.
         Subtitle B--Federally Qualified Health Insurance Plan

Sec. 111. Federally qualified health insurance plan.
Sec. 112. Family security benefits package.
Sec. 113. Rating practices.
Sec. 114. Guaranteed issue.
Sec. 115. Guaranteed renewability.
Subtitle C--Certification of Federally Qualified Health Insurance Plans

Sec. 121. Establishment of regulatory program for certification of 
                            plans.
Sec. 122. Standards for regulatory programs.
    TITLE II--PAPERWORK REDUCTION AND ADMINISTRATIVE SIMPLIFICATION

Sec. 201. Preemption of State quill pen laws.
Sec. 202. Confidentiality of electronic health care information.
Sec. 203. Standardization for the electronic receipt and transmission 
                            of health plan information.
Sec. 204. Use of uniform health claims forms and identification 
                            numbers.
Sec. 205. Priority among insurers.
Sec. 206. Furnishing of information among health plans.
Sec. 207. Definitions.
                TITLE III--HEALTH CARE LIABILITY REFORM

                     Subtitle A--General Provisions

Sec. 301. Federal reform of medical malpractice liability actions.
Sec. 302. Definitions.
Sec. 303. Effective date.
      Subtitle B--Medical Malpractice and Product Liability Reform

Sec. 311. Requirement for initial resolution of action through 
                            alternative dispute resolution.
Sec. 312. Calculation and payment of damages.
Sec. 313. Treatment of attorney's fees and other costs.
Sec. 314. Joint and several liability.
Sec. 315. Statute of limitations.
Sec. 316. Practice guidelines.
Sec. 317. Uniform standard for determining negligence.
Sec. 318. Special provision for certain obstetric services.
   Subtitle C--Requirements for State Alternative Dispute Resolution 
                             Systems (ADR)

Sec. 331. Basic requirements.
Sec. 332. Certification of State systems; applicability of alternative 
                            Federal system.
Sec. 333. Reports on implementation and effectiveness of alternative 
                            dispute resolution systems.
                     TITLE IV--ANTITRUST PROVISIONS

Sec. 401. Exemption from antitrust laws for certain competitive and 
                            collaborative activities.
Sec. 402. Safe harbors.
Sec. 403. Designation of additional safe harbors.
Sec. 404. Certificates of review.
Sec. 405. Notifications providing reduction in certain penalties under 
                            antitrust law for health care cooperative 
                            ventures.
Sec. 406. Review and reports on safe harbors and certificates of 
                            review.
Sec. 407. Rules, regulations, and guidelines.
Sec. 408. Establishment of HHS Office of Health Care Competition 
                            Policy.
Sec. 409. Definitions.
             TITLE V--ANTI-FRAUD AND ABUSE CONTROL PROGRAM

         Subtitle A--All-Payer Fraud and Abuse Control Program

Sec. 501. All-payer fraud and abuse control program.
Sec. 502. Application of Federal health anti-fraud and abuse sanctions 
                            to all fraud and abuse against any health 
                            care plan.
Sec. 503. Reporting of fraudulent actions under medicare.
     Subtitle B--Revisions to Current Sanctions for Fraud and Abuse

Sec. 511. Mandatory exclusion from participation in medicare and State 
                            health care programs.
Sec. 512. Establishment of minimum period of exclusion for certain 
                            individuals and entities subject to 
                            permissive exclusion from medicare and 
                            State health care programs.
Sec. 513. Permissive exclusion of individuals with ownership or control 
                            interest in sanctioned entities.
Sec. 514. Civil monetary penalties.
Sec. 515. Actions subject to criminal penalties.
Sec. 516. Sanctions against practitioners and persons for failure to 
                            comply with statutory obligations.
Sec. 517. Intermediate sanctions for medicare health maintenance 
                            organizations.
Sec. 518. Effective date.
        Subtitle C--Administrative and Miscellaneous Provisions

Sec. 521. Establishment of the health care fraud and abuse data 
                            collection program.
Sec. 522. Quarterly publication of adverse actions taken.
                 Subtitle D--Amendments to Criminal Law

Sec. 531. Health care fraud.
Sec. 532. Forfeitures for Federal health care offenses.
Sec. 533. Injunctive relief relating to Federal health care offenses.
Sec. 534. Racketeering activity relating to Federal health care 
                            offenses.
            Subtitle E--Amendments to Civil False Claims Act

Sec. 541. Amendments to Civil False Claims Act.
               TITLE VI--EXPANDING ACCESS IN RURAL AREAS

Sec. 601. Short title.
Sec. 602. Rural health extension networks.
Sec. 603. Rural managed care cooperatives.
Sec. 604. Rural mental health outreach grants.
Sec. 605. Area health education centers.
                       TITLE VII--TAX PROVISIONS

Sec. 701. Amendment of 1986 Code.
Sec. 702. Deductions for costs of qualified health plans.
                     TITLE VIII--REVENUE PROVISIONS

Sec. 801. Discretionary spending reductions.

SEC. 101. AMENDMENTS TO COBRA.

    (a) Lower Cost Coverage Options.--Subparagraph (A) of section 
4980B(f)(2) of the Internal Revenue Code of 1986 (relating to 
continuation coverage requirements of group health plans) is amended to 
read as follows:
                    ``(A) Type of benefit coverage.--The coverage must 
                consist of coverage which, as of the time the coverage 
                is being provided--
                            ``(i) is identical to the coverage provided 
                        under the plan to similarly situated 
                        beneficiaries under the plan with respect to 
                        whom a qualifying event has not occurred,
                            ``(ii) is so identical, except such 
                        coverage is offered with an annual $1,000 
                        deductible, and
                            ``(iii) is so identical, except such 
                        coverage is offered with an annual $3,000 
                        deductible.
                If coverage under the plan is modified for any group of 
                similarly situated beneficiaries, the coverage shall 
                also be modified in the same manner for all individuals 
                who are qualified beneficiaries under the plan pursuant 
                to this subsection in connection with such group.''.
    (b) Termination of COBRA Coverage After Eligible for Employer-Based 
Coverage for 90 Days.--Clause (iv) of section 4980B(f)(2)(B) of the 
Internal Revenue Code of 1986 (relating to period of coverage) is 
amended--
            (1) by striking ``or'' at the end of subclause (I);
            (2) by redesignating subclause (II) as subclause (III); and
            (3) by inserting after subclause (I) the following new 
        subclause:
                                    ``(II) eligible for such employer-
                                based coverage for more than 90 days, 
                                or''.
    (c) Effective Date.--The amendments made by this section shall 
apply to qualifying events occurring after the date of the enactment of 
this Act.

SEC. 102. PENALTY-FREE WITHDRAWALS FROM QUALIFIED RETIREMENT PLANS FOR 
              COBRA COVERAGE.

    (a) In General.--Subparagraph (A) of section 72(t)(2) of the 
Internal Revenue Code of 1986 (relating to additional tax not to apply 
to certain distributions) is amended--
            (1) by striking ``or'' at the end of clauses (iv) and (v);
            (2) by striking the period at the end of clause (vi) and 
        inserting ``, or''; and
            (3) by adding at the end the following new clause:
                            ``(vii) made to an employee who is a 
                        qualified beneficiary during the period of 
                        continuation coverage under section 4980B(f).''
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to distributions made after the date of the enactment of this 
Act.

         Subtitle B--Federally Qualified Health Insurance Plan

SEC. 111. FEDERALLY QUALIFIED HEALTH INSURANCE PLAN.

    (a) In General.--A federally qualified health insurance plan is a 
health insurance plan offered, issued, or renewed on or after January 
1, 1997, which is certified by the applicable regulatory authority as 
meeting, at a minimum, the requirements of sections 112, 113, 114, and 
115, and the regulatory program described in subtitle C.
    (b) General Definitions.--Except as specifically provided 
otherwise, as used in this Act:
            (1) Health insurance plan.--The term ``health insurance 
        plan'' means any hospital or medical service policy or 
        certificate, hospital or medical service plan contract, or 
        health maintenance organization group contract and, in States 
        which have distinct licensure requirements, a multiple employer 
        welfare arrangement, but does not include any of the following 
        offered by an insurer:
                    (A) Accident only, dental only, disability only, or 
                long-term care only insurance.
                    (B) Coverage issued as a supplement to liability 
                insurance.
                    (C) Workers' compensation or similar insurance.
                    (D) Automobile medical-payment insurance.
            (2) Applicable regulatory authority.--The term ``applicable 
        regulatory authority'' means--
                    (A) in the case of a State with a program described 
                in subtitle C, the State commissioner or superintendent 
                of insurance or other State authority responsible for 
                regulation of health insurance; or
                    (B) if the State has not established such a program 
                or such program has been decertified under section 
                __________, the Secretary.
            (3) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (4) State.--The term ``State'' means each of the several 
        States of the United States, the District of Columbia, the 
        Commonwealth of Puerto Rico, the United States Virgin Islands, 
        Guam, American Samoa, and the Commonwealth of the Northern 
        Mariana Islands.

SEC. 112. FAMILY SECURITY BENEFITS PACKAGE.

    (a) In General.--The requirements of this section are met, if the 
health insurance plan--
            (1) provides coverage for all medically necessary acute 
        medical care described in subsection (b);
            (2) does not exclude coverage for selected illnesses or 
        selected treatments if consistent with medically accepted 
        practices; and
            (3) meets the patient cost sharing requirements of 
        subsection (c).
    (b) Acute Medical Care.--Coverage for all medically necessary acute 
medical care is described in this subsection if such coverage 
includes--
            (1) physician services;
            (2) inpatient, outpatient, and emergency hospital services 
        and appropriate alternatives to hospitalization; and
            (3) inpatient and outpatient prescription drugs.
Nothing in this subsection may be construed to require the inclusion of 
abortion services.
    (c) Cost Sharing Requirements.--The requirements of this subsection 
are as follows:
            (1) Limitation on Deductibles.--A health insurance plan 
        shall not provide a deductible amount for benefits provided in 
        any plan year that exceeds--
                    (A) with respect to benefits payable for items and 
                services furnished to a single individual enrolled 
                under the plan, for a plan year beginning in--
                            (i) a calendar year prior to 1998, $1,000; 
                        or
                            (ii) for a subsequent calendar year, the 
                        limitation specified in this subparagraph for 
                        the previous calendar year increased by the 
                        percentage increase in the consumer price index 
                        for all urban consumers (United States city 
                        average, as published by the Bureau of Labor 
                        Statistics) for the 12-month period ending on 
                        September 30 of the preceding calendar year; 
                        and
                    (B) with respect to benefits payable for items and 
                services furnished to a family enrolled under the plan, 
                for a plan year beginning in--
                            (i) a calendar year prior to 1998, $2,000 
                        per family; or
                            (ii) for a subsequent calendar year, the 
                        limitation specified in this subparagraph for 
                        the previous calendar year increased by such 
                        percentage increase.
                If the limitation computed under subparagraph (A)(ii) 
                or (B)(ii) is not a multiple of $10, it shall be 
                rounded to the next highest multiple of $10.
            (2) Limitation on copayments and coinsurance.--
                    (A) In general.--A health insurance plan may not 
                require the payment of any copayment or coinsurance for 
                an item or service for which coverage is required under 
                this section after an individual or a family covered 
                under the plan has incurred out-of-pocket expenses 
                under the plan that are equal to the out-of-pocket 
                limit for a plan year.
                    (B) Limit on out-of-pocket expenses.--As used in 
                this paragraph--
                            (i) Out-of-pocket expenses defined.--The 
                        term ``out-of-pocket expenses'' means, with 
                        respect to an individual or a family in a plan 
                        year, amounts payable under the plan as 
                        deductibles and coinsurance with respect to 
                        items and services provided under the plan and 
                        furnished in the plan year on behalf of the 
                        individual or the family covered under the 
                        plan.
                            (ii) Out-of-pocket limit defined.--The term 
                        ``out-of-pocket limit'' means for a plan year 
                        beginning in--
                                    (I) a calendar year prior to 1998, 
                                $5,000; or
                                    (II) for a subsequent calendar 
                                year, the limit specified in this 
                                clause for the previous calendar year 
                                increased by the percentage increase in 
                                the consumer price index for all urban 
                                consumers (United States city average, 
                                as published by the Bureau of Labor 
                                Statistics) for the 12-month period 
                                ending on September 30 of the preceding 
                                calendar year.
                        If the limit computed under subclause (II) is 
                        not a multiple of $10, it shall be rounded to 
                        the next highest multiple of $10.

SEC. 113. RATING PRACTICES.

    (a) In General.--The requirements of this section are met, if, 
except as provided in subsection (b), the health insurance plan 
provides for--
            (1) a variation in premium rates only on the basis of age, 
        sex, and geography; and
            (2) a charge of the same premium rates to new applicants 
        and existing policyholders with the same age, sex, and 
        geographic characteristics.
    (b) Incentive Discounts.--A plan may discount an individual's 
premium rate as an incentive for participating in a program, approved 
by the applicable regulatory authority to be offered in conjunction 
with the coverage, which has as its objective, one or more of the 
following:
            (1) To promote healthy behavior.
            (2) To prevent or delay the onset of illness.
            (3) To provide for screening or early detection of illness.

SEC. 114. GUARANTEED ISSUE.

    (a) In General.--Except as provided in paragraph (2), in the case 
of applications made on and after January 1, 1998, the following rules 
apply:
            (1) In general.--The requirements of this section are met, 
        if, except as provided in paragraph (2), the health insurance 
        plan--
                    (A) provides guaranteed issue at standard rates to 
                all applicants, and
                    (B) does not exclude from coverage, or limit 
                coverage for, any preexisting medical condition of any 
                applicant who, on the date the application is made, has 
                been continuously insured for a period of at least 1 
                year prior to the date of the application under one or 
                more of the following health insurance plans or 
                programs:
                            (i) Another federally qualified health 
                        insurance plan.
                            (ii) An employer-sponsored group health 
                        insurance plan in effect before the date of the 
                        enactment of this Act.
                            (iii) An individual health insurance plan 
                        in effect before such date.
                            (iv) A program described in--
                                    (I) title XVIII or XIX of the 
                                Social Security Act;
                                    (II) chapter 55 of title 10, United 
                                States Code;
                                    (III) chapter 17 of title 38, 
                                United States Code;
                                    (IV) chapter 89 of title 5, United 
                                States Code; or
                                    (V) the Indian Health Care 
                                Improvement Act.
            (2) Break in coverage.--In the case of an applicant who has 
        not been continuously insured for a period of 1 year prior to 
        the date the application is made, the health insurance plan may 
        exclude from coverage, or limit coverage for, any preexisting 
        medical condition for a period no greater than the lesser of--
                    (A) the number of months immediately prior to the 
                date of the application during which the individual was 
                not insured since the illness or condition in question 
                was first diagnosed; or
                    (B) 1 year.
    (b) Transition Rule.--In the case of applications made in 1997, the 
requirements of this section are met, if the health insurance plan--
            (1) provides guaranteed issue at standard rates to all 
        applicants, and
            (2) does not exclude from coverage, or limit coverage for, 
        any preexisting medical condition of any applicant.

SEC. 115. GUARANTEED RENEWABILITY.

    The requirements of this section are met, if the health insurance 
plan provides the policyholder with a contractual right to renew the 
coverage which stipulates that the insurer cannot cancel or refuse to 
renew the coverage except for cases of--
            (1) nonpayment of premiums by the policyholder; or
            (2) fraud or misrepresentation by the policyholder.

Subtitle C--Certification Of Federally Qualified Health Insurance Plans

SEC. 121. ESTABLISHMENT OF REGULATORY PROGRAM FOR CERTIFICATION OF 
              PLANS.

    (a) In General.--Each State shall establish no later than January 
1, 1997, a regulatory program which meets the standards referred to in 
section 122.
    (b) Periodic Secretarial Review of State Regulatory Program.--The 
Secretary periodically shall review each State regulatory program to 
determine if such program continues to meet and enforce the standards 
referred to in section 122. If the Secretary initially determines that 
a State regulatory program no longer meets and enforces such standards, 
the Secretary shall provide the State an opportunity to adopt a plan of 
correction that would bring such program into compliance with such 
standards. If the Secretary makes a final determination that the State 
regulatory program fails to meet and enforce such standards after such 
an opportunity, the Secretary shall decertify such program and assume 
responsibility with respect to health insurance plans in the State.

SEC. 122. STANDARDS FOR REGULATORY PROGRAMS.

    (a) In General.--The Secretary, in consultation with the National 
Association of Insurance Commissioners (hereafter in this section 
referred to as ``NAIC'') shall develop by not later than 1 year after 
the date of the enactment of this Act, in the form of model Acts and 
model regulations, State regulatory program standards which include--
            (1) procedures for certifying that the requirements of 
        subtitle B have been met by a health insurance plan applying 
        for certification as a federally qualified health insurance 
        plan;
            (2) the requirements described in subsections (b), (c), and 
        (d);
            (3) requirements with respect to solvency standards and 
        guaranty funds for carriers of federally qualified health 
        insurance plans; and
            (4) reporting requirements under which carriers report to 
        the Internal Revenue Service regarding the acquisition and 
        termination by individuals of coverage under federally 
        qualified health insurance plans.
    (b) Passback of Claims and Premiums.--The requirements of this 
subsection are met, if, in the case of an applicant who has been 
continuously insured, as described in section 114(a)(1)(B), and is at 
the time of the application receiving treatment for a preexisting 
medical condition--
            (1) the federally qualified health insurance plan is 
        allowed to pass back to the applicant's previous plan any 
        claims relating to such condition, together with a portion of 
        the premium; and
            (2) such previous plan is required to pay such claims and 
        premium incurred during the lesser of--
                    (A) the duration of the course of the treatment or 
                spell of illness; or
                    (B) 2 years from the date at which coverage 
                commenced under the federally qualified health 
                insurance plan.
    (c) Marketing Practices.--The requirements of this subsection are 
met, if the carrier offering the federally qualified health insurance 
plan retains the right to select agents with whom such plan contracts 
and to determine the amount and form of compensation to such agents, 
except that--
            (1) if the carrier chooses to contract with an agent, the 
        carrier may not terminate or refuse to renew the agency 
        contract for any reason related to the age, sex, health status, 
        claims experience, occupation, or geographic location of the 
        insureds placed by the agent with such plan, and
            (2) the carrier may not, directly or indirectly, enter into 
        any contract, agreement, or arrangement with an agent that 
        provides for, or results in, any consideration provided to such 
        agent for the issuance or renewal of such a plan to vary on 
        account of the age, sex, health status, claims experience, 
        occupation, or geographic location of the insureds placed by 
        the agent with such plan.
    (d) Risk Adjustment or Reinsurance Programs.--The requirements of 
this subsection are met, if the carrier offering the federally 
qualified health insurance plan participates in a State-administered 
risk adjustment program (or, at the option of the State, a reinsurance 
program) designed to compensate for the potential occurrence of grossly 
disproportionate distributions of above-standard or below-standard 
insured risks among federally qualified health insurance plans.
    (e) Nonbinding Standards.--The Secretary, in consultation with 
NAIC, shall also develop within the 1-year period described in 
subsection (a), nonbinding standards for premium rating practices and 
guaranteed renewability of coverage which, if the insurer so elects, is 
more generous (additional benefits or lower cost sharing or both) than 
the requirements under subtitle B for federally qualified health 
insurance plans.

    TITLE II--PAPERWORK REDUCTION AND ADMINISTRATIVE SIMPLIFICATION

SEC. 201. PREEMPTION OF STATE QUILL PEN LAWS.

    After December 31, 1995, no effect shall be given to any provision 
of State law that requires medical or health insurance records 
(including billing information) to be maintained in written, rather 
than electronic, form.

SEC. 202. CONFIDENTIALITY OF ELECTRONIC HEALTH CARE INFORMATION.

    (a) Promulgation of Requirements.--
            (1) In general.--The Secretary shall promulgate, and may 
        modify from time to time, requirements to facilitate and ensure 
        the uniform, confidential treatment of individually 
        identifiable health care information in electronic 
        environments.
            (2) Items to be included.--The requirements under this 
        subsection shall--
                    (A) provide for the preservation of confidentiality 
                and privacy rights in electronic health care claims 
                processing and payment;
                    (B) apply to the collection, storage, handling, and 
                transmission of individually identifiable health care 
                data (including initial and subsequent disclosures) in 
                electronic form by health plans, public and private 
                third-party payers, providers of health care, and all 
                other entities involved in the transactions;
                    (C) not apply to public health reporting required 
                under Federal or State law;
                    (D) delineate protocols for securing electronic 
                storage, processing, and transmission of health care 
                data;
                    (E) specify fair information practices that assure 
                a proper balance between required disclosures and use 
                of data, including--
                            (i) creating a proper balance between what 
                        an individual is expected to divulge to a 
                        record-keeping organization and what the 
                        individual seeks in return;
                            (ii) minimizing the extent to which 
                        information concerning an individual is itself 
                        a source of unfairness in any decision made on 
                        the basis of such information; and
                            (iii) creating and defining obligations 
                        respecting the uses and disclosures that will 
                        be made of recorded information about an 
                        individual;
                    (F) require publication of the existence of health 
                care data banks;
                    (G) establish appropriate protections for highly 
                sensitive data (such as data concerning mental health, 
                substance abuse, and communicable and genetic 
                diseases);
                    (H) encourage the use of alternative dispute 
                resolution mechanisms (where appropriate); and
                    (I) provide for the deletion of information that is 
                no longer needed to carry out the purpose for which it 
                was collected.
            (3) Consultation with working group.--In promulgating and 
        modifying requirements under this subsection, the Secretary 
        shall consult with a working group of knowledgeable individuals 
        representing all interested parties (including third-party 
        payers, providers, consumers, employers, information managers, 
        and technical experts).
            (4) Deadline.--The Secretary shall first promulgate 
        requirements under this subsection by not later than 6 months 
        after the date of the enactment of this Act.
    (b) Application of Requirements.--
            (1) State enforcement of similar requirements.--The 
        requirements promulgated under subsection (a) shall not apply 
        to health care information in a State if--
                    (A) the State has applied to the Secretary for a 
                determination that the State has in effect a law that 
                provides for the application of requirements with 
                respect to such information (and enforcement provisions 
                with respect to such requirements) consistent with such 
                requirements (and with the enforcement provisions of 
                subsection (c)); and
                    (B) the Secretary determines that the State has 
                such a law in effect.
            (2) Application to current information.--The Secretary 
        shall specify the extent to which (and manner in which) the 
        requirements promulgated under subsection (a) apply to 
        information collected before the effective date of the 
        requirements.
    (c) Defense for Proper Disclosures.--An entity that establishes 
that it has disclosed health care information in accordance with the 
requirements promulgated under subsection (a) has established a defense 
in an action brought for improper disclosure of such information.
    (d) Penalties for Violations.--An entity that collects, stores, 
handles, transmits, or discloses health care information in violation 
of the requirements promulgated under subsection (a) is liable for 
civil damages, equitable remedies, and attorneys' fees (if 
appropriate), in accordance with regulations of the Secretary.

SEC. 203. STANDARDIZATION FOR THE ELECTRONIC RECEIPT AND TRANSMISSION 
              OF HEALTH PLAN INFORMATION.

    (a) Goals.--The Secretary shall establish national goals, and time 
frameworks, respecting the progress to be made by the health care 
industry in eliminating unnecessary paperwork and achieving appropriate 
standardization in the areas of electronic receipt and transmission of 
health care claims and health plan information and eligibility 
verification (consistent with the requirements promulgated under 
section 202(a)).
    (b) Contingent Requirements.--If the Secretary determines that the 
health care industry has failed to meet the goals established under 
subsection (a) by the deadlines established by the Secretary under such 
subsection, the Secretary shall promulgate (and may, from time to time, 
modify) standards and requirements concerning the electronic receipt 
and transmission of health plan claims forms and other health plan 
information.
    (c) Compliance.--
            (1) In General.--The Secretary may impose a civil money 
        penalty on any health plan (other than a health plan described 
        in paragraph (2)) that fails to comply with standards and 
        requirements promulgated under subsection (b) in an amount not 
        to exceed $100 for each such failure. The provisions of section 
        1128A of the Social Security Act (other than the first sentence 
        of subsection (a) and other than subsection (b)) shall apply to 
        a civil money penalty under this paragraph in the same manner 
        as such provisions apply to a penalty or proceeding under 
        section 1128A(a) of such Act.
            (2) Plans subject to effective state regulation.--A health 
        plan described in this paragraph is a health plan that is 
        subject to regulation by a State, if the Secretary finds that--
                    (A) the State provides for application of the 
                standards and requirements promulgated under subsection 
                (b); and
                    (B) the State regulatory program provides for the 
                appropriate and effective enforcement of such standards 
                and requirements with respect to such plans.
    (d) Consultation.--The Secretary shall conduct activities under 
this section in consultation with the Accredited Standards Committee X-
12 of the American National Standards Institute, insurers, providers, 
and others.

SEC. 204. USE OF UNIFORM HEALTH CLAIMS FORMS AND IDENTIFICATION 
              NUMBERS.

    (a) Goals.--The Secretary shall establish national goals, and time 
frameworks, respecting the progress to be made by the health care 
industry in achieving uniformity--
            (1) in the format and content of basic claims forms under 
        health plans, and
            (2) in the use of common identification numbers for 
        beneficiaries and providers of health care items or services 
        under health plans.
    (b) Contingent Requirements.--If the Secretary determines that the 
health care industry has failed to meet the goals established under 
subsection (a) by the deadlines established by the Secretary under such 
subsection, the Secretary shall promulgate (and may, from time to time, 
modify) standards and requirements concerning--
            (1) the format and content of basic claims forms under 
        health plans; and
            (2) the common identification numbers to be used by health 
        plans to identify health plan beneficiaries and health care 
        providers.
    (c) Compliance.--
            (1) In general.--The Secretary may impose a civil money 
        penalty on any health plan (other than a health plan described 
        in paragraph (2)) that fails to comply with standards and 
        requirements promulgated under subsection (b) in an amount not 
        to exceed $100 for each such failure. The provisions of section 
        1128A of the Social Security Act (other than the first sentence 
        of subsection (a) and other than subsection (b)) shall apply to 
        a civil money penalty under this paragraph in the same manner 
        as such provisions apply to a penalty or proceeding under 
        section 1128A(a) of such Act.
            (2) Plans subject to effective state regulation.--A health 
        plan described in this paragraph is a health plan that is 
        subject to regulation by a State, if the Secretary finds that--
                    (A) the State provides for application of the 
                standards and requirements promulgated under subsection 
                (b); and
                    (B) the State regulatory program provides for the 
                appropriate and effective enforcement of such standards 
                and requirements with respect to such plans.
    (d) Consultation.--The Secretary shall conduct activities under 
this section in consultation with the Workgroup for Electronic Data 
Interchange and with insurers, providers, and others.

SEC. 205. PRIORITY AMONG INSURERS.

    (a) Goals.--The Secretary shall establish national goals, and time 
frameworks, respecting the progress to be made by the health care 
industry in achieving uniformity in the rules for determining the 
liability of insurers when benefits are payable under two or more 
health plans.
    (b) Contingent Requirements.--If the Secretary determines that the 
health care industry has failed to meet the goals established under 
subsection (a) by the deadlines established by the Secretary under such 
subsection, the Secretary shall promulgate (and may, from time to time, 
modify) rules for determining the liability of health plans when 
benefits are payable under two or more health plans.
    (c) Compliance.--
            (1) In general.--The Secretary may impose a civil money 
        penalty on any health plan (other than a health plan described 
        in paragraph (2)) that fails to comply with rules promulgated 
        under subsection (b) in an amount not to exceed $100 for each 
        such failure. The provisions of section 1128A of the Social 
        Security Act (other than the first sentence of subsection (a) 
        and other than subsection (b)) shall apply to a civil money 
        penalty under this paragraph in the same manner as such 
        provisions apply to a penalty or proceeding under section 
        1128A(a) of such Act.
            (2) Plans subject to effective state regulation.--A health 
        plan described in this paragraph is a health plan that is 
        subject to regulation by a State, if the Secretary finds that--
                    (A) the State provides for application of the rules 
                established under subsection (b); and
                    (B) the State regulatory program provides for the 
                appropriate and effective enforcement of such rules 
                with respect to such plans.
    (d) Consultation.--The Secretary shall conduct activities under 
this section in consultation with health plans.

SEC. 206. FURNISHING OF INFORMATION AMONG HEALTH PLANS.

    (a) Goals.--The Secretary shall establish national goals, and time 
frameworks, respecting the progress to be made by the health care 
industry in achieving uniformity in the availability of information 
among health plans when benefits are payable under two or more health 
plans.
    (b) Contingent Requirements.--If the Secretary determines that the 
health care industry has failed to meet the goals established under 
subsection (a) by the deadlines established by the Secretary under such 
subsection, the Secretary shall promulgate (and may, from time to time, 
modify) requirements concerning the transfer among health plans (and 
annual updating) of appropriate information (which may include 
requirements for the use of unique identifiers, and for the listing of 
all individuals covered under a health plan).
    (c) Compliance.--
            (1) In general.--The Secretary may impose a civil money 
        penalty on any health plan (other than a health plan described 
        in paragraph (2)) that fails to comply with requirements 
        promulgated under subsection (b) in an amount not to exceed 
        $100 for each such failure. The provisions of section 1128A of 
        the Social Security Act (other than the first sentence of 
        subsection (a) and other than subsection (b)) shall apply to a 
        civil money penalty under this paragraph in the same manner as 
        such provisions apply to a penalty or proceeding under section 
        1128A(a) of such Act.
            (2) Plans subject to effective state regulation.--A plan 
        described in this paragraph is a health plan that is subject to 
        regulation by a State, if the Secretary finds that--
                    (A) the State provides for application of the 
                requirements promulgated under subsection (b); and
                    (B) the State regulatory program provides for the 
                appropriate and effective enforcement of such 
                requirements with respect to such plans.
    (d) Consultation.--The Secretary shall conduct activities under 
this section in consultation with health plans.

SEC. 207. DEFINITIONS.

    As used in this title:
            (1) Health plan.--The term ``health plan'' means any 
        contract or arrangement under which an entity bears all or part 
        of the cost of providing health care items and services, 
        including a hospital or medical expense incurred policy or 
        certificate, hospital or medical service plan contract, or 
        health maintenance subscriber contract (including any closed 
        accountable health plan), but does not include (except for 
        purposes of sections 205 and 206)--
                    (A) coverage only for accident, dental, vision, 
                disability, or long term care, medicare supplemental 
                health insurance, or any combination thereof,
                    (B) coverage issued as a supplement to liability 
                insurance,
                    (C) workers' compensation or similar insurance; or
                    (D) automobile medical-payment insurance.
            (2) Provider.--The term ``provider'' means a physician, 
        hospital, pharmacy, laboratory, or other person licensed or 
        otherwise authorized under applicable State laws to furnish 
        health care items or services.

                TITLE III--HEALTH CARE LIABILITY REFORM

                     Subtitle A--General Provisions

SEC. 301. FEDERAL REFORM OF MEDICAL MALPRACTICE LIABILITY ACTIONS.

    (a) Applicability.--This title shall apply with respect to any 
medical malpractice liability claim and to any medical malpractice 
liability action brought in any Federal or State court, except that 
this title shall not apply to a claim or action for damages arising 
from a vaccine-related injury or death to the extent that title XXI of 
the Public Health Service Act applies to the claim or action.
    (b) Preemption.--The provisions of this title shall preempt any 
State law to the extent such law is inconsistent with the limitations 
contained in such provisions. The provisions of this title shall not 
preempt any State law that provides for defenses or places limitations 
on a person's liability in addition to those contained in this title, 
places greater limitations on the amount of attorneys' fees that can be 
collected, or otherwise imposes greater restrictions than those 
provided in this title.
    (c) Effect on Sovereign Immunity and Choice of Law or Venue.--
    Nothing in subsection (b) shall be construed to--
            (1) waive or affect any defense of sovereign immunity 
        asserted by any State under any provision of law;
            (2) waive or affect any defense of sovereign immunity 
        asserted by the United States;
            (3) affect the applicability of any provision of the 
        Foreign Sovereign Immunities Act of 1976;
            (4) preempt State choice-of-law rules with respect to 
        claims brought by a foreign nation or a citizen of a foreign 
        nation; or
            (5) affect the right of any court to transfer venue or to 
        apply the law of a foreign nation or to dismiss a claim of a 
        foreign nation or of a citizen of a foreign nation on the 
        ground of inconvenient forum.
    (d) Federal Court Jurisdiction not Established on Federal Question 
Grounds.--Nothing in this title shall be construed to establish any 
jurisdiction in the district courts of the United States over medical 
malpractice liability actions on the basis of section 1331 or 1337 of 
title 28, United States Code.

SEC. 302. DEFINITIONS.

    As used in this title:
            (1) Alternative dispute resolution system; adr.--The term 
        ``alternative dispute resolution system'' or ``ADR'' means a 
        system established under this title that provides for the 
        resolution of medical malpractice liability claims in a manner 
        other than through medical malpractice liability actions.
            (2) Claimant.--The term ``claimant'' means any person who 
        alleges a medical malpractice liability claim, and any person 
        on whose behalf such a claim is alleged, including the decedent 
        in the case of an action brought through or on behalf of an 
        estate.
            (3) Clear and convincing evidence.--The term ``clear and 
        convincing evidence'' is that measure or degree of proof that 
        will produce in the mind of the trier of fact a firm belief or 
        conviction as to the truth of the allegations sought to be 
        established, except that such measure or degree of proof is 
        more than that required under preponderance of the evidence, 
        but less than that required for proof beyond a reasonable 
        doubt.
            (4) Economic damages.--The term ``economic damages'' means 
        damages paid to compensate an individual for hospital and other 
        medical expenses, lost wages, lost employment, and other 
        pecuniary losses.
            (5) Health care professional.--The term ``health care 
        professional'' means any individual who provides health care 
        services in a State and who is required by the laws or 
        regulations of the State to be licensed or certified by the 
        State to provide such services in the State.
            (6) Health care provider.--The term ``health care 
        provider'' means any organization or institution that is 
        engaged in the delivery of health care services in a State and 
        that is required by the laws or regulations of the State to be 
        licensed or certified by the State to engage in the delivery of 
        such services in the State.
            (7) Injury.--The term ``injury'' means any illness, 
        disease, or other harm that is the subject of a medical 
        malpractice liability action or a medical malpractice liability 
        claim.
            (8) Medical malpractice liability action.--The term 
        ``medical malpractice liability action'' means a civil action 
        brought in a Federal or State court against a health care 
        provider or health care professional in which the plaintiff 
        alleges a medical malpractice liability claim, but does not 
        include any action in which the plaintiff's sole allegation is 
        an allegation of an intentional tort.
            (9) Medical malpractice liability claim.--The term 
        ``medical malpractice liability claim'' means a claim in which 
        the claimant alleges that injury was caused by the provision of 
        (or the failure to provide) health care services or the use of 
        a medical product.
            (10) Medical product.--
                    (A) In general.--The term ``medical product'' 
                means, with respect to the allegation of a claimant, a 
                drug (as defined in section 201(g)(1) of the Federal 
                Food, Drug, and Cosmetic Act (21 U.S.C. 321(g)(1)) or a 
                medical device (as defined in section 201(h) of the 
                Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321(h)) 
                if--
                            (i) such drug or device was subject to 
                        premarket approval under section 505, 507, or 
                        515 of the Federal Food, Drug, and Cosmetic Act 
                        (21 U.S.C. 355, 357, or 360e) or section 351 of 
                        the Public Health Service Act (42 U.S.C. 262) 
                        with respect to the safety of the formulation 
                        or performance of the aspect of such drug or 
                        device which is the subject of the claimant's 
                        allegation or the adequacy of the packaging or 
                        labeling of such drug or device, and such drug 
                        or device is approved by the Food and Drug 
                        Administration; or
                            (ii) the drug or device is generally 
                        recognized as safe and effective under 
                        regulations issued by the Secretary under 
                        section 201(p) of the Federal Food, Drug, and 
                        Cosmetic Act (21 U.S.C. 321(p)).
                    (B) Exception in case of misrepresentation or 
                fraud.--Notwithstanding subparagraph (A), the term 
                ``medical product'' shall not include any product 
                described in such subparagraph if the claimant shows 
                that the product is approved by the Food and Drug 
                Administration for marketing as a result of withheld 
                information, misrepresentation, or an illegal payment 
                by manufacturer of the product.
            (11) Noneconomic damages.--The term ``noneconomic damages'' 
        means damages paid to compensate an individual for physical and 
        emotional pain, suffering, inconvenience, physical impairment, 
        mental anguish, disfigurement, loss of enjoyment of life, loss 
        of consortium, and other nonpecuniary losses, but does not 
        include punitive damages.
            (12) Punitive damages; exemplary damages.--The terms 
        ``punitive damages'' and ``exemplary damages'' mean 
        compensation, in addition to compensation for actual harm 
        suffered, that is awarded for the purpose of punishing a person 
        for conduct deemed to be malicious, wanton, willful, or 
        excessively reckless.
            (13) State.--The term ``State'' means each of the several 
        States, the District of Columbia, the Commonwealth of Puerto 
        Rico, the Virgin Islands, Guam, and American Samoa.

SEC. 303. EFFECTIVE DATE.

    (a) In General.--Except as provided in subsection (b) and section 
318(c), this title shall apply with respect to claims accruing or 
actions brought on or after the expiration of the 3-year period that 
begins on the date of the enactment of this Act.
    (b) Exception for States Requesting Earlier Implementation of 
Reforms.--
            (1) Application.--A State may submit an application to the 
        Secretary requesting the early implementation of this subtitle 
        with respect to claims or actions brought in the State.
            (2) Decision by secretary.--The Secretary shall issue a 
        response to a State's application under paragraph (1) not later 
        than 90 days after receiving the application. If the Secretary 
        determines that the State meets the requirements of this title 
        at the time of submitting its application, the Secretary shall 
        approve the State's application, and this title shall apply 
        with respect to actions brought in the State on or after the 
        expiration of the 90-day period that begins on the date the 
        Secretary issues the response. If the Secretary denies the 
        State's application, the Secretary shall provide the State with 
        a written explanation of the grounds for the decision.

      Subtitle B--Medical Malpractice and Product Liability Reform

SEC. 311. REQUIREMENT FOR INITIAL RESOLUTION OF ACTION THROUGH 
              ALTERNATIVE DISPUTE RESOLUTION.

    (a) In General.--
            (1) State cases.--A medical malpractice liability action 
        may not be brought in any State court during a calendar year 
        unless the medical malpractice liability claim that is the 
        subject of the action has been initially resolved under an 
        alternative dispute resolution system certified for the year by 
        the Secretary under section 332(a), or, in the case of a State 
        in which such a system is not in effect for the year, under the 
        alternative Federal system established under section 332(b).
            (2) Federal diversity actions.--A medical malpractice 
        liability action may not be brought in any Federal court under 
        section 1332 of title 28, United States Code, during a calendar 
        year unless the medical malpractice liability claim that is the 
        subject of the action has been initially resolved under the 
        alternative dispute resolution system referred to in paragraph 
        (1) that applied in the State whose law applies in such action.
            (3) Claims against united states.--
                    (A) Establishment of process for claims.--The 
                Attorney General shall establish an alternative dispute 
                resolution process for the resolution of tort claims 
                consisting of medical malpractice liability claims 
                brought against the United States under chapter 171 of 
                title 28, United States Code. Under such process, the 
                resolution of a claim shall occur after the completion 
                of the administrative claim process applicable to the 
                claim under section 2675 of such title.
                    (B) Requirement for initial resolution under 
                process.--A medical malpractice liability action based 
                on a medical malpractice liability claim described in 
                subparagraph (A) may not be brought in any Federal 
                court unless the claim has been initially resolved 
                under the alternative dispute resolution process 
                established by the Attorney General under such 
                subparagraph.
    (b) Initial Resolution of Claims Under ADR.--For purposes of 
subsection (a), an action is ``initially resolved'' under an 
alternative dispute resolution system if--
            (1) the ADR reaches a decision on whether the defendant is 
        liable to the plaintiff for damages; and
            (2) if the ADR determines that the defendant is liable, the 
        ADR reaches a decision on the amount of damages assessed 
        against the defendant.
    (c) Procedures for Filing Actions.--
            (1) Notice of intent to contest decision.--Not later than 
        60 days after a decision is issued with respect to a medical 
        malpractice liability claim under an alternative dispute 
        resolution system, each party affected by the decision shall 
        submit a sealed statement to a court of competent jurisdiction 
        indicating whether or not the party intends to contest the 
        decision.
            (2) Deadline for filing action.--A medical malpractice 
        liability action may not be brought by a party unless--
                    (A) the party has filed the notice of intent 
                required by paragraph (1); and
                    (B) the party files the action in a court of 
                competent jurisdiction not later than 90 days after the 
                decision resolving the medical malpractice liability 
                claim that is the subject of the action is issued under 
                the applicable alternative dispute resolution system.
            (3) Court of competent jurisdiction.--For purposes of this 
        subsection, the term ``court of competent jurisdiction'' 
        means--
                    (A) with respect to actions filed in a State court, 
                the appropriate State trial court; and
                    (B) with respect to actions filed in a Federal 
                court, the appropriate United States district court.
    (d) Legal Effect of Uncontested ADR Decision.--The decision reached 
under an alternative dispute resolution system shall, for purposes of 
enforcement by a court of competent jurisdiction, have the same status 
in the court as the verdict of a medical malpractice liability action 
adjudicated in a Federal or State trial court. The previous sentence 
shall not apply to a decision that is contested by a party affected by 
the decision pursuant to subsection (c)(1).

SEC. 312. CALCULATION AND PAYMENT OF DAMAGES.

    (a) Limitation on Noneconomic Damages.--
            (1) In general.--Except as provided in paragraph (2), the 
        total amount of damages that may be awarded to an individual 
        and the family members of such individual for noneconomic 
        losses resulting from an injury which is the subject of a 
        health care malpractice claim or a health care product 
        liability claim may not exceed $250,000, regardless of the 
        number of defendants against whom the claim is brought, the 
        number of claims brought with respect to the injury, or the 
        number of actions brought with respect to the injury.
            (2) Jury trials.--
                    (A) Reduction in awards.--Any jury trial with 
                respect to involving a medical malpractice liability 
                claim, the jury shall not be informed of the limitation 
                established under paragraph (1). If the jury awards an 
                amount for noneconomic damages that exceeds $250,000, 
                the court shall reduce the award to $250,000 unless the 
                court finds that special circumstances (such as 
                egregious injury) would make such reduction unjust.
                    (B) Discretion of court.--In any case in which the 
                court finds a reduction under subparagraph (A) would be 
                unjust, the court may--
                            (i) decline to reduce such award; or
                            (ii) reduce such award by a lesser amount 
                        than provided for under subparagraph (A).
    (b) Mandatory Offsets for Damages Paid by a Collateral Source.--
            (1) In general.--With respect to a health care malpractice 
        claim or action, the total amount of damages received by an 
        individual under such action shall be reduced, in accordance 
        with paragraph (2), by any other payment that has been, or will 
        be, made to an individual to compensate such individual for the 
        injury that was the subject of such action.
            (2) Amount of reduction.--The amount by which an award of 
        damages to an individual for an injury shall be reduced under 
        paragraph (1) shall be--
                    (A) the total amount of any payments (other than 
                such award) that have been made or that will be made to 
                such individual to pay costs of or compensate such 
                individual for the injury that was the subject of the 
                action; minus
                    (B) the amount paid by such individual (or by the 
                spouse, parent, or legal guardian of such individual) 
                to secure the payments described in subparagraph (A).
    (c) Treatment of Punitive Damages.--
            (1) Basis for recovery.--Punitive or exemplary damages 
        shall not be awarded in a medical malpractice liability action 
        unless the claimant establishes by clear and convincing 
        evidence that the injury suffered was the direct result of 
        conduct manifesting a malicious, wanton, willful, or 
        excessively reckless disregard of the safety of others.
            (2) No award against manufacturer of medical product.--In 
        the case of a medical malpractice liability action in which the 
        plaintiff alleges a claim against the manufacturer of a medical 
        product, no punitive or exemplary damages may be awarded 
        against such manufacturer.
            (3) Payments to state for medical quality assurance 
        activities.--
                    (A) In general.--Any punitive or exemplary damages 
                awarded in a medical malpractice liability action shall 
                be paid to the State in which the action is brought or, 
                in a case brought in Federal court, to the State in 
                which the health care services that caused the injury 
                that is the subject of the action were provided.
                    (B) Activities described.--A State shall use 
                amounts paid pursuant to subparagraph (A) to carry out 
                activities to assure the safety and quality of health 
                care services provided in the State, including (but not 
                limited to)--
                            (i) licensing or certifying health care 
                        professionals and health care providers in the 
                        State;
                            (ii) operating alternative dispute 
                        resolution systems;
                            (iii) carrying out public education 
                        programs relating to medical malpractice and 
                        the availability of alternative dispute 
                        resolution systems in the State; and
                            (iv) carrying out programs to reduce 
                        malpractice-related costs for retired providers 
                        or other providers volunteering to provide 
                        services in medically underserved areas.
                    (C) Maintenance of effort.--A State shall use any 
                amounts paid pursuant to subparagraph (A) to supplement 
                and not to replace amounts expended by the State for 
                the activities described in subparagraph (B).
    (d) Periodic Payments for Future Losses.--
            (1) General rule.--In any medical malpractice liability 
        action in which the damages awarded for future economic loss 
        exceeds $100,000, a defendant may not be required to pay such 
        damages in a single, lump-sum payment, but shall be permitted 
        to make such payments periodically based on when the damages 
        are found likely to occur, as such payments are determined by 
        the court.
            (2) Waiver.--A court may waive the application of paragraph 
        (1) with respect to a defendant if the court determines that it 
        is not in the best interests of the plaintiff to receive 
        payments for damages on such a periodic basis.

SEC. 313. TREATMENT OF ATTORNEY'S FEES AND OTHER COSTS.

    (a) Limitation on Amount of Contingency Fees.--
            (1) In general.--An attorney who represents, on a 
        contingency fee basis, a claimant in a medical malpractice 
        liability claim may not charge, demand, receive, or collect for 
        services rendered in connection with such claim in excess of 
        the following amount recovered by judgment or settlement under 
        such claim:
                    (A) 25 percent of the first $150,000 (or portion 
                thereof) recovered, plus
                    (B) 10 percent of any amount in excess of $150,000 
                recovered.
            (2) Calculation of periodic payments.--In the event that a 
        judgment or settlement includes periodic or future payments of 
        damages, the amount recovered for purposes of computing the 
        limitation on the contingency fee under paragraph (1) shall be 
        based on the cost of the annuity or trust established to make 
        the payments. In any case in which an annuity or trust is not 
        established to make such payments, such amount shall be based 
        on the present value of the payments.
    (b) Requiring Party Contesting ADR Ruling to Pay Attorney's Fees 
and Other Costs.--
            (1) In general.--The court in a medical malpractice 
        liability action shall require the party that (pursuant to 
        section 311(c)(1)) contested the ruling of the alternative 
        dispute resolution system with respect to the medical 
        malpractice liability claim that is the subject of the action 
        to pay to the opposing party the costs incurred by the opposing 
        party under the action, including attorney's fees, fees paid to 
        expert witnesses, and other litigation expenses (but not 
        including court costs, filing fees, or other expenses paid 
        directly by the party to the court, or any fees or costs 
        associated with the resolution of the claim under the 
        alternative dispute resolution system), but only if--
                    (A) in the case of an action in which the party 
                that contested the ruling is the claimant, the amount 
                of damages awarded to the party under the action does 
                not exceed the amount of damages awarded to the party 
                under the ADR system by at least 10 percent; and
                    (B) in the case of an action in which the party 
                that contested the ruling is the defendant, the amount 
                of damages assessed against the party under the action 
                is not at least 10 percent less than the amount of 
                damages assessed under the ADR system.
            (2) Exceptions.--Paragraph (1) shall not apply if--
                    (A) the party contesting the ruling made under the 
                previous alternative dispute resolution system shows 
                that--
                            (i) the ruling was procured by corruption, 
                        fraud, or undue means;
                            (ii) there was partiality or corruption 
                        under the system;
                            (iii) there was other misconduct under the 
                        system that materially prejudiced the party's 
                        rights; or
                            (iv) the ruling was based on an error of 
                        law;
                    (B) the party contesting the ruling made under the 
                alternative dispute resolution system presents new 
                evidence before the trier of fact that was not 
                available for presentation under the ADR system;
                    (C) the medical malpractice liability action raised 
                a novel issue of law; or
                    (D) the court finds that the application of such 
                paragraph to a party would constitute an undue 
                hardship, and issues an order waiving or modifying the 
                application of such paragraph that specifies the 
                grounds for the court's decision.
            (3) Requirement for performance bond.--The court in a 
        medical malpractice liability action shall require the party 
        that (pursuant to section 311(c)(1)) contested the ruling of 
        the alternative dispute resolution system with respect to the 
        medical malpractice liability claim that is the subject of the 
        action to post a performance bond (in such amount and 
        consisting of such funds and assets as the court determines to 
        be appropriate), except that the court may waive the 
        application of such requirement to a party if the court 
        determines that the posting of such a bond is not necessary to 
        ensure that the party shall meet the requirements of this 
        subsection to pay the opposing party the costs incurred by the 
        opposing party under the action.
            (4) Limit on attorney's fees paid.--Attorneys' fees that 
        are required to be paid under paragraph (1) by the contesting 
        party shall not exceed the amount of the attorneys' fees 
        incurred by the contesting party in the action. If the 
        attorneys' fees of the contesting party are based on a 
        contingency fee agreement, the amount of attorneys' fees for 
        purposes of the preceding sentence shall not exceed the 
        reasonable value of those services.
            (5) Records.--In order to receive attorneys' fees under 
        paragraph (1), counsel of record in the medical malpractice 
        liability action involved shall maintain accurate, complete 
        records of hours worked on the action, regardless of the fee 
        arrangement with the client involved.
    (c) Frivolous Actions.--
            (1) By attorney.--With respect to a health care malpractice 
        claim or action, if the court or the adjudicating body 
        determines that the claim or action, or any part thereof, was 
        pursued by an attorney where the attorney does not have 
        reasonable grounds to believe that the action was well grounded 
        in fact and was warranted by existing law, the court shall 
        impose an appropriate sanction, including the reasonable costs 
        and attorneys fees attributable to the frivolous claims.
            (2) By claimant.--Sanctions under paragraph (1) may apply 
        against a claimant if the court determines that the frivolous 
        nature of the action was a result of the misrepresentation of 
        facts by the claimant to the attorney.
    (d) Contingency Fee Defined.--As used in this section, the term 
``contingency fee'' means any fee for professional legal services which 
is, in whole or in part, contingent upon the recovery of any amount of 
damages, whether through judgment or settlement.

SEC. 314. JOINT AND SEVERAL LIABILITY.

    (a) In General.--Except as provided in Section 313(b), a defendant 
may be held severally but not jointly liable in a medical malpractice 
action. A person found liable for damages in any such action may be 
found liable, if at all, only for those damages directly attributable 
to the person's proportionate share of fault or responsibility for the 
injury, and may not be found liable for damages attributable to the 
proportionate share of fault or responsibility of any other person 
(without regard to whether that person is a party to the action) for 
the injury, including any person bringing the action.
    (b) Determination of Proportion of Responsibility.--For purposes of 
this subsection, the trier of fact shall determine the proportion of 
responsibility of each party for the claimant's harm.

SEC. 315. STATUTE OF LIMITATIONS.

    (a) In General.--Except as provided in paragraph (2), no health 
care malpractice claim or action may be initiated after the expiration 
of the 2-year period that begins on the date on which the alleged 
injury and its cause should reasonably have been discovered, but in no 
event later than 6 years after the date of the alleged occurrence of 
the injury.
    (2) Exception for Minors.--In the case of an alleged injury 
suffered by a minor who has not attained 6 years of age, no health care 
malpractice claim or action may be initiated after the expiration of 
the 2-year period that begins on the date on which the alleged injury 
and its cause should reasonably have been discovered, but in no event 
later than 6 years after the date of the alleged occurrence of the 
injury and its cause or the date on which the minor attains 12 years of 
age, whichever is later.

SEC. 316. PRACTICE GUIDELINES.

    (a) Rebuttable Presumption.--
            (1) Development.--Each State shall develop, for 
        certification by the Secretary, a set of specialty clinical 
        practice guidelines, based on recommended guidelines developed 
        by the Agency for Health Care Policy and Research.
            (2) Provision of health care under guidelines.--
        Notwithstanding any other provision of law, in any claim or 
        action brought in a Federal or State court or other forum 
        arising from the provision of a health care service to an 
        individual, if the service was provided to the individual in 
        accordance with the guidelines developed by the State (that 
        certified or regulates the health plan involved in the action) 
        and certified by the Secretary under paragraph (1), the 
        guidelines--
                    (A) may be introduced by a provider who is a party 
                to the claim or action;
                    (B) if introduced, shall establish a rebuttable 
                presumption that the service prescribed by the 
                guidelines is the appropriate standard of medical care; 
                and
                    (C) if used to establish a rebuttable presumption, 
                may only be overcome by the presentation of clear and 
                convincing evidence on behalf of the party against whom 
                the presumption operates.
    (b) Absolute Defense.--With respect to new or experimental 
treatments that are part of approved research trials (as defined in 
subsection (c)), no health care provider may be required to provide or 
held liable for failing to provide such treatment until that treatment 
is found to be safe and efficacious by the Agency for Health Care 
Policy and Research.
    (c) Definitions.--As used in this section--
            (1) Approved research trials.--The term ``approved research 
        trial'' means a trial--
                    (A) conducted for the primary purpose of 
                determining the safety, effectiveness, efficacy, or 
                health outcomes of a treatment, compared with the best 
                available alternative treatment; and
                    (B) approved by the Secretary.
A trial is deemed to be approved under this subparagraph if it is 
approved by the National Institutes of Health, the Food and Drug 
Administration (through an investigational new drug exemption), the 
Department of Defense, the Department of Veterans Affairs, or by a 
qualified nongovernmental research entity (as identified in guidelines 
issued by one or more of the National Institutes of Health).
            (2) New or experimental treatments.--The term ``new or 
        experimental treatments'' means a treatment for which there is 
        not sufficient evidence to determine the health outcome of the 
        treatment compared with the best available alternative 
        treatment (or with no treatment if there is no alternative 
        treatment).

SEC. 317. UNIFORM STANDARD FOR DETERMINING NEGLIGENCE.

    A defendant in a medical malpractice liability action may not be 
found to have acted negligently unless the defendant's conduct at the 
time of providing the health care services that are the subject of the 
action was not reasonable.

SEC. 318. SPECIAL PROVISION FOR CERTAIN OBSTETRIC SERVICES.

    (a) Imposition of Higher Standard of Proof.--In the case of a 
medical malpractice liability claim relating to services provided 
during labor or the delivery of a baby, if the health care professional 
against whom the claim is brought did not previously treat the 
individual alleged to have been injured for the pregnancy, the trier of 
fact may not find that the defendant committed malpractice and may not 
assess damages against the health care professional unless the 
malpractice is proven by clear and convincing evidence.
    (b) Applicability to Group Practices or Agreements Among 
Providers.--For purposes of subsection (a), a health care professional 
shall be considered to have previously treated an individual for a 
pregnancy if the professional is a member of a group practice whose 
members previously treated the individual for the pregnancy or is 
providing services to the individual during labor or the delivery of a 
baby pursuant to an agreement with another health care professional.
    (c) Effective Date.--This section shall apply with respect to 
claims accruing or actions brought on or after the expiration of the 2-
year period that begins on the date of the enactment of this Act.

   Subtitle C--Requirements for State Alternative Dispute Resolution 
                             Systems (ADR)

SEC. 331. BASIC REQUIREMENTS.

    (a) In General.--A State's alternative dispute resolution system 
meets the requirements of this section if the system--
            (1) applies to all medical malpractice liability claims 
        under the jurisdiction of the courts of that State;
            (2) requires that a written opinion resolving the dispute 
        be issued not later than 6 months after the date by which each 
        party against whom the claim is filed has received notice of 
        the claim (other than in exceptional cases for which a longer 
        period is required for the issuance of such an opinion), and 
        that the opinion contains--
                    (A) findings of fact relating to the dispute, and
                    (B) a description of the costs incurred in 
                resolving the dispute under the system (including any 
                fees paid to the individuals hearing and resolving the 
                claim), together with an appropriate assessment of the 
                costs against any of the parties;
            (3) requires individuals who hear and resolve claims under 
        the system to meet such qualifications as the State may require 
        (in accordance with regulations of the Secretary);
            (4) is approved by the State or by local governments in the 
        State;
            (5) with respect to a State system that consists of 
        multiple dispute resolution procedures--
                    (A) permits the parties to a dispute to select the 
                procedure to be used for the resolution of the dispute 
                under the system; and
                    (B) if the parties do not agree on the procedure to 
                be used for the resolution of the dispute, assigns a 
                particular procedure to the parties;
            (6) provides for the transmittal to the State agency 
        responsible for monitoring or disciplining health care 
        professionals and health care providers of any findings made 
        under the system that such a professional or provider committed 
        malpractice, unless, during the 90-day period beginning on the 
        date the system resolves the claim against the professional or 
        provider, the professional or provider brings an action 
        contesting the decision made under the system; and
            (7) provides for the regular transmittal to the 
        Administrator for Health Care Policy and Research of 
        information on disputes resolved under the system, in a manner 
        that assures that the identity of the parties to a dispute 
        shall not be revealed.
    (b) Application of Malpractice Liability Standards to Alternative 
Dispute Resolution.--The provisions of subtitle B shall apply with 
respect to claims brought under a State alternative dispute resolution 
system or the alternative Federal system in the same manner as such 
provisions apply with respect to medical malpractice liability actions 
brought in the State.

SEC. 332. CERTIFICATION OF STATE SYSTEMS; APPLICABILITY OF ALTERNATIVE 
              FEDERAL SYSTEM.

    (a) Certification.--
            (1) In general.--Not later than October 1 of each year 
        (beginning with 1994), the Secretary, in consultation with the 
        Attorney General, shall determine whether a State's alternative 
        dispute resolution system meets the requirements of this 
        subtitle for the following calendar year.
            (2) Basis for certification.--The Secretary shall certify a 
        State's alternative dispute resolution system under this 
        subsection for a calendar year if the Secretary determines 
        under paragraph (1) that the system meets the requirements of 
        section 331.
    (b) Applicability of Alternative Federal System.--
            (1) Establishment and applicability.--Not later than 
        October 1, 1994, the Secretary, in consultation with the 
        Attorney General, shall establish by rule an alternative 
        Federal ADR system for the resolution of medical malpractice 
        liability claims during a calendar year in States that do not 
        have in effect an alternative dispute resolution system 
        certified under subsection (a) for the year.
            (2) Requirements for system.--Under the alternative Federal 
        ADR system established under paragraph (1)--
                    (A) paragraphs (1), (2), (6), and (7) of section 
                331(a) shall apply to claims brought under the system;
                    (B) if the system provides for the resolution of 
                claims through arbitration, the claims brought under 
                the system shall be heard and resolved by arbitrators 
                appointed by the Secretary in consultation with the 
                Attorney General; and
                    (C) with respect to a State in which the system is 
                in effect, the Secretary may (at the State's request) 
                modify the system to take into account the existence of 
                dispute resolution procedures in the State that affect 
                the resolution of medical malpractice liability claims.
            (3) Treatment of states with alternative system in 
        effect.--If the alternative Federal ADR system established 
        under this subsection is applied with respect to a State for a 
        calendar year--
                    (A) the State shall reimburse the United States (at 
                such time and in such manner as the Secretary may 
                require) for the costs incurred by the United States 
                during the year as a result of the application of the 
                system with respect to the State; and
                    (B) notwithstanding any other provision of law, no 
                funds may be paid to the State (or to any unit of local 
                government in the State) or to any entity in the State 
                under the Public Health Service Act.

SEC. 333. REPORTS ON IMPLEMENTATION AND EFFECTIVENESS OF ALTERNATIVE 
              DISPUTE RESOLUTION SYSTEMS.

    (a) In General.--Not later than 5 years after the date of the 
enactment of this Act, the Secretary shall prepare and submit to the 
Congress a report describing and evaluating State alternative dispute 
resolution systems operated pursuant to this subtitle and the 
alternative Federal system established under section 332(b).
    (b) Contents of Report.--The Secretary shall include in the report 
prepared and submitted under subsection (a)--
            (1) information on--
                    (A) the effect of the alternative dispute 
                resolution systems on the cost of health care within 
                each State;
                    (B) the impact of such systems on the access of 
                individuals to health care within the State; and
                    (C) the effect of such systems on the quality of 
                health care provided within the State; and
            (2) to the extent that such report does not provide 
        information on nofault systems operated by States as 
        alternative dispute resolution systems pursuant to this 
        subtitle, an analysis of the feasibility and desirability of 
        establishing a system under which medical malpractice liability 
        claims shall be resolved on a no-fault basis.

                     TITLE IV--ANTITRUST PROVISIONS

SEC. 401. EXEMPTION FROM ANTITRUST LAWS FOR CERTAIN COMPETITIVE AND 
              COLLABORATIVE ACTIVITIES.

    (a) Exemption Described.--An activity relating to the provision of 
health care services shall be exempt from the antitrust laws if--
            (1) the activity is within one of the categories of safe 
        harbors described in section 402;
            (2) the activity is within an additional safe harbor 
        designated by the Attorney General under section 403; or
            (3) the activity is specified in and in compliance with the 
        terms of a certificate of review issued by the Attorney General 
        under section 404 and the activity occurs--
                    (A) while the certificate is in effect; or
                    (B) in the case of a certificate issued during the 
                2-year period beginning on the date of the enactment of 
                this Act, at any time on or after the first day of the 
                2-year period that ends on the date the certificate 
                takes effect.
    (b) Award of Attorney's Fees and Costs of Suit.--
            (1) In general.--If any person brings an action alleging a 
        claim under the antitrust laws and the activity on which the 
        claim is based is found by the court to be exempt from such 
        laws under subsection (a), the court shall, at the conclusion 
        of the action--
                    (A) award to a substantially prevailing claimant 
                the cost of suit attributable to such claim, including 
                a reasonable attorney's fee; or
                    (B) award to a substantially prevailing party 
                defending against such claim the cost of such suit 
                attributable to such claim, including reasonable 
                attorney's fee, if the claim, or the claimant's conduct 
                during litigation of the claim, was frivolous, 
                unreasonable, without foundation, or in bad faith.
            (2) Offset in cases of bad faith.--The court may reduce an 
        award made pursuant to paragraph (1) in whole or in part by an 
        award in favor of another party for any part of the cost of 
        suit (including a reasonable attorney's fee) attributable to 
        conduct during the litigation by any prevailing party that the 
        court finds to be frivolous, unreasonable, without foundation, 
        or in bad faith.

SEC. 402. SAFE HARBORS.

    The following activities are safe harbors for purposes of section 
401(a)(1):
            (1) Combinations with market share below threshold.--
        Activities relating to health care services of any combination 
        of health care providers if the number of each type or 
        specialty of provider in question does not exceed 20 percent of 
        the total number of such type or specialty of provider in the 
        relevant market area.
            (2) Activities of medical self-regulatory entities.--
                    (A) In general.--Subject to subparagraph (B), any 
                activity of a medical self-regulatory entity relating 
                to standard setting or standard enforcement activities 
                that are designed to promote the quality of health care 
                provided to patients.
                    (B) Exception.--No activity of a medical self-
                regulatory entity may be deemed to fall under the safe 
                harbor established under this paragraph if the activity 
                is conducted for purposes of financial gain.
            (3) Participation in surveys.--The participation of a 
        provider of health care services in a written survey of the 
        prices of services, reimbursement levels, or the compensation 
        and benefits of employees and personnel, but only if--
                    (A) the survey is conducted by a third party, such 
                as a purchaser of health care services, governmental 
                entity, institution of higher education, or trade 
                association;
                    (B) the information provided by participants in the 
                survey is based on prices charged, reimbursements 
                received, or compensation and benefits paid prior to 
                the third month preceding the month in which the 
                information is provided; and
                    (C) the results of the survey are disseminated, the 
                results are aggregated in a manner that ensures that no 
                recipient of the results may identify the prices 
                charged, reimbursement received, or compensation and 
                benefits paid by any particular provider.
            (4) Joint ventures for high technology and costly equipment 
        and services.--Any activity of a health care cooperative 
        venture relating to the purchase, operation, or marketing of 
        high technology or other expensive medical equipment, or the 
        provision of high cost or complex services, but only if the 
        number of participants in the venture does not exceed the 
        lowest number needed to support the venture. Other providers 
        may be included in the venture, but only if such other 
        providers could not purchase, operate, or market such equipment 
        or provide a competing service either alone or through the 
        formation of a competing venture.
            (5) Hospital mergers.--Activities relating to a merger of 2 
        hospitals if, during the 3-year period preceding the merger, 
        one of the hospitals had an average of 200 or fewer operational 
        beds and an average daily inpatient census of less than 60 
        percent of such beds.
            (6) Joint purchasing arrangements.--Any joint purchasing 
        arrangement among health care providers if--
                    (A) the purchases under the arrangement represent 
                less than 35 percent of the total sales of the product 
                or service purchased in the relevant market; and
                    (B) the cost of the products and services purchased 
                jointly accounts for less than 20 percent of the total 
                revenues from all products or services sold by each 
                participant in the joint purchasing arrangement.
            (7) Negotiations.--Activities consisting of good faith 
        negotiations to carry out any activity--
                    (A) described in this section;
                    (B) within an additional safe harbor designated by 
                the Attorney General under section 403;
                    (C) that is the subject of an application for a 
                certificate of review under section 404; or
                    (D) that is deemed a submission of a notification 
                under section 405(a)(2)(B), without regard to whether 
                such an activity is carried out.

SEC. 403. DESIGNATION OF ADDITIONAL SAFE HARBORS.

    (a) In General.--
            (1) Solicitation of proposals.--Not later than 30 days 
        after the date of the enactment of this Act, the Attorney 
        General shall publish a notice in the Federal Register 
        soliciting proposals for additional safe harbors.
            (2) Review and report on proposed safe harbors.--Not later 
        than 180 days after the date of the enactment of this Act, the 
        Attorney General (in consultation with the Secretary and the 
        Chair shall--
                    (A) review the proposed safe harbors submitted 
                under paragraph (1); and
                    (B) submit a report to Congress describing the 
                proposals to be included in the publication of 
                additional safe harbors described in paragraph (3) and 
                the proposals that are not to be so included, together 
                with explanations therefore.
            (3) Publication of additional safe harbors.--Not later than 
        180 days after the date of the enactment of this Act, the 
        Attorney General (in consultation with the Secretary and the 
        Chair shall publish in the Federal Register proposed additional 
        safe harbors for purposes of section 401(a)(2) for providers of 
        health care services. Not later than 180 days after publishing 
        such proposed safe harbors in the Federal Register, the 
        Attorney General shall issue final rules establishing such safe 
        harbors.
    (b) Criteria for Safe Harbors.--In establishing safe harbors under 
subsection (a), the Attorney General shall take into account the 
following:
            (1) The extent to which a competitive or collaborative 
        activity will accomplish any of the following:
                    (A) An increase in access to health care services.
                    (B) The enhancement of the quality of health care 
                services.
                    (C) The establishment of cost efficiencies that 
                will be passed on to consumers, including economies of 
                scale and reduced transaction and administrative costs.
                    (D) An increase in the ability of health care 
                facilities to provide services in medically underserved 
                areas or to medically underserved populations.
                    (E) An improvement in the utilization of health 
                care resources or the reduction in the inefficient 
                duplication of the use of such resources.
            (2) Whether the designation of an activity as a safe harbor 
        under subsection (a) will result in the following outcomes:
                    (A) Health plans and other health care insurers, 
                consumers of health care services, and health care 
                providers will be better able to negotiate payment and 
                service arrangements which will reduce costs to 
                consumers.
                    (B) Taking into consideration the characteristics 
                of the particular purchasers and providers involved, 
                competition will not be unduly restricted.
                    (C) Equally efficient and less restrictive 
                alternatives do not exist to meet the criteria 
                described in paragraph (1).
                    (D) The activity will not unreasonably foreclose 
                competition by denying competitors a necessary element 
                of competition.

SEC. 404. CERTIFICATES OF REVIEW.

    (a) Establishment of Program.--In consultation with the Secretary 
and the Chair, the Attorney General shall (not later than 180 days 
after the date of the enactment of this Act) issue certificates of 
review in accordance with this section for providers of health care 
services and advise and assist any person with respect to applying for 
such a certificate of review.
    (b) Procedures for Application for Certificate.--
            (1) Form; content.--To apply for a certificate of review, a 
        person shall submit to the Attorney General a written 
        application which--
                    (A) specifies the activities relating to the 
                provision of health care services which satisfy the 
                criteria described in section 403(b) and which will be 
                included in the certificate; and
                    (B) is in a form and contains any information, 
                including information pertaining to the overall market 
                in which the applicant operates, required by rule or 
                regulation promulgated under section 407.
            (2) Publication of notice in federal register.--Not later 
        than 10 days after an application submitted under paragraph (1) 
        is received by the Attorney General, the Attorney General shall 
        publish in the Federal Register a notice that announces that an 
        application for a certificate of review has been submitted, 
        identifies each person submitting the application, and 
        describes the conduct for which the application is submitted.
            (3) Establishment of procedures for issuance of 
        certificate.--In consultation with the Chair and the Secretary, 
        the Attorney General shall establish procedures to be used in 
        applying for and in determining whether to approve an 
        application for a certificate of review under this title. Under 
        such procedures the Attorney General shall approve an 
        application if the Attorney General determines that the 
        activities to be covered under the certificate will satisfy the 
        criteria described in section 403(b) for additional safe 
        harbors designated under such section and that the benefits of 
        the issuance of the certificate will outweigh any disadvantages 
        that may result from reduced competition.
            (4) Timing for decision on application.--
                    (A) In general.--Not later than 90 days after the 
                Attorney General receives an application for a 
                certificate of review, the Attorney General shall 
                determine whether the applicant's health care market 
                activities are in accordance with the procedures 
                described in paragraph (3). If the Attorney General, 
                with the concurrence of the Secretary, determines that 
                such procedures are met, the Attorney General shall 
                issue to the applicant a certificate of review. The 
                certificate of review shall specify--
                            (i) the health care market activities to 
                        which the certificate applies;
                            (ii) the person to whom the certificate of 
                        review is issued; and
                            (iii) any terms and conditions the Attorney 
                        General or the Secretary deems necessary to 
                        assure compliance with the applicable 
                        procedures described in paragraph (3).
                    (B) Applications deemed approved.--If the Attorney 
                General does not reject an application before the 
                expiration of the 90-day period beginning on the date 
                the Attorney General receives the application, the 
                Attorney General shall be deemed to have approved the 
                application and to have issued a certificate of review 
                relating to the applicant's health care market 
                activities covered under the application.
            (5) Expedited action.--If the applicant indicates a special 
        need for prompt disposition, the Attorney General and the 
        Secretary may expedite action on the application, except that 
        no certificate of review may be issued within 30 days of 
        publication of notice in the Federal Register under subsection 
        (b)(2).
            (6) Actions upon denial.--
                    (A) Notification.--If the Attorney General denies 
                in whole or in part an application for a certificate, 
                the Attorney General shall notify the applicant of the 
                Attorney General's determination and the reasons for 
                it.
                    (B) Request for reconsideration.--An applicant may, 
                within 30 days of receipt of notification that the 
                application has been denied in whole or in part, 
                request the Attorney General to reconsider the 
                determination. The Attorney General, with the 
                concurrence of the Secretary, shall notify the 
                applicant of the determination upon reconsideration 
                within 30 days of receipt of the request.
                    (C) Return of documents.--If the Attorney General 
                denies an application for the issuance of a certificate 
                of review and thereafter receives from the applicant a 
                request for the return of documents submitted by the 
                applicant in connection with the application for the 
                certificate, the Attorney General and the Secretary 
                shall return to the applicant, not later than 30 days 
                after receipt of the request, the documents and all 
                copies of the documents available to the Attorney 
                General and the Secretary, except to the extent that 
                the information has been made public under an exception 
                to the rule against public disclosure described in 
                subsection (g)(2)(B).
            (7) Fraudulent procurement.--A certificate of review shall 
        be void ab initio with respect to any health care market 
        activities for which the certificate was procured by fraud.
    (c) Amendment and Revocation of Certificates.--
            (1) Notification of changes.--Any applicant who receives a 
        certificate of review--
                    (A) shall promptly report to the Attorney General 
                any change relevant to the matters specified in the 
                certificate; and
                    (B) may submit to the Attorney General an 
                application to amend the certificate to reflect the 
                effect of the change on the conduct specified in the 
                certificate.
            (2) Amendment to certificate.--An application for an 
        amendment to a certificate of review shall be treated as an 
        application for the issuance of a certificate. The effective 
        date of an amendment shall be the date on which the application 
        for the amendment is submitted to the Attorney General.
            (3) Revocation.--
                    (A) Grounds for revocation.--In accordance with 
                this paragraph, the Attorney General may revoke in 
                whole or in part a certificate of review issued under 
                this section. The following shall be considered grounds 
                for the revocation of a certificate:
                            (i) After the expiration of the 2-year 
                        period beginning on the date a person's 
                        certificate is issued, the activities of the 
                        person have not substantially accomplished the 
                        purposes for the issuance of the certificate.
                            (ii) The person has failed to comply with 
                        any of the terms or conditions imposed under 
                        the certificate by the Attorney General or the 
                        Secretary under subsection (b)(4).
                            (iii) The activities covered under the 
                        certificate no longer satisfy the criteria set 
                        forth in section 403(b).
                    (B) Request for compliance information.--If the 
                Attorney General or Secretary has reason to believe 
                that any of the grounds for revocation of a certificate 
                of review described in subparagraph (A) may apply to a 
                person holding the certificate, the Attorney General 
                shall request such information from such person as the 
                Attorney General or the Secretary deems necessary to 
                resolve the matter of compliance. Failure to comply 
                with such request shall be grounds for revocation of 
                the certificate under this paragraph.
                    (C) Procedures for revocation.--If the Attorney 
                General or the Secretary determines that any of the 
                grounds for revocation of a certificate of review 
                described in subparagraph (A) apply to a person holding 
                the certificate, or that such person has failed to 
                comply with a request made under subparagraph (B), the 
                Attorney General shall give written notice of the 
                determination to such person. The notice shall include 
                a statement of the circumstances underlying, and the 
                reasons in support of, the determination. In the 60-day 
                period beginning 30 days after the notice is given, the 
                Attorney General shall revoke the certificate or modify 
                it as the Attorney General or the Secretary deems 
                necessary to cause the certificate to apply only to 
                activities that meet the procedures for the issuance of 
                certificates described in subsection (b)(2).
                    (D) Investigation authority.--For purposes of 
                carrying out this paragraph, the Attorney General may 
                conduct investigations in the same manner as the 
                Attorney General conducts investigations under section 
                3 of the Antitrust Civil Process Act, except that no 
                civil investigative demand may be issued to a person to 
                whom a certificate of review is issued if such person 
                is the target of such investigation.
    (d) Review of Determinations.--
            (1) Availability of review for certain actions.--If the 
        Attorney General denies, in whole or in part, an application 
        for a certificate of review or for an amendment to a 
        certificate, or revokes or modifies a certificate pursuant to 
        paragraph (3), the applicant or certificate holder (as the case 
        may be) may, within 30 days of the denial or revocation, bring 
        an action in any appropriate district court of the United 
        States to set aside the determination on the ground that such 
        determination is erroneous based on the preponderance of the 
        evidence.
            (2) No other review permitted.--Except as provided in 
        paragraph (1), no action by the Attorney General or the 
        Secretary pursuant to this title shall be subject to judicial 
        review.
            (3) Effect of rejected application.--If the Attorney 
        General denies, in whole or in part, an application for a 
        certificate of review or for an amendment to a certificate, or 
        revokes or amends a certificate, neither the negative 
        determination nor the statement of reasons therefore shall be 
        admissible in evidence, in any administrative or judicial 
        proceeding, concerning any claim under the antitrust laws.
    (e) Publication of Decisions.--The Attorney General shall publish a 
notice in the Federal Register on a timely basis of each decision made 
with respect to an application for a certificate of review under this 
section or the amendment or revocation of such a certificate, in a 
manner that protects the confidentiality of any proprietary information 
relating to the application.
    (f) Annual Reports.--Every person to whom a certificate of review 
is issued shall submit to the Attorney General an annual report, in 
such form and at such time as the Attorney General may require, that 
contains any necessary updates to the information required under 
subsection (b) and a description of the activities of the holder under 
the certificate during the preceding year.
    (g) Restrictions on Disclosure of Information.--
            (1) Waiver of disclosure requirements under administrative 
        procedure act.--Information submitted by any person in 
        connection with the issuance, amendment, or revocation of a 
        certificate of review shall be exempt from disclosure under 
        section 552 of title 5, United States Code.
            (2) Restrictions on disclosure of commercial or financial 
        information.--
                    (A) In general.--Except as provided in subparagraph 
                (B), no officer or employee of the United States shall 
                disclose commercial or financial information submitted 
                in connection with the issuance, amendment, or 
                revocation of a certificate of review if the 
                information is privileged or confidential and if 
                disclosure of the information would cause harm to the 
                person who submitted the information.
                    (B) Exceptions.--Subparagraph (A) shall not apply 
                with respect to information disclosed--
                            (i) upon a request made by the Congress or 
                        any committee of the Congress;
                            (ii) in a judicial or administrative 
                        proceeding, subject to appropriate protective 
                        orders;
                            (iii) with the consent of the person who 
                        submitted the information;
                            (iv) in the course of making a 
                        determination with respect to the issuance, 
                        amendment, or revocation of a certificate of 
                        review, if the Attorney General deems 
                        disclosure of the information to be necessary 
                        in connection with making the determination;
                            (v) in accordance with any requirement 
                        imposed by a statute of the United States; or
                            (vi) in accordance with any rule or 
                        regulation promulgated to permit the disclosure 
                        of the information to an agency of the United 
                        States or of a State on the condition that the 
                        agency will disclose the information only under 
                        the circumstances specified in clauses (i) 
                        through (v).
            (3) Prohibition against use of information to support or 
        answer claims under antitrust laws.--Any information disclosed 
        in an application for a certificate of review under this 
        section shall only be admissible into evidence in a judicial or 
        administrative proceeding for the sole purpose of establishing 
        that a person is entitled to the protections provided by such a 
        certificate.

SEC. 405. NOTIFICATIONS PROVIDING REDUCTION IN CERTAIN PENALTIES UNDER 
              ANTITRUST LAW FOR HEALTH CARE COOPERATIVE VENTURES.

    (a) Notifications Described.--
            (1) Submission of notification by venture.--Any party to a 
        health care cooperative venture, acting on such venture's 
        behalf, may, not later than 90 days after entering into a 
        written agreement to form such venture or not later than 90 
        days after the date of the enactment of this Act, whichever is 
        later, file with the Attorney General a written notification 
        disclosing--
                    (A) the identities of the parties to such venture;
                    (B) the nature and objectives of such venture; and
                    (C) such additional information as the Attorney 
                General may require by regulation.
            (2) Activities deemed submission of notification.--The 
        following health care cooperative ventures shall be deemed to 
        have filed a written notification with respect to the venture 
        under paragraph (1):
                    (A) Submission of application for certificate of 
                review.--Any health care cooperative venture for which 
                an application for a certificate of review is filed 
                with the Attorney General under section 403.
                    (B) Certain ventures.--Any health care cooperative 
                venture meeting the following requirements:
                            (i) The venture consists of a network of 
                        noninstitutional providers not greater than--
                                    (I) in the case of a nonexclusive 
                                network in which the participating 
                                members are permitted to create or join 
                                other competing networks, 50 percent of 
                                the providers of health care services 
                                in the relevant geographic area and 50 
                                percent of the members of the provider 
                                specialty group in the relevant market; 
                                or
                                    (II) in the case of an exclusive 
                                network in which the participating 
                                members are not permitted to create or 
                                join other competing networks, 35 
                                percent of the providers of health care 
                                services in the relevant geographic 
                                area and 35 percent of the members of 
                                the provider specialty group in the 
                                relevant market.
                            (ii) Each member of the venture assumes 
                        substantial financial risk for the operation of 
                        the venture through risk-sharing arrangements, 
                        including (but not limited to)--
                                    (I) the acceptance of capitation 
                                contracts;
                                    (II) the acceptance of contracts 
                                with fee withholding mechanisms 
                                relating to the ability to meet 
                                established goals for utilization 
                                review and management; and
                                    (III) the holding by members of 
                                significant ownership or equity 
                                interests in the venture, where the 
                                capital contributed by the members is 
                                used to fund the operational costs of 
                                the venture such as administration, 
                                marketing, and computer-operated 
                                medical information, if the venture 
                                develops and operates comprehensive 
                                programs for utilization management and 
                                quality assurance that include controls 
                                over the use of institutional, 
                                specialized, and ancillary medical 
                                services.
            (3) Submission of additional information.--
                    (A) Request of attorney general.--At any time after 
                receiving a notification filed under paragraph (1), the 
                Attorney General may require the submission of 
                additional information or documentary material relevant 
                to the proposed health care cooperative venture.
                    (B) Parties to venture.--Any party to a health care 
                cooperative venture may submit such additional 
                information on the venture's behalf as may be 
                appropriate to ensure that the venture will receive the 
                protections provided under subsection (b).
                    (C) Required submission of information on changes 
                to venture.--A health care cooperative venture for 
                which a notification is in effect under this section 
                shall submit information on any change in the 
                membership of the venture not later than 90 days after 
                such change occurs.
            (4) Publication of notification.--
                    (A) Information made publicly available.--Not later 
                than 30 days after receiving a notification with 
                respect to a venture under paragraph (1), the Attorney 
                General shall publish in the Federal Register a notice 
                with respect to the venture that identifies the parties 
                to the venture and generally describes the purpose and 
                planned activity of the venture. Prior to its 
                publication, the contents of the notice shall be made 
                available to the parties to the venture.
                    (B) Restriction on disclosure of other 
                information.--All information and documentary material 
                submitted pursuant to this section and all information 
                obtained by the Attorney General in the course of any 
                investigation or case with respect to a potential 
                violation of the antitrust laws by the health care 
                cooperative venture (other than information and 
                material described in subparagraph (A)) shall be exempt 
                from disclosure under section 552 of title 5, United 
                States Code, and shall not be made publicly available 
                by any agency of the United States to which such 
                section applies except in a judicial proceeding in 
                which such information and material is subject to any 
                protective order.
            (5) Withdrawal of notification.--Any person who files a 
        notification pursuant to this section may withdraw such 
        notification before a publication by the Attorney General 
        pursuant to paragraph (4). Any person who is deemed to have 
        filed a notification under paragraph (2)(A) shall be deemed to 
        have withdrawn the notification if the certificate of review in 
        question is revoked or withdrawn under section 404.
            (6) No judicial review permitted.--Any action taken or not 
        taken by the Attorney General with respect to notifications 
        filed pursuant to this subsection shall not be subject to 
        judicial review.
    (b) Protections for Ventures Subject to Notification.--
            (1) In general.--
                    (A) Protections described.--The provisions of 
                paragraphs (2), (3), (4), and (5) shall apply with 
                respect to any action under the antitrust laws 
                challenging conduct within the scope of a notification 
                which is in effect pursuant to subsection (a)(1).
                    (B) Timing of protections.--The protections 
                described in this subsection shall apply to the venture 
                that is the subject of a notification under subsection 
                (a)(1) as of the earlier of--
                            (i) the date of the publication in the 
                        Federal Register of the notice published with 
                        respect to the notification; or
                            (ii) if such notice is not published during 
                        the period required under subsection (a)(4), 
                        the expiration of the 30-day period that begins 
                        on the date the Attorney General receives any 
                        necessary information required to be submitted 
                        under subsection (a)(1) or any additional 
                        information required by the Attorney General 
                        under subsection (a)(3)(A).
            (2) Applicability of rule of reason standard.--In any 
        action under the antitrust laws, the conduct of any person 
        which is within the scope of a notification filed under 
        subsection (a) shall not be deemed illegal per se, but shall be 
        judged on the basis of its reasonableness, taking into account 
        all relevant factors affecting competition, including, but not 
        limited to, effects on competition in relevant markets.
            (3) Limitation on recovery to actual damages and 
        interest.--Notwithstanding section 4 of the Clayton Act, any 
        person who is entitled to recovery under the antitrust laws for 
        conduct that is within the scope of a notification filed under 
        subsection (a) shall recover the actual damages sustained by 
        such person and interest calculated at the rate specified in 
        section 1961 of title 28, United States Code, for the period 
        beginning on the earliest date for which injury can be 
        established and ending on the date of judgment, unless the 
        court finds that the award of all or part of such interest is 
        unjust under the circumstances.
            (4) Award of attorney's fees and costs of suit.--
                    (A) In general.--In any action under the antitrust 
                laws brought against a health care cooperative venture 
                for conduct that is within the scope of a notification 
                filed under subsection (a), the court shall, at the 
                conclusion of the action--
                            (i) award to a substantially prevailing 
                        claimant the cost of suit attributable to such 
                        claim, including a reasonable attorney's fee, 
                        or
                            (ii) award to a substantially prevailing 
                        party defending against such claim the cost of 
                        such suit attributable to such claim, including 
                        reasonable attorney's fee, if the claim, or the 
                        claimant's conduct during litigation of the 
                        claim, was frivolous, unreasonable, without 
                        foundation, or in bad faith.
                    (B) Offset in cases of bad faith.--The court may 
                reduce an award made pursuant to subparagraph (A) in 
                whole or in part by an award in favor of another party 
                for any part of the cost of suit (including a 
                reasonable attorney's fee) attributable to conduct 
                during the litigation by any prevailing party that the 
                court finds to be frivolous, unreasonable, without 
                foundation, or in bad faith.
            (5) Restrictions on admissibility of information.--
                    (A) In general.--Any information disclosed in a 
                notification submitted under subsection (a)(1) and the 
                fact of the publication of a notification by the 
                Attorney General under subsection (a)(4) shall only be 
                admissible into evidence in a judicial or 
                administrative proceeding for the sole purpose of 
                establishing that a party to a health care cooperative 
                venture is entitled to the protections described in 
                this subsection.
                    (B) Actions of attorney general.--No action taken 
                by the Attorney General pursuant to this section shall 
                be admissible into evidence in any judicial or 
                administrative proceeding for the purpose of supporting 
                or answering any claim under the antitrust laws.

SEC. 406. REVIEW AND REPORTS ON SAFE HARBORS AND CERTIFICATES OF 
              REVIEW.

    (a) In General.--The Attorney General (in consultation with the 
Secretary and the Chair) shall periodically review the safe harbors 
described in section 402, the additional safe harbors designated under 
section 403, and the certificates of review issued under section 404, 
and--
            (1) with respect to the safe harbors described in section 
        402, submit such recommendations to Congress as the Attorney 
        General considers appropriate for modifications of such safe 
        harbors;
            (2) with respect to the additional safe harbors designated 
        under section 403, issue proposed revisions to such activities 
        and publish the revisions in the Federal Register; and
            (3) with respect to the certificates of review, submit a 
        report to Congress on the issuance of such certificates, and 
        shall include in the report a description of the effect of such 
        certificates on increasing access to high quality health care 
        services at reduced costs.
    (b) Recommendations for Legislation.--The Attorney General shall 
include in the reports submitted under subsection (a)(3) any 
recommendations of the Attorney General for legislation to improve the 
program for the issuance of certificates of review established under 
this title.

SEC. 407. RULES, REGULATIONS, AND GUIDELINES.

    (a) Safe Harbors, Certificates, and Notifications.--The Attorney 
General, with the concurrence of the Secretary, shall promulgate such 
rules, regulations, and guidelines as are necessary to carry out 
sections 402, 403, 404, and 405, including guidelines defining or 
relating to relevant geographic and product markets for health care 
services and providers of health care services.
    (b) Guidance for Providers.--
            (1) In general.--To promote greater certainty regarding the 
        application of the antitrust laws to activities in the health 
        care market, the Attorney General, in consultation with the 
        Secretary and the Chair, shall (not later than 1 year after the 
        date of the enactment of this Act), taking into account the 
        criteria used to designate additional safe harbors under 
        section 403 and grant certificates of review under section 404, 
        publish guidelines--
                    (A) to assist providers of health care services in 
                analyzing whether the activities of such providers may 
                be subject to a safe harbor under section 402 or 403; 
                and
                    (B) describing specific types of activities which 
                would meet the requirements for a certificate of review 
                under section 404, and summarizing the factual and 
                legal bases on which the activities would meet the 
                requirements.
            (2) Periodic update.--The Attorney General shall 
        periodically update the guidelines published under paragraph 
        (1) as the Attorney General considers appropriate.
            (3) Waiver of administrative procedure act.--Section 553 of 
        title 5, United States Code, shall not apply to the issuance of 
        guidelines under paragraph (1).

SEC. 408. ESTABLISHMENT OF HHS OFFICE OF HEALTH CARE COMPETITION 
              POLICY.

    (a) In General.--There is established within the Department of 
Health and Human Services an Office to be known as the Office of Health 
Care Competition Policy (hereafter in this section referred to as the 
``Office''). The Office shall be headed by a director, who shall be 
appointed by the Secretary.
    (b) Duties.--The Office shall coordinate the responsibilities of 
the Secretary under this Act and otherwise assist the Secretary in 
developing policies relating to the competitive and collaborative 
activities of providers of health care services.

SEC. 409. DEFINITIONS.

    As used in this Act:
            (1) Antitrust laws.--The term ``antitrust laws''--
                    (A) has the meaning given such term in subsection 
                (a) of the first section of the Clayton Act (15 U.S.C. 
                12(a)), except that such term includes section 5 of the 
                Federal Trade Commission Act (15 U.S.C. 45) to the 
                extent such section applies to unfair methods of 
                competition; and
                    (B) includes any State law similar to the laws 
                referred to in subparagraph (A).
            (2) Chair.--The term ``Chair'' means the Chair of the 
        Federal Trade Commission.
            (3) Health benefit plan.--The term ``health benefit plan'' 
        means any hospital or medical expense incurred policy or 
        certificate, hospital or medical service plan contract, or 
        health maintenance subscriber contract, or a multiple employer 
        welfare arrangement or employee benefit plan (as defined under 
        the Employee Retirement Income Security Act of 1974) which 
        provides benefits with respect to health care services.
            (4) Health care cooperative venture.--The term ``health 
        care cooperative venture'' means any activities, including 
        attempts to enter into or perform a contract or agreement, 
        carried out by 2 or more persons for the purpose of providing 
        health care services.
            (5) Health care services.--The term ``health care 
        services'' means any services for which payment may be made 
        under a health benefit plan, including services related to the 
        delivery or administration of such services.
            (6) Medical self-regulatory entity.--The term ``medical 
        self-regulatory entity'' means a medical society or 
        association, a specialty board, a recognized accrediting 
        agency, or a hospital medical staff, and includes the members, 
        officers, employees, consultants, and volunteers or committees 
        of such an entity.
            (7) Person.--The term ``person'' includes a State or unit 
        of local government.
            (8) Provider of health care services.--The term ``provider 
        of health care services'' means any individual or entity that 
        is engaged in the delivery of health care services in a State 
        and that is required by State law or regulation to be licensed 
        or certified by the State to engage in the delivery of such 
        services in the State.
            (9) Specialty group.--The term ``specialty group'' means a 
        medical specialty or subspecialty in which a provider of health 
        care services may be licensed to practice by a State (as 
        determined by the Secretary in consultation with the 
        certification boards for such specialties and subspecialties).
            (10) The term ``standard setting and enforcement 
        activities'' means--
                    (A) accreditation of health care practitioners, 
                health care providers, medical education institutions, 
                or medical education programs,
                    (B) technology assessment and risk management 
                activities,
                    (C) the development and implementation of practice 
                guidelines or practice parameters, or
                    (D) official peer review proceedings undertaken by 
                a hospital medical staff (or committee thereof) or a 
                medical society or association for purposes of 
                evaluating the professional conduct or quality of 
                health care provided by a medical professional.

             TITLE V--ANTI-FRAUD AND ABUSE CONTROL PROGRAM

         Subtitle A--All-Payer Fraud and Abuse Control Program

SEC. 501. ALL-PAYER FRAUD AND ABUSE CONTROL PROGRAM.

    (a) Establishment of Program.--
            (1) In general.--Not later than January 1, 1995, the 
        Secretary shall establish in the Office of the Inspector 
        General of the Department of Health and Human Services a 
        program (hereafter referred to in this section as the 
        ``program'')--
                    (A) to coordinate Federal, State, and local law 
                enforcement programs to control fraud and abuse with 
                respect to the delivery of and payment for health care 
                in the United States,
                    (B) to conduct investigations, audits, evaluations, 
                and inspections relating to the delivery of and payment 
                for health care in the United States, and
                    (C) to facilitate the enforcement of the provisions 
                of sections 1128, 1128A, and 1128B of the Social 
                Security Act and other statutes applicable to health 
                care fraud and abuse.
            (2) Coordination with health care plans.--In carrying out 
        the program established under paragraph (1), the Secretary 
        shall consult with, and arrange for the sharing of data with, 
        representatives of health care plans.
            (3) Regulations.--
                    (A) In general.--The Secretary shall by regulation 
                establish standards to carry out the program under 
                paragraph (1).
                    (B) Information standards.--
                            (i) In general.--Standards under 
                        subparagraph (A) shall include standards 
                        relating to the furnishing of information by 
                        health care plans, providers, and others to 
                        enable the Secretary to carry out the program 
                        (including coordination with health care plans 
                        under paragraph (2)).
                            (ii) Confidentiality.--Standards under 
                        subparagraph (A) shall include procedures to 
                        assure that such information is provided and 
                        utilized in a manner that appropriately 
                        protects the confidentiality of the information 
                        and the privacy of individuals receiving health 
                        care services and items.
                            (iii) Qualified immunity for providing 
                        information.--The provisions of section 1157(a) 
                        of the Social Security Act (relating to 
                        limitation on liability) shall apply to a 
                        person providing information to the Secretary 
                        under the program under this section, with 
                        respect to the Secretary's performance of 
                        duties under the program, in the same manner as 
                        such section applies to information provided to 
                        organizations with a contract under part B of 
                        title XI of such Act, with respect to the 
                        performance of such a contract.
                    (C) Disclosure of ownership information.--
                            (i) In general.--Standards under 
                        subparagraph (A) shall include standards 
                        relating to the disclosure of ownership 
                        information described in clause (ii) by any 
                        entity providing health care services and 
                        items.
                            (ii) Ownership information described.--The 
                        ownership information described in this clause 
                        includes--
                                    (I) a description of such items and 
                                services provided by such entity;
                                    (II) the names and unique physician 
                                identification numbers of all 
                                physicians with a financial 
                                relationship (as defined in section 
                                1877(a)(2) of the Social Security Act) 
                                with such entity;
                                    (III) the names of all other 
                                individuals with such an ownership or 
                                investment interest in such entity; and
                                    (IV) any other ownership and 
                                related information required to be 
                                disclosed by such entity under section 
                                1124 or section 1124A of the Social 
                                Security Act.
            (4) Authorization of appropriations for investigations and 
        other personnel.--In addition to any other amounts authorized 
        to be appropriated to the Secretary for health care anti-fraud 
        and abuse activities for a fiscal year, there are authorized to 
        be appropriated additional amounts as may be necessary to 
        enable the Secretary to conduct investigations and audits of 
        allegations of health care fraud and abuse and otherwise carry 
        out the program established under paragraph (1) in a fiscal 
        year.
            (5) Ensuring access to documentation.--
                    (A) In general.--The Inspector General of the 
                Department of Health and Human Services is authorized 
                to exercise the authority described in paragraphs (4) 
                and (5) of section 6 of the Inspector General Act of 
                1978 (relating to subpoenas and administration of 
                oaths) with respect to the activities under the program 
                established under this subsection to the same extent as 
                such Inspector General may exercise such authorities to 
                perform the functions assigned by such Act.
                    (B) Permissive exclusion.--Section 1128(b) of the 
                Social Security Act (42 U.(b)) is amended by adding at 
                the end the following new paragraph:
            ``(15) Failure to supply requested information to the 
        inspector general.--Any individual or entity that fails fully 
        and accurately to provide, upon request of the Inspector 
        General of the Department of Health and Human Services, 
        records, documents, and other information necessary for the 
        purposes of carrying out activities under the all-payer fraud 
        and abuse control program established under section 501 of the 
        Advancement of Health Care Reform Act of 1994.''.
            (6) Health care plan defined.--For the purposes of this 
        subsection, the term ``health care plan'' shall have the 
        meaning given such term in section 1128(i) of the Social 
        Security Act.
    (b) Establishment of Anti-Fraud and Abuse Trust Fund.--
            (1) Establishment.--
                    (A) In general.--There is hereby created on the 
                books of the Treasury of the United States a trust fund 
                to be known as the ``Anti-Fraud and Abuse Trust Fund'' 
                (hereafter referred to as the ``Trust Fund''). The 
                Trust Fund shall consist of such gifts and bequests as 
                may be made as provided in subparagraph (B) and such 
                amounts as may be deposited in, or appropriated to, 
                such Trust Fund as provided in subsection (a)(5), and 
                title XI of the Social Security Act.
                    (B) Authorization to accept gifts.--The Managing 
                Trustee of the Trust Fund is authorized to accept on 
                behalf of the United States money gifts and bequests 
                made unconditionally to the Trust Fund, for the benefit 
                of the Trust Fund, or any activity financed through the 
                Trust Fund.
            (2) Management.--
                    (A) In general.--The Trust Fund shall be managed by 
                the Secretary through a Managing Trustee designated by 
                the Secretary.
                    (B) Investment of funds.--
                            (i) In general.--It shall be the duty of 
                        the Managing Trustee to invest such portion of 
                        the Trust Fund as is not, in the Managing 
                        Trustee's judgment, required to meet current 
                        withdrawals.
                            (ii) General form of investment.--
                        Investments described in clause (i) may be made 
                        only in interest-bearing obligations of the 
                        United States or in obligations guaranteed as 
                        to both principal and interest by the United 
                        States. For such purpose such obligations may 
                        be acquired--
                                    (I) on original issue at the issue 
                                price, or
                                    (II) by purchase of outstanding 
                                obligations at market price.
                            (iii) Issuance of public-debt 
                        obligations.--The purposes for which 
                        obligations of the United States may be issued 
                        under chapter 31 of title 31, United States 
                        Code, are hereby extended to authorize the 
                        issuance at par of public-debt obligations for 
                        purchase by the Trust Fund. Such obligations 
                        issued for purchase by the Trust Fund shall 
                        have maturities fixed with due regard for the 
                        needs of the Trust Fund and shall bear interest 
                        at a rate equal to the average market yield 
                        (computed by the Managing Trustee on the basis 
                        of market quotations as of the end of the 
                        calendar month next preceding the date of such 
                        issue) on all marketable interest-bearing 
                        obligations of the United States then forming a 
                        part of the public debt which are not due or 
                        callable until after the expiration of 4 years 
                        from the end of such calendar month, except 
                        that where such average is not a multiple of 
                        \1/8\ of 1 percent, the rate of interest on 
                        such obligations shall be the multiple of \1/8\ 
                        of 1 percent nearest such market yield.
                            (iv) Purchases of other obligations.--The 
                        Managing Trustee may purchase other interest-
                        bearing obligations of the United States or 
                        obligations guaranteed as to both principal and 
                        interest by the United States, on original 
                        issue or at the market price, only where the 
                        Managing Trustee determines that the purchase 
                        of such other obligations is in the public 
                        interest.
                    (C) Sale of obligations.--Any obligations acquired 
                by the Trust Fund (except public-debt obligations 
                issued exclusively to the Trust Fund) may be sold by 
                the Managing Trustee at the market price, and such 
                public-debt obligations may be redeemed at par plus 
                accrued interest.
                    (D) Interest on obligations and proceeds from sale 
                or redemption of obligations.--The interest on, and the 
                proceeds from the sale or redemption of, any 
                obligations held in the Trust Fund shall be credited to 
                and form a part of the Trust Fund.
                    (E) Receipts and disbursements not included in 
                united states government budget totals.--The receipts 
                and disbursements of the Secretary in the discharge of 
                the functions of the Secretary under the all-payer 
                fraud and abuse control program established under 
                subsection (a) shall not be included in the totals of 
                the budget of the United States Government. For 
                purposes of part C of the Balanced Budget and Emergency 
                Deficit Control Act of 1985, the Secretary and the 
                Trust Fund shall be treated in the same manner as the 
                Federal Retirement Thrift Investment Board and the 
                Thrift Savings Fund, respectively. The United States is 
                not liable for any obligation or liability incurred by 
                the Trust Fund.
            (3) Use of funds.--
                    (A) In general.--Amounts in the Trust Fund shall be 
                used without regard to fiscal year limitation to assist 
                the Inspector General of the Department of Health and 
                Human Services in carrying out the all-payer fraud and 
                abuse control program established under subsection (a).
                    (B) Overall administration.--The Managing Trustee 
                shall also pay from time to time from the Trust Fund 
                such amounts as the Secretary certifies are necessary 
                to carry out the all-payer fraud and abuse control 
                program established under subsection (a).
            (4) Annual report.--The Managing Trustee shall be required 
        to submit an annual report to Congress on the amount of revenue 
        which is generated and disbursed by the Trust Fund in each 
        fiscal year. Such report shall include an estimate of the 
        amount of additional appropriations authorized under subsection 
        (a)(5) necessary for the Secretary to conduct the all-payer 
        fraud and abuse program established under subsection (a) in the 
        next fiscal year.

SEC. 502. APPLICATION OF FEDERAL HEALTH ANTI-FRAUD AND ABUSE SANCTIONS 
              TO ALL FRAUD AND ABUSE AGAINST ANY HEALTH CARE 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), by inserting ``or of any health 
        care plan (as defined in section 1128(i)),'' after ``subsection 
        (i)(1)),''.
            (2) In subsection (b)(1)(A), by inserting ``or under a 
        health care 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 care plan, the portion of such amounts as 
        is determined to have been paid by the plan shall be repaid to 
        the plan, and the portion of such amounts attributable to the 
        amounts recovered under this section by reason of the 
        amendments made by title V of the Advancement of Health Care 
        Reform Act of 1994 (as estimated by the Secretary) shall be 
        deposited into the Anti-Fraud and Abuse Trust Fund established 
        under section 501(b) of such Act.''.
            (4) In subsection (i)--
                    (A) in paragraph (2), by inserting ``or under a 
                health care plan'' before the period at the end, and
                    (B) in paragraph (5), by inserting ``or under a 
                health care plan'' after ``or XX''.
    (b) Crimes.--
            (1) Social security act.--Section 1128B of such Act (42 
        U.S.C. 1320-7b) is amended as follows:
                    (A) In the heading, by adding at the end the 
                following: ``OR HEALTH CARE PLANS''.
                    (B) In subsection (a)(1)--
                            (i) by striking ``title XVIII or'' and 
                        inserting ``title XVIII,'', and
                            (ii) by adding at the end the following: 
                        ``or a health care plan (as defined in section 
                        1128(i)),''.
                    (C) 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 care 
                plan''.
                    (D) In the second sentence of subsection (a)--
                            (i) by inserting after ``title XIX'' the 
                        following: ``or a health care plan'', and
                            (ii) by inserting after ``the State'' the 
                        following: ``or the plan''.
                    (E) 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 care plan''.
                    (F) 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 care plan''.
                    (G) 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 care 
                plan''.
            (2) Identification of community service opportunities.--
        Section 1128B of such Act (42 U.S.C. 1320a-7b) is further 
        amended by adding at the end the following new subsection:
    ``(f) The Secretary may--
            ``(1) in consultation with State and local health care 
        officials, identify opportunities for the satisfaction of 
        community service obligations that a court may impose upon the 
        conviction of an offense under this section, and
            ``(2) make information concerning such opportunities 
        available to Federal and State law enforcement officers and 
        State and local health care officials.''.
    (c) Health Care Plan Defined.--Section 1128 of such 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 Care Plan Defined.--For purposes of sections 1128A and 
1128B, the term `health care plan' means a public or private program 
for the delivery of or payment for health care items or services other 
than the medicare program, the medicaid program, or a State health care 
program.''.
    (d) Effective Date.--The amendments made by this section shall take 
effect on January 1, 1995.

SEC. 503. REPORTING OF FRAUDULENT ACTIONS UNDER MEDICARE.

    Not later than 1 year after the date of the enactment of this Act, 
the Secretary shall establish a program through which individuals 
entitled to benefits under the medicare program may report to the 
Secretary on a confidential basis (at the individual's request) 
instances of suspected fraudulent actions arising under the program by 
providers of items and services under the program.

     Subtitle B--Revisions to Current Sanctions for Fraud and Abuse

SEC. 511. MANDATORY EXCLUSION FROM PARTICIPATION IN MEDICARE AND STATE 
              HEALTH CARE PROGRAMS.

    (a) Individual Convicted of Felony Related To Fraud.--
            (1) In general.--Section 1128(a) of the Social Security Act 
        (42 U.S.C. 1320a-7(a)) is amended by adding at the end the 
        following new paragraph:
            ``(3) Felony conviction relating to fraud.--Any individual 
        or entity that has been convicted, under Federal or State law, 
        in connection with the delivery of a health care item or 
        service or with respect to any act or omission in a program 
        (other than those specifically described in paragraph (1)) 
        operated by or financed in whole or in part by any Federal, 
        State, or local government agency, of a criminal offense 
        consisting of a felony relating to fraud, theft, embezzlement, 
        breach of fiduciary responsibility, or other financial 
        misconduct.''.
            (2) Conforming amendment.--Section 1128(b)(1) of such Act 
        (42 U.S.C. 1320a-7(b)(1)) is amended--
                    (A) in the heading, by striking ``Conviction'' and 
                inserting ``Misdemeanor conviction''; and
                    (B) by striking ``criminal offense'' and inserting 
                ``criminal offense consisting of a misdemeanor''.
    (b) Individual Convicted of Felony Relating To Controlled 
Substance.--
            (1) In general.--Section 1128(a) of the Social Security Act 
        (42 U.S.C. 1320a-7(a)), as amended by subsection (a), is 
        amended by adding at the end the following new paragraph:
            ``(4) Felony conviction relating to controlled substance.--
        Any individual or entity that has been convicted, under Federal 
        or State law, of a criminal offense consisting of a felony 
        relating to the unlawful manufacture, distribution, 
        prescription, or dispensing of a controlled substance.''.
            (2) Conforming amendment.--Section 1128(b)(3) of such Act 
        (42 U.S.C. 1320a-7(b)(3)) is amended--
                    (A) in the heading, by striking ``Conviction'' and 
                inserting ``Misdemeanor conviction''; and
                    (B) by striking ``criminal offense'' and inserting 
                ``criminal offense consisting of a misdemeanor''.

SEC. 512. ESTABLISHMENT OF MINIMUM PERIOD OF EXCLUSION FOR CERTAIN 
              INDIVIDUALS AND ENTITIES SUBJECT TO PERMISSIVE EXCLUSION 
              FROM MEDICARE AND STATE HEALTH CARE PROGRAMS.

    Section 1128(c)(3) of the Social Security Act (42 U.S.C. 1320a-
7(c)(3)) is amended by adding at the end the following new 
subparagraphs:
    ``(D) In the case of an exclusion of an individual or entity under 
paragraph (1), (2), or (3) of subsection (b), the period of the 
exclusion shall be 3 years, unless the Secretary determines in 
accordance with published regulations that a shorter period is 
appropriate because of mitigating circumstances or that a longer period 
is appropriate because of aggravating circumstances.
    ``(E) In the case of an exclusion of an individual or entity under 
subsection (b)(4) or (b)(5), the period of the exclusion shall not be 
less than the period during which the individual's or entity's license 
to provide health care is revoked, suspended, or surrendered, or the 
individual or the entity is excluded or suspended from a Federal or 
State health care program.
    ``(F) In the case of an exclusion of an individual or entity under 
subsection (b)(6)(B), the period of the exclusion shall be not less 
than 1 year.''.

SEC. 513. PERMISSIVE EXCLUSION OF INDIVIDUALS WITH OWNERSHIP OR CONTROL 
              INTEREST IN SANCTIONED ENTITIES.

    Section 1128(b) of the Social Security Act (42 U.S.C. 1320a-7(b)), 
as amended by section 501(a)(5)(B), is further amended by adding at the 
end the following new paragraph:
            ``(16) Individuals controlling a sanctioned entity.--Any 
        individual who has a direct or indirect ownership or control 
        interest of 5 percent or more, or an ownership or control 
        interest (as defined in section 1124(a)(3)) in, or who is an 
        officer, director, agent, or managing employee (as defined in 
        section 1126(b)) of, an entity--
                    ``(A) that has been convicted of any offense 
                described in subsection (a) or in paragraph (1), (2), 
                or (3) of this subsection;
                    ``(B) against which a civil monetary penalty has 
                been assessed under section 1128A; or
                    ``(C) that has been excluded from participation 
                under a program under title XVIII or under a State 
                health care program.''.

SEC. 514. CIVIL MONETARY PENALTIES.

    (a) Prohibition Against Offering Inducements to Individuals 
Enrolled Under or Employed by Programs or Plans.--
            (1) Inducements to individuals enrolled under medicare.--
                    (A) Offer of remuneration.--Section 1128A(a) of the 
                Social Security Act (42 U.S.C. 1320a-7a(a)) is 
                amended--
                            (i) by striking ``, or'' at the end of 
                        paragraph (2) and inserting a semicolon;
                            (ii) by striking the semicolon at the end 
                        of paragraph (3) and inserting ``; or''; and
                            (iii) by inserting after paragraph (3) the 
                        following new paragraph:
            ``(4) offers to or transfers remuneration to any individual 
        eligible for benefits under title XVIII of this Act, or under a 
        State health care program (as defined in section 1128(h)) that 
        such person knows or should know is likely to influence such 
        individual to order or receive from a particular provider, 
        practitioner, or supplier any item or service for which payment 
        may be made, in whole or in part, under title XVIII, or a State 
        health care program;''.
                    (B) Remuneration defined.--Section 1128A(i) is 
                amended by adding the following new paragraph:
            ``(6) The term `remuneration' includes the waiver of 
        coinsurance and deductible amounts (or any part thereof), and 
        transfers of items or services for free or for other than fair 
        market value. The term `remuneration' does not include the 
        waiver of coinsurance and deductible amounts by a person, if--
                    ``(A) the waiver is not offered as part of any 
                advertisement or solicitation;
                    ``(B) the person does not routinely waive 
                coinsurance or deductible amounts; and
                    ``(C) the person--
                            ``(i) waives the coinsurance and deductible 
                        amounts after determining in good faith that 
                        the individual is in financial need;
                            ``(ii) fails to collect coinsurance or 
                        deductible amounts after making reasonable 
                        collection efforts; or
                            ``(iii) provides for any permissible waiver 
                        as specified in section 1128B(b)(3) or in 
                        regulations issued by the Secretary.''.
            (2) Inducements to employees.--Section 1128A(a) of such Act 
        (42 U.S.C. 1320a-7a(a)), as amended by paragraph (1), is 
        further amended--
                    (A) by striking ``or'' at the end of paragraph (3);
                    (B) by striking the semicolon at the end of 
                paragraph (4) and inserting ``; or''; and
                    (C) by inserting after paragraph (4) the following 
                new paragraph:
            ``(5) pays a bonus, reward, or any other remuneration, 
        directly or indirectly, to an employee to induce the employee 
        to encourage individuals to seek or obtain covered items or 
        services for which payment may be made under the medicare 
        program, or a State health care program where the amount of the 
        remuneration is determined in a manner that takes into account 
        (directly or indirectly) the value or volume of any referrals 
        by the employee to the employer for covered items or 
        services;''.
    (b) Excluded Individual Retaining Ownership or Control Interest in 
Participating Entity.--Section 1128A(a) of such Act, as amended by 
subsection (a), is further amended--
            (1) by striking ``or'' at the end of paragraph (4);
            (2) by striking the semicolon at the end of paragraph (5) 
        and inserting ``; or''; and
            (3) by inserting after paragraph (5) the following new 
        paragraph:
            ``(6) in the case of a person who is not an organization, 
        agency, or other entity, is excluded from participating in a 
        program under title XVIII or a State health care program in 
        accordance with this subsection or under section 1128 and who, 
        during the period of exclusion, retains a direct or indirect 
        ownership or control interest of 5 percent or more, or an 
        ownership or control interest (as defined in section 
        1124(a)(3)) in, or who is an officer, director, agent, or 
        managing employee (as defined in section 1126(b)) of, an entity 
        that is participating in a program under title XVIII or a State 
        health care program;''.
    (c) Modifications of Amounts of Penalties and Assessments.--Section 
1128A(a) of such Act (42 U.S.C. 1320a-7a(a)), as amended by subsections 
(a) and (b), is amended in the matter following paragraph (6)--
            (1) by striking ``$2,000'' and inserting ``$10,000'';
            (2) by inserting ``; in cases under paragraph (4), $10,000 
        for each such offer or transfer; in cases under paragraph (5), 
        $10,000 for each such payment; in cases under paragraph (6), 
        $10,000 for each day the prohibited relationship occurs; in 
        cases under paragraph (7), $10,000 per violation'' after 
        ``false or misleading information was given'';
            (3) by striking ``twice the amount'' and inserting ``3 
        times the amount''; and
            (4) by inserting ``(or, in cases under paragraphs (4), (5), 
        and (7), 3 times the amount of the illegal remuneration)'' 
        after ``for each such item or service''.
    (d) Claim for Item or Services Based on Incorrect Coding or 
Medically Unnecessary Services.--Section 1128A(a)(1) of such Act (42 
U.S.C. 1320a-7a(a)(1)) is amended--
            (1) in subparagraph (A) by striking ``claimed,'' and 
        inserting the following: ``claimed, including any person who 
        presents or causes to be presented a claim for an item or 
        service that is based on a code that the person knows or should 
        know will result in a greater payment to the person than the 
        code the person knows or should know is applicable to the item 
        or service actually provided,'';
            (2) in subparagraph (C), by striking ``or'' at the end; and
            (3) by inserting after subparagraph (D) the following new 
        subparagraph:
                    ``(E) is for a medical or other item or service 
                that a person knows or should know is not medically 
                necessary; or''.
    (e) Permitting Parties To Bring Actions on Own Behalf.--Section 
1128A of such Act (42 U.S.C. 1320a-7a) is amended by adding at the end 
the following new subsection:
    ``(m)(1) Subject to paragraphs (2) and (3), any person (including 
an organization, agency, or other entity, but excluding a beneficiary, 
as defined in subsection (i)(5)) that suffers harm or monetary loss as 
a result of any activity of an individual or entity which makes the 
individual or entity subject to a civil monetary penalty under this 
section may, in a civil action against the individual or entity in the 
United States District Court, obtain treble damages and costs including 
attorneys' fees against the individual or entity and such equitable 
relief as is appropriate.
    ``(2) A person may bring a civil action under this subsection only 
if--
            ``(A) the person provides the Secretary with written notice 
        of--
                    ``(i) the person's intent to bring an action under 
                this subsection,
                    ``(ii) the identities of the individuals or 
                entities the person intends to name as defendants to 
                the action, and
                    ``(iii) all information the person possesses 
                regarding the activity that is the subject of the 
                action that may materially affect the Secretary's 
                decision to initiate a proceeding to impose a civil 
                monetary penalty under this section against the 
                defendants, and
            ``(B) one of the following conditions is met:
                    ``(i) During the 60-day period that begins on the 
                date the Secretary receives the written notice 
                described in subparagraph (A), the Secretary does not 
                notify the person that the Secretary intends to 
                initiate an investigation to determine whether to 
                impose a civil monetary penalty under this section 
                against the defendants.
                    ``(ii) The Secretary notifies the person during the 
                60-day period described in clause (i) that the 
                Secretary intends to initiate an investigation to 
                determine whether to impose a civil monetary penalty 
                under this section against the defendants, and the 
                Secretary subsequently notifies the person that the 
                Secretary no longer intends to initiate an 
                investigation or proceeding to impose a civil monetary 
                penalty against the defendants.
                    ``(iii) After the expiration of the 2-year period 
                that begins on the date written notice is provided to 
                the Secretary, the Secretary has not initiated a 
                proceeding to impose a civil monetary penalty against 
                the defendants.
    ``(3) If a person is awarded any amounts in an action brought under 
this subsection that are in excess of the damages suffered by the 
person as a result of the defendant's activities, 20 percent of such 
amounts shall be withheld from the person for payment into the Anti-
Fraud and Abuse Trust Fund established under section 501(b) of the 
Advancement of Health Care Reform Act of 1994.
    ``(4) No action may be brought under this subsection more than 6 
years after the date of the activity with respect to which the action 
is brought.''.

SEC. 515. ACTIONS SUBJECT TO CRIMINAL PENALTIES.

    (a) Permitting Secretary To Impose Civil Monetary Penalty.--Section 
1128A(b) of the Social Security Act (42 U.S.C. 1320a-7a(a)) is amended 
by adding the following new paragraph:
    ``(3) Any person (including any organization, agency, or other 
entity, but excluding a beneficiary as defined in subsection (i)(5)) 
who the Secretary determines has violated section 1128(B)(b) shall be 
subject to a civil monetary penalty of not more than $10,000 for each 
such violation. In addition, such person shall be subject to an 
assessment of not more than twice the total amount of the remuneration 
offered, paid, solicited, or received in violation of section 1128B(b). 
The total amount of remuneration subject to an assessment shall be 
calculated without regard to whether some portion thereof also may have 
been intended to serve a purpose other than one proscribed by section 
1128B(b).''.
    (b) Restriction on Application of Exception for Amounts Paid to 
Employees.--Section 1128B(b)(3)(B) of such Act (42 U.S.C. 1320a-
7b(b)(3)(B)) is amended by striking ``services;'' and inserting the 
following: ``services, but only if the amount of remuneration under the 
arrangement is (i) consistent with fair market value; (ii) not 
determined in a manner that takes into account (directly or indirectly) 
the volume or value of any referrals by the employee to the employer 
for the furnishing (or arranging for the furnishing) of such items or 
services; and (iii) provided pursuant to an arrangement that would be 
commercially reasonable even if no referrals were made;''.

SEC. 516. SANCTIONS AGAINST PRACTITIONERS AND PERSONS FOR FAILURE TO 
              COMPLY WITH STATUTORY OBLIGATIONS.

    (a) Minimum Period of Exclusion for Practitioners and Persons 
Failing To Meet Statutory Obligations.--
            (1) In general.--The second sentence of section 1156(b)(1) 
        of the Social Security Act (42 U.S.C. 1320c-5(b)(1)) is amended 
        by striking ``may prescribe)'' and inserting ``may prescribe, 
        except that such period may not be less than 1 year)''.
            (2) Conforming amendment.--Section 1156(b)(2) of such Act 
        (42 U.S.C. 1320c-5(b)(2)) is amended by striking ``shall 
        remain'' and inserting ``shall (subject to the minimum period 
        specified in the second sentence of paragraph (1)) remain''.
    (b) Repeal of ``Unwilling or Unable'' Condition for Imposition of 
Sanction.--Section 1156(b)(1) of such Act (42 U.S.C. 1320c-5(b)(1)) is 
amended--
            (1) in the second sentence, by striking ``and determines'' 
        and all that follows through ``such obligations,''; and
            (2) by striking the third sentence.
    (c) Amount of Civil Money Penalty.--Section 1156(b)(3) of such Act 
(42 U.S.C. 1320c-5(b)(3)) is amended by striking ``the actual or 
estimated cost'' and inserting the following: ``up to $10,000 for each 
instance''.

SEC. 517. INTERMEDIATE SANCTIONS FOR MEDICARE HEALTH MAINTENANCE 
              ORGANIZATIONS.

    (a) Application of Intermediate Sanctions for any Program 
Violations.--
            (1) In general.--Section 1876(i)(1) of the Social Security 
        Act (42 U.S.C. 1395mm(i)(1)) is amended by striking ``the 
        Secretary may terminate'' and all that follows and inserting 
        the following: ``in accordance with procedures established 
        under paragraph (9), the Secretary may at any time terminate 
        any such contract or may impose the intermediate sanctions 
        described in paragraph (6)(B) or (6)(C) (whichever is 
        applicable) on the eligible organization if the Secretary 
        determines that the organization--
                    ``(A) has failed substantially to carry out the 
                contract;
                    ``(B) is carrying out the contract in a manner 
                inconsistent with the efficient and effective 
                administration of this section;
                    ``(C) is operating in a manner that is not in the 
                best interests of the individuals covered under the 
                contract; or
                    ``(D) no longer substantially meets the applicable 
                conditions of subsections (b), (c), (e), and (f).''.
            (2) Other intermediate sanctions for miscellaneous program 
        violations.--Section 1876(i)(6) of such Act (42 U.S.C. 
        1395mm(i)(6)) is amended by adding at the end the following new 
        subparagraph:
    ``(C) In the case of an eligible organization for which the 
Secretary makes a determination under paragraph (1) the basis of which 
is not described in subparagraph (A), the Secretary may apply the 
following intermediate sanctions:
            ``(i) Civil money penalties of not more than $25,000 for 
        each determination under paragraph (1) if the deficiency that 
        is the basis of the determination has directly adversely 
        affected (or has the substantial likelihood of adversely 
        affecting) an individual covered under the organization's 
        contract.
            ``(ii) Civil money penalties of not more than $10,000 for 
        each week beginning after the initiation of procedures by the 
        Secretary under paragraph (9) during which the deficiency that 
        is the basis of a determination under paragraph (1) exists.
            ``(iii) Suspension of enrollment of individuals under this 
        section after the date the Secretary notifies the organization 
        of a determination under paragraph (1) and until the Secretary 
        is satisfied that the deficiency that is the basis for the 
        determination has been corrected and is not likely to recur.''.
            (3) Procedures for imposing sanctions.--Section 1876(i) of 
        such Act (42 U.S.C. 1395mm(i)) is amended by adding at the end 
        the following new paragraph:
    ``(9) The Secretary may terminate a contract with an eligible 
organization under this section or may impose the intermediate 
sanctions described in paragraph (6) on the organization in accordance 
with formal investigation and compliance procedures established by the 
Secretary under which--
            ``(A) the Secretary provides the organization with the 
        opportunity to develop and implement a corrective action plan 
        to correct the deficiencies that were the basis of the 
        Secretary's determination under paragraph (1);
            ``(B) in deciding whether to impose sanctions, the 
        Secretary considers aggravating factors such as whether an 
        entity has a history of deficiencies or has not taken action to 
        correct deficiencies the Secretary has brought to their 
        attention;
            ``(C) there are no unreasonable or unnecessary delays 
        between the finding of a deficiency and the imposition of 
        sanctions; and
            ``(D) the Secretary provides the organization with 
        reasonable notice and opportunity for hearing (including the 
        right to appeal an initial decision) before imposing any 
        sanction or terminating the contract.''.
            (4) Conforming amendments.--
                    (A) In general.--Section 1876(i)(6)(B) of such Act 
                (42 U.S.C. 1395mm(i)(6)(B)) is amended by striking the 
                second sentence.
                    (B) Procedural provisions.--Section 1876(i)(6) of 
                such Act (42 U.S.C. 1395mm(i)(6)) is further amended by 
                adding at the end the following new subparagraph:
    ``(D) The provisions of section 1128A (other than subsections (a) 
and (b)) shall apply to a civil money penalty under subparagraph (A) or 
(B) in the same manner as they apply to a civil money penalty or 
proceeding under section 1128A(a).''.
    (b) Agreements With Peer Review Organizations.--
            (1) Requirement for written agreement.--Section 
        1876(i)(7)(A) of the Social Security Act (42 U.S.C. 
        1395mm(i)(7)(A)) is amended by striking ``an agreement'' and 
        inserting ``a written agreement''.
            (2) Development of model agencies.--Not later than July 1, 
        1995, the Secretary shall develop a model of the agreement that 
        an eligible organization with a risk-sharing contract under 
        section 1876 of the Social Security Act must enter into with an 
        entity providing peer review services with respect to services 
        provided by the organization under section 1876(i)(7)(A) of 
        such Act.
            (3) Report by gao.--
                    (A) Study.--The Comptroller General shall conduct a 
                study of the costs incurred by eligible organizations 
                with risk-sharing contracts under section 1876(b) of 
                such Act of complying with the requirement of entering 
                into a written agreement with an entity providing peer 
                review services with respect to services provided by 
                the organization, together with an analysis of how 
                information generated by such entities is used by the 
                Secretary to assess the quality of services provided by 
                such eligible organizations.
                    (B) Report to congress.--Not later than July 1, 
                1997, the Comptroller General shall submit a report to 
                the Committee on Ways and Means and the Committee on 
                Energy and Commerce of the House of Representatives and 
                the Committee on Finance and the Special Committee on 
                Aging of the Senate on the study conducted under 
                subparagraph (A).
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to contract years beginning on or after January 1, 
1995.

SEC. 518. EFFECTIVE DATE.

    Unless specifically provided otherwise, the amendments made by this 
subtitle shall take effect on January 1, 1995.

        Subtitle C--Administrative and Miscellaneous Provisions

SEC. 521. ESTABLISHMENT OF THE HEALTH CARE FRAUD AND ABUSE DATA 
              COLLECTION PROGRAM.

    (a) Findings.--The Congress finds the following:
            (1) Fraud and abuse with respect to the delivery of and 
        payment for health care services is a significant contributor 
        to the growing costs of the Nation's health care.
            (2) Control of fraud and abuse in health care services 
        warrants greater efforts of coordination than those that can be 
        undertaken by individual States or the various Federal, State, 
        and local law enforcement programs.
            (3) There is a national need to coordinate information 
        about health care providers and entities that have engaged in 
        fraud and abuse in the delivery of and payment for health care 
        services.
            (4) There is no comprehensive national data collection 
        program for the reporting of public information about final 
        adverse actions against health care providers, suppliers, or 
        licensed health care practitioners that have engaged in fraud 
        and abuse in the delivery of and payment for health care 
        services.
            (5) A comprehensive national data collection program for 
        the reporting of public information about final adverse actions 
        will facilitate the enforcement of the provisions of the Social 
        Security Act and other statutes applicable to health care fraud 
        and abuse.
    (b) General Purpose.--Not later than January 1, 1995, the Secretary 
shall establish a national health care fraud and abuse data collection 
program for the reporting of final adverse actions (not including 
settlements where no finding of liability has been made) against health 
care providers, suppliers, or practitioners as required by subsection 
(c), with access as set forth in subsection (d).
    (c) Reporting of Information.--
            (1) In general.--Each government agency and health care 
        plan shall report any final adverse action (not including 
        settlements where no finding of liability has been made) taken 
        against a health care provider, supplier, or practitioner.
            (2) Information to be reported.--The information to be 
        reported under paragraph (1) includes:
                    (A) The name of any health care provider, supplier, 
                or practitioner who is the subject of a final adverse 
                action.
                    (B) The name (if known) of any health care entity 
                with which a health care provider, supplier, or 
                practitioner is affiliated or associated.
                    (C) The nature of the final adverse action.
                    (D) A description of the acts or omissions and 
                injuries upon which the final adverse action was based, 
                and such other information as the Secretary determines 
                by regulation is required for appropriate 
                interpretation of information reported under this 
                section.
            (3) Confidentiality.--In determining what information is 
        required to be reported, the Secretary shall establish 
        procedures to assure that the privacy of individuals receiving 
        health care services is appropriately protected.
            (4) Timing and form of reporting.--The information required 
        to be reported under this subsection shall be reported 
        regularly (but not less often than monthly) and in such form 
        and manner as the Secretary prescribes. Such information shall 
        first be required to be reported on a date specified by the 
        Secretary.
            (5) To whom reported.--The information required to be 
        reported under this subsection shall be reported to the 
        Secretary.
    (d) Disclosure and Correction of Information.--
            (1) Disclosure.--With respect to the information about 
        final adverse actions (not including settlements where no 
        findings of liability has been made) reported to the Secretary 
        under this section respecting a health care provider, supplier, 
        or practitioner, the Secretary shall, by regulation, provide 
        for--
                    (A) disclosure of the information, upon request, to 
                the health care provider, supplier, or licensed 
                practitioner, and
                    (B) procedures in the case of disputed accuracy of 
                the information.
            (2) Corrections.--Each Government agency and health care 
        plan shall report corrections of information already reported 
        about any final adverse action taken against a health care 
        provider, supplier, or practitioner, in such form and manner 
        that the Secretary prescribes by regulation.
    (e) Access to Reported Information.--
            (1) Availability.--The information in the health care fraud 
        and abuse data collection program database shall be available 
        to the public, Federal and State government agencies, and 
        health care plans pursuant to procedures that the Secretary 
        shall provide by regulation.
            (2) Fees for disclosure.--The Secretary may establish or 
        approve reasonable fees for the disclosure of information in 
        such database. The amount of such a fee may not exceed the 
        costs of processing the requests for disclosure and of 
        providing such information. Such fees shall be available to the 
        Secretary or, in the Secretary's discretion to the agency 
        designated under this section to cover such costs.
    (f) Protection From Liability for Reporting.--No person or entity 
shall be held liable in any civil action with respect to any report 
made as required by this section, without knowledge of the falsity of 
the information contained in the report.
    (g) Definitions and Special Rules.--For purposes of this section:
            (1) Final adverse action.--The term ``final adverse 
        action'' includes:
                    (A) Civil judgments against a health care provider 
                in Federal or State court related to the delivery of a 
                health care item or service.
                    (B) Federal or State criminal convictions related 
                to the delivery of a health care item or service.
                    (C) Actions by Federal or State agencies 
                responsible for the licensing and certification of 
                health care providers, suppliers, and licensed health 
                care practitioners, including--
                            (i) formal or official actions, such as 
                        revocation or suspension of a license (and the 
                        length of any such suspension), reprimand, 
                        censure or probation,
                            (ii) any other loss of license of the 
                        provider, supplier, or practitioner, by 
                        operation of law, or
                            (iii) any other negative action or finding 
                        by such State or Federal agency that is 
                        publicly available information.
                    (D) Exclusion from participation in Federal or 
                State health care programs.
                    (E) Any other adjudicated actions or decisions that 
                the Secretary shall establish by regulation.
        For purposes of subparagraph (B), the existence of a conviction 
        shall be determined under paragraph (4) of section 1128(j) of 
        the Social Security Act.
            (2) Government agency.--The term ``Government agency'' 
        shall include:
                    (A) The Department of Justice.
                    (B) The Department of Health and Human Services.
                    (C) Any other Federal agency that either 
                administers or provides payment for the delivery of 
                health care services, including, but not limited to the 
                Department of Defense and the Department of Veterans 
                Affairs.
                    (D) State law enforcement agencies.
                    (E) State medicaid fraud and abuse units.
                    (F) State or Federal agencies responsible for the 
                licensing and certification of health care providers 
                and licensed health care practitioners.
            (3) Health care plan.--The term ``health care plan'' has 
        the meaning given to such term by section 1128(i) of the Social 
        Security Act.
            (4) Health care provider.--The term ``health care 
        provider'' means a provider of services as defined in section 
        1861(u) of the Social Security Act, and any entity, including a 
        health maintenance organization, group medical practice, or any 
        other entity listed by the Secretary in regulation, that 
        provides health care services.
            (5) Licensed health care practitioners.--The terms 
        ``licensed health care practitioner'', ``licensed 
        practitioner'', and ``practitioner'' mean, with respect to a 
        State, an individual who is licensed or otherwise authorized by 
        the State to provide health care services (or any individual 
        who, without authority holds himself or herself out to be so 
        licensed or authorized).
            (6) Supplier.--The term ``supplier'' means a supplier of 
        health care items and services described in sections 1819 (a) 
        and (b), and section 1861 of the Social Security Act.
    (h) Conforming Amendment.--Section 1921(d) of the Social Security 
Act is amended by inserting ``and section 521 of the Advancement of 
Health Care Reform Act of 1994'' after ``section 422 of the Health Care 
Quality Improvement Act of 1986''.

SEC. 522. QUARTERLY PUBLICATION OF ADVERSE ACTIONS TAKEN.

    (a) In General.--Part A of title XI of the Social Security Act (42 
U.S.C. 1301 et seq.) is amended by adding at the end the following new 
section:

            ``quarterly publication of adverse actions taken

    ``Sec. 1145. Not later than 30 days after the end of each calendar 
quarter, the Secretary shall publish in the Federal Register a listing 
of all final adverse actions taken during the quarter under this part 
(including penalties imposed under section 1107, exclusions under 
section 1128, the imposition of civil monetary penalties under section 
1128A, and the imposition of criminal penalties under section 1128B) 
and under section 1156.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to calendar quarters beginning on or after January 1, 1995.

                 Subtitle D--Amendments to Criminal Law

SEC. 531. HEALTH CARE FRAUD.

    (a) In General.--
            (1) Fines and imprisonment for health care fraud 
        violations.--Chapter 63 of title 18, United States Code, is 
        amended by adding at the end the following:
``Sec. 1347. Health care fraud
    ``(a) Whoever knowingly executes, or attempts to execute, a scheme 
or artifice--
            ``(1) to defraud any health care plan or other person, in 
        connection with the delivery of or payment for health care 
        benefits, items, or services; or
            ``(2) to obtain, by means of false or fraudulent pretenses, 
        representations, or promises, any of the money or property 
        owned by, or under the custody or control of, any health care 
        plan, or person in connection with the delivery of or payment 
        for health care benefits, items, or services;
shall be fined under this title or imprisoned not more than 10 years, 
or both. If the violation results in serious bodily injury (as defined 
in section 1365(g)(3) of this title), such person shall be imprisoned 
for life or any term of years.
    ``(b) For purposes of this section, the term `health care plan' 
means a federally funded public program or private program for the 
delivery of or payment for health care items or services.''.
            (2) Clerical amendment.--The table of sections at the 
        beginning of chapter 63 of title 18, United States Code, is 
        amended by adding at the end the following:

``1347. Health care fraud.''.

SEC. 532. FORFEITURES FOR FEDERAL HEALTH CARE OFFENSES.

    Section 982(a) of title 18, United States Code, is amended by 
inserting after paragraph (5) the following:
    ``(6)(A) If the court determines that a Federal health care offense 
is of a type that poses a serious threat to the health of any person or 
has a significant detrimental impact on the health care system, the 
court, in imposing sentence on a person convicted of that offense, 
shall order that person to forfeit property, real or personal, that--
            ``(i)(I) is used in the commission of the offense; or
            ``(II) constitutes or is derived from proceeds traceable to 
        the commission of the offense; and
            ``(ii) is of a value proportionate to the seriousness of 
        the offense.
    ``(B) For purposes of this paragraph, the term `Federal health care 
offense' means a violation of, or a criminal conspiracy to violate--
            ``(i) section 1347 of this title;
            ``(ii) section 1128B of the Social Security Act;
            ``(iii) sections 287, 371, 664, 666, 1001, 1027, 1341, 
        1343, or 1954 of this title if the violation or conspiracy 
        relates to health care fraud;
            ``(iv) section 501 or 511 of the Employee Retirement Income 
        Security Act of 1974, if the violation or conspiracy relates to 
        health care fraud; and
            ``(v) section 301, 303 (a)(2), or 303 (b) or (e) of the 
        Federal Food, Drug and Cosmetic Act, if the violation or 
        conspiracy relates to health care fraud.''.

SEC. 533. INJUNCTIVE RELIEF RELATING TO FEDERAL HEALTH CARE OFFENSES.

    Section 1345(a)(1) of title 18, United States Code, is amended--
            (1) by striking ``or'' at the end of subparagraph (A);
            (2) by inserting ``or'' at the end of subparagraph (B); and
            (3) by adding at the end the following new subparagraph:
            ``(C) committing or about to commit a Federal health care 
        offense (as defined in section 982(a)(6)(B) of this title);''.

SEC. 534. RACKETEERING ACTIVITY RELATING TO FEDERAL HEALTH CARE 
              OFFENSES.

    Section 1961(1) of title 18, United States Code, is amended by 
inserting ``section 982(a)(6) (relating to Federal health care 
offenses),'' after ``sections 891-894 (relating to extortionate credit 
transactions),''.

            Subtitle E--Amendments to Civil False Claims Act

SEC. 541. AMENDMENTS TO CIVIL FALSE CLAIMS ACT.

    Section 3729 of title 31, United States Code, is amended--
            (1) in subsection (a)(7), by inserting ``or to a health 
        care plan,'' after ``property to the Government,'';
            (2) in the matter following subsection (a)(7), by inserting 
        ``or health care plan'' before ``sustains because of the act of 
        that person,'';
            (3) at the end of the first sentence of subsection (a), by 
        inserting ``or health care plan'' before ``sustains because of 
        the act of the person.'';
            (4) in subsection (c)--
                    (A) by inserting ``the term` after ``section,''; 
                and
                    (B) by adding at the end the following new 
                sentence: ``The term also includes any request or 
                demand, whether under contract or otherwise, for money 
                or property which is made or presented to a health care 
                plan.''; and
            (5) by adding at the end the following new subsection:
    ``(f) Health Care Plan Defined.--For purposes of this section, the 
term `health care plan' means a federally funded public program for the 
delivery of or payment for health care items or services.''.

               TITLE VI--EXPANDING ACCESS IN RURAL AREAS

SEC. 601. SHORT TITLE.

    This title may be cited as the ``Rural Health Innovation 
Demonstration Act of 1993''.

SEC. 602. RURAL HEALTH EXTENSION NETWORKS.

    Title XVII of the Public Health Service Act (42 U.S.C. 300u et 
seq.) is amended by adding at the end thereof the following new 
section:

``SEC. 1709. RURAL HEALTH EXTENSION NETWORKS.

    ``(a) Grants.--The Secretary, acting through the Health Resources 
and Services Administration, may award competitive grants to eligible 
entities to enable such entities to facilitate the development of 
networks among rural and urban health care providers to preserve and 
share health care resources and enhance the quality and availability of 
health care in rural areas. Such networks may be statewide or 
regionalized in focus.
    ``(b) Eligible Entities.--To be eligible to receive a grant under 
subsection (a) an entity shall--
            ``(1)(A) be a rural health extension network that meets the 
        requirements of subsection (c); or
            ``(B) be an Area Health Education Center Program;
            ``(2) prepare and submit to the Secretary an application at 
        such time, in such form and containing such information as the 
        Secretary may require; and
            ``(3) meet such other requirements as the Secretary 
        determines appropriate.
    ``(c) Networks.--For purposes of subsection (b)(1)(A), a rural 
health extension network shall be an association or consortium of three 
or more rural health care providers, and may include one or more urban 
health care provider, for the purposes of applying for a grant under 
this section and using amounts received under such grant to provide the 
services described in subsection (d).
    ``(d) Services.--
            ``(1) In general.--An entity that receives a grant under 
        subsection (a) shall use amounts received under such grant to--
                    ``(A) provide education and community 
                decisionmaking support for health care providers in the 
                rural areas served by the network;
                    ``(B) utilize existing health care provider 
                education programs, including but not limited to, the 
                program for area health education centers under section 
                781, to provide educational services to health care 
                providers and trainees including, but not limited to, 
                physicians, nurses and nursing students in the areas 
                served by the network;
                    ``(C) make appropriately trained facilitators 
                available to health care providers located in the areas 
                served by the network to assist such providers in 
                developing cooperative approaches to health care in 
                such area;
                    ``(D) facilitate linkage building through the 
                organization of discussion and planning groups and the 
                dissemination of information concerning the health care 
                resources where available, within the area served by 
                the network;
                    ``(E) support telecommunications and consultative 
                projects to link rural hospitals and other health care 
                providers, and urban or tertiary hospitals in the areas 
                served by the network; or
                    ``(F) carry out any other activity determined 
                appropriate by the Secretary.
            ``(2) Education.--In carrying out activities under 
        paragraph (1)(B), an entity shall support the development of an 
        information and resource sharing system, including elements 
        targeted towards high risk populations and focusing on health 
        promotion, to facilitate the ability of rural health care 
        providers to have access to needed health care information. 
        Such activities may include the provision of training to enable 
        individuals to serve as coordinators of health education 
        programs in rural areas.
            ``(3) Collection and dissemination of data.--The chief 
        executive officer of a State shall designate a State agency 
        that shall be responsible for collecting and regularly 
        disseminating information concerning the activities of the 
        rural health extension networks in that State.
    ``(e) Matching Requirement.--An entity that receives a grant under 
subsection (a) shall make available (directly or through donations from 
public or private entities), non-Federal contributions towards the 
costs of the operations of the network in an amount equal to the amount 
of the grant.
    ``(f) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section, $10,000,000 for each of the 
fiscal years 1994 through 1997.
    ``(g) Definition.--As used in this section and section 1710, the 
term `rural health care providers' means health care professionals and 
hospitals located in rural areas. The Secretary shall ensure that for 
purposes of this definition, rural areas shall include any area that 
meets any applicable Federal or State definition of rural area.
    ``(h) Relation to Other Laws.--
            ``(1) In general.--Notwithstanding any provision of the 
        antitrust laws, it shall not be considered a violation of the 
        antitrust laws for entities to develop and operate networks in 
        accordance with this section.
            ``(2) Definition.--For purposes of this subsection, the 
        term `antitrust laws' means--
                    ``(A) the Act entitled `An Act to protect trade and 
                commerce against unlawful restraints and monopolies', 
                approved July 2, 1890, commonly known as the `Sherman 
                Act' (26 Stat. 209; chapter 647; 15 U.S.C. 1 et seq.);
                    ``(B) the Federal Trade Commission Act, approved 
                September 26, 1914 (38 Stat. 717; chapter 311; 15 
                U.S.C. 41 et seq.);
                    ``(C) the Act entitled `An Act to supplement 
                existing laws against unlawful restraints and 
                monopolies, and for other purposes', approved October 
                15, 1914, commonly known as the `Clayton Act' (38 Stat. 
                730; chapter 323; 15 U.S.C. 12 et seq.; 18 U.S.C. 402, 
                660, 3285, 3691; 29 U.S.C. 52, 53);
                    ``(D) the Act of June 19, 1936, commonly known as 
                the Robinson-Patman Antidiscrimination Act (15 U.S.C. 
                13 et seq.); and
                    ``(E) any State antitrust laws that would prohibit 
                the activities described in paragraph (1).''.

SEC. 603. RURAL MANAGED CARE COOPERATIVES.

    Title XVII of the Public Health Service Act (42 U.S.C. 300u et 
seq.) as amended by section 602 is further amended by adding at the end 
thereof the following new section:

``SEC. 1710. RURAL MANAGED CARE COOPERATIVES.

    ``(a) Grants.--The Secretary, acting through the Health Resources 
and Services Administration, may award competitive grants to eligible 
entities to enable such entities to develop and administer cooperatives 
in rural areas that will establish an effective case management and 
reimbursement system designed to support the economic viability of 
essential public or private health services, facilities, health care 
systems and health care resources in such rural areas.
    ``(b) Eligible Entities.--To be eligible to receive a grant under 
subsection (a) an entity shall--
            ``(1) prepare and submit to the Secretary an application at 
        such time, in such form and containing such information as the 
        Secretary may require, including a description of the 
        cooperative that the entity intends to develop and operate 
        using grant funds; and
            ``(2) meet such other requirements as the Secretary 
        determines appropriate.
    ``(c) Cooperatives.--
            ``(1) In general.--Amounts provided under a grant awarded 
        under subsection (a) shall be used to establish and operate a 
        cooperative made up of all types of health care providers, 
        hospitals, primary access hospitals, other alternate rural 
        health care facilities, physicians, rural health clinics, rural 
        nurse practitioners and physician assistant practitioners, 
        public health departments and others located in, but not 
        restricted to, the rural areas to be served by the cooperative.
            ``(2) Board of directors.--A cooperative established under 
        paragraph (1) shall be administered by a board of directors 
        elected by the members of the cooperative, a majority of whom 
        shall represent rural providers from the local community and 
        include representatives from the local community. Such members 
        shall serve at the pleasure of such members.
            ``(3) Executive director.--The members of a cooperative 
        established under paragraph (1) shall elect an executive 
        director who shall serve as the chief operating officer of the 
        cooperative. The executive director shall be responsible for 
        conducting the day to day operation of the cooperative 
        including--
                    ``(A) maintaining an accounting system for the 
                cooperative;
                    ``(B) maintaining the business records of the 
                cooperative;
                    ``(C) negotiating contracts with provider members 
                of the cooperative; and
                    ``(D) coordinating the membership and programs of 
                the cooperative.
            ``(4) Reimbursements.--
                    ``(A) Negotiations.--A cooperative established 
                under paragraph (1) shall facilitate negotiations among 
                member health care providers and third party payors 
                concerning the rates at which such providers will be 
                reimbursed for services provided to individuals for 
                which such payors may be liable.
                    ``(B) Agreements.--Agreements reached under 
                subparagraph (A) shall be binding on the members of the 
                cooperative.
                    ``(C) Employers.--Employer entities may become 
                members of a cooperative established under paragraph 
                (1) in order to provide, through a member third party 
                payor, health insurance coverage for its employees. 
                Deductibles shall only be charged to employees covered 
                under such insurance if such employees receive health 
                care services from a provider that is not a member of 
                the cooperative if similar services would have been 
                available from a member provider.
                    ``(D) Malpractice insurance.--A cooperative 
                established under paragraph (1) shall be responsible 
                for identifying and implementing an affordable 
                malpractice insurance program that shall include a 
                requirement that such cooperative assume responsibility 
                for the payment of a portion of the malpractice 
                insurance premium of providers members.
            ``(5) Managed care and practice standards.--A cooperative 
        established under paragraph (1) shall establish joint case 
        management and patient care practice standards programs that 
        health care providers that are members of such cooperative must 
        meet to be eligible to participate in agreements entered into 
        under paragraph (4). Such standards shall be developed by such 
        provider members and shall be subject to the approval of a 
        majority of the board of directors. Such programs shall include 
        cost and quality of care guidelines including a requirement 
        that such providers make available preadmission screening, 
        selective case management services, joint patient care practice 
        standards development and compliance and joint utilization 
        review.
            ``(6) Confidentiality.--
                    ``(A) In general.--Patients records, records of 
                peer review, utilization review, and quality assurance 
                proceedings conducted by the cooperative should be 
                considered confidential and protected from release 
                outside of the cooperative. The provider members of the 
                cooperative shall be indemnified by the cooperative for 
                the good faith participation by such members in such 
                the required activities.
                    ``(B) Quality data.--Notwithstanding any other 
                provision of law, quality data obtained by a hospital 
                or other member of a cooperative in the normal course 
                of the operations of the hospital or member shall be 
                immune from discovery regardless of whether such data 
                is used for purposes other than peer review or is 
                disclosed to other members of the cooperative involved.
    ``(d) Linkages.--A cooperative shall create linkages among member 
health care providers, employers, and payors for the joint consultation 
and formulation of the types, rates, costs, and quality of health care 
provided in rural areas served by the cooperative.
    ``(e) Matching Requirement.--An entity that receives a grant under 
subsection (a) shall make available (directly or through donations from 
public or private entities), non-Federal contributions towards the 
costs of the operations of the network in an amount equal to the amount 
of the grant.
    ``(f) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section, $15,000,000 for each of the 
fiscal years 1994 through 1997.
    ``(g) Relation to Other Laws.--
            ``(1) In general.--Notwithstanding any provision of the 
        antitrust laws, it shall not be considered a violation of the 
        antitrust laws for entities to develop and operate cooperatives 
        in accordance with this section.
            ``(2) Definition.--For purposes of this subsection, the 
        term `antitrust laws' means--
                    ``(A) the Act entitled `An Act to protect trade and 
                commerce against unlawful restraints and monopolies', 
                approved July 2, 1890, commonly known as the `Sherman 
                Act' (26 Stat. 209; chapter 647; 15 U.S.C. 1 et seq.);
                    ``(B) the Federal Trade Commission Act, approved 
                September 26, 1914 (38 Stat. 717; chapter 311; 15 
                U.S.C. 41 et seq.);
                    ``(C) the Act entitled `An Act to supplement 
                existing laws against unlawful restraints and 
                monopolies, and for other purposes', approved October 
                15, 1914, commonly known as the `Clayton Act' (38 Stat. 
                730; chapter 323; 15 U.S.C. 12 et seq.; 18 U.S.C. 402, 
                660, 3285, 3691; 29 U.S.C. 52, 53); and
                    ``(D) the Act of June 19, 1936, commonly known as 
                the Robinson-Patman Antidiscrimination Act (15 U.S.C. 
                13 et seq.); and
                    ``(E) any State antitrust laws that would prohibit 
                the activities described in paragraph (1).''.

SEC. 604. RURAL MENTAL HEALTH OUTREACH GRANTS.

    Subpart 3 of part B of title V of the Public Health Service Act (42 
U.S.C. 209bb-31 et seq.) is amended by adding at the end thereof the 
following new section:

``SEC. 520C. RURAL MENTAL HEALTH OUTREACH GRANTS.

    ``(a) In General.--The Secretary may award competitive grants to 
eligible entities to enable such entities to develop and implement a 
plan for mental health outreach programs in rural areas.
    ``(b) Eligible Entities.--To be eligible to receive a grant under 
subsection (a) an entity shall--
            ``(1) prepare and submit to the Secretary an application at 
        such time, in such form and containing such information as the 
        Secretary may require, including a description of the 
        activities that the entity intends to undertake using grant 
        funds; and
            ``(2) meet such other requirements as the Secretary 
        determines appropriate.
    ``(c) Priority.--In awarding grants under subsection (a), the 
Secretary shall give priority to applications that place emphasis on 
mental health services for the elderly or children. Priority shall also 
be given to applications that involve relationships between the 
applicant and rural managed care cooperatives.
    ``(d) Matching Requirement.--An entity that receives a grant under 
subsection (a) shall make available (directly or through donations from 
public or private entities), non-Federal contributions towards the 
costs of the operations of the network in an amount equal to the amount 
of the grant.
    ``(e) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section, $5,000,000 for each of the 
fiscal years 1994 through 1997.''.

SEC. 605. AREA HEALTH EDUCATION CENTERS.

    (a) Stipends for Personnel.--Section 746(a) of the Public Health 
Service Act (42 U.S.C. 293j(a)) is amended by adding at the end thereof 
the following new paragraph:
            ``(4) Stipends.--
                    ``(A) The Secretary may make award grants under 
                this section to rural communities to enable such 
                communities to provide stipends to physicians, nurses, 
                nurse practitioners, physician assistants, and other 
                health professional trainees to encourage such 
                individuals to provide health care services in such 
                rural communities. In addition, the Secretary may award 
                grants under this section to rural communities to 
                enable such communities to provide stipends to 
                physicians, nurses, nurse practitioners, physician 
                assistants, and other health professionals that are 
                practicing in rural areas to retain such individuals in 
                such areas.
                    ``(B) A community that receives a grant under 
                subparagraph (A) shall make available (directly or 
                through donations from public or private entities), 
                non-Federal contributions towards the costs of the 
                operations of the network in an amount equal to the 
                amount of the grant.''.
    (b) Reauthorization.--Section 746(i)(1)(A) of such Act (42 U.S.C. 
293j(i)(1)(A)) is amended by striking out ``$25,000,000'' and all that 
follows through ``1995'' and inserting in lieu thereof ``$25,000,000 
for fiscal year 1993, and $42,000,000 for each of the fiscal years 1994 
through 1997''.

                       TITLE VII--TAX PROVISIONS

SEC. 701. AMENDMENT OF 1986 CODE.

    Except as otherwise expressly provided, whenever in this subtitle 
an amendment or repeal is expressed in terms of an amendment to, or 
repeal of, a section or other provision, the reference shall be 
considered to be made to a section or other provision of the Internal 
Revenue Code of 1986.

SEC. 702. DEDUCTIONS FOR COSTS OF QUALIFIED HEALTH PLANS.

    (a) Business Expense Deduction for Health Insurance.--Section 162 
(relating to trade or business expenses) is amended by redesignating 
subsection (m) as subsection (n) and by inserting after subsection (l) 
the following new subsection:
    ``(m) Group Health Plans.--The amount of expenses paid or incurred 
by an employer for a group health plan or as contributions to an 
employee's medical savings account shall not be allowed as a deduction 
under this section unless the plan is a federally qualified health plan 
(as defined in section 111 of the Advancement of Health Care Reform Act 
of 1994).''.
    (b) Permanent Extension and Increase in Health Insurance Tax 
Deduction for Self-Employed Individuals.--
            (1) Permanent extension of deduction.--
                    (A) In general.--Subsection (l) of section 162 
                (relating to special rules for health insurance costs 
                of self-employed individuals) is amended by striking 
                paragraph (6).
                    (B) Effective date.--The amendment made by this 
                paragraph shall apply to taxable years beginning after 
                December 31, 1993.
            (2) Increase in amount of deduction; insurance purchased 
        must meet certain standards.--
                    (A) Increase in amount of deduction.--Paragraph (1) 
                of section 162(l) is amended--
                            (i) by striking ``25 percent of'' and 
                        inserting ``100 percent of''.
                    (B) Insurance purchased must meet certain 
                standards.--Paragraph (2) of section 162(l) is amended 
                by adding at the end the following new subparagraph:
                    ``(C) Insurance must meet certain standards.--
                Paragraph (1) shall apply only to insurance which is a 
                qualified health plan.''.
                    (C) Treatment of multiemployer health plans.--
                Subsection (l) of section 162 is amended by adding at 
                the end the following new paragraph:
            ``(6) Treatment of multiemployer health plans.--For 
        purposes of this subsection, an amount paid into a 
        multiemployer health plan (as defined in section 91(d)(7)) 
        shall be deemed to be an amount paid for insurance which 
        constitutes medical care.''.
    (c) Deduction for Premiums Limited to Qualified Health Plans.--
Subparagraph (C) of section 213(d)(1) (defining medical care) is 
amended by striking ``for insurance'' and inserting ``for a qualified 
health plan (as defined in section 111 of the Advancement of Health 
Care Reform Act of 1994).''.
    (d) Effective Date.--Except as provided in subsection (b)(1)(B), 
the amendments made by this section shall apply to taxable years 
beginning after the December 31, 1996.

                     TITLE VIII--REVENUE PROVISIONS

SEC. 801. DISCRETIONARY SPENDING REDUCTIONS.

    Section 601(a)(2) of the Congressional Budget Act of 1974 is 
amended--
            (1) in subparagraph (D) by inserting ``and'' after the 
        semicolon;
            (2) by amending subparagraph (E) to read as follows:
                    ``(E) with respect to fiscal years 1995, 1996, 
                1997, and 1998 for the discretionary category 99.6 
                percent of the amounts set forth for fiscal year 1994 
                in the concurrent resolution on the budget for fiscal 
                year 1994 (H. Con. Res. 64, 103d Congress);''; and
            (3) by striking subparagraph (F).
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                                                       Calendar No. 457

103d CONGRESS

  2d Session

                                S. 2153

_______________________________________________________________________

                                 A BILL

To improve access to quality health care, to reform medical malpractice 
liability standards, to reduce paperwork and simplify administration of 
 health care claims, to establish safe harbors from the application of 
 the antitrust laws for certain activities of providers of health care 
   services, to prevent fraud and abuse in the health care delivery 
                    system, and for other purposes.

_______________________________________________________________________

                              June 7, 1994

            Read the second time and placed on the calendar
```