125
uals in its insured health benefit plan (or in a
geographic area served by the plan) if—
‘‘(i) it ceases to enroll any new em-
ployer groups or individuals, and
‘‘(ii) it can demonstrate that its finan-
cial or administrative capacity to serve pre-
viously enrolled groups and individuals
(and additional individuals who will be ex-
pected to enroll because of affiliation with
such previously enrolled groups) will be im-
paired if it is required to enroll new em-
ployer groups or individuals.
‘‘(b) GROUNDS
FOR
REFUSAL
TO
ISSUE
OR
RENEW.—A carrier may refuse to issue or renew or termi-
nate a plan only for—
‘‘(1) nonpayment of premiums, and
‘‘(2) fraud or misrepresentation.
‘‘(c) 
USE
OF
COMMUNITY-RATED
PREMIUM
RATES.—
‘‘(1) IN GENERAL.—Subject to paragraph (2),
the premium rate charged for an insured health ben-
efit plan with similar benefits in a community for a
type of enrollment (described in paragraph (4)) shall
be—
126
‘‘(A) the same for all enrollments on a
group basis, and
‘‘(B) the same for all other enrollments.
‘‘(2) TRANSITION.—
‘‘(A) IN GENERAL.—In the case of an in-
sured health benefit plan that charged different
premium rates for similar benefits in a commu-
nity for a type of enrollment in 1993, notwith-
standing paragraph (1) the percentage range
(as defined in subparagraph (B)) of premium
rates charged—
‘‘(i) in 1994 may not be greater than
2⁄3 of the premium range of premium rates
charged in 1993, and
‘‘(ii) in 1995 may not be greater than
1⁄3 of the premium range of premium rates
charged in 1993.
‘‘(B) PREMIUM RANGE DEFINED.—In sub-
paragraph (A), the term ‘premium range’
means, with respect to premium rates under a
plan for similar benefits in a community for a
type of enrollment, the quotient (expressed as a
percentage) of—
‘‘(i) the difference between the highest
premium rate for such coverage and the
127
lowest premium rate for such coverage, di-
vided by
‘‘(ii) the lowest premium rate for such
coverage.
‘‘(3) SPECIFICATION OF COMMUNITY.—For pur-
poses of this subsection, no carrier may use a geo-
graphic area that is smaller than a metropolitan sta-
tistical area as a community.
‘‘(4) TYPES OF ENROLLMENT.—For purposes
of this subsection, the types of enrollment in a
health benefit plan are individual-only coverage and
coverage of a family consisting of more than 1 indi-
vidual.
‘‘(d) MINIMUM PLAN PERIOD.—A carrier may not
offer to, or issue with respect to, an individual or employer
an insured health benefit plan with a term of less than
12 months.
‘‘(e) NOTICES AND RENEWAL PERIODS.—
‘‘(1) NOTICE
AND
SPECIFICATION
OF
RATES
AND ADMINISTRATIVE CHANGES.—
‘‘(A) NOTICE.—The carrier of an insured
health benefit plan shall provide for notice, at
least 30 days before the date of expiration of
the plan, of the terms for renewal of the plan.
Except with respect to rates and administrative
128
changes, the terms of renewal (including bene-
fits) shall be the same as the terms of issuance.
‘‘(B) RENEWAL RATES SAME AS ISSUANCE
RATES.—The carrier may change the terms for
such renewal, but the premium rates charged
with respect to such renewal shall be the same
as that for a new issue.
‘‘(2) PERIOD OF RENEWAL.—The period of re-
newal of each insured health benefit plan shall be for
a period of not less than 12 months.
‘‘SEC. 2105. PAYMENT OF COMMISSIONS.
‘‘A carrier may not vary the remuneration paid a
broker for the sale or renewal of any health benefit plan
based, directly or indirectly, on the anticipated or actual
claims experience associated with the group or individuals
to which the plan was sold.
‘‘SEC. 2106. INSURANCE REQUIREMENT FOR MULTIPLE EM-
PLOYER WELFARE ARRANGEMENTS.
‘‘Each insured health benefit plan that is a multiple
employer welfare arrangement must be offered by an en-
tity licensed under an insurance law of a State.
‘‘SEC. 2107. NONAPPLICATION IN PUERTO RICO AND THE
TERRITORIES.
‘‘This title shall not apply outside the 50 States or
the District of Columbia.
129
‘‘SEC. 2108. DEFINITIONS.
‘‘In this title:
‘‘(1) CARRIER.—The term ‘carrier’ means any
person that offers a health benefit plan, whether
through insurance or otherwise, including a licensed
insurance company, a prepaid hospital or medical
service plan, a health maintenance organization, and
a multiple employer welfare arrangement.
‘‘(2) GROUP.—The term ‘group’ means 2 or
more employees of the same employer who normally
perform on a monthly basis at least 171⁄2 hours of
service per week for that employer.
‘‘(3) HEALTH BENEFIT PLAN.—
‘‘(A) IN GENERAL.—The term ‘health ben-
efit plan’ means any plan or contract under
which any medical benefit is provided to any in-
dividual.
‘‘(B) CERTAIN
PLANS
AND
CONTRACTS
NOT COVERED.—The term ‘health benefit plan’
does not include any plan or contract—
‘‘(i) which provides for accident only,
dental only, or disability only coverage,
‘‘(ii) which provides coverage as a
supplement to liability insurance, and
‘‘(iii) which provides insurance arising
out of a workers’ compensation or similar
130
law, or automobile medical-payment insur-
ance.
‘‘(4) HEALTH MAINTENANCE ORGANIZATION.—
The term ‘health maintenance organization’ has the
meaning given the term ‘eligible organization’ in sec-
tion 1876(b).
‘‘(5) INSURED HEALTH BENEFIT PLAN.—The
term ‘insured health benefit plan’ means any health
benefit plan provided through insurance, and in-
cludes a prepaid hospital or medical service plan, the
health benefit plan of a health maintenance organi-
zation, and a multiple employer welfare arrange-
ment.
‘‘(6) MEDICAL
BENEFIT.—The term ‘medical
benefit’ means any benefit which consists of the pro-
viding (through insurance or otherwise) of medical
care (as defined in section 213(d) of the Internal
Revenue Code of 1986).
‘‘(7) MULTIPLE
EMPLOYER
WELFARE
AR-
RANGEMENT.—The term ‘multiple employer welfare
arrangement’ has the meaning given such term in
section 3(40) of the Employee Retirement Income
Security Act of 1974.
‘‘(8) SELF-INSURED HEALTH BENEFIT PLAN.—
The term ‘self-insured health benefit plan’ means
131
any health benefit plan not provided through insur-
ance.
‘‘(9) STATE.—The term ‘State’ means the 50
States and the District of Columbia.’’.
SEC. 303. ASSURING CONTINUATION OF ACCESS TO COL-
LEGE AND UNIVERSITY HEALTH BENEFIT
PLANS BY GRADUATING STUDENTS.
(a) IN GENERAL.—No State shall establish or enforce
any law or regulation that prevents the health benefit plan
of a college or university from offering eligible individuals
continuation of coverage under the plan.
(b) CONSTRUCTION.—Nothing in this section shall be
construed—
(1) as requiring the health benefit plan of a col-
lege or university to provide for the continuation
coverage described in subsection (a),
(2) if such continuation coverage is provided, as
requiring such continuation coverage to be made
available to other individuals or as requiring facili-
ties of the health benefit plan to be made available
to any individuals who have not otherwise been asso-
ciated with the college or university, or
(3) as preventing such a health benefit plan
from imposing premiums for such continuation cov-
erage.
132
(c) DEFINITIONS.—In this section:
(1) The term ‘‘college or university’’ means an
institution of higher education (as defined in section
1201(a) of the Higher Education Act of 1965).
(2) The term ‘‘eligible individual’’ means, with
respect to a college or university, an individual
who—
(A) is enrolled under the health benefit
plan of the college or university as a student (or
as a dependent of a student), and
(B) whose enrollment under the plan would
otherwise terminate because of the graduation
from the college or university of the individual
(or the spouse or parent of the individual).
(d) EFFECTIVE DATE.—This section shall take effect
on the date of the enactment of this Act.
Subtitle B—Administrative
Simplification
SEC. 321. REQUIREMENT FOR UNIFORM HEALTH CLAIMS
CARDS.
(a) UNIFORM HEALTH CLAIMS CARDS.—
(1) REQUIREMENT.—Each health benefit plan
(as defined in section 326(a)) shall issue a health
claims card that meets the requirements of sub-
section (c) for each individual who is entitled to ben-
133
efits under the plan and who is residing in the Unit-
ed States. Such card shall be issued to the individual
involved or, in the case of an individual enrolled as
a dependent of another individual, to that other indi-
vidual.
(2) DEADLINE FOR APPLICATION OF REQUIRE-
MENT.—The deadline specified under this paragraph
for the requirement under paragraph (1) is 6
months after the date the standards are established
under subsection (c).
(b) ENFORCEMENT THROUGH CIVIL MONEY PEN-
ALTIES.—
(1) IN GENERAL.—In the case of a health bene-
fit plan that fails to issue a health claims card in ac-
cordance with subsection (a)(1), the plan is subject
to a civil money penalty of not to exceed $100 for
each such violation. The provisions of section 1128A
of the Social Security Act (other than subsections
(a) and (b)) shall apply to a civil money penalty
under this subsection in the same manner as such
provisions apply to a penalty or proceeding under
section 1128A(a) of such Act.
(2) EFFECTIVE DATE.—No penalty may be im-
posed under paragraph (1) for any failure occurring
before the deadline specified in subsection (a)(2).
134
(c) UNIFORM HEALTH CLAIMS CARDS.—
(1) IN GENERAL.—The Secretary shall establish
standards consistent with this subsection respecting
the form and information to be contained on uni-
form health claims cards (for purposes of subsection
(a)).
(2) ELECTRONIC.—
(A) IN
GENERAL.—Subject to subpara-
graph (B), the card shall be in a form similar
to that of a credit card and shall have, encoded
in electronic form—
(i) the identity of the individual,
(ii) the health benefit plan in which
the individual is enrolled, and
(iii) the telephone number or numbers
to be used for the verification electronically
of entitlement to benefits under the plan
under section 322 and for the submission
electronically of claims under the plan
under section 323.
(B) USE
OF
ELECTRONIC
READ-AND-
WRITE CARDS.—The Secretary may provide for
cards in an electronic form that permits infor-
mation on the card to be readily changed. Such
information may include information relating to
135
the health coverage status of the individual and
the medical history of the individual.
(C) PERSONAL
IDENTIFIER.—For pur-
poses of subparagraph (A) and for purposes of
claims processing and related purposes under
section 323, the Social Security account number
of the individual or, in the case of an infant or
other individual to whom such a number has
not been issued, such a Social Security account
number of a parent or guardian or other num-
ber as the Secretary shall specify, shall be used
as the personal identifier for the individual.
(3) 
ADDITIONAL
INFORMATION.—The 
card
shall include such additional information, in elec-
tronic or other form, as the Secretary may require
to carry out the purposes of this Act. In addition,
the health benefit plan issuing the card may include
such additional information on the card as the plan
desires, subject to such limitations as the Secretary
may provide.
(4) DEADLINE.—The Secretary shall first es-
tablish the standards for uniform health claims
cards under this subsection by not later than 12
months after the date of the enactment of this Act.
136
(d) APPLICATION TO MEDICARE AND MEDICAID PRO-
GRAMS.—
(1) MEDICARE PROGRAM.—The Secretary shall
provide, in regulations promulgated to carry out the
medicare program, that identification cards issued
under that program are modified to the extent re-
quired to conform to the standards established under
subsection (c), by not later than the deadline speci-
fied in subsection (a)(2).
(2) STATE MEDICAID PLANS.—As a condition
for the approval of a State plan under the medicaid
program, effective for calendar quarters beginning
on or after the deadline specified in subsection
(a)(2), each such plan shall provide, in accordance
with regulations of the Secretary, that identification
cards issued under the plan are modified to the ex-
tent required to conform to the requirements of sub-
section (c).
SEC. 322. REQUIREMENT FOR ENTITLEMENT VERIFICA-
TION SYSTEM.
(a) IN GENERAL.—
(1) REQUIREMENT.—Each health benefit plan
shall provide for an electronic system, that is cer-
tified by the Secretary as meeting the standards es-
tablished under subsection (c), for the verification of
137
an individual’s entitlement to benefits under such
plan.
(2) DEADLINE FOR APPLICATION OF REQUIRE-
MENT.—The deadline specified under this paragraph
for the requirement under paragraph (1) is 6
months after the date the standards are established
under subsection (c).
(b) ENFORCEMENT THROUGH CIVIL MONEY PEN-
ALTIES.—
(1) IN GENERAL.—In the case of a health bene-
fit plan that fails to provide for an electronic ver-
ification system that is certified by the Secretary as
meeting the standards established under subsection
(c), the plan is subject to a civil money penalty of
not to exceed $100 for each day in which such fail-
ure persists. The provisions of section 1128A of the
Social Security Act (other than subsections (a) and
(b)) shall apply to a civil money penalty under this
subsection in the same manner as such provisions
apply to a penalty or proceeding under section
1128A(a) of such Act.
(2) EFFECTIVE DATE.—No penalty may be im-
posed under paragraph (1) for any failure occurring
before the deadline specified in subsection (a)(2).
138
(c) STANDARDS FOR ENTITLEMENT VERIFICATION
SYSTEMS.—
(1) IN GENERAL.—The Secretary shall establish
standards consistent with this subsection respecting
the requirements for certification of entitlement ver-
ification systems.
(2) INFORMATION AVAILABLE.—Such standards
shall require a system to provide information, with
respect to individuals, concerning the following:
(A) The specific benefits to which the indi-
vidual is entitled under the plan.
(B) Current status of the individual with
respect 
to 
fulfillment 
of 
deductibles,
copayments, and out-of-pocket limits on cost-
sharing.
(C) Restrictions on providers who may pro-
vide covered services, including utilization con-
trols (such as preadmission certification).
(3) COORDINATION
OF
BENEFIT
INFORMA-
TION.—Such standards shall require a system to
provide for the transfer among health benefit plans
of appropriate information in determining liability in
cases in which benefits may be payable under two or
more such plans.
139
(4) FORM OF INQUIRY.—Each verification sys-
tem shall be capable of accepting inquiries under
this subsection from health care providers (and, to
the extent provided under paragraph (3), from other
health benefit plans) in a variety of electronic and
other forms, including—
(A) through electronic transmission of in-
formation on the uniform health claims card (in
a manner similar to that for verification of
credit card purchases),
(B) through the use of a touch-tone tele-
phone line, and
(C) through the use of a computer modem.
The system shall also provide, for an additional fee,
for the acceptance of inquiries in a nonelectronic
form.
(5) FORM OF RESPONSE.—Each such system
shall be capable of responding to such inquiries
under this subsection in a variety of electronic and
other forms, including—
(A) through modem transmission of infor-
mation,
(B) through computer synthesized voice
communication, and
140
(C) through transmission of information to
a facsimile (fax) machine.
The system shall also provide, for an additional fee,
for the response to inquiries in a nonelectronic form.
(6) LIMITATION
ON
FEES.—A health benefit
plan may not impose a fee for the acceptance or re-
sponse to an inquiry under this subsection except
where 
the 
acceptance 
or 
response 
is 
in 
a
nonelectronic form.
(7) PUBLIC
DOMAIN
SOFTWARE
TO
PROVID-
ERS.—The Secretary shall provide for the develop-
ment, and shall make available without charge to
health service providers and health benefit plans,
such computer software as will enable—
(A) such providers to make inquiries, and
receive responses, electronically respecting the
eligibility and benefits of an individual under
health benefit plans, and
(B) such plans to make inquiries, and re-
ceive responses, electronically respecting liability
of other plans for the provision or payment of
benefits.
(8) DEADLINE.—The Secretary shall first es-
tablish the standards under this subsection (and
shall develop and make available the software under
141
paragraph (7)) by not later than 12 months after
the date of the enactment of this Act.
(d) APPLICATION TO MEDICARE AND MEDICAID PRO-
GRAMS.—
(1) MEDICARE PROGRAM.—The Secretary shall
provide, in regulations promulgated to carry out the
medicare program, that there is established an enti-
tlement verification system that meets the standards
established under subsection (c), by not later than
the deadline specified in subsection (a)(2).
(2) STATE MEDICAID PLANS.—As a condition
for the approval of a State plan under the medicaid
program, effective for calendar quarters beginning
on or after the deadline specified in subsection
(a)(2), each such plan shall provide, in accordance
with regulations of the Secretary, that there is es-
tablished an entitlement verification system that
meets the standards established under subsection
(c).
SEC. 323. REQUIREMENTS FOR UNIFORM CLAIMS AND
ELECTRONIC CLAIMS DATA SET.
(a) REQUIREMENTS.—
(1) SUBMISSION OF CLAIMS.—Each health serv-
ice provider that furnishes services in the United
States for which payment may be made under a
142
health benefit plan shall submit any claim for pay-
ment for such services only in a form and manner
consistent with standards established under sub-
section (c).
(2) ACCEPTANCE OF CLAIMS.—A health benefit
plan may not reject a claim for payment under the
plan on the basis of the form or manner in which
the claim is submitted if the claim is submitted in
accordance with the standards established under
subsection (c).
(3) EFFECTIVE
DATE.—This subsection shall
apply to claims for services furnished on or after the
date that is 6 months after the date standards are
established under subsection (c).
(b) ENFORCEMENT THROUGH CIVIL MONEY PEN-
ALTIES.—
(1) IN GENERAL.—
(A) PROVIDERS.—In the case of a health
service provider that submits a claim in viola-
tion of subsection (a)(1), the provider is subject
to a civil money penalty of not to exceed $100
(or, if greater, the amount of the claim) for
each such violation.
(B) PLANS.—In the case of a health bene-
fit plan that rejects a claim in violation of sub-
143
section (a)(2), the plan is subject to a civil
money penalty of not to exceed $100 (or, if
greater, the amount of the claim) for each such
violation.
(2) PROCESS.—The provisions of section 1128A
of the Social Security Act (other than subsections
(a) and (b)) shall apply to a civil money penalty
under paragraph (1) in the same manner as such
provisions apply to a penalty or proceeding under
section 1128A(a) of such Act.
(3) SUNSET
FOR
PENALTY.—No civil money
penalty may be imposed under this subsection for
submission (or rejection) of any claim on or after
the date that is 36 months after the effective date
specified in subsection (a)(3).
(c) STANDARDS RELATING TO UNIFORM CLAIMS AND
ELECTRONIC CLAIMS DATA SET.—
(1) ESTABLISHMENT
OF
STANDARDS.—The
Secretary shall establish standards that—
(A) relate to the form and manner of sub-
mission of claims for benefits under a health
benefit plan, and
(B) define the data elements to be con-
tained in a uniform electronic claims data set to
be used with respect to such claims.
144
(2) SCOPE OF INFORMATION.—
(A) IN
GENERAL.—The standards under
this subsection are intended to cover substan-
tially most claims that are filed under health
benefit plans. Such information need not in-
clude all elements that may potentially be re-
quired to be reported under utilization review
provisions of plans.
(B) 
ENSURING
ACCOUNTABILITY
FOR
CLAIMS SUBMITTED ELECTRONICALLY.—In es-
tablishing such standards, the Secretary, in
consultation with appropriate agencies, shall in-
clude such methods of ensuring provider re-
sponsibility and accountability for claims sub-
mitted electronically that are designed to con-
trol fraud and abuse in the submission of such
claims.
(C) COMPONENTS.—In establishing such
standards the Secretary shall—
(i) with respect to data elements, de-
fine data fields, formats, and medical no-
menclature, and plan benefit and insurance
information;
145
(ii) develop a single, uniform coding
system for diagnostic and procedure codes;
and
(iii) provide for standards for the uni-
form electronic transmission of such ele-
ments.
(3) COORDINATION
WITH
STANDARDS
FOR
ELECTRONIC
MEDICAL
RECORDS.—In establishing
standards under this subsection, the Secretary shall
assure that—
(A) the development of such standards is
coordinated with the development of the stand-
ards for electronic medical records under sec-
tion 324, and
(B) the coding of data elements under the
uniform electronic claims data set and the cod-
ing of the same elements in the uniform hos-
pital clinical data set are consistent.
(4) USE OF TASK FORCES.—In adopting stand-
ards under this subsection—
(A) the Secretary shall take into account
the recommendations of current task forces, in-
cluding at least the Workgroup on Electronic
Data Interchange, National Uniform Billing
Committee, the Uniform Claim Task Force, and
146
the Computer-based Patient Record Institute,
and
(B) the Secretary shall provide that the
electronic transmission standards are consist-
ent, to the extent practicable, with the applica-
ble standards established by the Accredited
Standards Committee X-12 of the American
National Standards Institute.
(5) UNIFORM, UNIQUE PROVIDER IDENTIFICA-
TION CODES.—In establishing standards under this
subsection—
(A) the Secretary shall provide for a
unique identifier code for each health service
provider that furnishes services for which a
claim may be submitted under a health benefit
plan, and
(B) in the case of a provider that has a
unique identifier issued for purposes of the
medicare program, the code provided under
subparagraph (A) shall be the same as such
unique identifier.
(6) PUBLIC
DOMAIN
SOFTWARE
TO
PROVID-
ERS.—The Secretary shall provide for the develop-
ment, and shall make available without charge to
health service providers, such computer software as
147
will enable the providers to submit claims and to re-
ceive verification of claims status electronically.
(7) STANDARDS
FOR
PAPER
CLAIMS.—The
standards shall provide for a uniform paper claims
form which is consistent with data elements required
for the submission of claims electronically.
(8) STANDARDS
FOR
CLAIMS
FOR
CLINICAL
LABORATORY TESTS.—The standards shall provide
that claims for clinical laboratory tests for which
benefits are provided under a health benefit plan
shall be submitted directly by the person or entity
that performed (or supervised the performance of)
the tests to the plan in a manner consistent with
(and subject to such exceptions as are provided
under) the requirement for direct submission of such
claims under the medicare program.
(9) DEADLINE.—The Secretary shall first pro-
vide for the standards for the uniform claims under
this subsection (and shall develop and make avail-
able the software under paragraph (6)) by not later
than 1 year after the date of the enactment of this
Act.
(d) USE UNDER MEDICARE AND MEDICAID PRO-
GRAMS.—
148
(1) REQUIREMENT
FOR
PROVIDERS.—In the
case of a health service provider that submits a
claim for services furnished under the medicare pro-
gram or medicaid program in violation of subsection
(a)(1), no payment shall be made under such pro-
gram for such services.
(2) REQUIREMENTS OF INTERMEDIARIES AND
CARRIERS UNDER MEDICARE PROGRAM.—The Sec-
retary shall provide, in regulations promulgated to
carry out title XVIII of the Social Security Act, that
the claims process provided under that title is modi-
fied to the extent required to conform to the stand-
ards established under subsection (c).
(3) 
REQUIREMENTS
OF
STATE
MEDICAID
PLANS.—As a condition for the approval of State
plans under the medicaid program, effective as of
the effective date specified in subsection (a)(3), each
such plan shall provide, in accordance with regula-
tions of the Secretary, that the claims process pro-
vided under the plan is modified to the extent re-
quired to conform to the standards established under
subsection (c).
151
(A) consult with the American National
Standards Institute, hospitals, health benefit
plans, and other interested parties, and
(B) take into consideration, in developing
standards under paragraph (2)(A), the data set
used by the utilization and quality control peer
review program under part B of title XI of the
Social Security Act.
(b) REQUIREMENT
FOR APPLICATION
OF ELEC-
TRONIC RECORDS STANDARDS TO HOSPITALS.—
(1) AS
CONDITION
OF
MEDICARE
PARTICIPA-
TION.—As of January 1, 1996, each hospital, as a
requirement of each participation agreement under
section 1866 of the Social Security Act, shall, in ac-
cordance with the standards promulgated under sub-
section (a)(1)—
(A) maintain clinical data included in the
uniform hospital clinical data set under sub-
section (a)(2)(A) in electronic form on all inpa-
tients,
(B) upon request of the Secretary or of a
utilization and quality control peer review orga-
nization (with which the Secretary has entered
into a contract under part B of title XI of such
152
Act), transmit electronically data requested
from such data set, and
(C) upon request of the Secretary, or of a
fiscal intermediary or carrier, transmit elec-
tronically any data (with respect to a claim)
from such data set.
(2) APPLICATION
OF
PRESENTATION
AND
TRANSMISSION STANDARDS TO ELECTRONIC TRANS-
MISSION TO FEDERAL AGENCIES.—Effective Janu-
ary 1, 1996, if a hospital is required under a Fed-
eral program to transmit a data element that is sub-
ject to a standard, promulgated under subsection
(a)(1), described in subparagraph (C) or (D) of sub-
section (a)(2), the head of the Federal agency re-
sponsible for such program (if not otherwise author-
ized) is authorized to require the provider to present
and transmit the data element electronically in ac-
cordance with such a standard.
(c) LIMITATION ON DATA REQUIREMENTS WHERE
STANDARDS IN EFFECT.—
(1) IN
GENERAL.—On or after January 1,
1996, a health benefit plan may not require, for the
purpose of utilization review or as a condition of
providing benefits or making payments under the
plan, that a hospital—
153
(A) provide any data element not in the
uniform hospital clinical data set specified
under the standards promulgated under sub-
section (a), or
(B) transmit or present any such data ele-
ment in a manner inconsistent with such stand-
ards applicable to such transmission or presen-
tation.
(2) COMPLIANCE.—The Secretary may impose
a civil money penalty on any health benefit plan that
fails to comply with paragraph (1) in an amount not
to exceed $100 for each such failure. The provisions
of section 1128A of the Social Security Act (other
than the first sentence of subsection (a) and other
than subsection (b)) shall apply to a civil money
penalty under this paragraph in the same manner as
such provisions apply to a penalty or proceeding
under section 1128A(a) of such Act.
(3) APPLICATION TO MEDICARE PROGRAM.—Ef-
fective as of January 1, 1996, neither the Secretary,
nor any carrier or fiscal intermediary, nor any utili-
zation and quality control peer review organization
may require, for the purpose of utilization review or
as a condition of providing benefits or making pay-
154
ments under the medicare program, that a hos-
pital—
(A) provide any data element not in the
uniform hospital clinical data set specified
under the standards promulgated under sub-
section (a), or
(B) transmit or present any such data ele-
ment in a manner inconsistent with such stand-
ards applicable to such transmission or presen-
tation.
(4) APPLICATION TO MEDICAID PROGRAM.—As
a condition for the approval of State plans under the
medicaid program and in accordance with regula-
tions of the Secretary, effective as of January 1,
1996, each such plan may not require that a hos-
pital, for the purpose of utilization review or as a
condition of providing benefits or making payments
under the plan—
(A) provide any data element not in the
uniform hospital clinical data set specified
under the standards promulgated under sub-
section (a), or
(B) transmit or present any such data ele-
ment in a manner inconsistent with such stand-
155
ards applicable to such transmission or presen-
tation.
(d) PREEMPTION OF STATE QUILL PEN LAWS.—
(1) IN GENERAL.—Any provision of State law
that requires medical or health insurance records
(including billing information) to be maintained in
written, rather than electronic, form shall deemed to
be satisfied if the records are maintained in an elec-
tronic form that meets standards established by the
Secretary under paragraph (2).
(2) SECRETARIAL AUTHORITY.—Not later than
1 year after the the date of the enactment of this
Act, the Secretary shall issue regulations to carry
out paragraph (1). The regulations shall provide for
an electronic substitute that is in the form of a
unique identifier (assigned to each authorized indi-
vidual) that serves the functional equivalent of a sig-
nature. The regulations may provide for such excep-
tions to paragraph (1) as the Secretary determines
to be necessary to prevent fraud and abuse, to pre-
vent the illegal distribution of controlled substances,
and in such other cases as the Secretary deems ap-
propriate.
(3) EFFECTIVE
DATE.—Paragraph (1) shall
take effect on the first day of the first month that
156
begins more than 30 days after the date the Sec-
retary issues the regulations referred to in para-
graph (2).
SEC. 325. UNIFORM HOSPITAL COST REPORTING.
Each hospital, as a requirement under a participation
agreement under section 1866(a) of the Social Security
Act for each cost reporting period beginning during or
after fiscal year 1993, shall provide for the reporting of
information to the Secretary with respect to any hospital
care provided in a uniform manner consistent with stand-
ards established by the Secretary to carry out section
4007(c) of the Omnibus Budget Reconciliation Act of
1987 and in an electronic form consistent with standards
established by the Secretary.
SEC. 326. DEFINITIONS.
(a) HEALTH BENEFIT PLAN.—In this subtitle:
(1) IN
GENERAL.—The term ‘‘health benefit
plan’’ means, except as provided in paragraphs (2)
through (4), any public or private entity or program
that provides for payments for health care services,
including—
(A) a group health plan (as defined in sec-
tion 5000(b)(1) of the Internal Revenue Code
of 1986), and
157
(B) any other health insurance arrange-
ment, including any arrangement consisting of
a hospital or medical expense incurred policy or
certificate, hospital or medical service plan con-
tract, or health maintenance organization sub-
scriber contract.
(2) PLANS EXCLUDED.—Such term does not in-
clude—
(A) accident-only, credit, or disability in-
come insurance;
(B) coverage issued as a supplement to li-
ability insurance;
(C) an individual making payment on the
individual’s own behalf (or on behalf of a rel-
ative or other individual) for deductibles, coin-
surance, or services not covered under a health
benefit plan; and
(D) such other plans as the Secretary may
determine, because of the limitation of benefits
to a single type or kind of health care, such as
dental services, or other reasons should not be
subject to the requirements of this section.
(3) PLANS INCLUDED.—Such term includes—
(A) worker’s compensation or similar in-
surance, and
158
(B) automobile medical-payment insurance.
(4) TREATMENT OF DIRECT FEDERAL PROVI-
SION OF SERVICES.—Such term does not include a
Federal program that provides directly for the provi-
sion of health services to beneficiaries.
(b) HEALTH SERVICE PROVIDER.—In this subtitle,
the term ‘‘health service provider’’ includes a provider of
services (as defined in section 1861(u) of the Social Secu-
rity Act), physician, supplier, and other person furnishing
health care services.
Subtitle C—Fraud and Abuse
PART 1—NATIONAL HEALTH CARE FRAUD CONTROL
PROGRAM
SEC. 341. ALL-PAYER FRAUD AND ABUSE CONTROL PRO-
GRAM
(a) ESTABLISHMENT OF PROGRAM.—
(1) ESTABLISHMENT.—Not later than January
1, 1994, the Secretary shall establish in the Office
of the Inspector General of the Department of
Health and Human Services a program—
(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,
159
(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 LAW ENFORCEMENT
AGENCIES.—In carrying out the program established
under paragraph (1), the Secretary shall consult
with, and arrange for the sharing of data and re-
sources with, the Attorney General and State law
enforcement agencies, State medicaid fraud and
abuse units, and State agencies responsible for the
licensing and certification of health care providers.
(3) REGULATIONS.—
(A) IN GENERAL.—The Secretary 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 insurers
(including 
self-insured 
health 
benefit
160
plans), providers, and others to enable the
Secretary to carry out the program (in-
cluding coordination with law enforcement
agencies 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 protects the con-
fidentiality of the information and the pri-
vacy of individuals receiving health care
services.
(iii) QUALIFIED IMMUNITY FOR PRO-
VIDING INFORMATION.—The provisions of
section 1157(a) of the Social Security Act
(relating to limitation on liability) shall
apply to a person providing information to
the Secretary under the program under
this section, with respect to the Secretary’s
performance of duties under the program,
in the same manner as such section applies
to information provided to organizations
with a contract under part B of title XI of
such Act, with respect to the performance
of such a contract.
161
(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).
(ii) OWNERSHIP
INFORMATION
DE-
SCRIBED.—The ownership information de-
scribed in this clause includes—
(I) covered items and services
provided by an entity;
(II) the names and unique physi-
cian identification numbers of all phy-
sicians with an ownership or invest-
ment interest in the entity (as de-
scribed in section 1877(a)(2)(A) of
the Social Security Act) or whose im-
mediate relatives have such an owner-
ship or investment interest; and
(III) the names of all other indi-
viduals with such an ownership or in-
vestment interest in the entity.
(D) INTEGRITY
OF
ISSUANCE
OF
PRO-
VIDER
IDENTIFICATION
CODES.—Such stand-
ards shall, insofar as they relate to the issuance
162
of unique provider codes (described in section
323(c)(5))—
(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
for the issuance of similar codes under the
medicare program.
(4) AUTHORIZATION OF APPROPRIATIONS FOR
INVESTIGATORS AND OTHER PERSONNEL.—
(A) IN
GENERAL.—In addition to any
other amounts authorized to be appropriated to
the Secretary for health care anti-fraud and
abuse activities for a fiscal year, there are au-
thorized to be appropriated additional amounts
described in subparagraph (B) to enable the
Secretary to conduct investigations of allega-
tions of health care fraud and otherwise carry
out the program established under paragraph
(1) in a fiscal year.
163
(B) AMOUNTS DESCRIBED.—The amounts
referred to in subparagraph (A) are as follows:
(i) 
For 
fiscal 
year 
1995,
$300,000,000.
(ii) 
For 
fiscal 
year 
1996,
$350,000,000.
(iii) 
For 
fiscal 
year 
1997,
$400,000,000.
(iv) 
For 
fiscal 
year 
1998,
$450,000,000.
(5) ENSURING ACCESS TO DOCUMENTATION.—
(A) The Inspector General of the Department of
Health and Human Services is authorized to exercise
the authority described in paragraphs (4) and (5) of
section 6 of the Inspector General Act of 1978 (re-
lating to subpoenas and administration of oaths)
with respect to the activities under the all-payor
fraud and abuse control program established under
this subsection to the same extent as such Inspector
General may exercise such authorities to perform the
functions assigned to such official by such Act.
(B) Section 1128(b) of the Social Security Act
(42 U.S.C. 1320a–7(b)) is amended by adding at
the end the following new paragraph:
164
‘‘(15) FAILURE
TO
SUPPLY
REQUESTED
INFORMATION TO THE INSPECTOR GENERAL.—
Any individual or entity that fails fully and ac-
curately to provide, upon request of the Inspec-
tor General of the Department of Health and
Human Services, records, documents, and other
information necessary for the purposes of carry-
ing out activities under the all-payor fraud and
abuse control program established under section
341 of the Health Care Cost Containment and
Reform Act of 1993.’’.
(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
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 this subtitle, section 143(b), and title XI of
the Social Security Act.
165
(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 through a Manag-
ing Trustee designated by the Secretary.
(B) INVESTMENT OF FUNDS.—It shall be
the duty of the Managing Trustee to invest
such portion of the Trust Fund as is not, in the
trustee’s judgment, required to meet current
withdrawals. Such investments may be made
only in interest-bearing obligations of the Unit-
ed States or in obligations 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 obliga-
tions at market price. The purposes for which
obligations of the United States may be issued
under chapter 31 of title 31, United States
166
Code, are hereby extended to authorize the issu-
ance at par of public-debt obligations for pur-
chase by the Trust Fund. Such obligations is-
sued 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 (com-
puted by the Managing Trustee on the basis of
market quotations as of the end of the calendar
month next preceding the date of such issue) on
all marketable interest-bearing obligations of
the United States then forming 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. The Managing Trustee may purchase
other interest-bearing obligations of the United
States or obligations guaranteed as to both
principal and interest by the United States, on
original issue or at the market price, only where
the Trustee determines that the purchase of
such other obligations is in the public interest.
167
(C) Any obligations acquired by the Trust
Fund (except public-debt obligations issued ex-
clusively to the Trust Fund) may be sold by the
Managing Trustee at the market price, and
such public-debt obligations may be redeemed
at par plus accrued interest.
(D) 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) The receipts and disbursements of the
Secretary in the discharge of the functions of
the Secretary shall not be included in the totals
of the budget of the United States Government.
For purposes of part C of the Balanced Budget
and Emergency Deficit Control Act of 1985,
the Secretary and the Trust Fund shall be
treated in the same manner as the Federal Re-
tirement Thrift Investment Board and the
Thrift Savings Fund, respectively. The United
States is not liable for any obligation or liability
incurred by the Trust Fund.
(3) USE
OF
FUNDS.—Amounts in the Trust
Fund shall be used to assist the Inspector General
of the Department of Health and Human Services in
168
carrying out the all-payor fraud and abuse control
program established under subsection (a) in the fis-
cal year involved.
SEC. 342. APPLICATION OF FEDERAL HEALTH ANTI-FRAUD
AND ABUSE SANCTIONS TO ALL FRAUD AND
ABUSE AGAINST ANY HEALTH BENEFIT PLAN.
(a) CIVIL MONETARY PENALTIES.—Section 1128A
of the Social Security Act (42 U.S.C. 1320a–7a) is amend-
ed as follows:
(1) In subsection (a)(1), in the matter before
subparagraph (A), by inserting ‘‘or of any health
benefit plan,’’ after ‘‘subsection (i)(1)),’’.
(2) In subsection (b)(1)(A), by inserting ‘‘or
under a health benefit plan’’ after ‘‘title XIX’’.
(3) In subsection (f), by amending paragraph
(2) to read as follows:
‘‘(2) In the case of amounts recovered arising
out of claim under a health benefit plan, the portion
of amounts recovered as is determined to have been
paid out of the Federal Hospital Insurance Trust
Fund and the Federal Supplementary Medical In-
surance Trust Fund, and the portion of amounts re-
covered arising out of a claim under title XIX that
is not paid to the State agency under paragraph
(1)(A), such amounts (and such portions) shall be
169
paid to the Anti-Fraud and Abuse Trust Fund es-
tablished under section 341(b) of the Health Care
Cost Containment and Reform Act of 1993.’’.
(4) In subsection (i)—
(A) in paragraph (2), by inserting ‘‘or
under a health benefit plan’’ before the period
at the end, and
(B) in paragraph (5), by inserting ‘‘or
under a health benefit plan’’ after ‘‘or XX’’.
(b) CRIMES.—
(1) SOCIAL SECURITY ACT.—Section 1128B of
such Act (42 U.S.C. 1320a–7b) is amended as fol-
lows:
(A) In the heading, by adding at the end
the following: ‘‘OR HEALTH BENEFIT 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 benefit 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 benefit plan’’.
170
(D) In the second sentence of subsection
(a)—
(i) by inserting after ‘‘title XIX’’ the
following: ‘‘or a health benefit 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 benefit
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 benefit
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 benefit plan’’.
(H) In subsection (d)(2)—
(i) by striking ‘‘title XIX,’’ and insert-
ing ‘‘title XIX or under a health benefit
plan,’’, and
171
(ii) by striking ‘‘State plan,’’ and in-
serting ‘‘State plan or the health benefit
plan,’’.
(2) TREBLE
DAMAGES
FOR
CRIMINAL
SANC-
TIONS.—Section 1128B of such Act (42 U.S.C.
1320a–7b) is amended by adding at the end the fol-
lowing new subsection:
‘‘(f) In addition to the fines that may be imposed
under subsection (a), (b), or (c), any individual found to
have violated the provisions of any of such subsections
may be subject to treble damages.’’.
(3) 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:
‘‘(g) The Secretary shall—
‘‘(1) identify opportunities for the satisfaction
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.’’.
(d) HEALTH BENEFIT PLAN DEFINED.—Section
1128 of such Act (42 U.S.C. 1320a–7) is amended by re-
172
designating subsection (i) as subsection (j) and by insert-
ing after subsection (h) the following new subsection:
‘‘(i) HEALTH BENEFIT PLAN DEFINED.—For pur-
poses of sections 1128A and 1128B, the term ‘health ben-
efit plan’ means a health benefit program other than the
medicare program, the medicaid program, or a State
health care program.’’.
(e) 
CONFORMING
AMENDMENT.—Section
1128(b)(8)(B)(ii) of such Act (42 U.S.C. 1320a–
7(b)(8)(B)(ii)) is amended by striking ‘‘1128A’’ and in-
serting ‘‘1128A (other than a penalty arising from a
health benefit plan, as defined in subsection (i))’’.
SEC. 343. PROHIBITION AGAINST OFFERING INDUCEMENTS
TO INDIVIDUALS ENROLLED UNDER OR EM-
PLOYED BY PROGRAMS OR PLANS.
(a) INDUCEMENTS
TO
INDIVIDUALS
ENROLLED
UNDER MEDICARE.—Section 1128A(a)(1) of the Social
Security Act (42 U.S.C. 1320a–7a(a)(1)) is amended—
(1) by striking ‘‘or’’ at the end of paragraph
(1)(D);
(2) by striking ‘‘, or’’ at the end of paragraph
(2) and inserting a semicolon;
(3) by striking the semicolon at the end of
paragraph (3) and inserting ‘‘; or’’; and
173
(4) by inserting after paragraph (3) the follow-
ing new paragraph:
‘‘(4) routinely transfers anything for less than
fair market value to (or for the benefit of) an indi-
vidual entitled to benefits under the medicare pro-
gram in order to influence the individual to receive
from a particular provider, practitioner, or supplier
a covered item or service for which payment may be
made under such program;’’.
(b) 
INDUCEMENTS
TO
EMPLOYEES.—Section
1128A(a)(1) of such Act (42 U.S.C. 1320a–7a(a)(1)), as
amended by subsection (a), is further amended—
(1) by striking ‘‘or’’ at the end of paragraph
(3);
(2) by striking the semicolon at the end of
paragraph (4) and inserting ‘‘; or’’; and
(3) by inserting after paragraph (4) the follow-
ing new paragraph:
‘‘(5) pays a bonus, reward, or other incentive to
an employee to induce the employee to encourage in-
dividuals to seek or obtain covered items or services
for which payment may be made under the medicare
program, a State health care program, or a health
benefit plan where the amount of the incentive is in
proportion to the activities of the employee in en-
174
couraging individuals to seek or obtain covered items
or services;’’.
SEC. 344. INTERMEDIATE SANCTIONS FOR MEDICARE
HEALTH MAINTENANCE ORGANIZATIONS.
(a) APPLICATION OF INTERMEDIATE SANCTIONS FOR
ANY PROGRAM VIOLATIONS.—
(1) IN
GENERAL.—Section 1876(i)(1) of the
Social Security Act (42 U.S.C. 1395mm(i)(1)) is
amended by striking ‘‘the Secretary may terminate’’
and all that follows and inserting the following: ‘‘in
accordance with procedures established under para-
graph (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;
‘‘(B) is carrying out the contract in a man-
ner inconsistent with the efficient and effective
administration of this section;
‘‘(C) is operating in a manner that is not
in the best interests of the individuals covered
under the contract; or
175
‘‘(D) no longer substantially meets the ap-
plicable conditions of subsections (b), (c), (e),
and (f).’’.
(2) OTHER
INTERMEDIATE
SANCTIONS
FOR MISCELLANEOUS PROGRAM VIOLATIONS.—
Section 1876(i)(6) of such Act (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 Secretary makes a determination under
paragraph (1) the basis of which is not described in
subparagraph (A), the Secretary may apply the fol-
lowing intermediate sanctions:
‘‘(i) civil money penalties of not more than
$25,000 for each determination under para-
graph (1) if the deficiency that is the basis of
the determination has directly adversely af-
fected (or has the substantial likelihood of ad-
versely 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 initi-
ation of procedures by the Secretary under
paragraph (9) during which the deficiency that
176
is the basis of a determination under paragraph
(1) exists; and
‘‘(iii) suspension of enrollment of individ-
uals under this section after the date the Sec-
retary notifies the organization of a determina-
tion under paragraph (1) and until the Sec-
retary is satisfied that the deficiency that is the
basis for the determination has been corrected
and is not likely to recur.’’.
(3) PROCEDURES FOR IMPOSING SANCTIONS.—
Section 1876(i) of such Act (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 accordance with formal investigation and
compliance procedures established by the Secretary under
which—
‘‘(A) the Secretary provides the organization
with the 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);
177
‘‘(B) the Secretary shall impose more severe
sanctions on organizations that have a history of de-
ficiencies or that have not taken steps to correct de-
ficiencies the Secretary has brought to their atten-
tion;
‘‘(C) there are no unreasonable or unnecessary
delays between the finding of a deficiency and the
imposition of sanctions; and
‘‘(D) the Secretary provides the organization
with reasonable notice and opportunity for hearing
(including the right to appeal an initial decision) be-
fore imposing any sanction or terminating the con-
tract.’’.
(4) CONFORMING AMENDMENTS.—(A) Section
1876(i)(6)(B) 
of 
such 
Act 
(42 
U.S.C.
1395mm(i)(6)(B)) is amended by striking the sec-
ond sentence.
(B) Section 1876(i)(6) of such Act (42 U.S.C.
1395mm(i)(6)) is further amended by adding at the
end the following new subparagraph:
‘‘(D) The provisions of section 1128A (other
than subsections (a) and (b)) shall apply to a civil
money penalty under subparagraph (A) or (B) in the
same manner as they apply to a civil money penalty
or proceeding under section 1128A(a).’’.
178
(b) AGREEMENTS WITH PEER REVIEW ORGANIZA-
TIONS.—
(1) REQUIREMENT
FOR
WRITTEN
AGREE-
MENT.—Section 1876(i)(7)(A) of the Social Security
Act (42 U.S.C. 1395mm(i)(7)(A)) is amended by
striking ‘‘an agreement’’ and inserting ‘‘a written
agreement’’.
(2) DEVELOPMENT OF MODEL AGREEMENT.—
Not later than July 1, 1993, the Secretary of Health
and Human Services shall develop a model of the
agreement that an eligible organization with a risk-
sharing contract under section 1876 of the Social
Security Act must enter into with an entity provid-
ing peer review services with respect to services pro-
vided 
by 
the 
organization 
under 
section
1876(i)(7)(A) of such Act.
(3) REPORT BY GAO.—
(A) STUDY.—The Comptroller General
shall conduct a study of the costs incurred by
eligible organizations with risk-sharing con-
tracts under section 1876(b) of such Act of
complying with the requirement of entering into
a written agreement with an entity providing
peer review services with respect to services pro-
vided by the organization, together with an
179
analysis of how information generated by such
entities is used by the Secretary of Health and
Human Services to assess the quality of serv-
ices provided by such eligible organizations.
(B) REPORT
TO
CONGRESS.—Not later
than July 1, 1995, the Comptroller General
shall submit a report to the Committee on
Ways and Means and the Committee on Energy
and Commerce of the House of Representatives
and the Committee on Finance of the Senate on
the study conducted under subparagraph (A).
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply with respect to contract years be-
ginning on or after January 1, 1994.
PART 2—BAN ON IMPROPER PHYSICIAN REFERRALS
SEC. 351. APPLICATION OF MEDICARE BAN ON SELF-RE-
FERRALS TO ALL PAYORS.
Section 1877 of the Social Security Act (42 U.S.C.
1395nn) is amended—
(1) in subsection (a)—
(A) in paragraph (1)(A), by striking ‘‘for
which payment otherwise may be made under
this title’’ and inserting ‘‘for which a charge is
imposed’’, and
180
(B) in paragraph (1)(B), by striking
‘‘under this title’’;
(2) by amending paragraph (1) of subsection
(g) to read as follows:
‘‘(1) DENIAL OF PAYMENT.—No payment may
be made under this title, under another Federal
health care program, or under a State health care
program (as defined in section 1128(h)) for a des-
ignated health service for which a claim is presented
in violation of subsection (a)(1)(B). No individual,
third party payor, or other entity is liable for pay-
ment for designated health services for which a
claim is presented in violation of such subsection.’’;
and
(3) in subsection (g)(3), by striking ‘‘for which
payment may not be made under paragraph (1)’’
and inserting ‘‘for which such a claim may not be
presented under subsection (a)(1)’’.
SEC. 352. EXTENSION OF SELF-REFERRAL BAN TO ADDI-
TIONAL SPECIFIED SERVICES.
(a) IN GENERAL.—Section 1877 of the Social Secu-
rity Act is further amended—
(1) by striking ‘‘clinical laboratory services’’
and ‘‘CLINICAL LABORATORY SERVICES’’ and insert-
ing ‘‘designated health services’’ and ‘‘DESIGNATED
181
HEALTH SERVICES’’, respectively, each place either
appears 
in 
subsections 
(a)(1), 
(b)(2)(A)(ii)(I),
(b)(4), (d)(1), (d)(2), and (d)(3), and
(2) by adding at the end the following new sub-
section:
‘‘(i) DESIGNATED HEALTH SERVICES DEFINED.—In
this section, the term ‘designated health services’ means—
‘‘(1) clinical laboratory services;
‘‘(2) physical therapy services;
‘‘(3) radiology services, including magnetic reso-
nance imaging, computerized axial tomography
scans, and ultrasound services;
‘‘(4) radiation therapy services;
‘‘(5) the furnishing of durable medical equip-
ment;
‘‘(6) the furnishing of parenteral and enteral
nutrition equipment and supplies;
‘‘(7) the furnishing of outpatient prescription
drugs;
‘‘(8) ambulance services;
‘‘(9) home infusion therapy services;
‘‘(10) occupational therapy services; and
‘‘(11) inpatient and outpatient hospital services
(including services furnished at a psychiatric or re-
habilitation hospital).’’.
210
SEC. 403. FULL FEDERAL PAYMENT FOR INCREASED
COSTS.
Section 1903 of the Social Security Act (42 U.S.C.
1396b) is amended by adding at the end the following new
subsection:
‘‘(w)(1) Notwithstanding subsection (a), with respect
to new mandated expenditures (as defined in paragraph
(2)) in a quarter, instead of the amounts otherwise paid
to a State under subsection (a) for a quarter with respect
to such expenditures, there shall be paid to the State an
amount equal to 100 percent of the amount of such ex-
penditures.
‘‘(2) In this subsection, the term ‘new mandated ex-
penditures’ means the sum of the following expenditures
under the State plan during a quarter:
‘‘(A) The amount by which (i) the minimum
amount of expenditures for medical assistance for
inpatient hospital services (consistent with section
401(a) of the Health Care Cost Containment and
Reform Act of 1993), exceeds (ii) the amount of ex-
penditures for such assistance which the Secretary
determines would have been payable under the plan
(as such plan was in effect as of the date of the en-
actment of this subsection).
‘‘(B) The amount by which (i) the minimum
amount of expenditures under the plan for medical