I
105TH CONGRESS
1ST SESSION
H. R. 2301
To establish a program to improve the control of fraud and abuse in the
Medicare Program, to increase the amount of civil monetary penalties
which may be assessed against individuals and entities committing fraud
against the Medicare Program, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JULY 30, 1997
Ms. DANNER introduced the following bill; which was referred to the Commit-
tee on Ways and Means, and in addition to the Committee on Commerce,
for a period to be subsequently determined by the Speaker, in each case
for consideration of such provisions as fall within the jurisdiction of the
committee concerned
A BILL
To establish a program to improve the control of fraud
and abuse in the Medicare Program, to increase the
amount of civil monetary penalties which may be as-
sessed against individuals and entities committing fraud
against the Medicare Program, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Medicare Fraud and
Abuse Control Act of 1997’’.
SEC. 2. ESTABLISHMENT OF MEDICARE FRAUD AND ABUSE
CONTROL PROGRAM.
(a) IN GENERAL.—Not later than 6 months after the
date of the enactment of this Act, the Secretary of Health
and Human Services shall establish a program to improve
the prevention, detection, and control of fraud and abuse
under the medicare program.
(b) AWARD OF PORTION OF AMOUNTS COLLECTED
TO INDIVIDUALS PROVIDING INFORMATION.—Under the
program established pursuant to subsection (a), the Sec-
retary shall pay a portion of any civil monetary penalty
assessed under the medicare program to any individual or
entity who provided information which served as the basis
for the assessment of the penalty, under the same terms
and conditions applicable to awards to qui tam plaintiffs
under chapter 37 of title 31, United States Code.
SEC. 3. PROVIDING INFORMATION ON REPORTING FRAUD
AND ABUSE WITH MEDICARE CLAIMS AND
BENEFIT FORMS.
(a) IN GENERAL.—Title XVIII of the Social Security
Act (42 U.S.C. 1395 et seq.) is amended by adding at
the end the following new section:
‘‘SOLICITATION OF INFORMATION ON FRAUD AND ABUSE
‘‘SEC. 1894. With each explanation of benefits pro-
vided to an individual to whom items or services are fur-
nished under this title and with each notice of payment
provided to an individual or entity furnishing an item or
service for which payment is made under this title, the
Secretary shall include a statement soliciting any informa-
tion the individual or entity may possess on any fraud and
abuse committed against the program under this title.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to items and services furnished
and payments made under title XVIII of the Social Secu-
rity Act on or after January 1, 1998.
SEC. 4. INCREASE IN AMOUNT OF PENALTIES.
(a) IN GENERAL.—
(1) GENERAL CIVIL MONETARY PENALTIES.—
Section 1128A of the Social Security Act (42 U.S.C.
1320a–7a) is amended—
(A) 
in 
subsection 
(a), 
by 
striking
‘‘$15,000’’ and inserting ‘‘$30,000’’; and
(B) in subsection (b), by striking ‘‘$2,000’’
each place it appears and inserting ‘‘$4,000’’.
(2) CRIMINAL PENALTIES.—Section 1128B of
such Act (42 U.S.C. 1320a–7b) is amended—
(A) in subsection (a)—
(i) by striking ‘‘$25,000’’ and insert-
ing ‘‘$50,000’’, and
(ii) by striking ‘‘$10,000’’ and insert-
ing ‘‘$20,000’’;
(B) in subsections (b), (c), and (d), by
striking ‘‘$25,000’’ each place it appears and
inserting ‘‘$50,000’’; and
(C) in subsection (e), by striking ‘‘$2,000’’
and inserting ‘‘$4,000’’.
(3) STANDARDS FOR NURSING FACILITIES.—
(A) PROVIDING ADVANCE NOTICE OF SUR-
VEY
TO
NURSING
FACILITY.—Section
1819(g)(2)(A)(i) of such Act (42 U.S.C. 1395i–
3(g)(2)(A)(i)) is amended by striking ‘‘$2,000’’
and inserting ‘‘$4,000’’.
(B) NONCOMPLIANCE WITH NURSING FA-
CILITY STANDARDS.—Section 1819(h)(2)(B)(ii)
of such Act (42 U.S.C. 1395i–3(h)(2)(B)(ii)) is
amended by striking ‘‘$10,000’’ and inserting
‘‘$20,000’’.
(4) FAILURE TO PROVIDE INFORMATION ON RE-
FERRING PHYSICIAN ON UNASSIGNED CLAIMS.—Sec-
tion 1833(q)(2)(B)(i) of such Act (42 U.S.C.
1395l(q)(2)(B)(i)) is amended by striking ‘‘$2,000’’
and inserting ‘‘$4,000’’.
(5) DISTRIBUTION BY SUPPLIERS OF MEDICAL
EQUIPMENT OF MEDICAL NECESSITY FORMS.—Sec-
tion 1834(j)(2)(A)(iii) of such Act (42 U.S.C.
1395m(j)(2)(A)(iii)) 
is 
amended 
by 
striking
‘‘$1,000’’ and inserting ‘‘$2,000’’.
(6) FAILURE TO INCLUDE DIAGNOSIS CODE ON
UNASSIGNED
CLAIMS.—Section 1842(p)(3)(A) of
such Act (42 U.S.C. 1395u(p)(3)(A)) is amended by
striking ‘‘$2,000’’ and inserting ‘‘$4,000’’.
(7) INTERMEDIATE SANCTIONS FOR PROVIDERS
OR SUPPLIERS OF CLINICAL DIAGNOSTIC LABORA-
TORY TESTS.—Section 1846(b)(2)(A)(ii) of such Act
(42 U.S.C. 1395w–2(b)(2)(A)(ii)) is amended by
striking ‘‘$10,000’’ and inserting ‘‘$20,000’’.
(8) MEDICARE SECONDARY PAYER.—
(A) OFFERING
FINANCIAL
INCENTIVES
FOR BENEFICIARIES NOT TO ENROLL IN PRI-
MARY PLANS.—The second sentence of section
1862(b)(3)(C) 
of 
such 
Act 
(42 
U.S.C.
1395y(b)(3)(C)) 
is 
amended 
by 
striking
‘‘$5,000’’ and inserting ‘‘$10,000’’.
(B) FAILURE OF EMPLOYER TO PROVIDE
MATCHING
INFORMATION
ON
SECONDARY
PAYER
SITUATIONS.—The second sentence of
section 1862(b)(5)(C)(ii) of such Act (42
U.S.C. 1395y(b)(5)(C)(ii)) is amended by strik-
ing ‘‘$1,000’’ and inserting ‘‘$2,000’’.
(C) FAILURE OF PROVIDER TO PROVIDE
INFORMATION
ON
AVAILABILITY
OF
OTHER
PAYERS.—Section 1862(b)(6)(B) of such Act
(42 U.S.C. 1395y(b)(6)(B)) is amended by
striking ‘‘$2,000’’ and inserting ‘‘$4,000’’.
(9) IMPROPER
BILLING
BY
HOSPITALS.—Sec-
tion 1866(g) of such Act (42 U.S.C. 1395cc(g)) is
amended by striking ‘‘$2,000’’ and inserting
‘‘$4,000’’.
(10) VIOLATION
OF
ANTI-DUMPING
RESTRIC-
TIONS.—Section 1867(d)(1) of such Act (42 U.S.C.
1395dd(d)(1)) is amended—
(A) by striking ‘‘$50,000’’ each place it
appears and inserting ‘‘$100,000’’; and
(B) in subparagraph (A), by striking
‘‘$25,000’’ and inserting ‘‘$50,000’’.
(11) SANCTIONS
AGAINST
HEALTH
MAINTE-
NANCE
ORGANIZATIONS.—Section 1876(i)(6)(B)(i)
of such Act (42 U.S.C. 1395mm(i)(6)(B)(i)) is
amended—
(A) by striking ‘‘$25,000’’ and inserting
‘‘$50,000’’;
(B) by striking ‘‘$100,000’’ and inserting
‘‘$200,000’’; and
(C) by striking ‘‘$15,000’’ and inserting
‘‘$30,000’’.
(12) REFERRALS BY PHYSICIANS WITH OWNER-
SHIP OR INVESTMENT INTERESTS.—
(A) 
IMPROPER
CLAIMS.—Section
1877(g)(3) 
of 
such 
Act 
(42 
U.S.C.
1395nn(g)(3)) 
is 
amended 
by 
striking
‘‘$15,000’’ and inserting ‘‘$30,000’’.
(B) CIRCUMVENTION
SCHEMES.—Section
1877(g)(4) 
of 
such 
Act 
(42 
U.S.C.
1395nn(g)(4)) 
is 
amended 
by 
striking
‘‘$100,000’’ and inserting ‘‘$200,000’’.
(C) FAILURE TO REPORT INFORMATION.—
Section 1877(g)(5) of such Act (42 U.S.C.
1395nn(g)(5)) 
is 
amended 
by 
striking
‘‘$10,000’’ and inserting ‘‘$20,000’’.
(13) MEDICARE SUPPLEMENTAL POLICIES.—
(A) ISSUANCE
OF
POLICIES
WHERE
NO
STANDARDS IN EFFECT.—The second sentence
of section 1882(a)(2) of such Act (42 U.S.C.
1395ss(a)(2)) 
is 
amended 
by 
striking
‘‘$25,000’’ and inserting ‘‘$50,000’’.
(B) MISREPRESENTATIONS OF POLICIES.—
Section 1882(d) of such Act (42 U.S.C.
1395ss(d)) is amended—
(i) in paragraphs (1), (2), and (4)(A),
by 
striking 
‘‘$5,000’’ 
and 
inserting
‘‘$10,000’’; and
(ii) in paragraph (3), by striking
‘‘$25,000 (or $15,000’’ each place it ap-
pears 
and 
inserting 
‘‘$50,000 
(or
$30,000’’.
(C) VIOLATION
OF
BENEFITS
STAND-
ARDS.—Section 1882(p) of such Act (42 U.S.C.
1395ss(p)) is amended by striking ‘‘$25,000 (or
$15,000’’ each place it appears in paragraphs
(8) and (9)(C) and inserting ‘‘$50,000 (or
$30,000’’.
(D) VIOLATION OF GUARANTEED RENEW-
ABILITY
STANDARDS.—Section 1882(q)(5)(C)
of such Act (42 U.S.C. 1395ss(q)(5)(C)) is
amended by striking ‘‘$25,000’’ and inserting
‘‘$50,000’’.
(E) VIOLATION
OF
LOSS
RATIO
STAND-
ARDS.—Section 1882(r)(6)(A) of such Act (42
U.S.C. 1395ss(r)(6)(A)) is amended by striking
‘‘$25,000’’ and inserting ‘‘$50,000’’.
(F) VIOLATION OF PRE-EXISTING CONDI-
TION STANDARDS.—Section 1882(s)(3) of such