I 
115TH CONGRESS 
1ST SESSION H. R. 3173 
To amend title XVIII of the Social Security Act to create alternative sanctions 
for technical noncompliance with the Stark rule under Medicare, and 
for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 10, 2017 
Mr. MARCHANT (for himself, Mr. KIND, and Mr. MEEHAN) introduced the fol-
lowing bill; which was referred to the Committee on Energy and Com-
merce, and in addition to the Committee on Ways and Means, for a pe-
riod to be subsequently determined by the Speaker, in each case for con-
sideration of such provisions as fall within the jurisdiction of the com-
mittee concerned 
A BILL 
To amend title XVIII of the Social Security Act to create 
alternative sanctions for technical noncompliance with 
the Stark rule under Medicare, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Stark Administrative 
Simplification Act of 2017’’. 
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SEC. 2. ALTERNATIVE SANCTIONS FOR TECHNICAL NON-
COMPLIANCE 
WITH 
STARK 
RULE 
UNDER 
MEDICARE. 
Section 1877(g) of the Social Security Act (42 U.S.C. 
1395nn(g)) is amended— 
(1) in paragraph (1), by striking ‘‘No’’ and in-
serting ‘‘Subject to paragraph (7), no’’; 
(2) in paragraph (2), by striking ‘‘If’’ and in-
serting ‘‘Subject to paragraph (7), if’’; 
(3) in paragraph (3), by striking ‘‘Any’’ and in-
serting ‘‘Subject to paragraph (7), any’’; and 
(4) by adding at the end the following new 
paragraph: 
‘‘(7) ALTERNATIVE SANCTIONS FOR TECHNICAL 
NONCOMPLIANCE.— 
‘‘(A) SINGLE
PENALTY
FOR
COMPENSA-
TION
ARRANGEMENTS
IN
TECHNICAL
NON-
COMPLIANCE.—In the case of a compensation 
arrangement between a physician (or an imme-
diate family member of such physician) and a 
person or entity that is in violation of sub-
section (a)(1) solely due to technical noncompli-
ance, instead of the sanctions described in para-
graphs (1), (2), and (3) for any such violation, 
the person or entity with respect to such ar-
rangement shall be subject to a single civil mon-
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etary penalty under this paragraph in an 
amount that does not exceed— 
‘‘(i) in the case in which the disclo-
sure of the violation is submitted to the 
Secretary not later than the date that is 
one year after the initial date of non-
compliance, $5,000; and 
‘‘(ii) in the case in which the disclo-
sure of the violation is submitted to the 
Secretary after the date that is one year 
after the initial date of noncompliance, 
$10,000. 
‘‘(B) ACCEPTANCE
OF
VOLUNTARY
DIS-
CLOSURES.— 
‘‘(i) IN
GENERAL.—Beginning as of 
the date of the enactment of this para-
graph, the Secretary shall accept the vol-
untary disclosure of a technically non-
compliant compensation arrangement if 
such voluntary disclosure is made as de-
scribed in clause (iii). The Secretary may 
accept and reasonably rely on information 
provided by a person or entity that is in 
violation of subsection (a)(1) only because 
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of a compensation arrangement that is 
technically noncompliant. 
‘‘(ii) ACCEPTANCE OF DISCLOSURE.— 
The Secretary may reject any voluntary 
disclosure submitted under clause (iii) 
within 90 days after the receipt of the dis-
closure only if the Secretary determines 
that the disclosure does not conform to the 
requirements described in clause (iii). If 
the Secretary fails to reject a voluntary 
disclosure within such 90-day period, the 
voluntary disclosure is deemed to be ac-
cepted. 
‘‘(iii) VOLUNTARY
DISCLOSURE.—A 
voluntary disclosure described in this 
clause is a disclosure concerning a com-
pensation arrangement that is submitted 
to the Secretary by a party to such ar-
rangement that contains the following: 
‘‘(I) The identification of the dis-
closing party and all other parties to 
the disclosed compensation arrange-
ment. 
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‘‘(II) A description of the com-
pensation paid under the arrangement 
and the dates of noncompliance. 
‘‘(III) A certification by the dis-
closing party that the compensation 
arrangement satisfies the require-
ments described in clause (v). 
‘‘(IV) 
Payment 
for 
the 
full 
amount of the civil monetary penalty 
under clause (i) or (ii), as applicable, 
of subparagraph (A). 
‘‘(iv) SETTLEMENT OF LIABILITY AND 
PAYMENT OF CLAIMS.—A voluntary disclo-
sure of a technically noncompliant com-
pensation arrangement that is made and 
accepted under this subparagraph shall 
constitute a full and complete settlement of 
liability under this subsection to the extent 
such liability is with respect to such tech-
nically noncompliant compensation ar-
rangement. Any bill or claim for payment 
related to a technically noncompliant com-
pensation arrangement shall not be subject 
to the sanctions under this subsection and 
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shall be payable after a voluntary disclo-
sure is made as described in clause (iii). 
‘‘(v) COMPENSATION
ARRANGEMENT 
REQUIREMENTS.—For purposes of clause 
(iii)(III), the requirements described in 
this clause, with respect to a compensation 
arrangement, are the following: 
‘‘(I) The compensation arrange-
ment is technically noncompliant (as 
defined by subparagraph (C)). 
‘‘(II) The compensation arrange-
ment has been cured of the technical 
noncompliance, or is otherwise termi-
nated. 
‘‘(III) In the case of technical 
noncompliance described in subpara-
graph (C)(i), the compensation ar-
rangement is consistent with fair mar-
ket value, and the remuneration under 
the arrangement is not determined in 
a manner that takes into account di-
rectly or indirectly the volume or 
value of any referrals. 
‘‘(C) DEFINITION TECHNICAL NONCOMPLI-
ANCE.—For purposes of this paragraph, the 
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term ‘technical noncompliance’ means, with re-
spect to a compensation arrangement, such an 
arrangement that is in violation of subsection 
(a)(1) only because— 
‘‘(i) the arrangement is not set forth 
in writing; 
‘‘(ii) the arrangement is not signed by 
one or more parties to the arrangement; or 
‘‘(iii) the arrangement became in vio-
lation of such subsection by reason of its 
expiration. 
‘‘(D) APPLICABILITY TO PRE-ENACTMENT 
DISCLOSURES TO RELIEVE BACKLOG.—In addi-
tion to the application of this paragraph to 
technically noncompliant compensation arrange-
ments disclosed on or after the date of the en-
actment of this paragraph, the Secretary shall 
provide for the application of this paragraph to 
any technically noncompliant compensation ar-
rangement that has been disclosed, and to 
which there has not been a final settlement, as 
of the date of enactment of this paragraph. 
‘‘(E) REPORT.—Not later than 24 months 
after the date of enactment of this paragraph, 
the Administrator of the Centers for Medicare 
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& Medicaid Services shall submit to Congress a 
report on the implementation of this paragraph. 
Such report shall include— 
‘‘(i) the number of persons or entities 
making disclosures of technical noncompli-
ance under this paragraph; 
‘‘(ii) the amount and type of alter-
native sanctions collected or imposed for 
technical noncompliance; 
‘‘(iii) the types of violations disclosed; 
and 
‘‘(iv) such other information as the 
Inspector General determines may be nec-
essary to evaluate the impact of this para-
graph.’’. 
SEC. 3. CLARIFICATION OF THE WRITING REQUIREMENT 
AND SIGNATURE REQUIREMENT FOR AR-
RANGEMENTS PURSUANT TO THE STARK 
RULE UNDER MEDICARE. 
(a) WRITING REQUIREMENT.—Section 1877(h)(1) of 
the Social Security Act (42 U.S.C. 1395nn(h)(1)) is 
amended by adding at the end the following new subpara-
graph: 
‘‘(D) WRITTEN REQUIREMENT CLARIFIED.—In 
the case of any requirement pursuant to this section 
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for a compensation arrangement to be in writing, 
such requirement shall be satisfied by such means as 
determined by the Secretary, including by a collec-
tion of documents, including contemporaneous docu-
ments evidencing the course of conduct between the 
parties involved.’’. 
(b) SIGNATURE REQUIREMENT.—Section 1877(e) of 
the Social Security Act (42 U.S.C. 1395nn(e)) is amend-
ed— 
(1) in paragraph (1)(A)(i), by inserting ‘‘before 
or not later than 90 days after the effective date of 
the lease’’ after ‘‘signed by the parties’’; 
(2) in paragraph (1)(B)(i), by inserting ‘‘before 
or not later than 90 days after the effective date of 
the lease’’ after ‘‘signed by the parties’’; and 
(3) in paragraph (3)(A)(i), by inserting ‘‘before 
or not later than 90 days after the effective date of 
the arrangement’’ after ‘‘signed by the parties’’. 
SEC. 4. INDEFINITE HOLDOVER FOR LEASE ARRANGE-
MENTS AND PERSONAL SERVICES ARRANGE-
MENTS PURSUANT TO THE STARK RULE 
UNDER MEDICARE. 
Section 1877 of the Social Security Act (42 U.S.C. 
1395nn) is amended— 
(1) in subsection (e)— 
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(A) in paragraph (1), by adding at the end 
the following new subparagraph: 
‘‘(C) 
HOLDOVER
LEASE
ARRANGE-
MENTS.—In the case of a holdover lease ar-
rangement for the lease of office space or equip-
ment, which immediately follows a lease ar-
rangement described in subparagraph (A) for 
the use of such office space or subparagraph 
(B) for the use of such equipment and that ex-
pired after a term of at least one year, pay-
ments made by the lessee to the lessor pursuant 
to such holdover lease arrangement, if— 
‘‘(i) the lease arrangement met the 
conditions of subparagraph (A) for the 
lease of office space or subparagraph (B) 
for the use of equipment when the ar-
rangement expired; 
‘‘(ii) the holdover lease arrangement is 
on the same terms and conditions as the 
immediately preceding arrangement; and 
‘‘(iii) the holdover arrangement con-
tinues to satisfy the conditions of subpara-
graph (A) for the lease of office space or 
subparagraph (B) for the use of equip-
ment.’’; and 
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(B) in paragraph (3), by adding at the end 
the following new subparagraph: 
‘‘(C) HOLDOVER PERSONAL SERVICE AR-
RANGEMENT.—In the case of a holdover per-
sonal service arrangement, which immediately 
follows an arrangement described in subpara-
graph (A) that expired after a term of at least 
one year, remuneration from an entity pursuant 
to such holdover personal service arrangement, 
if— 
‘‘(i) the personal service arrangement 
hmet the conditions of subparagraph (A) 
when the arrangement expired; 
‘‘(ii) the holdover personal service ar-
rangement is on the same terms and condi-
tions as the immediately preceding ar-
rangement; and 
‘‘(iii) the holdover arrangement con-
tinues to satisfy the conditions of subpara-
graph (A).’’; and 
(2) in subsection (h)(1), as amended by section 
3(a)— 
(A) in the heading, by inserting ‘‘; HOLD-
OVER ARRANGEMENT’’ after ‘‘REMUNERATION’’; 
and 
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(B) by adding at the end the following new 
subparagraph: 
‘‘(E) HOLDOVER
ARRANGEMENT.—The term 
‘holdover arrangement’ means an arrangement, with 
respect to an agreement (including a lease or other 
arrangement) that has expired but as of the date of 
such expiration had been in compliance with the ap-
plicable requirements of this section, under which 
the parties to such expired agreement have, since 
such date of expiration, continued to perform under 
the terms and conditions of such expired agree-
ment.’’. 
Æ 
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