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‘‘(1) the entity has demonstrated capability to
carry out such activities;
‘‘(2) in carrying out such activities, the entity
agrees to cooperate with the Inspector General of
the Department of Health and Human Services, the
Attorney General of the United States, and other
law enforcement agencies, as appropriate, in the in-
vestigation and deterrence of fraud and abuse in re-
lation to this title and in other cases arising out of
such activities;
‘‘(3) the entity’s financial holdings, interests, or
relationships will not interfere with its ability to per-
form the functions to be required by the contract in
an effective and impartial manner; and
‘‘(4) the entity meets such other requirements
as the Secretary may impose.
‘‘(d) PROCESS FOR ENTERING INTO CONTRACTS.—
The Secretary shall enter into contracts under the Pro-
gram in accordance with such procedures as the Secretary
may by regulation establish, except that such procedures
shall include the following:
‘‘(1) The Secretary shall determine the appro-
priate number of separate contracts which are nec-
essary to carry out the Program and the appropriate
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times at which the Secretary shall enter into such
contracts.
‘‘(2) The provisions of section 1153(e)(1) shall
apply to contracts and contracting authority under
this section, except that competitive procedures must
be used when entering into new contracts under this
section, or at any other time considered appropriate
by the Secretary.
‘‘(3) A contract under this section may be re-
newed without regard to any provision of law requir-
ing competition if the contractor has met or ex-
ceeded the performance requirements established in
the current contract.
‘‘(e) LIMITATION ON CONTRACTOR LIABILITY.—The
Secretary shall by regulation provide for the limitation of
a contractor’s liability for actions taken to carry out a con-
tract under the Program, and such regulation shall, to the
extent the Secretary finds appropriate, employ the same
or comparable standards and other substantive and proce-
dural provisions as are contained in section 1157.
‘‘(f) TRANSFER OF AMOUNTS TO MEDICARE ANTI-
FRAUD AND ABUSE TRUST FUND.—For each fiscal year,
the Secretary shall transfer from the Federal Hospital In-
surance Trust Fund and the Federal Supplementary Med-
ical Insurance Trust Fund to the Medicare Anti-Fraud
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and Abuse Trust Fund under subsection (g) such amounts
as are necessary to carry out the activities described in
subsection (b). Such transfer shall be in an allocation as
reasonably reflects the proportion of such expenditures as-
sociated with part A and part B.
‘‘(g) MEDICARE ANTI-FRAUD
AND ABUSE TRUST
FUND.—
‘‘(1) ESTABLISHMENT.—
‘‘(A) IN GENERAL.—There is hereby estab-
lished in the Treasury of the United States the
Anti-Fraud and Abuse Trust Fund (hereafter
in this subsection 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 the Trust Fund as provided in
subsection (f), paragraph (3), and title XI.
‘‘(B) AUTHORIZATION
TO
ACCEPT
GIFTS
AND BEQUESTS.—The Trust Fund is author-
ized 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) INVESTMENT.—
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‘‘(A) IN GENERAL.—The Secretary of the
Treasury shall invest such amounts of the Fund
as such Secretary determines are not required
to meet current withdrawals from the Fund in
government account serial securities.
‘‘(B) USE OF INCOME.—Any interest de-
rived from investments under subparagraph (A)
shall be credited to the Fund.
‘‘(3) 
AMOUNTS
DEPOSITED
INTO
TRUST
FUND.—In addition to amounts transferred under
subsection (f), there shall be deposited in the Trust
Fund—
‘‘(A) that portion of amounts recovered in
relation to section 1128A arising out of a claim
under title XVIII as remains after application
of subsection (f)(2) (relating to repayment of
the Federal Hospital Insurance Trust Fund or
the Federal Supplementary Medical Insurance
Trust Fund) of that section, as may be applica-
ble,
‘‘(B) fines imposed under section 1128B
arising out of a claim under this title, and
‘‘(C) penalties and damages imposed (other
than funds awarded to a relator or for restitu-
tion) under sections 3729 through 3732 of title
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31, United States Code (pertaining to false
claims) in cases involving claims relating to pro-
grams under title XVIII, XIX, or XXI.
‘‘(4) DIRECT
APPROPRIATION
OF
FUNDS
TO
CARRY OUT PROGRAM.—
‘‘(A) IN
GENERAL.—There are appro-
priated from the Trust Fund for each fiscal
year such amounts as are necessary to carry
out the Medicare Integrity Program under this
section, subject to subparagraph (B).
‘‘(B) AMOUNTS SPECIFIED.—The amount
appropriated under subparagraph (A) for a fis-
cal year is as follows:
‘‘(i) For fiscal year 1996, such
amount 
shall 
be 
not 
less 
than
$430,000,000 
and 
not 
more 
than
$440,000,000.
‘‘(ii) For fiscal year 1997, such
amount 
shall 
be 
not 
less 
than
$490,000,000 
and 
not 
more 
than
$500,000,000.
‘‘(iii) For fiscal year 1998, such
amount 
shall 
be 
not 
less 
than
$550,000,000 
and 
not 
more 
than
$560,000,000.
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‘‘(iv) For fiscal year 1999, such
amount 
shall 
be 
not 
less 
than
$620,000,000 
and 
not 
more 
than
$630,000,000.
‘‘(v) For fiscal year 2000, such
amount 
shall 
be 
not 
less 
than
$670,000,000 
and 
not 
more 
than
$680,000,000.
‘‘(vi) For fiscal year 2001, such
amount 
shall 
be 
not 
less 
than
$690,000,000 
and 
not 
more 
than
$700,000,000.
‘‘(vii) For fiscal year 2002, such
amount 
shall 
be 
not 
less 
than
$710,000,000 
and 
not 
more 
than
$720,000,000.
‘‘(5) ANNUAL
REPORT.—The Secretary shall
submit an annual report to Congress on the amount
of revenue which is generated and disbursed by the
Trust Fund in each fiscal year.’’.
(b) ELIMINATION OF FI AND CARRIER RESPONSIBIL-
ITY FOR CARRYING OUT ACTIVITIES SUBJECT TO PRO-
GRAM.—
(1) 
RESPONSIBILITIES
OF
FISCAL
INTERMEDIARIES
UNDER
PART
A.—Section 1816
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(42 U.S.C. 1395h) is amended by adding at the end
the following new subsection:
‘‘(l) No agency or organization may carry out (or re-
ceive payment for carrying out) any activity pursuant to
an agreement under this section to the extent that the ac-
tivity is carried out pursuant to a contract under the Med-
icare Integrity Program under section 1893.’’.
(2) RESPONSIBILITIES
OF
CARRIERS
UNDER
PART B.—Section 1842(c) (42 U.S.C. 1395u(c)) is
amended by adding at the end the following new
paragraph:
‘‘(6) No carrier may carry out (or receive payment
for carrying out) any activity pursuant to a contract under
this subsection to the extent that the activity is carried
out pursuant to a contract under the Medicare Integrity
Program under section 1893.’’.
(c) 
CONFORMING
AMENDMENT.—Section
1128A(f)(3) (42 U.S.C. 1320a–7a(f)(3)) is amended by
striking ‘‘as miscellaneous receipts of the Treasury of the
United States’’ and inserting ‘‘in the Anti-Fraud and
Abuse Trust Fund established under section 1893(g)’’.
(d) DIRECT SPENDING FOR MEDICARE-RELATED AC-
TIVITIES
OF INSPECTOR GENERAL.—Section 1893, as
added by subsection (a), is amended by adding at the end
the following new subsection:
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‘‘(h) DIRECT SPENDING FOR MEDICARE-RELATED
ACTIVITIES OF INSPECTOR GENERAL.—
‘‘(1) IN
GENERAL.—There are appropriated
from the Federal Hospital Insurance Trust Fund
and the Federal Supplementary Medical Insurance
Trust Fund to the Inspector General of the Depart-
ment of Health and Human Services for each fiscal
year such amounts as are necessary to enable the
Inspector General to carry out activities relating to
the medicare program (as described in paragraph
(2)), subject to paragraph (3).
‘‘(2) ACTIVITIES
DESCRIBED.—The activities
described in this paragraph are as follows:
‘‘(A) Prosecuting medicare-related matters
through criminal, civil, and administrative pro-
ceedings.
‘‘(B) Conducting investigations relating to
the medicare program.
‘‘(C) Performing financial and performance
audits of programs and operations relating to
the medicare program.
‘‘(D) Performing inspections and other
evaluations relating to the medicare program.
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‘‘(E) Conducting provider and conumer
education activities regarding the requirements
of this title.
‘‘(3) AMOUNTS
SPECIFIED.—The amount ap-
propriated under paragraph (1) for a fiscal year is
as follows:
‘‘(A) For fiscal year 1996, such amount
shall be $130,000,000.
‘‘(B) For fiscal year 1997, such amount
shall be $181,000,000.
‘‘(C) For fiscal year 1998, such amount
shall be $204,000,000.
‘‘(D) For each subsequent fiscal year, the
amount appropriated for the previous fiscal
year, increased by the percentage increase in
aggregate expenditures under this title for the
fiscal year involved over the previous fiscal year.
‘‘(4) ALLOCATION OF PAYMENTS AMONG TRUST
FUNDS.—The appropriations made under paragraph
(1) shall be in an allocation as reasonably reflects
the proportion of such expenditures associated with
part A and part B.’’.
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SEC. 15107. PERMITTING CARRIERS TO CARRY OUT PRIOR
AUTHORIZATION FOR CERTAIN ITEMS OF DU-
RABLE MEDICAL EQUIPMENT.
(a) IN GENERAL.—Section 1834(a)(15) (42 U.S.C.
1395m(a)(15)), as amended by section 135(b) of the So-
cial Security Act Amendments of 1994, is amended by
adding at the end the following new subparagraphs:
‘‘(D) APPLICATION BY CARRIERS.—A car-
rier may develop (and periodically update) a list
of items under subparagraph (A) and a list of
suppliers under subparagraph (B) in the same
manner as the Secretary may develop (and peri-
odically update) such lists.
‘‘(E) WAIVER OF PUBLICATION REQUIRE-
MENT.—A carrier may make an advance deter-
mination under subparagraph (C) with respect
to an item or supplier on a list developed by the
Secretary or the carrier without regard to
whether or not the Secretary has promulgated
a regulation with respect to the list, except that
the carrier may not make such an advance de-
termination with respect to an item or supplier
on a list until the expiration of the 30-day pe-
riod beginning on the date the Secretary or the
carrier places the item or supplier on the list.’’.
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(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall take effect as if included in the enact-
ment of the Social Security Act Amendments of 1994.
SEC. 15108. NATIONAL HEALTH CARE ANTI-FRAUD TASK
FORCE.
(a) ESTABLISHMENT.—The Attorney General, in
consultation with the Secretary of Health and Human
Services, shall establish a national health care anti-fraud
task force (in this section referred to as the ‘‘task force’’).
The Attorney General shall establish the task force within
120 days after the date of the enactment of this Act.
(b) COMPOSITION.—The task force shall include rep-
resentatives of Federal agencies involved in the investiga-
tion and prosecution of persons violating laws relating to
health care fraud and abuse, including at least one rep-
resentative from each of the following agencies:
(1) The Department of Justice and the Federal
Bureau of Investigation.
(2) The Department of Health and Human
Services and the Office of the Inspector General
within the Department.
(3) The office in the Department of Defense re-
sponsible for administration of the CHAMPUS pro-
gram.
(4) The Department of Veterans’ Affairs.
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(5) The United States Postal Inspection Serv-
ice.
(6) The Internal Revenue Service.
The Attorney General (or the designee of the Attorney
General) shall serve as chair of the task force.
(c) DUTIES.—The task force shall coordinate Federal
law enforcement activities relating to health care fraud
and abuse in order to better control fraud and abuse in
the delivery of health care in the United States. Specifi-
cally, the task force shall coordinate activities—
(1) in order to assure the effective targeting
and investigation of persons who organize, direct, fi-
nance, or otherwise knowingly engage in health care
fraud, and
(2) in order to assure full and effective coopera-
tion between Federal and State agencies involved in
health care fraud investigations.
(d) STAFF.—Each member of the task force who rep-
resents an agency shall be responsible for providing for
the detail (from the agency) of at least one full-time staff
person to staff the task force. Such detail shall be without
change in salary, compensation, benefits, and other em-
ployment-related matters.
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SEC. 15109. STUDY OF ADEQUACY OF PRIVATE QUALITY AS-
SURANCE PROGRAMS.
(a) IN GENERAL.—The Administrator of the Health
Care Financing Administration (acting through the Direc-
tor of the Office of Research and Demonstrations) shall
enter into an agreement with a private entity to conduct
a study during the 5-year period beginning on the date
of the enactment of this Act of the adequacy of the quality
assurance programs and consumer protections used by the
MedicarePlus program under part C of title XVIII of the
Social Security Act (as inserted by section 15002(a)), and
shall include in the study an analysis of the effectiveness
of such programs in protecting plan enrollees against the
risk of insufficient provision of benefits which may result
from utilization controls.
(b) REPORT.—Not later than 6 months after the con-
clusion of the 5-year period described in subsection (a),
the Administrator shall submit a report to Congress on
the study conducted under subsection (a).
SEC. 15110. PENALTY FOR FALSE CERTIFICATION FOR
HOME HEALTH SERVICES.
(a) IN GENERAL.—Section 1128A(b) (42 U.S.C.
1320a–7a(b)) is amended by adding at the end the follow-
ing new paragraph:
‘‘(3)(A) Any physician who executes a document de-
scribed in subparagraph (B) with respect to an individual
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knowing that all of the requirements referred to in such
subparagraph are not met with respect to the individual
shall be subject to a civil monetary penalty of not more
than the greater of—
‘‘(i) $5,000, or
‘‘(ii) three times the amount of the payments
under title XVIII for home health services which are
made pursuant to such certification.
‘‘(B) A document described in this subparagraph is
any document that certifies, for purposes of title XVIII,
that an individual meets the requirements of section
1814(a)(2)(C) or 1835(a)(2)(A) in the case of home
health services furnished to the individual.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to certifications made on or
after the date of the enactment of this Act.
SEC. 15111. PILOT PROJECTS.
The Secretary of Health and Human Services shall
establish and operate 5 pilot projects (in various geo-
graphic regions of the United States) under which the Sec-
retary shall implement innovative approaches to monitor
payment claims under the medicare program to detect
those claims that are wasteful or fraudulent.
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PART 2—REVISIONS TO CRIMINAL LAW
SEC. 15121. DEFINITION OF FEDERAL HEALTH CARE OF-
FENSE.
(a) IN GENERAL.—Chapter 2 of title 18, United
States Code, is amended by adding at the end the follow-
ing:
‘‘§ 24. Definition of Federal health care offense
‘‘(a) As used in this title, the term ‘Federal health
care offense’ means—
‘‘(1) a violation of, or criminal conspiracy to
violate section 226, 227, 669, 1035, 1347, or 1518
of this title;
‘‘(2) a violation of, or criminal conspiracy to
violate section 1128B of the Social Security Act (42
U.S.C. 1320a–7b);
‘‘(3) a violation of, or criminal conspiracy to
violate section 201, 287, 371, 664, 666, 1001, 1027,
1341, 1343, or 1954 of this title, if the violation or
conspiracy relates to a health care benefit program;
‘‘(4) a violation of, or criminal conspiracy to
violate section 501 or 511 of the Employee Retire-
ment Income Security Act of 1974 (29 U.S.C. 1131
or 29 U.S.C. 1141), if the violation or conspiracy re-
lates to a health care benefit program;
‘‘(5) the commission of, or attempt to commit,
an act which constitutes grounds for the imposition
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of a penalty under section 303 of the Federal Food,
Drug, and Cosmetic Act, if the act or attempt re-
lates to a health care benefit program; or
‘‘(6) a violation of, or criminal conspiracy to
violate, section 3 of the Anti-Kickback Act of 1986
(41 U.S.C. 53), if the violation or conspiracy relates
to a health care benefit program.
‘‘(b) As used in this title, the term ‘health care bene-
fit program’ has the meaning given such term in section
1347(b) of this title.’’.
(b) CLERICAL AMENDMENT.—The table of sections
at the beginning of chapter 2 of title 18, United States
Code, is amended by inserting after the item relating to
section 23 the following new item:
‘‘24. Definition relating to Federal health care offense defined.’’.
SEC. 15122. HEALTH CARE FRAUD.
(a) IN GENERAL.—Chapter 63 of title 18, United
States Code, is amended by adding at the end the follow-
ing:
‘‘§ 1347. Health care fraud
‘‘(a) Whoever, having devised or intending to devise
a scheme or artifice, commits or attempts to commit an
act in furtherance of or for the purpose of executing such
scheme or artifice—
‘‘(1) to defraud any health care benefit pro-
gram; or
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‘‘(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 benefit program,
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 of this title), such per-
son shall be fined under this title or imprisoned not more
than 20 years, or both; and if the violation results in
death, such person shall be fined under this title, or im-
prisoned for any term of years or for life, or both.
‘‘(b) As used in this section, the term ‘health care
benefit program’ means any public or private plan or con-
tract under which any medical benefit, item, or service is
provided to any individual, and includes any individual or
entity who is providing a medical benefit, item, or service
for which payment may be made under the plan or con-
tract.’’.
(b) 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. 15123. THEFT OR EMBEZZLEMENT.
(a) IN GENERAL.—Chapter 31 of title 18, United
States Code, is amended by adding at the end the follow-
ing:
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‘‘§ 669. Theft or embezzlement in connection with
health care
‘‘(a) Whoever embezzles, steals, or otherwise without
authority willfully and unlawfully converts to the use of
any person other than the rightful owner, or intentionally
misapplies any of the moneys, funds, securities, premiums,
credits, property, or other assets of a health care benefit
program, shall be fined under this title or imprisoned not
more than 10 years, or both.
‘‘(b) As used in this section, the term ‘health care
benefit program’ has the meaning given such term in sec-
tion 1347(b) of this title.’’.
(b) CLERICAL AMENDMENT.—The table of sections
at the beginning of chapter 31 of title 18, United States
Code, is amended by adding at the end the following:
‘‘669. Theft or embezzlement in connection with health care.’’.
SEC. 15124. FALSE STATEMENTS.
(a) IN GENERAL.—Chapter 47 of title 18, United
States Code, is amended by adding at the end the follow-
ing:
‘‘§ 1035. False statements relating to health care mat-
ters
‘‘(a) Whoever, in any matter involving a health care
benefit program, knowingly and willfully falsifies, conceals,
or covers up by any trick, scheme, or device a material
fact, or makes any false, fictitious, or fraudulent state-
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ments or representations, or makes or uses any false writ-
ing or document knowing the same to contain any false,
fictitious, or fraudulent statement or entry, shall be fined
under this title or imprisoned not more than 5 years, or
both.
‘‘(b) As used in this section, the term ‘health care
benefit program’ has the meaning given such term in sec-
tion 1347(b) of this title.’’.
(b) CLERICAL AMENDMENT.—The table of sections
at the beginning of chapter 47 of title 18, United States
Code, is amended by adding at the end the following new
item:
‘‘1035. False statements relating to health care matters.’’.
SEC. 15125. BRIBERY AND GRAFT.
(a) IN GENERAL.—Chapter 11 of title 18, United
States Code, is amended by adding at the end the follow-
ing:
‘‘§ 226. Bribery and graft in connection with health
care
‘‘(a) Whoever—
‘‘(1) directly or indirectly, corruptly gives, of-
fers, or promises anything of value to a health care
official, or offers or promises to give anything of
value to any other person, or attempts to violate this
subsection, with intent—
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‘‘(A) to influence any of the health care of-
ficial’s actions, decisions, or duties relating to a
health care benefit program;
‘‘(B) to influence such an official to com-
mit or aid in the committing, or collude in or
allow, any fraud, or make opportunity for the
commission of any fraud, on a health care bene-
fit program; or
‘‘(C) to induce such an official to engage
in any conduct in violation of the lawful duty of
such official; or
‘‘(2) being a health care official, directly or in-
directly, corruptly demands, seeks, receives, accepts,
or agrees to accept anything of value personally or
for any other person or entity, the giving of which
violates paragraph (1) of this subsection, or at-
tempts to violate this subsection,
shall be fined under this title or imprisoned not more than
15 years, or both.
‘‘(b) Whoever—
‘‘(1) otherwise than as provided by law for the
proper discharge of any duty, directly or indirectly
gives, offers, or promises anything of value to a
health care official, for or because of any of the
health care official’s actions, decisions, or duties re-
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lating to a health care benefit program, or attempts
to violate this subsection; or
‘‘(2) being a health care official, otherwise than
as provided by law for the proper discharge of any
duty, directly or indirectly, demands, seeks, receives,
accepts or agrees to accept anything of value person-
ally or for any other person or entity, the giving of
which violates paragraph (1) of this subsection, or
attempts to violate this subsection,
shall be fined under this title, or imprisoned not more than
2 years, or both.
‘‘(c) As used in this section—
‘‘(1) the term ‘health care official’ means—
‘‘(A) an administrator, officer, trustee, fi-
duciary, custodian, counsel, agent, or employee
of any health care benefit program;
‘‘(B) an officer, counsel, agent, or em-
ployee, of an organization that provides services
under contract to any health care benefit pro-
gram; or
‘‘(C) an official, employee, or agent of an
entity having regulatory authority over any
health care benefit program; and
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‘‘(2) the term ‘health care benefit program’ has
the meaning given such term in section 1347(b) of
this title.’’.
(b) CLERICAL AMENDMENT.—The table of chapters
at the beginning of chapter 11 of title 18, United States
Code, is amended by adding at the end the following new
item:
‘‘226. Bribery and graft in connection with health care.’’.
SEC. 15126. ILLEGAL REMUNERATION WITH RESPECT TO
HEALTH CARE BENEFIT PROGRAMS.
(a) IN GENERAL.—Chapter 11 of title 18, United
States Code, is amended by adding at the end the follow-
ing:
‘‘§ 227. Illegal remuneration with respect to health
care benefit programs
‘‘(a) Whoever knowingly and willfully solicits or re-
ceives any remuneration (including any kickback, bribe, or
rebate) directly or indirectly, overtly or covertly, in cash
or in kind—
‘‘(1) in return for referring any individual to a
person for the furnishing or arranging for the fur-
nishing of any item or service for which payment
may be made in whole or in part by any health care
benefit program; or
‘‘(2) in return for purchasing, leasing, ordering,
or arranging for or recommending purchasing, leas-
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ing, or ordering any good, facility, service, or item
for which payment may be made in whole or in part
by any health care benefit program, or attempting to
do so,
shall be fined under this title or imprisoned for not more
than 5 years, or both.
‘‘(b) Whoever knowingly and willfully offers or pays
any remuneration (including any kickback, bribe, or re-
bate) directly or indirectly, overtly, or covertly, in cash or
in kind to any person to induce such person—
‘‘(1) to refer an individual to a person for the
furnishing or arranging for the furnishing of any
item or service for which payment may be made in
whole or in part by any health benefit program; or
‘‘(2) to purchase, lease, order, or arrange for or
recommend purchasing, leasing, or ordering any
good, facility, service, or item for which payment
may be made in whole or in part by any health bene-
fit program or attempts to do so,
shall be fined under this title or imprisoned for not more
than 5 years, or both.
‘‘(c) Subsections (a) and (b) shall not apply to—
‘‘(1) a discount or other reduction in price ob-
tained by a provider of services or other entity under
a health care benefit program if the reduction in
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price is properly disclosed and appropriately re-
flected in the costs claimed or charges made by the
provider or entity under a health care benefit pro-
gram;
‘‘(2) any amount paid by an employer to an em-
ployee (who has a bona fide employment relationship
with such employer) for employment in the provision
of covered items or services if the amount of the re-
muneration under the arrangement is consistent
with the fair market value of the services and is not
determined in a manner that takes into account (di-
rectly or indirectly) the volume or value of any refer-
rals;
‘‘(3) any amount paid by a vendor of goods or
services to a person authorized to act as a purchas-
ing agent for a group of individuals or entities who
are furnishing services reimbursed under a health
care benefit program if—
‘‘(A) the person has a written contract,
with each such individual or entity, which speci-
fies the amount to be paid the person, which
amount may be a fixed amount or a percentage
of the value of the purchases made by each
such individual or entity under the contract,
and
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‘‘(B) in the case of an entity that is a pro-
vider of services (as defined in section 1861(u)
of the Social Security Act, the person discloses
(in such form and manner as the Secretary of
Health and Human Services requires) to the
entity and, upon request, to the Secretary the
amount received from each such vendor with re-
spect to purchases made by or on behalf of the
entity;
‘‘(4) a waiver of any coinsurance under part B
of title XVIII of the Social Security Act by a feder-
ally qualified health care center with respect to an
individual who qualifies for subsidized services under
a provision of the Public Health Service Act; and
‘‘(5) any payment practice specified by the Sec-
retary of Health and Human Services in regulations
promulgated pursuant to section 14(a) of the Medi-
care and Medicaid Patient and Program Protection
Act of 1987.
‘‘(d) Any person injured in his business or property
by reason of a violation of this section or section 226 of
this title may sue therefor in any appropriate United
States district court and shall recover threefold the dam-
ages such person sustains and the cost of the suit, includ-
ing a reasonable attorney’s fee.
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‘‘(e) As used in this section, ‘health care benefit pro-
gram’ has the meaning given such term in section 1347(b)
of this title.’’.
(b) CLERICAL AMENDMENT.—The table of sections
at the beginning of chapter 11 of title 18, United States
Code, is amended by adding at the end the following:
‘‘227. Illegal remuneration with respect to health care benefit programs.’’.
(c) CONFORMING AMENDMENT.—Section 1128B of
the Social Security Act (42 U.S.C. 1320a–7b) is amended
by striking subsection (b).
SEC. 15127. OBSTRUCTION OF CRIMINAL INVESTIGATIONS
OF HEALTH CARE OFFENSES.
(a) IN GENERAL.—Chapter 73 of title 18, United
States Code, is amended by adding at the end the follow-
ing:
‘‘§ 1518. Obstruction of criminal investigations of
health care offenses
‘‘(a) Whoever willfully prevents, obstructs, misleads,
delays or attempts to prevent, obstruct, mislead, or delay
the communication of information or records relating to
a violation of a health care offense to a criminal investiga-
tor shall be fined under this title or imprisoned not more
than 5 years, or both.
‘‘(b) As used in this section the term ‘health care of-
fense’ has the meaning given such term in section 24 of
this title.
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‘‘(c) As used in this section the term ‘criminal inves-
tigator’ means any individual duly authorized by a depart-
ment, agency, or armed force of the United States to con-
duct or engage in investigations for prosecutions for viola-
tions of health care offenses.’’.
(b) CLERICAL AMENDMENT.—The table of sections
at the beginning of chapter 73 of title 18, United States
Code, is amended by adding at the end the following new
item:
‘‘1518. Obstruction of criminal investigations of health care offenses.’’.
SEC. 15128. CIVIL PENALTIES FOR VIOLATIONS OF FED-
ERAL HEALTH CARE OFFENSES.
(a) IN GENERAL.—Chapter 63 of title 18, United
States Code, is amended by adding at the end the follow-
ing:
‘‘§ 1348. Civil penalties for violations of Federal
health care offenses
‘‘The Attorney General may bring a civil action in
the appropriate United States district court against any
person who engages in conduct constituting a violation of
Federal health care offense, as that term is defined in sec-
tion 24 of this title and, upon proof of such conduct by
a preponderance of the evidence, such person shall be sub-
ject to a civil penalty of not more than $50,000 for each
violation or the amount of compensation or proceeds which
the person received or offered for the prohibited conduct,
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whichever amount is greater. The imposition of a civil pen-
alty under this section does not preclude any other crimi-
nal or civil statutory, common law, or administrative rem-
edy, which is available by law to the United States or any
other person.’’.
(b) CLERICAL AMENDMENT.—The table of sections
for chapter 63 of title 18, United States Code, is amended
by adding at the end the following item:
‘‘1348. Civil penalties for violations of Federal health care offenses.’’.
SEC. 15129. INJUNCTIVE RELIEF RELATING TO 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 subpara-
graph (B); and
(3) by adding at the end the following:
‘‘(C) committing or about to commit a
Federal health care offense (as defined in sec-
tion 24 of this title).’’.
SEC. 15130. AUTHORIZED INVESTIGATIVE DEMAND PROCE-
DURES.
(a) IN GENERAL.—Chapter 233 of title 18, United
States Code, is amended by adding after section 3485 the
following:
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‘‘§ 3486. Authorized investigative demand procedures
‘‘(a) AUTHORIZATION.—(1) In any investigation re-
lating to functions set forth in paragraph (2), the Attorney
General or the Director of the Federal Bureau of Inves-
tigation or their designees may issue in writing and cause
to be served a summons compelling the attendance and
testimony of witnesses and requiring the production of any
records (including any books, papers, documents, elec-
tronic media, or other objects or tangible things), which
may be relevant to an authorized law enforcement inquiry,
that a person or legal entity may possess or have care,
custody, or control. The attendance of witnesses and the
production of records may be required from any place in
any State or in any territory or other place subject to the
jurisdiction of the United States at any designated place
of hearing; except that a witness shall not be required to
appear at any hearing more than 500 miles distant from
the place where he was served with a subpoena. Witnesses
summoned under this section shall be paid the same fees
and mileage that are paid witnesses in the courts of the
United States. A summons requiring the production of
records shall describe the objects required to be produced
and prescribe a return date within a reasonable period of
time within which the objects can be assembled and made
available.
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‘‘(2) Investigative demands utilizing an administra-
tive summons are authorized for:
‘‘(A) Any investigation with respect to any act
or activity constituting an offense involving a Fed-
eral health care offense as that term is defined in
section 24 of title 18, United States Code.
‘‘(B) Any investigation, with respect to viola-
tions of sections 1073 and 1074 of title 18, United
States Code, or in which an individual has been law-
fully charged with a Federal offense and such indi-
vidual is avoiding prosecution or custody or confine-
ment after conviction of such offense or attempt.
‘‘(b) SERVICE.—A subpoena issued under this section
may be served by any person designated in the subpoena
to serve it. Service upon a natural person may be made
by personal delivery of the subpoena to him. Service may
be made upon a domestic or foreign corporation or upon
a partnership or other unincorporated association which
is subject to suit under a common name, by delivering the
subpoena to an officer, to a managing or general agent,
or to any other agent authorized by appointment or by
law to receive service of process. The affidavit of the per-
son serving the subpoena entered on a true copy thereof
by the person serving it shall be proof of service.
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‘‘(c) ENFORCEMENT.—In the case of contumacy by
or refusal to obey a subpoena issued to any person, the
Attorney General may invoke the aid of any court of the
United States within the jurisdiction of which the inves-
tigation is carried on or of which the subpoenaed person
is an inhabitant, or in which he carries on business or may
be found, to compel compliance with the subpoena. The
court may issue an order requiring the subpoenaed person
to appear before the Attorney General to produce records,
if so ordered, or to give testimony touching the matter
under investigation. Any failure to obey the order of the
court may be punished by the court as a contempt thereof.
All process in any such case may be served in any judicial
district in which such person may be found.
‘‘(d) IMMUNITY FROM CIVIL LIABILITY.—Notwith-
standing any Federal, State, or local law, any person, in-
cluding officers, agents, and employees, receiving a sum-
mons under this section, who complies in good faith with
the summons and thus produces the materials sought,
shall not be liable in any court of any State or the United
States to any customer or other person for such produc-
tion or for nondisclosure of that production to the cus-
tomer.’’.
(b) CLERICAL AMENDMENT.—The table of sections
at the beginning of chapter 223 of title 18, United States
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Code, is amended by inserting after the item relating to
section 3485 the following new item:
‘‘3486. Authorized investigative demand procedures.’’.
(c) 
CONFORMING
AMENDMENT.—Section
1510(b)(3)(B) of title 18, United States Code, is amended
by inserting ‘‘or a Federal Bureau of Investigation sum-
mons (issued under section 3486 of title 18),’’ after ‘‘sub-
poena’’.
SEC. 15131. GRAND JURY DISCLOSURE.
Section 3322 of title 18, United States Code, is
amended—
(1) by redesignating subsections (c) and (d) as
subsections (d) and (e), respectively; and
(2) by inserting after subsection (b) the follow-
ing:
‘‘(c) A person who is privy to grand jury information
concerning a health care offense—
‘‘(1) received in the course of duty as an attor-
ney for the Government; or
‘‘(2) disclosed under rule 6(e)(3)(A)(ii) of the
Federal Rules of Criminal Procedure;
may disclose that information to an attorney for the Gov-
ernment to use in any civil investigation or proceeding re-
lated to a Federal health care offense (as defined in sec-
tion 24 of this title).’’.
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SEC. 15132. MISCELLANEOUS AMENDMENTS TO TITLE 18,
UNITED STATES CODE.
(a) LAUNDERING OF MONETARY INSTRUMENTS.—
Section 1956(c)(7) of title 18, United States Code, is
amended by adding at the end thereof the following:
‘‘(F) Any act or activity constituting an offense
involving a Federal health care offense as that term
is defined in section 24 of title 18, United States
Code.’’.
(b) ENHANCED PENALTIES.—Section 2326(2) of title
18, United States Code, is amended by striking ‘‘sections
that—’’ and inserting ‘‘or in the case of a Federal health
care offense as that term is defined in section 24 of this
title, that—’’.
(c) AUTHORIZATION FOR INTERCEPTION OF WIRE,
ORAL, 
OR
ELECTRONIC
COMMUNICATIONS.—Section
2516(1)(c) of title 18, United States Code, is amended—
(1) by inserting ‘‘section 226 (bribery and graft
in connection with health care), section 227 (illegal
remunerations)’’ after ‘‘section 224 (bribery in
sporting contests),’’; and
(2) by inserting ‘‘section 1347 (health care
fraud)’’ after ‘‘section 1344 (relating to bank
fraud),’’ .
(d) DEFINITIONS.—Section 1961(1) of title 18, Unit-
ed States Code, is amended—
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(1) by inserting ‘‘sections 226 and 227 (relating
to bribery and graft, and illegal remuneration in
connection with health care)’’ after ‘‘section 224 (re-
lating to sports bribery),’’;
(2) by inserting ‘‘section 669 (relating to theft
or embezzlement in connection with health care)’’
after ‘‘section 664 (relating to embezzlement from
pension and welfare funds),’’; and
(3) by inserting ‘‘section 1347 (relating to
health care fraud)’’ after ‘‘section 1344 (relating to
financial institution fraud),’’.
(e) CRIMINAL FORFEITURE.—Section 982(a) of title
18, United States Code, is amended by adding at the end
the following new paragraph:
‘‘(6) The court in imposing sentence on a per-
son convicted of a Federal health care offense as de-
fined in section 24 of this title, shall order that the
offender forfeit to the United States any real or per-
sonal property constituting or derived from proceeds
that the offender obtained directly or indirectly as
the result of the offense.’’.
(f) REWARDS FOR INFORMATION LEADING TO PROS-
ECUTION AND CONVICTION.—Section 3059(c)(1) of title
18, United States Code, is amended by inserting ‘‘or fur-
nishes information unknown to the Government relating
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to a possible prosecution of a Federal health care offense
as defined in section 24 of this title, which results in a
conviction’’ before the period at the end.
Subtitle C—Regulatory Relief
PART 1—PHYSICIAN OWNERSHIP REFERRAL
REFORM
SEC. 15201. REPEAL OF PROHIBITIONS BASED ON COM-
PENSATION ARRANGEMENTS.
(a) IN GENERAL.—Section 1877(a)(2) (42 U.S.C.
1395nn(a)(2)) is amended by striking ‘‘is—’’ and all that
follows through ‘‘equity,’’ and inserting the following: ‘‘is
(except as provided in subsection (c)) an ownership or in-
vestment interest in the entity through equity,’’.
(b) CONFORMING AMENDMENTS.—Section 1877 (42
U.S.C. 1395nn) is amended as follows:
(1) In subsection (b)—
(A) in the heading, by striking ‘‘TO BOTH
OWNERSHIP
AND
COMPENSATION
ARRANGE-
MENT PROHIBITIONS’’ and inserting ‘‘WHERE
FINANCIAL RELATIONSHIP EXISTS’’; and
(B) by redesignating paragraph (4) as
paragraph (7).
(2) In subsection (c)—
(A) by amending the heading to read as
follows: ‘‘EXCEPTION FOR OWNERSHIP OR IN-
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‘‘(E) with a contract with a State to pro-
vide services under the State plan under title
XIX (in accordance with section 1903(m)) or a
State MediGrant plan under title XXI; or
‘‘(F) which is a MedicarePlus organization
under part C or which provides or arranges for
the provision of health care items or services
pursuant to a written agreement between the
organization and an individual or entity if the
written agreement places the individual or en-
tity at substantial financial risk for the cost or
utilization of the items or services which the in-
dividual or entity is obligated to provide, wheth-
er through a withhold, capitation, incentive
pool, per diem payment, or any other similar
risk arrangement which places the individual or
entity at substantial financial risk.’’.
(d) NEW EXCEPTION FOR SHARED FACILITY SERV-
ICES.—
(1) IN GENERAL.—Section 1877(b) (42 U.S.C.
1395nn(b)), as amended by section 15201(b)(3)(C),
is amended—
(A) 
by 
redesignating 
paragraphs 
(4)
through (7) as paragraphs (5) through (8); and
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or after August 14, 1995, regardless of whether or not
regulations are promulgated to carry out such amend-
ments.
PART 2—OTHER MEDICARE REGULATORY
RELIEF
SEC. 15211. REPEAL OF MEDICARE AND MEDICAID COV-
ERAGE DATA BANK.
(a) IN GENERAL.—Section 1144 (42 U.S.C. 1320b–
14) is repealed.
(b) CONFORMING AMENDMENTS.—
(1) MEDICARE.—Section 1862(b)(5) (42 U.S.C.
1395y(b)(5)) is amended—
(A) in subparagraph (B), by striking
‘‘under—’’ and all that follows through the end
and inserting ‘‘subparagraph (A) for purposes
of carrying out this subsection.’’, and
(B) in subparagraph (C)(i), by striking
‘‘subparagraph (B)(i)’’ and inserting ‘‘subpara-
graph (B)’’.
(2) MEDICAID.—Section 1902(a)(25)(A)(i) (42
U.S.C. 1396a(a)(25)(A)(i)) is amended by striking
‘‘including the use of’’ and all that follows through
‘‘any additional measures’’.