I
105TH CONGRESS
1ST SESSION
H. R. 2632
To amend title XI and title XVIII of the Social Security Act to combat
health care fraud and abuse.
IN THE HOUSE OF REPRESENTATIVES
OCTOBER 7, 1997
Mr. STARK introduced the following bill; which was referred to the Committee
on Ways and Means, and in addition to the Committees on Commerce,
and the Judiciary, 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 amend title XI and title XVIII of the Social Security
Act to combat health care fraud and abuse.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; AMENDMENTS TO SOCIAL SECU-
RITY ACT; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Medicare and Medicaid Beneficiary Protection Act of
1997’’.
(b) AMENDMENTS TO SOCIAL SECURITY ACT.—Ex-
cept as otherwise specifically provided, whenever in this
title an amendment is expressed in terms of an amend-
ment to or repeal of a section or other provision, the ref-
erence shall be considered to be made to that section or
other provision of the Social Security Act.
(c) TABLE OF CONTENTS.—The table of contents of
this Act is as follows:
Sec. 1. Short title; amendments to Social Security Act; table of contents.
TITLE I—REVISIONS TO SANCTIONS FOR FRAUD AND ABUSE
Subtitle A—Exclusion Authority
Sec. 101. Clarification of application of mandatory exclusion based on felony
convictions relating to controlled substances to individuals in-
volved in health care.
Sec. 102. Clarification of period of exclusion based on loss of license.
Sec. 103. Clarification of application of sanctions to Federal health care pro-
grams.
Sec. 104. Clarification of application of certain individuals who have had an
ownership or control interest.
Subtitle B—Civil Monetary Penalties
Sec. 111. Repeal of clarification concerning levels of knowledge required for im-
position of civil monetary penalties.
Sec. 112. Civil money penalties for services ordered or prescribed by an ex-
cluded individual or entity.
Sec. 113. Permitting HHS to pursue civil monetary penalty actions after con-
sultation with the attorney general.
Sec. 114. Clarification of payment practice exception authority to definition of
remuneration.
Sec. 115. Extension of subpoena and injunction authority.
Sec. 116. Amounts of civil monetary penalties.
Sec. 117. Applying anti-dumping sanctions against physicians who refuse an
appropriate transfer at a hospital with specialized capabilities
or facilities.
Subtitle C—Criminal Penalties
Sec. 121. Kickback penalties for knowing violations.
Sec. 122. Repeal of expanded exception for risk-sharing contract to anti-kick-
back provisions.
Sec. 123. Expansion of criminal penalties for kickbacks.
Sec. 124. Treatment of certain social security act crimes as Federal health care
offenses.
Subtitle D—Miscellaneous Provision
Sec. 131. Repeal of HIPAA advisory opinion authority.
Sec. 132. Clarification of identification numbers to be used with adverse action
data base.
Sec. 133. Access to information in adverse action data bank by entities pro-
vided information on licensing sanctions.
TITLE II—IMPROVEMENTS IN PROTECTING PROGRAM INTEGRITY
Subtitle A—General Provisions
Sec. 201. Limiting the use of automatic stays and discharge in bankruptcy pro-
ceedings for provider liability for health care fraud.
Sec. 202. Requiring certain providers to fund annual financial and compliance
audits as a condition of participation under the medicare and
medicaid programs.
Sec. 203. Liability of medicare carriers and fiscal intermediaries and of State
medicaid agencies for claims submitted by excluded providers.
Sec. 204. Medicare hospital outpatient payment policies.
Sec. 205. Standardization of forms used for certifications of medical necessity
and certifications of terminal illness.
Sec. 206. No mark-up for drugs, biologicals, or nutrients; use of national drug
code numbers in medicare claims.
Sec. 207. Adjustments in hospital payments to reflect excess payment resulting
from a financial interest with down-stream facilities.
Subtitle B—Other Provisions
Sec. 211. Inclusion of cost of home health services in explanation of medicare
benefits.
Sec. 212. Prohibition of ‘‘cold call’’ marketing for Medicare+Choice plans.
TITLE III—PROVIDER ENROLLMENT PROCESS; FEES
Sec. 301. Fees for agreements with medicare providers and suppliers.
Sec. 302. Requirements and fees for issuance of standard health care identifi-
ers.
Sec. 303. Administrative fees for medicare overpayment collection.
TITLE IV—PAYMENT IMPROVEMENTS
Subtitle A—Mental Health Partial Hospitalization Services
Sec. 401. Limitation on location of provision of services.
Sec. 402. Qualifications for community mental health centers.
Sec. 403. Audit of providers of partial hospitalization services.
Sec. 404. Prospective payment system for partial hospitalization services.
Sec. 405. Demonstration for expanded partial hospitalization services.
Subtitle B—Rural Health Clinic Services
Sec. 411. Decreased beneficiary cost sharing for rural health clinic services.
Sec. 412. Prospective payment system for rural health clinic services.
TITLE I—REVISIONS TO SANC-
TIONS 
FOR 
FRAUD 
AND
ABUSE
Subtitle A—Exclusion Authority
SEC. 101. CLARIFICATION OF APPLICATION OF MANDA-
TORY EXCLUSION BASED ON FELONY CON-
VICTIONS RELATING TO CONTROLLED SUB-
STANCES 
TO 
INDIVIDUALS 
INVOLVED 
IN
HEALTH CARE.
(a) IN GENERAL.—Section 1128(a)(4) (42 U.S.C.
1320a–7(a)(4)) is amended—
(1) by striking ‘‘convicted for’’ and inserting
‘‘convicted of’’, and
(2) by striking the period at the end and insert-
ing the following: ‘‘if the individual or entity at the
time of the offense or conviction—
‘‘(A) is a health care practitioner, provider,
or supplier;
‘‘(B) is a person with an ownership or con-
trol interest (as defined in section 1124(a)(3))
in an entity that is a health care provider or
supplier;
‘‘(C) is an officer, director, agent, or man-
aging employee (as defined in section 1126(b))
of such an entity; or
‘‘(D) is employed in any capacity in the
health care industry.’’.
(b) CONFORMING EXPANSION
OF DISCRETIONARY
EXCLUSION AUTHORITY.—Section 1128(b)(3) (42 U.S.C.
1320a–7(b)(3)) is amended—
(1) in the heading, by striking ‘‘MISDEMEANOR
CONVICTION’’ and inserting ‘‘CONVICTION’’;
(2) by inserting ‘‘that is not described in sub-
section (a)(3) and’’ after ‘‘Any individual or entity’’;
and
(3) by striking ‘‘consisting of a misdemeanor’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall be effective as if included in the enact-
ment of section 211(b) of the Health Insurance Portability
and Accountability Act of 1996, but shall not apply to any
action initiated before the date of the enactment of this
Act.
SEC. 102. CLARIFICATION OF PERIOD OF EXCLUSION
BASED ON LOSS OF LICENSE.
(a) IN GENERAL.—Section 1128(c)(3)(E) (42 U.S.C.
1320a–7(c)(3)(E)) is amended—
(1) by striking ‘‘or surrendered’’ and inserting
‘‘or otherwise lost, or surrendered during a formal
disciplinary proceeding,’’, and
(2) by inserting ‘‘, or otherwise sanctioned
under,’’ after ‘‘suspended from’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) shall apply to exclusions in effect on or after
the date of the enactment of this Act.
SEC. 103. CLARIFICATION OF APPLICATION OF SANCTIONS
TO FEDERAL HEALTH CARE PROGRAMS.
(a) COVERAGE OF EMPLOYMENT.—Section 1128 (42
U.S.C. 1320a–7) is amended—
(1) in subsection (a), by inserting ‘‘(including
employment under)’’ after ‘‘participation in’’, and
(2) in subsection (b), by inserting ‘‘(including
employment)’’ after ‘‘participation’’.
(b) APPLICATION UNDER CIVIL MONEY PENALTY
AUTHORITY.—Section 1128A (42 U.S.C. 1320a–7a) is
amended—
(1) in subsection (a)(4), by striking ‘‘program
under title XVIII or a State health care program’’
and inserting ‘‘Federal health care program’’ each
place it appears;
(2) in subsection (a)(5)—
(A) by striking ‘‘title XVIII of this Act, or
under a State health care program (as defined
in section 1128(h))’’ and inserting ‘‘a Federal
health care program’’, and