668 
‘‘(vi) DISTRIBUTION.—The Secretary 
shall distribute the increase in resident 
training positions to qualifying hospitals 
under this subparagraph not later than 
July 1, 2011. 
‘‘(C) RESIDENT
LEVEL
AND
LIMIT
DE-
FINED.—In this paragraph: 
‘‘(i) The term ‘resident level’ has the 
meaning given such term in paragraph 
(7)(C)(i). 
‘‘(ii) The term ‘otherwise applicable 
resident limit’ means, with respect to a 
hospital, the limit otherwise applicable 
under subparagraphs (F)(i) and (H) of 
paragraph (4) on the resident level for the 
hospital determined without regard to this 
paragraph but taking into account para-
graph (7)(A). 
‘‘(D) MAINTENANCE
OF
PRIMARY
CARE 
RESIDENT LEVEL.—In carrying out this para-
graph, the Secretary shall require hospitals that 
receive additional resident positions under sub-
paragraph (B)— 
‘‘(i) to maintain records, and periodi-
cally report to the Secretary, on the num-
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669 
ber of primary care residents in its resi-
dency training programs; and 
‘‘(ii) as a condition of payment for a 
cost reporting period under this subsection 
for such positions, to maintain the level of 
such positions at not less than the sum 
of— 
‘‘(I) the base level of primary 
care resident positions (as determined 
under subparagraph (B)(ii)(I)) before 
receiving such additional positions; 
and 
‘‘(II) the number of such addi-
tional positions.’’. 
(b) IME.— 
(1) IN GENERAL.—Section 1886(d)(5)(B)(v) of 
the 
Social 
Security 
Act 
(42 
U.S.C. 
1395ww(d)(5)(B)(v)), in the second sentence, is 
amended— 
(A) by striking ‘‘subsection (h)(7)’’ and in-
serting ‘‘subsections (h)(7) and (h)(8)’’; and 
(B) by striking ‘‘it applies’’ and inserting 
‘‘they apply’’. 
(2) 
CONFORMING
PROVISION.—Section 
1886(d)(5)(B) of the Social Security Act (42 U.S.C. 
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1395ww(d)(5)(B)) is amended by adding at the end 
the following clause: 
‘‘(x) For discharges occurring on or after July 1, 
2011, insofar as an additional payment amount under this 
subparagraph is attributable to resident positions distrib-
uted to a hospital under subsection (h)(8)(B), the indirect 
teaching adjustment factor shall be computed in the same 
manner as provided under clause (ii) with respect to such 
resident positions.’’. 
(c) CONFORMING AMENDMENT.—Section 422(b)(2) 
of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 (Public Law 108–173) is 
amended by striking ‘‘section 1886(h)(7)’’ and all that fol-
lows and inserting ‘‘paragraphs (7) and (8) of subsection 
(h) of section 1886 of the Social Security Act’’. 
SEC. 1502. INCREASING TRAINING IN NONPROVIDER SET-
TINGS. 
(a) DIRECT GME.—Section 1886(h)(4)(E) of the So-
cial Security Act (42 U.S.C. 1395ww(h)) is amended— 
(1) by designating the first sentence as a clause 
(i) with the heading ‘‘IN GENERAL’’ and appropriate 
indentation; 
(2) by striking ‘‘shall be counted and that all 
the time’’ and inserting ‘‘shall be counted and 
that— 
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‘‘(I) effective for cost reporting 
periods beginning before July 1, 2009, 
all the time’’; 
(3) in subclause (I), as inserted by paragraph 
(1), by striking the period at the end and inserting 
‘‘; and’’; and 
(A) by inserting after subclause (I), as so 
inserted, the following: 
‘‘(II) effective for cost reporting 
periods beginning on or after July 1, 
2009, all the time so spent by a resi-
dent shall be counted towards the de-
termination of full-time equivalency, 
without regard to the setting in which 
the activities are performed, if the 
hospital incurs the costs of the sti-
pends and fringe benefits of the resi-
dent during the time the resident 
spends in that setting. 
Any hospital claiming under this subpara-
graph for time spent in a nonprovider set-
ting shall maintain and make available to 
the 
Secretary 
records 
regarding 
the 
amount of such time and such amount in 
comparison with amounts of such time in 
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672 
such base year as the Secretary shall speci-
fy.’’. 
(b) IME.—Section 1886(d)(5)(B)(iv) of the Social 
Security Act (42 U.S.C. 1395ww(d)(5)(B)(iv)) is amend-
ed— 
(1) by striking ‘‘(iv) Effective for discharges oc-
curring on or after October 1, 1997’’ and inserting 
‘‘(iv)(I) Effective for discharges occurring on or 
after October 1, 1997, and before July 1, 2009’’; 
and 
(2) by inserting after subclause (I), as inserted 
by paragraph (1), the following new subclause: 
‘‘(II) Effective for discharges occurring on or 
after July 1, 2009, all the time spent by an intern 
or resident in patient care activities at an entity in 
a nonprovider setting shall be counted towards the 
determination of full-time equivalency if the hospital 
incurs the costs of the stipends and fringe benefits 
of the intern or resident during the time the intern 
or resident spends in that setting.’’. 
(c) OIG STUDY ON IMPACT ON TRAINING.—The In-
spector General of the Department of Health and Human 
Services shall analyze the data collected by the Secretary 
of Health and Human Services from the records made 
available to the Secretary under section 1886(h)(4)(E) of 
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673 
the Social Security Act, as amended by subsection (a), in 
order to assess the extent to which there is an increase 
in time spent by medical residents in training in nonpro-
vider settings as a result of the amendments made by this 
section. Not later than 4 years after the date of the enact-
ment of this Act, the Inspector General shall submit a re-
port to Congress on such analysis and assessment. 
(d) DEMONSTRATION
PROJECT
FOR
APPROVED 
TEACHING HEALTH CENTERS.— 
(1) IN GENERAL.—The Secretary of Health and 
Human Services shall conduct a demonstration 
project under which an approved teaching health 
center (as defined in paragraph (3)) would be eligi-
ble for payment under subsections (h) and (k) of 
section 1886 of the Social Security Act (42 U.S.C. 
1395ww) of amounts for its own direct costs of 
graduate medical education activities for primary 
care residents, as well as for the direct costs of grad-
uate medical education activities of its contracting 
hospital for such residents, in a manner similar to 
the manner in which such payments would be made 
to a hospital if the hospital were to operate such a 
program. 
(2) CONDITIONS.—Under the demonstration 
project— 
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674 
(A) an approved teaching health center 
shall contract with an accredited teaching hos-
pital to carry out the inpatient responsibilities 
of the primary care residency program of the 
hospital involved and is responsible for payment 
to the hospital for the hospital’s costs of the 
salary and fringe benefits for residents in the 
program; 
(B) the number of primary care residents 
of the center shall not count against the con-
tracting hospital’s resident limit; and 
(C) the contracting hospital shall agree not 
to diminish the number of residents in its pri-
mary care residency training program. 
(3) APPROVED TEACHING HEALTH CENTER DE-
FINED.—In this subsection, the term ‘‘approved 
teaching health center’’ means a nonprovider setting, 
such as a Federally qualified health center or rural 
health clinic (as defined in section 1861(aa) of the 
Social Security Act), that develops and operates an 
accredited primary care residency program for which 
funding would be available if it were operated by a 
hospital. 
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675 
SEC. 1503. RULES FOR COUNTING RESIDENT TIME FOR DI-
DACTIC AND SCHOLARLY ACTIVITIES AND 
OTHER ACTIVITIES. 
(a) DIRECT GME.—Section 1886(h) of the Social Se-
curity Act (42 U.S.C. 1395ww(h)) is amended— 
(1) in paragraph (4)(E), as amended by section 
1502(a)— 
(A) in clause (i), by striking ‘‘Such rules’’ 
and inserting ‘‘Subject to clause (ii), such 
rules’’; and 
(B) by adding at the end the following new 
clause: 
‘‘(ii) TREATMENT OF CERTAIN NON-
PROVIDER
AND
DIDACTIC
ACTIVITIES.— 
Such rules shall provide that all time spent 
by an intern or resident in an approved 
medical residency training program in a 
nonprovider setting that is primarily en-
gaged in furnishing patient care (as de-
fined in paragraph (5)(K)) in nonpatient 
care activities, such as didactic conferences 
and seminars, but not including research 
not associated with the treatment or diag-
nosis of a particular patient, as such time 
and activities are defined by the Secretary, 
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676 
shall be counted toward the determination 
of full-time equivalency.’’; 
(2) in paragraph (4), by adding at the end the 
following new subparagraph: 
‘‘(I) In determining the hospital’s number 
of full-time equivalent residents for purposes of 
this subsection, all the time that is spent by an 
intern or resident in an approved medical resi-
dency training program on vacation, sick leave, 
or other approved leave, as such time is defined 
by the Secretary, and that does not prolong the 
total time the resident is participating in the 
approved program beyond the normal duration 
of the program shall be counted toward the de-
termination of full-time equivalency.’’; and 
(3) in paragraph (5), by adding at the end the 
following new subparagraph: 
‘‘(K) NONPROVIDER SETTING THAT IS PRI-
MARILY
ENGAGED
IN
FURNISHING
PATIENT 
CARE.—The term ‘nonprovider setting that is 
primarily engaged in furnishing patient care’ 
means a nonprovider setting in which the pri-
mary activity is the care and treatment of pa-
tients, as defined by the Secretary.’’. 
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677 
(b) IME DETERMINATIONS.—Section 1886(d)(5)(B) 
of such Act (42 U.S.C. 1395ww(d)(5)(B)), as amended by 
section 1501(b), is amended by adding at the end the fol-
lowing new clause: 
‘‘(xi)(I) The provisions of subparagraph (I) of sub-
section (h)(4) shall apply under this subparagraph in the 
same manner as they apply under such subsection. 
‘‘(II) In determining the hospital’s number of full- 
time equivalent residents for purposes of this subpara-
graph, all the time spent by an intern or resident in an 
approved medical residency training program in non-
patient care activities, such as didactic conferences and 
seminars, as such time and activities are defined by the 
Secretary, that occurs in the hospital shall be counted to-
ward the determination of full-time equivalency if the hos-
pital— 
‘‘(aa) is recognized as a subsection (d) hospital; 
‘‘(bb) is recognized as a subsection (d) Puerto 
Rico hospital; 
‘‘(cc) is reimbursed under a reimbursement sys-
tem authorized under section 1814(b)(3); or 
‘‘(dd) is a provider-based hospital outpatient de-
partment. 
‘‘(III) In determining the hospital’s number of full- 
time equivalent residents for purposes of this subpara-
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678 
graph, all the time spent by an intern or resident in an 
approved medical residency training program in research 
activities that are not associated with the treatment or di-
agnosis of a particular patient, as such time and activities 
are defined by the Secretary, shall not be counted toward 
the determination of full-time equivalency.’’. 
(c) EFFECTIVE DATES; APPLICATION.— 
(1) IN
GENERAL.—Except as otherwise pro-
vided, the Secretary of Health and Human Services 
shall implement the amendments made by this sec-
tion in a manner so as to apply to cost reporting pe-
riods beginning on or after January 1, 1983. 
(2) DIRECT GME.—Section 1886(h)(4)(E)(ii) of 
the Social Security Act, as added by subsection 
(a)(1)(B), shall apply to cost reporting periods be-
ginning on or after July 1, 2008. 
(3) IME.—Section 1886(d)(5)(B)(x)(III) of the 
Social Security Act, as added by subsection (b), shall 
apply to cost reporting periods beginning on or after 
October 1, 2001. Such section, as so added, shall 
not give rise to any inference on how the law in ef-
fect prior to such date should be interpreted. 
(4) APPLICATION.—The amendments made by 
this section shall not be applied in a manner that re-
quires reopening of any settled hospital cost reports 
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679 
as to which there is not a jurisdictionally proper ap-
peal pending as of the date of the enactment of this 
Act on the issue of payment for indirect costs of 
medical education under section 1886(d)(5)(B) of 
the Social Security Act or for direct graduate med-
ical education costs under section 1886(h) of such 
Act. 
SEC. 1504. PRESERVATION OF RESIDENT CAP POSITIONS 
FROM CLOSED HOSPITALS. 
(a) DIRECT GME.—Section 1886(h)(4)(H) of the So-
cial Security Act (42 U.S.C. Section 1395ww(h)(4)(H)) 
is amended by adding at the end the following new clause: 
‘‘(vi) REDISTRIBUTION OF RESIDENCY 
SLOTS AFTER A HOSPITAL CLOSES.— 
‘‘(I) IN
GENERAL.—The Sec-
retary shall, by regulation, establish a 
process consistent with subclauses (II) 
and (III) under which, in the case 
where a hospital (other than a hos-
pital described in clause (v)) with an 
approved medical residency program 
in a State closes on or after the date 
that is 2 years before the date of the 
enactment of this clause, the Sec-
retary shall increase the otherwise ap-
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680 
plicable resident limit under this para-
graph for other hospitals in the State 
in accordance with this clause. 
‘‘(II) PROCESS
FOR
HOSPITALS 
IN CERTAIN AREAS.—In determining 
for which hospitals the increase in the 
otherwise applicable resident limit de-
scribed in subclause (I) is provided, 
the Secretary shall establish a process 
to provide for such increase to one or 
more hospitals located in the State. 
Such process shall take into consider-
ation the recommendations submitted 
to the Secretary by the senior health 
official (as designated by the chief ex-
ecutive officer of such State) if such 
recommendations are submitted not 
later than 180 days after the date of 
the hospital closure involved (or, in 
the case of a hospital that closed after 
the date that is 2 years before the 
date of the enactment of this clause, 
180 days after such date of enact-
ment). 
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681 
‘‘(III) LIMITATION.—The esti-
mated aggregate number of increases 
in the otherwise applicable resident 
limits for hospitals under this clause 
shall be equal to the estimated num-
ber of resident positions in the ap-
proved medical residency programs 
that closed on or after the date de-
scribed in subclause (I).’’. 
(b) NO EFFECT ON TEMPORARY FTE CAP ADJUST-
MENTS.—The amendments made by this section shall not 
effect any temporary adjustment to a hospital’s FTE cap 
under section 413.79(h) of title 42, Code of Federal Regu-
lations (as in effect on the date of enactment of this Act) 
and 
shall 
not 
affect 
the 
application 
of 
section 
1886(h)(4)(H)(v) of the Social Security Act. 
(c) CONFORMING AMENDMENTS.— 
(1) Section 422(b)(2) of the Medicare Prescrip-
tion Drug, Improvement, and Modernization Act of 
2003 (Public Law 108–173), as amended by section 
1501(c), is amended by striking ‘‘(7) and’’ and in-
serting ‘‘(4)(H)(vi), (7), and’’. 
(2) Section 1886(h)(7)(E) of the Social Secu-
rity Act (42 U.S.C. 1395ww(h)(7)(E)) is amended 
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682 
by inserting ‘‘or under paragraph (4)(H)(vi)’’ after 
‘‘under this paragraph’’. 
SEC. 1505. IMPROVING ACCOUNTABILITY FOR APPROVED 
MEDICAL RESIDENCY TRAINING. 
(a) SPECIFICATION OF GOALS FOR APPROVED MED-
ICAL
RESIDENCY
TRAINING
PROGRAMS.—Section 
1886(h)(1) of the Social Security Act (42 U.S.C. 
1395ww(h)(1)) is amended— 
(1) by designating the matter beginning with 
‘‘Notwithstanding’’ as a subparagraph (A) with the 
heading ‘‘IN GENERAL.—’’ and with appropriate in-
dentation; and 
(2) by adding at the end the following new 
paragraph: 
‘‘(B) GOALS
AND
ACCOUNTABILITY
FOR 
APPROVED MEDICAL RESIDENCY TRAINING PRO-
GRAMS.—The goals of medical residency train-
ing programs are to foster a physician work-
force so that physicians are trained to be able 
to do the following: 
‘‘(i) Work effectively in various health 
care delivery settings, such as nonprovider 
settings. 
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‘‘(ii) Coordinate patient care within 
and across settings relevant to their spe-
cialties. 
‘‘(iii) Understand the relevant cost 
and value of various diagnostic and treat-
ment options. 
‘‘(iv) Work in inter-professional teams 
and multi-disciplinary team-based models 
in provider and nonprovider settings to en-
hance safety and improve quality of patient 
care. 
‘‘(v) Be knowledgeable in methods of 
identifying systematic errors in health care 
delivery and in implementing systematic 
solutions in case of such errors, including 
experience and participation in continuous 
quality improvement projects to improve 
health outcomes of the population the phy-
sicians serve. 
‘‘(vi) Be meaningful EHR users (as 
determined under section 1848(o)(2)) in 
the delivery of care and in improving the 
quality of the health of the community and 
the individuals that the hospital serves.’’ 
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684 
(b) GAO STUDY ON EVALUATION OF TRAINING PRO-
GRAMS.— 
(1) IN GENERAL.—The Comptroller General of 
the United States shall conduct a study to evaluate 
the extent to which medical residency training pro-
grams— 
(A) are meeting the goals described in sec-
tion 1886(h)(1)(B) of the Social Security Act, 
as added by subsection (a), in a range of resi-
dency programs, including primary care and 
other specialties; and 
(B) have the appropriate faculty expertise 
to teach the topics required to achieve such 
goals. 
(2) REPORT.—Not later than 18 months after 
the date of the enactment of this Act, the Comp-
troller General shall submit to Congress a report on 
such study and shall include in such report rec-
ommendations as to how medical residency training 
programs could be further encouraged to meet such 
goals through means such as— 
(A) development of curriculum require-
ments; and 
(B) assessment of the accreditation proc-
esses of the Accreditation Council for Graduate 
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Medical Education and the American Osteo-
pathic Association and effectiveness of those 
processes in accrediting medical residency pro-
grams that meet the goals referred to in para-
graph (1)(A). 
TITLE VI—PROGRAM INTEGRITY 
Subtitle A—Increased Funding To 
Fight Waste, Fraud, and Abuse 
SEC. 1601. INCREASED FUNDING AND FLEXIBILITY TO 
FIGHT FRAUD AND ABUSE. 
(a) IN GENERAL.—Section 1817(k) of the Social Se-
curity Act (42 U.S.C. 1395i(k)) is amended— 
(1) by adding at the end the following new 
paragraph: 
‘‘(7) ADDITIONAL FUNDING.—In addition to the 
funds otherwise appropriated to the Account from 
the Trust Fund under paragraphs (3) and (4) and 
for purposes described in paragraphs (3)(C) and 
(4)(A), there are hereby appropriated an additional 
$100,000,000 to such Account from such Trust 
Fund for each fiscal year beginning with 2011. The 
funds appropriated under this paragraph shall be al-
located in the same proportion as the total funding 
appropriated with respect to paragraphs (3)(A) and 
(4)(A) was allocated with respect to fiscal year 
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686 
2010, and shall be available without further appro-
priation until expended.’’. 
(2) in paragraph (4)(A)— 
(A) by inserting ‘‘for activities described in 
paragraph (3)(C) and’’ after ‘‘necessary’’; and 
(B) by inserting ‘‘until expended’’ after 
‘‘appropriation’’. 
(b) 
FLEXIBILITY
IN
PURSUING
FRAUD
AND 
ABUSE.—Section 1893(a) of the Social Security Act (42 
U.S.C. 1395ddd(a)) is amended by inserting ‘‘, or other-
wise,’’ after ‘‘entities’’. 
Subtitle B—Enhanced Penalties for 
Fraud and Abuse 
SEC. 1611. ENHANCED PENALTIES FOR FALSE STATEMENTS 
ON PROVIDER OR SUPPLIER ENROLLMENT 
APPLICATIONS. 
(a) IN GENERAL.—Section 1128A(a) of the Social 
Security Act (42 U.S.C. 1320a–7a(a)) is amended— 
(1) in paragraph (1)(D), by striking all that fol-
lows ‘‘in which the person was excluded’’ and insert-
ing ‘‘under Federal law from the Federal health care 
program under which the claim was made, or’’; 
(2) by striking ‘‘or’’ at the end of paragraph 
(6); 
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(3) in paragraph (7), by inserting at the end 
‘‘or’’; 
(4) by inserting after paragraph (7) the fol-
lowing new paragraph: 
‘‘(8) knowingly makes or causes to be made any 
false statement, omission, or misrepresentation of a 
material fact in any application, agreement, bid, or 
contract to participate or enroll as a provider of 
services or supplier under a Federal health care pro-
gram, including managed care organizations under 
title XIX, Medicare Advantage organizations under 
part C of title XVIII, prescription drug plan spon-
sors under part D of title XVIII, and entities that 
apply to participate as providers of services or sup-
pliers in such managed care organizations and such 
plans;’’; 
(5) in the matter following paragraph (8), as 
inserted by paragraph (4), by striking ‘‘or in cases 
under paragraph (7), $50,000 for each such act)’’ 
and inserting ‘‘in cases under paragraph (7), 
$50,000 for each such act, or in cases under para-
graph (8), $50,000 for each false statement, omis-
sion, or misrepresentation of a material fact)’’; and 
(6) in the second sentence, by striking ‘‘for a 
lawful purpose)’’ and inserting ‘‘for a lawful pur-
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pose, or in cases under paragraph (8), an assess-
ment of not more than 3 times the amount claimed 
as the result of the false statement, omission, or 
misrepresentation of material fact claimed by a pro-
vider of services or supplier whose application to 
participate contained such false statement, omission, 
or misrepresentation)’’. 
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall apply to acts committed on or after 
January 1, 2010. 
SEC. 1612. ENHANCED PENALTIES FOR SUBMISSION OF 
FALSE STATEMENTS MATERIAL TO A FALSE 
CLAIM. 
(a) IN GENERAL.—Section 1128A(a) of the Social 
Security Act (42 U.S.C. 1320a–7a(a)), as amended by sec-
tion 1611, is further amended— 
(1) in paragraph (7), by striking ‘‘or’’ at the 
end; 
(2) in paragraph (8), by inserting ‘‘or’’ at the 
end; and 
(3) by inserting after paragraph (8), the fol-
lowing new paragraph: 
‘‘(9) knowingly makes, uses, or causes to be 
made or used, a false record or statement material 
to a false or fraudulent claim for payment for items 
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and services furnished under a Federal health care 
program;’’; and 
(4) in the matter following paragraph (9), as 
inserted by paragraph (3)— 
(A) by striking ‘‘or in cases under para-
graph (8)’’ and inserting ‘‘in cases under para-
graph (8)’’; and 
(B) by striking ‘‘a material fact)’’ and in-
serting ‘‘a material fact, in cases under para-
graph (9), $50,000 for each false record or 
statement)’’. 
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall apply to acts committed on or after 
January 1, 2010. 
SEC. 1613. ENHANCED PENALTIES FOR DELAYING INSPEC-
TIONS. 
(a) IN GENERAL.—Section 1128A(a) of the Social 
Security Act (42 U.S.C. 1320a–7a(a)), as amended by sec-
tions 1611 and 1612, is further amended— 
(1) in paragraph (8), by striking ‘‘or’’ at the 
end; 
(2) in paragraph (9), by inserting ‘‘or’’ at the 
end; 
(3) by inserting after paragraph (9) the fol-
lowing new paragraph: 
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‘‘(10) fails to grant timely access, upon reason-
able request (as defined by the Secretary in regula-
tions), to the Inspector General of the Department 
of Health and Human Services, for the purpose of 
audits, investigations, evaluations, or other statutory 
functions of the Inspector General of the Depart-
ment of Health and Human Services;’’; and 
(4) in the matter following paragraph (10), as 
inserted by paragraph (3)— 
(A) by striking ‘‘or’’ after ‘‘$50,000 for 
each such act,’’; and 
(B) by inserting ‘‘, or in cases under para-
graph (10), $15,000 for each day of the failure 
described in such paragraph’’ after ‘‘false 
record or statement’’. 
(b) ENSURING TIMELY INSPECTIONS RELATING TO 
CONTRACTS
WITH
MA 
ORGANIZATIONS.—Section 
1857(d)(2) of such Act (42 U.S.C. 1395w–27(d)(2)) is 
amended— 
(1) in subparagraph (A), by inserting ‘‘timely’’ 
before ‘‘inspect’’; and 
(2) in subparagraph (B), by inserting ‘‘timely’’ 
before ‘‘audit and inspect’’. 
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(c) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall apply to violations committed on or 
after January 1, 2010. 
SEC. 1614. ENHANCED HOSPICE PROGRAM SAFEGUARDS. 
(a) MEDICARE.—Part A of title XVIII of the Social 
Security Act is amended by inserting after section 1819 
the following new section: 
‘‘SEC. 1819A. ASSURING QUALITY OF CARE IN HOSPICE 
CARE. 
‘‘(a) IN GENERAL.—If the Secretary determines on 
the basis of a survey or otherwise, that a hospice program 
that is certified for participation under this title has dem-
onstrated a substandard quality of care and failed to meet 
such other requirements as the Secretary may find nec-
essary in the interest of the health and safety of the indi-
viduals who are provided care and services by the agency 
or organization involved and determines— 
‘‘(1) that the deficiencies involved immediately 
jeopardize the health and safety of the individuals to 
whom the program furnishes items and services, the 
Secretary shall take immediate action to remove the 
jeopardy and correct the deficiencies through the 
remedy specified in subsection (b)(2)(A)(iii) or ter-
minate the certification of the program, and may 
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692 
provide, in addition, for 1 or more of the other rem-
edies described in subsection (b)(2)(A); or 
‘‘(2) that the deficiencies involved do not imme-
diately jeopardize the health and safety of the indi-
viduals to whom the program furnishes items and 
services, the Secretary may— 
‘‘(A) impose intermediate sanctions devel-
oped pursuant to subsection (b), in lieu of ter-
minating the certification of the program; and 
‘‘(B) if, after such a period of intermediate 
sanctions, the program is still not in compliance 
with such requirements, the Secretary shall ter-
minate the certification of the program. 
If the Secretary determines that a hospice program 
that is certified for participation under this title is 
in compliance with such requirements but, as of a 
previous period, was not in compliance with such re-
quirements, the Secretary may provide for a civil 
money penalty under subsection (b)(2)(A)(i) for the 
days in which it finds that the program was not in 
compliance with such requirements. 
‘‘(b) INTERMEDIATE SANCTIONS.— 
‘‘(1) DEVELOPMENT AND IMPLEMENTATION.— 
The Secretary shall develop and implement, by not 
later than July 1, 2012— 
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‘‘(A) a range of intermediate sanctions to 
apply to hospice programs under the conditions 
described in subsection (a), and 
‘‘(B) appropriate procedures for appealing 
determinations relating to the imposition of 
such sanctions. 
‘‘(2) SPECIFIED SANCTIONS.— 
‘‘(A) 
IN
GENERAL.—The 
intermediate 
sanctions developed under paragraph (1) may 
include— 
‘‘(i) civil money penalties in an 
amount not to exceed $10,000 for each day 
of noncompliance or, in the case of a per 
instance penalty applied by the Secretary, 
not to exceed $25,000, 
‘‘(ii) denial of all or part of the pay-
ments to which a hospice program would 
otherwise be entitled under this title with 
respect to items and services furnished by 
a hospice program on or after the date on 
which the Secretary determines that inter-
mediate sanctions should be imposed pur-
suant to subsection (a)(2), 
‘‘(iii) the appointment of temporary 
management to oversee the operation of 
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jlentini on DSKJ8SOYB1PROD with BILLS
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the hospice program and to protect and as-
sure the health and safety of the individ-
uals under the care of the program while 
improvements are made, 
‘‘(iv) corrective action plans, and 
‘‘(v) in-service training for staff. 
The provisions of section 1128A (other than 
subsections (a) and (b)) shall apply to a civil 
money penalty under clause (i) in the same 
manner as such provisions apply to a penalty or 
proceeding under section 1128A(a). The tem-
porary management under clause (iii) shall not 
be terminated until the Secretary has deter-
mined that the program has the management 
capability to ensure continued compliance with 
all requirements referred to in that clause. 
‘‘(B) 
CLARIFICATION.—The 
sanctions 
specified in subparagraph (A) are in addition to 
sanctions otherwise available under State or 
Federal law and shall not be construed as lim-
iting other remedies, including any remedy 
available to an individual at common law. 
‘‘(C) COMMENCEMENT
OF
PAYMENT.—A 
denial of payment under subparagraph (A)(ii) 
shall terminate when the Secretary determines 
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that the hospice program no longer dem-
onstrates a substandard quality of care and 
meets such other requirements as the Secretary 
may find necessary in the interest of the health 
and safety of the individuals who are provided 
care and services by the agency or organization 
involved. 
‘‘(3) SECRETARIAL AUTHORITY.—The Secretary 
shall develop and implement, by not later than July 
1, 2011, specific procedures with respect to the con-
ditions under which each of the intermediate sanc-
tions developed under paragraph (1) is to be applied, 
including the amount of any fines and the severity 
of each of these sanctions. Such procedures shall be 
designed so as to minimize the time between identi-
fication of deficiencies and imposition of these sanc-
tions and shall provide for the imposition of incre-
mentally more severe fines for repeated or uncor-
rected deficiencies.’’. 
(b) APPLICATION TO MEDICAID.—Section 1905(o) of 
the Social Security Act (42 U.S.C. 1396d(o)) is amended 
by adding at the end the following new paragraph: 
‘‘(4) The provisions of section 1819A shall apply to 
a hospice program providing hospice care under this title 
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jlentini on DSKJ8SOYB1PROD with BILLS
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in the same manner as such provisions apply to a hospice 
program providing hospice care under title XVIII.’’. 
(c) APPLICATION TO CHIP.—Title XXI of the Social 
Security Act is amended by adding at the end the fol-
lowing new section: 
‘‘SEC. 2114. ASSURING QUALITY OF CARE IN HOSPICE CARE. 
‘‘The provisions of section 1819A shall apply to a 
hospice program providing hospice care under this title in 
the same manner such provisions apply to a hospice pro-
gram providing hospice care under title XVIII.’’. 
SEC. 1615. ENHANCED PENALTIES FOR INDIVIDUALS EX-
CLUDED FROM PROGRAM PARTICIPATION. 
(a) IN GENERAL.—Section 1128A(a) of the Social 
Security Act (42 U.S.C. 1320a–7a(a)), as amended by the 
previous sections, is further amended— 
(1) by striking ‘‘or’’ at the end of paragraph 
(9); 
(2) by inserting ‘‘or’’ at the end of paragraph 
(10); 
(3) by inserting after paragraph (10) the fol-
lowing new paragraph: 
‘‘(11) orders or prescribes an item or service, 
including without limitation home health care, diag-
nostic and clinical lab tests, prescription drugs, du-
rable medical equipment, ambulance services, phys-
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jlentini on DSKJ8SOYB1PROD with BILLS
697 
ical or occupational therapy, or any other item or 
service, during a period when the person has been 
excluded from participation in a Federal health care 
program, and the person knows or should know that 
a claim for such item or service will be presented to 
such a program;’’; and 
(4) in the matter following paragraph (11), as 
inserted by paragraph (2), by striking ‘‘$15,000 for 
each day of the failure described in such paragraph’’ 
and inserting ‘‘$15,000 for each day of the failure 
described in such paragraph, or in cases under para-
graph (11), $50,000 for each order or prescription 
for an item or service by an excluded individual’’. 
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall apply to violations committed on or 
after January 1, 2010. 
SEC. 1616. ENHANCED PENALTIES FOR PROVISION OF 
FALSE INFORMATION BY MEDICARE ADVAN-
TAGE AND PART D PLANS. 
(a) IN GENERAL.—Section 1857(g)(2)(A) of the So-
cial Security Act (42 U.S.C. 1395w–27(g)(2)(A)) is 
amended by inserting ‘‘except with respect to a determina-
tion under subparagraph (E), an assessment of not more 
than 3 times the amount claimed by such plan or plan 
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jlentini on DSKJ8SOYB1PROD with BILLS
698 
sponsor based upon the misrepresentation or falsified in-
formation involved,’’ after ‘‘for each such determination,’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to violations committed on or 
after January 1, 2010. 
SEC. 1617. ENHANCED PENALTIES FOR MEDICARE ADVAN-
TAGE AND PART D MARKETING VIOLATIONS. 
(a) IN GENERAL.—Section 1857(g)(1) of the Social 
Security Act (42 U.S.C. 1395w–27(g)(1)), as amended by 
section 1221(b), is amended— 
(1) in subparagraph (G), by striking ‘‘or’’ at 
the end; 
(2) by inserting after subparagraph (H) the fol-
lowing new subparagraphs: 
‘‘(I) except as provided under subpara-
graph (C) or (D) of section 1860D–1(b)(1), en-
rolls an individual in any plan under this part 
without the prior consent of the individual or 
the designee of the individual; 
‘‘(J) transfers an individual enrolled under 
this part from one plan to another without the 
prior consent of the individual or the designee 
of the individual or solely for the purpose of 
earning a commission; 
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‘‘(K) fails to comply with marketing re-
strictions described in subsections (h) and (j) of 
section 1851 or applicable implementing regula-
tions or guidance; or 
‘‘(L) employs or contracts with any indi-
vidual or entity who engages in the conduct de-
scribed in subparagraphs (A) through (K) of 
this paragraph;’’; and 
(3) by adding at the end the following new sen-
tence: ‘‘The Secretary may provide, in addition to 
any other remedies authorized by law, for any of the 
remedies described in paragraph (2), if the Secretary 
determines that any employee or agent of such orga-
nization, or any provider or supplier who contracts 
with such organization, has engaged in any conduct 
described in subparagraphs (A) through (L) of this 
paragraph.’’ 
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall apply to violations committed on or 
after January 1, 2010. 
SEC. 1618. ENHANCED PENALTIES FOR OBSTRUCTION OF 
PROGRAM AUDITS. 
(a) IN GENERAL.—Section 1128(b)(2) of the Social 
Security Act (42 U.S.C. 1320a–7(b)(2)) is amended— 
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jlentini on DSKJ8SOYB1PROD with BILLS
700 
(1) in the heading, by inserting ‘‘OR AUDIT’’ 
after ‘‘INVESTIGATION’’; and 
(2) by striking ‘‘investigation into’’ and all that 
follows through the period and inserting ‘‘investiga-
tion or audit related to—’’ 
‘‘(i) any offense described in para-
graph (1) or in subsection (a); or 
‘‘(ii) the use of funds received, directly 
or indirectly, from any Federal health care 
program 
(as 
defined 
in 
section 
1128B(f)).’’. 
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall apply to violations committed on or 
after January 1, 2010. 
SEC. 1619. EXCLUSION OF CERTAIN INDIVIDUALS AND EN-
TITIES FROM PARTICIPATION IN MEDICARE 
AND STATE HEALTH CARE PROGRAMS. 
(a) IN GENERAL.—Section 1128(c) of the Social Se-
curity Act, as previously amended by this division, is fur-
ther amended— 
(1) in the heading, by striking ‘‘AND PERIOD’’ 
and inserting ‘‘, PERIOD, AND EFFECT’’; and 
(2) by adding at the end the following new 
paragraph: 
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701 
‘‘(4)(A) For purposes of this Act, subject to 
subparagraph (C), the effect of exclusion is that no 
payment may be made by any Federal health care 
program (as defined in section 1128B(f)) with re-
spect to any item or service furnished— 
‘‘(i) by an excluded individual or entity; or 
‘‘(ii) at the medical direction or on the pre-
scription of a physician or other authorized in-
dividual when the person submitting a claim for 
such item or service knew or had reason to 
know of the exclusion of such individual. 
‘‘(B) For purposes of this section and sections 
1128A and 1128B, subject to subparagraph (C), an 
item or service has been furnished by an individual 
or entity if the individual or entity directly or indi-
rectly provided, ordered, manufactured, distributed, 
prescribed, or otherwise supplied the item or service 
regardless of how the item or service was paid for 
by a Federal health care program or to whom such 
payment was made. 
‘‘(C)(i) Payment may be made under a Federal 
health care program for emergency items or services 
(not including items or services furnished in an 
emergency room of a hospital) furnished by an ex-
cluded individual or entity, or at the medical direc-
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702 
tion or on the prescription of an excluded physician 
or other authorized individual during the period of 
such individual’s exclusion. 
‘‘(ii) In the case that an individual eligible for 
benefits under title XVIII or XIX submits a claim 
for payment for items or services furnished by an ex-
cluded individual or entity, and such individual eligi-
ble for such benefits did not know or have reason to 
know that such excluded individual or entity was so 
excluded, then, notwithstanding such exclusion, pay-
ment shall be made for such items or services. In 
such case the Secretary shall notify such individual 
eligible for such benefits of the exclusion of the indi-
vidual or entity furnishing the items or services. 
Payment shall not be made for items or services fur-
nished by an excluded individual or entity to an indi-
vidual eligible for such benefits after a reasonable 
time (as determined by the Secretary in regulations) 
after the Secretary has notified the individual eligi-
ble for such benefits of the exclusion of the indi-
vidual or entity furnishing the items or services. 
‘‘(iii) In the case that a claim for payment for 
items or services furnished by an excluded individual 
or entity is submitted by an individual or entity 
other than an individual eligible for benefits under 
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703 
title XVIII or XIX or the excluded individual or en-
tity, and the Secretary determines that the indi-
vidual or entity that submitted the claim took rea-
sonable steps to learn of the exclusion and reason-
ably relied upon inaccurate or misleading informa-
tion from the relevant Federal health care program 
or its contractor, the Secretary may waive repay-
ment of the amount paid in violation of the exclusion 
to the individual or entity that submitted the claim 
for the items or services furnished by the excluded 
individual or entity. If a Federal health care pro-
gram contractor provided inaccurate or misleading 
information that resulted in the waiver of an over-
payment under this clause, the Secretary shall take 
appropriate action to recover the improperly paid 
amount from the contractor.’’. 
Subtitle C—Enhanced Program 
and Provider Protections 
SEC. 1631. ENHANCED CMS PROGRAM PROTECTION AU-
THORITY. 
(a) IN GENERAL.—Title XI of the Social Security Act 
(42 U.S.C. 1301 et seq.) is amended by inserting after 
section 1128F the following new section: 
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704 
‘‘SEC. 1128G. ENHANCED PROGRAM AND PROVIDER PRO-
TECTIONS IN THE MEDICARE, MEDICAID, AND 
CHIP PROGRAMS. 
‘‘(a) CERTAIN AUTHORIZED SCREENING, ENHANCED 
OVERSIGHT PERIODS, AND ENROLLMENT MORATORIA.— 
‘‘(1) IN GENERAL.—For periods beginning after 
January 1, 2011, in the case that the Secretary de-
termines there is a significant risk of fraudulent ac-
tivity (as determined by the Secretary based on rel-
evant complaints, reports, referrals by law enforce-
ment or other sources, data analysis, trending infor-
mation, or claims submissions by providers of serv-
ices and suppliers) with respect to a category of pro-
vider of services or supplier of items or services, in-
cluding a category within a geographic area, under 
title XVIII, XIX, or XXI, the Secretary may impose 
any of the following requirements with respect to a 
provider of services or a supplier (whether such pro-
vider or supplier is initially enrolling in the program 
or is renewing such enrollment): 
‘‘(A) Screening under paragraph (2). 
‘‘(B) Enhanced oversight periods under 
paragraph (3). 
‘‘(C) Enrollment moratoria under para-
graph (4). 
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705 
In applying this subsection for purposes of title XIX 
and XXI the Secretary may require a State to carry 
out the provisions of this subsection as a require-
ment of the State plan under title XIX or the child 
health plan under title XXI. Actions taken and de-
terminations made under this subsection shall not be 
subject to review by a judicial tribunal. 
‘‘(2) SCREENING.—For purposes of paragraph 
(1), the Secretary shall establish procedures under 
which screening is conducted with respect to pro-
viders of services and suppliers described in such 
paragraph. Such screening may include— 
‘‘(A) licensing board checks; 
‘‘(B) screening against the list of individ-
uals and entities excluded from the program 
under title XVIII, XIX, or XXI; 
‘‘(C) the excluded provider list system; 
‘‘(D) background checks; and 
‘‘(E) unannounced pre-enrollment or other 
site visits. 
‘‘(3) ENHANCED
OVERSIGHT
PERIOD.—For 
purposes of paragraph (1), the Secretary shall estab-
lish procedures to provide for a period of not less 
than 30 days and not more than 365 days during 
which providers of services and suppliers described 
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706 
in such paragraph, as the Secretary determines ap-
propriate, would be subject to enhanced oversight, 
such as required or unannounced (or required and 
unannounced) site visits or inspections, prepayment 
review, enhanced review of claims, and such other 
actions as specified by the Secretary, under the pro-
grams under titles XVIII, XIX, and XXI. Under 
such procedures, the Secretary may extend such pe-
riod for more than 365 days if the Secretary deter-
mines that after the initial period such additional 
period of oversight is necessary. 
‘‘(4) MORATORIUM ON ENROLLMENT OF PRO-
VIDERS
AND
SUPPLIERS.—For purposes of para-
graph (1), the Secretary, based upon a finding of a 
risk of serious ongoing fraud within a program 
under title XVIII, XIX, or XXI, may impose a mor-
atorium on the enrollment of providers of services 
and suppliers within a category of providers of serv-
ices and suppliers (including a category within a spe-
cific geographic area) under such title. Such a mora-
torium may only be imposed if the Secretary makes 
a determination that the moratorium would not ad-
versely impact access of individuals to care under 
such program. 
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707 
‘‘(5) CLARIFICATION.—Nothing in this sub-
section shall be interpreted to preclude or limit the 
ability of a State to engage in provider screening or 
enhanced provider oversight activities beyond those 
required by the Secretary.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) MEDICAID.—Section 1902(a) of the Social 
Security Act (42 U.S.C. 42 U.S.C. 1396a(a)) is 
amended— 
(A) in paragraph (23), by inserting before 
the semicolon at the end the following: ‘‘or by 
a person to whom or entity to which a morato-
rium under section 1128G(a)(4) is applied dur-
ing the period of such moratorium’’; 
(B) in paragraph (72); by striking at the 
end ‘‘and’’; 
(C) in paragraph (73), by striking the pe-
riod at the end and inserting ‘‘and’’; and 
(D) by adding after paragraph (73) the 
following new paragraph: 
‘‘(74) provide that the State will enforce any 
determination made by the Secretary under sub-
section (a) of section 1128G (relating to a signifi-
cant risk of fraudulent activity with respect to a cat-
egory of provider or supplier described in such sub-
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jlentini on DSKJ8SOYB1PROD with BILLS
708 
section (a) through use of the appropriate proce-
dures described in such subsection (a)), and that the 
State will carry out any activities as required by the 
Secretary for purposes of such subsection (a).’’. 
(2) CHIP.—Section 2102 of such Act (42 
U.S.C. 1397bb) is amended by adding at the end the 
following new subsection: 
‘‘(d) PROGRAM INTEGRITY.—A State child health 
plan shall include a description of the procedures to be 
used by the State— 
‘‘(1) to enforce any determination made by the 
Secretary under subsection (a) of section 1128G (re-
lating to a significant risk of fraudulent activity with 
respect to a category of provider or supplier de-
scribed in such subsection through use of the appro-
priate procedures described in such subsection); and 
‘‘(2) to carry out any activities as required by 
the Secretary for purposes of such subsection.’’. 
(3) MEDICARE.—Section 1866(j) of such Act 
(42 U.S.C. 1395cc(j)) is amended by adding at the 
end the following new paragraph: 
‘‘(3) PROGRAM INTEGRITY.—The provisions of 
section 1128G(a) apply to enrollments and renewals 
of enrollments of providers of services and suppliers 
under this title.’’. 
VerDate Nov 24 2008 
00:36 Jul 15, 2009
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jlentini on DSKJ8SOYB1PROD with BILLS