304
Title IV, Subtitle A
and Cosmetic Act, by the Food and Drug
Administration, with respect to—
(I) the safety of the formulation
or performance of the aspect of the
drug or device that caused the harm;
or
(II) the adequacy of the packag-
ing or labeling of the drug or device;
and
(ii) was approved by the Food and
Drug Administration; or
(B) the drug or device is generally recog-
nized as safe and effective pursuant to condi-
tions established by the Food and Drug Admin-
istration and applicable regulations, including
packaging and labeling regulations.
(2) WITHHELD
INFORMATION; MISREPRESEN-
TATION; 
ILLEGAL
PAYMENT.—The provisions of
paragraph (1) shall not apply in any case in which
the defendant—
(A) withheld from or misrepresented to the
Food and Drug Administration or any other
agency or official of the Federal Government,
information that is material and relevant to the
performance of the drug or device; or
305
Title IV, Subtitle A
(B) made an illegal payment to an official
of the Food and Drug Administration for the
purpose of securing approval of the drug or de-
vice.
(c) SEPARATE PROCEEDING.—
(1) CONSIDERATIONS.—At the request of the
health care producer, or other defendant joined, in
an action described in subsection (b), the trier of
fact shall consider in a separate proceeding—
(A) whether punitive damages are to be
awarded and the amount of the award; or
(B) the amount of punitive damages fol-
lowing a determination of punitive liability.
(2) EVIDENCE.—If a separate proceeding is re-
quested in accordance with paragraph (1), evidence
relevant only to the claim of punitive damages, as
determined by applicable State law, shall be inadmis-
sible in any proceeding to determine whether com-
pensatory damages are to be awarded.
(d) AMOUNT OF PUNITIVE DAMAGES.—In determin-
ing the amount of punitive damages in an action described
in subsection (b) or (c), the trier of fact shall consider
all relevant evidence, including—
(1) the financial condition of the health care
producer;
306
Title IV, Subtitle A
(2) the severity of the harm caused by the con-
duct of the health care producer;
(3) the duration of the conduct or any conceal-
ment of the conduct by the health care producer;
(4) the profitability of the conduct to the health
care producer;
(5) the number of products sold by the health
care producer of the kind causing the harm com-
plained of by the claimant;
(6) awards of punitive or exemplary damages to
persons similarly situated to the claimant;
(7) prospective awards of compensatory dam-
ages to persons similarly situated to the claimant;
(8) any criminal penalties imposed on the
health care producer as a result of the conduct com-
plained of by the claimant; and
(9) the amount of any civil fines assessed
against the defendant as a result of the conduct
complained of by the claimant.
(e) STRICT LIABILITY DEFENSE.—In a civil action
brought by a claimant in a Federal or State court under
which the claimant alleges that a health care producer of
a drug or device is strictly liable to such claimant for inju-
ries sustained from the use of such drug or device, a show-
ing by the defendant that such drug or devices was subject
307
Title IV, Subtitle A
to approval and was approved by the Food and Drug Ad-
ministration as described in subsection (b)(1)(A) shall be
an absolute defense to such strict liability claims.
SEC. 4027. REPORT.
The Secretary shall continuously monitor the oper-
ation of the provision of this subtitle. Not later than 3
years after the date of enactment of this Act, the Sec-
retary shall prepare and submit to the appropriate com-
mittees of Congress a report outlining the effects of this
subtitle on—
(1) access to health care;
(2) the costs of health care;
(3) the cost reductions passed on to the con-
sumers of health care;
(4) the number of health care malpractice ac-
tions filed;
(5) the time needed to resolve these claims;
(6) the numbers of claims resolved through al-
ternative dispute resolution; and
(7) the effect on the quality of health care.
308
Title IV, Subtitle B
Subtitle B—Anti-Fraud and Abuse
Control Program
PART I—ALL-PAYER FRAUD AND ABUSE
CONTROL PROGRAM
SEC. 4101. ALL-PAYER FRAUD AND ABUSE CONTROL PRO-
GRAM.
(a) ESTABLISHMENT OF PROGRAM.—
(1) IN GENERAL.—Not later than January 1,
1995, the Attorney General shall establish a pro-
gram—
(A) to coordinate Federal, State, and local
law enforcement programs to control fraud and
abuse with respect to the delivery of and pay-
ment for health care in the United States,
(B) to conduct investigations, audits, eval-
uations, 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 Attorney General shall
309
Title IV, Subtitle B
consult with, and arrange for the sharing of data
with the Attorney General.
(3) REGULATIONS.—
(A) IN GENERAL.—The Attorney General
shall by regulation establish standards to carry
out the program under paragraph (1).
(B) INFORMATION STANDARDS.—
(i) IN
GENERAL.—Such standards
shall include standards relating to the fur-
nishing of information by health care
plans, providers, and others to enable the
Attorney General to carry out the program
(including coordination with health care
plans under paragraph (2)).
(ii) CONFIDENTIALITY.—Such stand-
ards shall include procedures to assure
that such information is provided and uti-
lized in a manner that appropriately pro-
tects the confidentiality of the information
and the privacy of individuals receiving
health care services and items.
(iii) QUALIFIED IMMUNITY FOR PRO-
VIDING INFORMATION.—The provisions of
section 1157(a) of the Social Security Act
(relating to limitation on liability) shall
310
Title IV, Subtitle B
apply to a person providing information to
the Attorney General under the program
under this section, with respect to the At-
torney General’s performance of duties
under the program, in the same manner as
such section applies to information pro-
vided to organizations with a contract
under part B of title XI of such Act, with
respect to the performance of such a con-
tract.
(C) DISCLOSURE
OF
OWNERSHIP
INFOR-
MATION.—
(i) IN
GENERAL.—Such standards
shall include standards relating to the dis-
closure of ownership information described
in clause (ii) by any entity providing health
care services and items.
(ii) OWNERSHIP
INFORMATION
DE-
SCRIBED.—The ownership information de-
scribed in this clause includes—
(I) a description of such items
and services provided by such entity;
(II) the names and unique physi-
cian identification numbers of all phy-
sicians with a financial relationship
311
Title IV, Subtitle B
(as defined in section 1877(a)(2) of
the Social Security Act) with such
entity;
(III) the names of all other indi-
viduals with such an ownership or in-
vestment interest in such entity; and
(IV) any other ownership and re-
lated information required to be dis-
closed by such entity under section
1124 or section 1124A of the Social
Security Act.
(D) INTEGRITY
OF
ISSUANCE
OF
PRO-
VIDER
IDENTIFICATION
CODES.—Such stand-
ards shall, insofar as they relate to the issuance
of unique provider codes (described in section
4121(c)(4))—
(i) include standards relating to the
information (including ownership informa-
tion described in subparagraph (C)(ii) and
other information needed in the adminis-
tration of the program) to be required for
the issuance of such codes, and
(ii) provide for the issuance of such a
code upon the presentation of such infor-
mation as would be sufficient to provide
312
Title IV, Subtitle B
for the issuance of similar codes under the
medicare program.
(4) AUTHORIZATION OF APPROPRIATIONS FOR
INVESTIGATORS AND OTHER PERSONNEL.—In addi-
tion to any other amounts authorized to be appro-
priated to the Attorney General 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 Attorney General 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) HEALTH CARE PLAN DEFINED.—For the
purposes of this subsection, the term ‘‘health care
plan’’ shall have the meaning given such term in sec-
tion 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’’ (in this section
referred to as the ‘‘Trust Fund’’). The Trust
313
Title IV, Subtitle B
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 uncondi-
tionally 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 and the Attorney
General through a Managing Trustee des-
ignated by the Secretary and the Attorney Gen-
eral.
(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.
314
Title IV, Subtitle B
(ii) GENERAL
FORM
OF
INVEST-
MENT.—Investments described in clause (i)
may be made only in interest-bearing obli-
gations of the United States or in obliga-
tions 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 OBLI-
GATIONS.—The purposes for which obliga-
tions 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 obli-
gations 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
315
Title IV, Subtitle B
issue) on all marketable interest-bearing
obligations of the United States then form-
ing 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 OBLIGA-
TIONS.—The Managing Trustee may pur-
chase other interest-bearing obligations of
the United States or obligations guaran-
teed 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 obliga-
tions acquired by the Trust Fund (except pub-
lic-debt obligations issued exclusively to the
Trust Fund) may be sold by the Managing
Trustee at the market price, and such public-
316
Title IV, Subtitle B
debt obligations may be redeemed at par plus
accrued interest.
(D) INTEREST ON OBLIGATIONS AND PRO-
CEEDS FROM SALE OR REDEMPTION OF OBLI-
GATIONS.—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 disburse-
ments of the Secretary and the Attorney Gen-
eral in the discharge of the functions of the
Secretary and the Attorney General under the
all-payer fraud and abuse control program es-
tablished under subsection (a) shall be included
in the totals of the budget of the United States
Government. 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 Attorney General in car-
317
Title IV, Subtitle B
rying 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 and the Attorney General certifies are
necessary to carry out the all-payer fraud and
abuse control program established under sub-
section (a).
(C) DEPOSIT OF FEDERAL HEALTH ANTI-
FRAUD
AND
ABUSE
PENALTIES
INTO
TRUST
FUND.—Section 1128A(f)(3) of the Social Se-
curity Act (42 U.S.C. 1320a–7a(f)(3)) is
amended by striking ‘‘as miscellaneous receipts
of the Treasury of the United States’’ and in-
serting ‘‘in the Anti-Fraud and Abuse Trust
Fund established under section 4101(b) of the
Health Equity and Access Reform Today Act of
1993’’.
(D) USE
OF
FEDERAL
HEALTH
ANTI-
FRAUD
AND
ABUSE
PENALTIES
TO
REPAY
BENEFICIARIES
FOR
COST-SHARING.—Section
1128A(f) of the Social Security Act (42 U.S.C.
1320a–7a(f)) is amended in the matter preced-
ing paragraph (1) by striking ‘‘Secretary and
318
Title IV, Subtitle B
disposed of as follows:’’ and inserting the fol-
lowing: ‘‘Secretary. If the person against whom
such a penalty or assessment was assessed col-
lected a payment from an individual for provid-
ing to the individual the service that is the sub-
ject of the penalty or assessment, the Secretary
shall pay a portion of the amount recovered to
the individual in the nature of restitution in an
amount equal to the payment so collected. The
Secretary shall dispose of any remaining
amounts recovered under this section as fol-
lows:’’.
(4) ANNUAL REPORT.—The Managing Trustee
shall be required to submit an annual report to Con-
gress 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 sub-
section (a)(5) necessary for the Secretary and the
Attorney General to conduct the all-payer fraud and
abuse program established under subsection (a) in
the next fiscal year.
319
Title IV, Subtitle B
SEC. 4102. 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 por-
tion of such amounts attributable to the amounts re-
covered under this section by reason of the amend-
ments made by subtitle B of title IV of the Health
Equity and Access Reform Today Act of 1993 (as
estimated by the Secretary) shall be deposited into
the Anti-Fraud and Abuse Trust Fund.’’.
320
Title IV, Subtitle B
(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. 1320a–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 follow-
ing: ‘‘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 in-
serting ‘‘title XVIII, a State health care pro-
gram, or a health care plan’’.
(D) In the second sentence of subsection
(a)—
321
Title IV, Subtitle B
(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—
322
Title IV, Subtitle B
‘‘(1) in consultation with State and local health
care officials, identify opportunities for the satisfac-
tion of community service obligations that a court
may impose upon the conviction of an offense under
this section, and
‘‘(2) make information concerning such oppor-
tunities available to Federal and State law enforce-
ment 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 redesignat-
ing 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. 4103. 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