202 
(i) is elected by the participating em-
ployers, with each employer having one 
vote; and 
(ii) has complete fiscal control over 
the arrangement and which is responsible 
for all operations of the arrangement; 
(D) the requirements of section 804(a) of 
such Act shall be deemed met with respect to 
such arrangement; and 
(E) the arrangement may be certified by 
any applicable authority with respect to its op-
erations in any State only if it operates in such 
State on the date of certification. 
The provisions of this subsection shall cease to apply 
with respect to any such arrangement at such time 
after the date of the enactment of this Act as the 
applicable requirements of this subsection are not 
met with respect to such arrangement. 
(2) DEFINITIONS.—For purposes of this sub-
section, the terms ‘‘group health plan’’, ‘‘medical 
care’’, and ‘‘participating employer’’ shall have the 
meanings provided in section 812 of the Employee 
Retirement Income Security Act of 1974, except 
that the reference in paragraph (7) of such section 
to an ‘‘association health plan’’ shall be deemed a 
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203 
reference to an arrangement referred to in this sub-
section. 
CHAPTER 2—TARGETED EFFORTS TO 
EXPAND ACCESS 
SEC. 631. EXTENDING COVERAGE OF DEPENDENTS. 
(a) EMPLOYEE RETIREMENT INCOME SECURITY ACT 
OF 1974.— 
(1) IN GENERAL.—Part 7 of subtitle B of title 
I of the Employee Retirement Income Security Act 
of 1974 is amended by inserting after section 2714 
the following new section: 
‘‘SEC. 715. EXTENDING COVERAGE OF DEPENDENTS. 
‘‘(a) IN GENERAL.—In the case of a group health 
plan, or health insurance coverage offered in connection 
with a group health plan, that treats as a beneficiary 
under the plan an individual who is a dependent child of 
a participant or beneficiary under the plan, the plan or 
coverage shall continue to treat the individual as a depend-
ent child without regard to the individual’s age through 
at least the end of the plan year in which the individual 
turns an age specified in the plan, but not less than 23 
years of age. 
‘‘(b) CONSTRUCTION.—Nothing in this section shall 
be construed as requiring a group health plan to provide 
benefits for dependent children as beneficiaries under the 
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204 
plan or to require a participant to elect coverage of de-
pendent children.’’. 
(2) CLERICAL AMENDMENT.—The table of con-
tents of such Act is amended by inserting after the 
item relating to section 714 the following new item: 
‘‘Sec. 715. Extending coverage of dependents.’’. 
(b) PHSA.—Title XXVII of the Public Health Serv-
ice Act is amended by inserting after section 2707 the fol-
lowing new section: 
‘‘SEC. 2708. EXTENDING COVERAGE OF DEPENDENTS. 
‘‘(a) IN GENERAL.—In the case of a group health 
plan, or health insurance coverage offered in connection 
with a group health plan, that treats as a beneficiary 
under the plan an individual who is a dependent child of 
a participant or beneficiary under the plan, the plan or 
coverage shall continue to treat the individual as a depend-
ent child without regard to the individual’s age through 
at least the end of the plan year in which the individual 
turns an age specified in the plan, but not less than 23 
years of age. 
‘‘(b) CONSTRUCTION.—Nothing in this section shall 
be construed as requiring a group health plan to provide 
benefits for dependent children as beneficiaries under the 
plan or to require a participant to elect coverage of de-
pendent children.’’. 
(c) IRC.— 
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205 
(1) IN
GENERAL.—Subchapter B of chapter 
100 of the Internal Revenue Code of 1986 is amend-
ed by adding at the end the following new section: 
‘‘SEC. 9814. EXTENDING COVERAGE OF DEPENDENTS. 
‘‘(a) IN GENERAL.—In the case of a group health 
plan that treats as a beneficiary under the plan an indi-
vidual who is a dependent child of a participant or bene-
ficiary under the plan, the plan shall continue to treat the 
individual as a dependent child without regard to the indi-
vidual’s age through at least the end of the plan year in 
which the individual turns an age specified in the plan, 
but not less than 23 years of age. 
‘‘(b) CONSTRUCTION.—Nothing in this section shall 
be construed as requiring a group health plan to provide 
coverage for dependent children as beneficiaries under the 
plan or to require a participant to elect coverage of de-
pendent children.’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions in such subchapter is amended by adding at 
the end the following new item: 
‘‘Sec. 9814. Extending coverage of dependents.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to group health plans for plan 
years beginning more than 3 months after the date of the 
enactment of this Act and shall apply to individuals who 
are dependent children under a group health plan, or 
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206 
health insurance coverage offered in connection with such 
a plan, on or after such date. 
SEC. 632. ALLOWING AUTO-ENROLLMENT FOR EMPLOYER 
SPONSORED COVERAGE. 
(a) IN GENERAL.—No State shall establish a law 
that prevents an employer from instituting auto-enroll-
ment for coverage of a participant or beneficiary, including 
current employees, under a group health plan, or health 
insurance coverage offered in connection with such a plan, 
so long as the participant or beneficiary has the option 
of declining such coverage. 
(b) AUTO-ENROLLMENT.— 
(1) NOTICE REQUIRED.—Employers with auto- 
enrollment under a group health plan or health in-
surance coverage shall provide annual notification, 
within a reasonable period before the beginning of 
each plan year, to each employee eligible to partici-
pate in the plan. The notice shall explain the em-
ployee contribution to such plan and the employee’s 
right to decline coverage. 
(2) TREATMENT OF NON-ACTION.—After a rea-
sonable period of time after receipt of the notice, if 
an employee fails to make an affirmative declaration 
declining coverage, then such an employee may be 
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207 
enrolled in the group health plan or health insurance 
coverage offered in connection with such a plan.’’. 
(c) CONSTRUCTION.—Nothing in this section shall be 
construed to supersede State law which establishes, imple-
ments, or continues in effect any standard or requirement 
relating to employers in connection with payroll or the 
sponsoring of employer sponsored health insurance cov-
erage except to the extent that such standard or require-
ment prevents an employer from instituting the auto-en-
rollment described in subsection (a). 
TITLE 
VII—STOPPING 
MEDI-
CARE, WASTE, FRAUD, AND 
ABUSE AND INCREASING PEN-
ALTIES FOR ABUSERS 
SEC. 701. INCREASED CIVIL MONEY PENALTIES AND CRIMI-
NAL FINES FOR MEDICARE FRAUD AND 
ABUSE. 
(a) INCREASED CIVIL MONEY PENALTIES.—Section 
1128A of the Social Security Act (42 U.S.C. 1320a–7a) 
is amended— 
(1) in subsection (a), in the matter following 
paragraph (10)— 
(A) by striking ‘‘$10,000’’ each place it 
appears and inserting ‘‘$20,000’’; 
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208 
(B) by striking ‘‘$15,000’’ and inserting 
‘‘$30,000’’; and 
(C) by striking ‘‘$50,000’’ each place it ap-
pears and inserting ‘‘$100,000’’; and 
(2) in subsection (b)— 
(A) in paragraph (1), in the flush matter 
following 
subparagraph 
(B), 
by 
striking 
‘‘$2,000’’ and inserting ‘‘$4,000’’; 
(B) in paragraph (2), by striking ‘‘$2,000’’ 
and inserting ‘‘$4,000’’; and 
(C) in paragraph (3)(A)(i), by striking 
‘‘$5,000’’ and inserting ‘‘$10,000’’. 
(b) INCREASED CRIMINAL FINES.—Section 1128B of 
the Social Security Act (42 U.S.C. 1320a–7b) is amend-
ed— 
(1) in subsection (a), in the flush matter fol-
lowing paragraph (6)— 
(A) by striking ‘‘$25,000’’ and inserting 
‘‘$100,000’’; and 
(B) by striking ‘‘$10,000’’ and inserting 
‘‘$20,000’’; 
(2) in subsection (b)— 
(A) in paragraph (1), in the flush matter 
following 
subparagraph 
(B), 
by 
striking 
‘‘$25,000’’ and inserting ‘‘$100,000’’; and 
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209 
(B) in paragraph (2), in the flush matter 
following 
subparagraph 
(B), 
by 
striking 
‘‘$25,000’’ and inserting ‘‘$100,000’’; 
(3) in subsection (c), by striking ‘‘$25,000’’ and 
inserting ‘‘$100,000’’; 
(4) in subsection (d), in the second flush matter 
following subparagraph (B), by striking ‘‘$25,000’’ 
and inserting ‘‘$100,000’’; and 
(5) in subsection (e), by striking ‘‘$2,000’’ and 
inserting ‘‘$4,000’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to civil money penalties and fines 
imposed for actions taken on or after the date of enact-
ment of this Act. 
SEC. 702. INCREASED SENTENCES FOR FELONIES INVOLV-
ING MEDICARE FRAUD AND ABUSE. 
(a) FALSE STATEMENTS AND REPRESENTATIONS.— 
Section 1128B(a) of the Social Security Act (42 U.S.C. 
1320a–7b(a)) is amended, in clause (i) of the flush matter 
following paragraph (6), by striking ‘‘not more than five 
years’’ and inserting ‘‘not more than 10 years’’. 
(b) ANTI-KICKBACK.—Section 1128B(b) of the So-
cial Security Act (42 U.S.C. 1320a–7b(b)) is amended— 
(1) in paragraph (1), in the flush matter fol-
lowing subparagraph (B), by striking ‘‘not more 
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210 
than five years’’ and inserting ‘‘not more than 10 
years’’; and 
(2) in paragraph (2), in the flush matter fol-
lowing subparagraph (B), by striking ‘‘not more 
than five years’’ and inserting ‘‘not more than 10 
years’’. 
(c) FALSE STATEMENT OR REPRESENTATION WITH 
RESPECT TO CONDITIONS OR OPERATIONS OF FACILI-
TIES.—Section 1128B(c) of the Social Security Act (42 
U.S.C. 1320a–7b(c)) is amended by striking ‘‘not more 
than five years’’ and inserting ‘‘not more than 10 years’’. 
(d) EXCESS CHARGES.—Section 1128B(d) of the So-
cial Security Act (42 U.S.C. 1320a–7b(d)) is amended, in 
the second flush matter following subparagraph (B), by 
striking ‘‘not more than five years’’ and inserting ‘‘not 
more than 10 years’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to criminal penalties imposed for 
actions taken on or after the date of enactment of this 
Act. 
SEC. 703. OTHER DME SUPPLIER ANTI-FRAUD AND ABUSE 
PROVISIONS. 
(a) MANDATORY PERIODIC SITE INSPECTIONS FOR 
DME SUPPLIERS.—The Secretary of Health and Human 
Services shall require, as a condition for participation of 
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211 
suppliers of durable medical equipment under part B of 
title XVIII of the Social Security Act— 
(1) a site inspection to be conducted for each 
such supplier that has not previously participated 
under such part within 6 months of the date of its 
initial participation under such part; and 
(2) a site inspection at least every 2 years to 
be conducted for each such supplier that has pre-
viously participated under such part. 
(b) POST-PAYMENT REVIEW.—The Secretary also 
shall provide conduct post-payment reviews of claims for 
items and services furnished under such part by durable 
medical equipment suppliers that begin participation 
under such part after the date of the enactment of this 
Act. Such reviews shall be conducted not less often than 
after the first 6, 12, and 18 months of such participation. 
(c) AVAILABILITY OF FUNDS.—Funds in the Health 
Care Fraud and Abuse Control Account under section 
1817(k) of the Social Security Act (42 U.S.C. 1395i(k)) 
shall be available for the conduct of site inspections and 
post-payment review required under this section. 
(d) TREATMENT
OF SKILLED NURSING FACILI-
TIES.—In this section, a skilled nursing facility shall not 
be treated as a supplier of durable medical equipment with 
respect to any individual who is a resident of such facility. 
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212 
SEC. 704. RETENTION OF CERTAIN FRAUD AND ABUSE PRO-
VISIONS. 
Section 101 shall not apply to the provisions (includ-
ing amendments made by) title VI of Public Law 111– 
148, other than subtitles D, H, and I of such title, and 
provisions of Public Law 111–152 insofar as they relative 
to such provisions. 
SEC. 705. ENSURING TIMELY ENFORCEMENT OF MEDICARE 
SECONDARY PAYER REQUIREMENTS IN LI-
ABILITY CASES. 
The Secretary of the Health and Human Services, 
acting through the Administrator of the Centers for Medi-
care & Medicaid Services, shall affirmatively establish, for 
initial implementation not later than 90 days after the 
date of the enactment of this Act, a plan to require appli-
cable plans (as defined in subparagraph (F) of section 
1862(b)(8) of the Social Security Act (42 U.S.C. 
1395y(b)(8)), as added by section 111(a) of the Medicare, 
Medicaid, and SCHIP Extension Act of 2007 (Public Law 
110–173)), to meet the determination and submission re-
quirements under subparagraph (A) of such section 
1862(b)(8). 
Æ 
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