H. R. 3103—68
‘‘(c) SPECIAL FRAUD ALERTS.—
‘‘(1) IN GENERAL.—
‘‘(A) REQUEST FOR SPECIAL FRAUD ALERTS.—Any person
may present, at any time, a request to the Inspector Gen-
eral for a notice which informs the public of practices
which the Inspector General considers to be suspect or
of particular concern under the Medicare program under
title XVIII or a State health care program, as defined
in section 1128(h) (in this subsection referred to as a ‘spe-
cial fraud alert’).
‘‘(B) ISSUANCE
AND
PUBLICATION
OF
SPECIAL
FRAUD
ALERTS.—Upon receipt of a request described in subpara-
graph (A), the Inspector General shall investigate the sub-
ject matter of the request to determine whether a special
fraud alert should be issued. If appropriate, the Inspector
General shall issue a special fraud alert in response to
the request. All special fraud alerts issued pursuant to
this subparagraph shall be published in the Federal Reg-
ister.
‘‘(2) CRITERIA FOR SPECIAL FRAUD ALERTS.—In determining
whether to issue a special fraud alert upon a request described
in paragraph (1), the Inspector General may consider—
‘‘(A) whether and to what extent the practices that
would be identified in the special fraud alert may result
in any of the consequences described in subsection (a)(2);
and
‘‘(B) the volume and frequency of the conduct that
would be identified in the special fraud alert.’’.
Subtitle B—Revisions to Current Sanctions
for Fraud and Abuse
SEC. 211. MANDATORY EXCLUSION FROM PARTICIPATION IN MEDI-
CARE AND STATE HEALTH CARE PROGRAMS.
(a) INDIVIDUAL CONVICTED OF FELONY RELATING TO HEALTH
CARE FRAUD.—
(1) IN GENERAL.—Section 1128(a) (42 U.S.C. 1320a–7(a))
is amended by adding at the end the following new paragraph:
‘‘(3) FELONY
CONVICTION
RELATING
TO
HEALTH
CARE
FRAUD.—Any individual or entity that has been convicted for
an offense which occurred after the date of the enactment
of the Health Insurance Portability and Accountability Act of
1996, under Federal or State law, in connection with the deliv-
ery of a health care item or service or with respect to any
act or omission in a health care 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.—Paragraph (1) of section
1128(b) (42 U.S.C. 1320a–7(b)) is amended to read as follows:
‘‘(1) CONVICTION RELATING TO FRAUD.—Any individual or
entity that has been convicted for an offense which occurred
after the date of the enactment of the Health Insurance Port-
H. R. 3103—69
ability and Accountability Act of 1996, under Federal or State
law—
‘‘(A) of a criminal offense consisting of a misdemeanor
relating to fraud, theft, embezzlement, breach of fiduciary
responsibility, or other financial misconduct—
‘‘(i) in connection with the delivery of a health
care item or service, or
‘‘(ii) with respect to any act or omission in a health
care program (other than those specifically described
in subsection (a)(1)) operated by or financed in whole
or in part by any Federal, State, or local government
agency; or
‘‘(B) of a criminal offense relating to fraud, theft,
embezzlement, breach of fiduciary responsibility, or other
financial misconduct with respect to any act or omission
in a program (other than a health care program) operated
by or financed in whole or in part by any Federal, State,
or local government agency.’’.
(b) INDIVIDUAL CONVICTED
OF FELONY RELATING
TO CON-
TROLLED SUBSTANCE.—
(1) IN GENERAL.—Section 1128(a) (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 SUB-
STANCE.—Any individual or entity that has been convicted for
an offense which occurred after the date of the enactment
of the Health Insurance Portability and Accountability Act of
1996, under Federal or State law, of a criminal offense consist-
ing of a felony relating to the unlawful manufacture, distribu-
tion, prescription, or dispensing of a controlled substance.’’.
(2) CONFORMING
AMENDMENT.—Section 1128(b)(3) (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. 212. 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) (42 U.S.C. 1320a–7(c)(3)) is amended by add-
ing 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.
H. R. 3103—70
‘‘(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. 213. PERMISSIVE EXCLUSION OF INDIVIDUALS WITH OWNERSHIP
OR CONTROL INTEREST IN SANCTIONED ENTITIES.
Section 1128(b) (42 U.S.C. 1320a–7(b)) is amended by adding
at the end the following new paragraph:
‘‘(15) INDIVIDUALS CONTROLLING A SANCTIONED ENTITY.—
(A) Any individual—
‘‘(i) who has a direct or indirect ownership or control
interest in a sanctioned entity and who knows or should
know (as defined in section 1128A(i)(6)) of the action con-
stituting the basis for the conviction or exclusion described
in subparagraph (B); or
‘‘(ii) who is an officer or managing employee (as defined
in section 1126(b)) of such an entity.
‘‘(B) For purposes of subparagraph (A), the term ‘sanctioned
entity’ means an entity—
‘‘(i) that has been convicted of any offense described
in subsection (a) or in paragraph (1), (2), or (3) of this
subsection; or
‘‘(ii) that has been excluded from participation under
a program under title XVIII or under a State health care
program.’’.
SEC. 214. 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)
(42 U.S.C. 1320c–5(b)(1)) is amended by striking ‘‘may pre-
scribe)’’ and inserting ‘‘may prescribe, except that such period
may not be less than 1 year)’’.
(2) CONFORMING
AMENDMENT.—Section 1156(b)(2) (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 IMPOSI-
TION OF SANCTION.—Section 1156(b)(1) (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.
SEC. 215. INTERMEDIATE 
SANCTIONS 
FOR 
MEDICARE 
HEALTH
MAINTENANCE ORGANIZATIONS.
(a) APPLICATION OF INTERMEDIATE SANCTIONS FOR ANY PRO-
GRAM VIOLATIONS.—
(1) 
IN
GENERAL.—Section 
1876(i)(1) 
(42 
U.S.C.
1395mm(i)(1)) is amended by striking ‘‘the Secretary may termi-
nate’’ and all that follows and inserting ‘‘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;
H. R. 3103—71
‘‘(B) is carrying out the contract in a manner substantially
inconsistent with the efficient and effective administration of
this section; or
‘‘(C) 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) 
(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 Sec-
retary 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 deter-
mination has been corrected and is not likely to recur.’’.
(3) PROCEDURES FOR IMPOSING SANCTIONS.—Section 1876(i)
(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 accord-
ance with formal investigation and compliance procedures estab-
lished by the Secretary under which—
‘‘(A) the Secretary first provides the organization with the
reasonable 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) and the
organization fails to develop or implement such a plan;
‘‘(B) in deciding whether to impose sanctions, the Secretary
considers aggravating factors such as whether an organization
has a history of deficiencies or has not taken action to correct
deficiencies the Secretary has brought to the organization’s
attention;
‘‘(C) there are no unreasonable or unnecessary delays
between the finding of a deficiency and the imposition of sanc-
tions; and
‘‘(D) the Secretary provides the organization with reason-
able notice and opportunity for hearing (including the right
to appeal an initial decision) before imposing any sanction
or terminating the contract.’’.
(4) CONFORMING AMENDMENTS.—Section 1876(i)(6)(B) (42
U.S.C. 1395mm(i)(6)(B)) is amended by striking the second
sentence.