(b) 
CONFORMING
AMENDMENT.—Section
1128(c)(3)(A) of such Act (42 U.S.C. 1320a–7(c)(3)(A))
is amended by striking ‘‘subsection (b)(12)’’ and inserting
‘‘paragraph (1), (2), (3), (4), (6)(B), or (12) of subsection
(b)’’.
SEC. 203. PERMISSIVE EXCLUSION OF INDIVIDUALS WITH
OWNERSHIP 
OR 
CONTROL 
INTEREST 
IN
SANCTIONED ENTITIES.
Section 1128(b) of the Social Security Act (42 U.S.C.
1320a–7(b)) is amended by adding at the end the follow-
ing new paragraph:
‘‘(15) INDIVIDUALS
CONTROLLING
A
SANC-
TIONED ENTITY.—Any individual who has a direct
or indirect ownership or control interest of 5 percent
or more, or an ownership or control interest (as de-
fined in section 1124(a)(3)) in, or who is an officer,
director, agent, or managing employee (as defined in
section 1126(b)) of, an entity—
‘‘(A) that has been convicted of any of-
fense described in subsection (a) or in para-
graph (1), (2), or (3);
‘‘(B) against which a civil monetary pen-
alty has been assessed under section 1128A; or
‘‘(C) that has been excluded from partici-
pation under a program under title XVIII or
under a State health care program.’’.
SEC. 204. CIVIL MONETARY PENALTIES.
(a) PROHIBITION AGAINST OFFERING INDUCEMENTS
TO INDIVIDUALS ENROLLED UNDER OR EMPLOYED BY
PROGRAMS OR PLANS.—
(1) INDUCEMENTS TO INDIVIDUALS ENROLLED
UNDER MEDICARE.—Section 1128A(a) of the Social
Security Act (42 U.S.C. 1320a–7a(a)) is amended—
(A) by striking ‘‘or’’ at the end of para-
graph (1)(D);
(B) by striking ‘‘, or’’ at the end of para-
graph (2) and inserting a semicolon;
(C) by striking the semicolon at the end of
paragraph (3) and inserting ‘‘; or’’; and
(D) by inserting after paragraph (3) the
following 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, including the routine
waiver of the payment of any amounts owed by the
individual to the person for an item or service
furnished under part B of such program;’’.
(2) INDUCEMENTS
TO
EMPLOYEES.—Section
1128A(a) of such Act (42 U.S.C. 1320a–7a(a)), as
amended by paragraph (1), is further amended—
(A) by striking ‘‘or’’ at the end of para-
graph (3);
(B) by striking the semicolon at the end of
paragraph (4) and inserting ‘‘; or’’; and
(C) by inserting after paragraph (4) the
following 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-
couraging individuals to seek or obtain covered items
or services;’’.
(b) EXCLUDED INDIVIDUAL RETAINING OWNERSHIP
OR CONTROL INTEREST IN PARTICIPATING ENTITY.—
Section 1128A(a) of such Act, as amended by subsection
(a), is further amended—
(A) by striking ‘‘or’’ at the end of paragraph
(4);
(B) by striking the semicolon at the end of
paragraph (5) and inserting ‘‘; or’’; and
(C) by inserting after paragraph (5) the follow-
ing new paragraph:
‘‘(6) in the case of a person who is not an orga-
nization, agency, or other entity, is excluded from
participating in a program under title XVIII or a
State health care program in accordance with this
subsection or under section 1128 and who, during
the period of exclusion, retains a direct or indirect
ownership or control interest of 5 percent or more,
or an ownership or control interest (as defined in
section 1124(a)(3)) in, or who is an officer, director,
agent, or managing employee (as defined in section
1126(b)) of, an entity that is participating in a pro-
gram under title XVIII or a State health care
program;’’.
(c) INCREASE IN MAXIMUM AMOUNT OF PENALTIES
AND ASSESSMENTS.—Section 1128A(a) of such Act (42
U.S.C. 1320a–7a(a)), as amended by subsections (a) and
(b), is amended in the matter following paragraph (6)—
(1) 
by 
striking 
‘‘$2,000’’ 
and 
inserting
‘‘$10,000’’; and
(2) by striking ‘‘twice the amount’’ and insert-
ing ‘‘three times the amount’’.
(d) CLAIM FOR ITEM OR SERVICE BASED ON INCOR-
RECT CODING.—Section 1128A(a)(1)(A) of such Act (42
U.S.C. 1320a–7a(a)(1)(A)) is amended by striking
‘‘claimed,’’ and inserting the following: ‘‘claimed, including
any person who on a repeated basis presents or causes
to be presented a claim for an item or service that is based
on a code (in the case of a physician’s service) or a diag-
nosis-related group (in the case of inpatient hospital serv-
ices) that results in a greater payment to the person than
the code or diagnosis-related group that actually applies
to the item or service,’’.
(e) PERMITTING PARTIES TO BRING ACTIONS ON
OWN BEHALF.—Section 1128A of such Act (42 U.S.C.
1320a–7a) is amended by adding at the end the following
new subsection:
‘‘(m)(1) Subject to paragraphs (2) and (3), any per-
son (including an organization, agency, or other entity,
but excluding a beneficiary, as defined in subsection
(i)(5)) that suffers harm as a direct result of any activity
of an individual or entity which makes the individual or
entity subject to a civil monetary penalty under this sec-
tion may, in a civil action against the individual or entity
in the United States District Court, obtain damages
against the individual or entity and such equitable relief
as is appropriate.
‘‘(2) A person may bring a civil action under this sub-
section only if the person provides the Secretary with writ-
ten notice of the person’s intent to bring an action under
this subsection, the identities of the individuals or entities
the person intends to name as defendants to the action,
and all information the person possesses regarding the ac-
tivity that is the subject of the action that may materially
affect the Secretary’s decision to initiate a proceeding to
impose a civil monetary penalty under this section against
the defendants.
‘‘(3) A person may bring a civil action under this sub-
section only if any of the following conditions are met:
‘‘(A) During the 60-day period that begins on
the date the Secretary receives the written notice de-
scribed in paragraph (2), the Secretary does not no-
tify the person that the Secretary intends to initiate
a proceeding to impose a civil monetary penalty
under this section against the defendants.
‘‘(B) If the Secretary notifies the person during
the 60-day period described in subparagraph (A)
that the Secretary intends to initiate a proceeding to
impose a civil monetary penalty under this section
against the defendants, the Secretary subsequently