I
104TH CONGRESS
1ST SESSION
H. R. 1758
To provide a Federal response to fraud in connection with the provision
of or receipt of payment for health care services, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JUNE 7, 1995
Ms. DELAURO (for herself, Mr. BEVILL, Mr. BARRETT of Wisconsin, and Mr.
DURBIN) introduced the following bill; which was referred to the Commit-
tee on the Judiciary, and in addition to the Committee on Commerce, for
a period to be subsequently determined by the Speaker, in each case for
consideration of such provisions as fall within the jurisdiction of the com-
mittee concerned
A BILL
To provide a Federal response to fraud in connection with
the provision of or receipt of payment for health care
services, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
TITLE I—HEALTH CARE FRAUD
PROSECUTION
SEC. 101. SHORT TITLE.
This title may be cited as the ‘‘Health Care Fraud
Prosecution Act of 1995’’.
SEC. 102. INCREASED PENALTIES FOR HEALTH CARE
FRAUD.
(a) OFFENSE.—Part I of title 18, United States
Code, is amended by inserting after chapter 50A the fol-
lowing new chapter:
‘‘CHAPTER 50B—HEALTH CARE FRAUD
‘‘Sec.
‘‘1101. Health care fraud.
‘‘1102. Penalties.
‘‘1103. Restitution.
‘‘§ 1101. Health care fraud
‘‘(a) DEFINITION.—In this section, the term ‘health
care provider’ means—
‘‘(1) a physician, nurse, dentist, therapist, phar-
macist, or other professional provider of health care;
and
‘‘(2) a hospital, health maintenance organiza-
tion, pharmacy, laboratory, clinic, or other health
care facility or a provider of medical services, medi-
cal devices, medical equipment, or other medical sup-
plies.
‘‘(b) OFFENSE.—A health care provider that engages
in conduct constituting an offense under section 1341 or
1343 of this title for the purpose of or in connection with
the provision of health care services or supplies or the pay-
ment therefor or reimbursement of the costs thereof,
when—
‘‘(1) the amount of loss caused by the fraudu-
lent conduct exceeds $10,000; or
‘‘(2) the offender had previously been convicted
of fraud in Federal or State court,
shall be fined under this title, imprisoned in accordance
with section 1102 of this title, or both.
‘‘§ 1102. Penalties
‘‘(a) IN GENERAL.—In the case of an offense under
section 1101 of this title not described in subsection (b)
or (c) of this section, the offender shall be sentenced to
a term of imprisonment of not more than 10 years.
‘‘(b) 
SERIOUS
PHYSICAL
INJURY
OR
ENDANGERMENT OF LIFE OF PATIENT.—In the case of
an offense under section 1101 of this title that—
‘‘(1) caused serious physical injury to a patient;
or
‘‘(2) endangered the life of a patient,
the offender shall be sentenced to a term of imprisonment
of not more than 20 years.
‘‘(c) DEATH OF PATIENT.—In the case of an offense
under section 1101 of this title that caused the death of
a patient, the offender shall be sentenced to a term of im-
prisonment of not more than life.
‘‘§ 1103. Restitution
‘‘(a) IN GENERAL.—In sentencing a person convicted
of an offense under section 1101 of this title, the court
shall order the offender to pay restitution to the patient
and any payor, such as an insurer, employer health benefit
plan, or government program, for economic loss sustained
as a result of the offense.
‘‘(b) RESTITUTION PROCEDURE.—Except to the ex-
tent inconsistent with this section, sections 3363 and 3364
of this title apply to restitution made under this section.’’.
(b) CLERICAL AMENDMENT.—The table of chapters
at the beginning of part I of title 18, United States Code,
is amended by inserting after the item relating to chapter
50A the following new item:
‘‘50B. Health care fraud.’’.
SEC. 103. CRIMINAL FORFEITURE OF HEALTH CARE FRAUD
PROCEEDS.
Section 982(a) of title 18, United States Code, is
amended by adding at the end the following new para-
graph:
‘‘(6) The court, in imposing sentence on a person con-
victed of an offense under section 1101 of this title, shall
order that the offender forfeit to the United States any
real or personal property constituting or derived from pro-
ceeds that the offender obtained directly or indirectly as
the result of the offense.’’.
SEC. 104. REWARDS FOR INFORMATION LEADING TO PROS-
ECUTION AND CONVICTION.
Section 3059(c)(1) of title 18, United States Code,
is amended by inserting ‘‘1101 or’’ before ‘‘2326’’.
SEC. 105. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated for the pur-
poses of carrying out the amendments made by this title—
(1) for fiscal year 1996—
(A) $25,000,000 for the Federal Bureau of
Investigation to hire, equip, and train no fewer
than 250 special agents and support staff to in-
vestigate health-care fraud cases;
(B) $5,000,000 to hire, equip, and train
no fewer than 50 assistant United States Attor-
neys and support staff to prosecute health-care
fraud cases; and
(C) $5,000,000 to hire, equip, and train no
fewer than 50 investigators in the Office of In-
spector General, Department of Health and
Human Services, to be devoted exclusively to
health-care fraud cases; and
(2) for each fiscal year thereafter, such sums as
may be necessary.
TITLE II—HEALTH CARE FRAUD
AND ABUSE COMMISSION
SEC. 201. SHORT TITLE.
This title may be cited as the ‘‘Health Care Fraud
and Abuse Commission Act of 1995’’.
SEC. 202. ESTABLISHMENT OF HEALTH CARE FRAUD AND
ABUSE COMMISSION.
(a) IN GENERAL.—There is established a commission
to be known as the ‘‘Health Care Fraud and Abuse Com-
mission’’ (in this title referred to as the ‘‘Commission’’).
(b) COMPOSITION.—The Commission shall be com-
posed of 18 members as follows:
(1) OFFICIALS.—
(A) The Secretary of Health and Human
Services (or the Secretary’s designee).
(B) The Inspector General of the Depart-
ment of Health and Human Services (or the In-
spector General’s designee).
(C) The Attorney General (or the Attorney
General’s designee).
(D) The Director of the Federal Bureau of
Investigation (or the Director’s designee).
(E) The Administrator of the Health Care
Financing Administration (or the Administra-
tor’s designee).
(2) PUBLIC MEMBERS.—Thirteen members, ap-
pointed by the President, of which—
(A) one shall be an Attorney General of a
State;
(B) one shall be a representative of State
medicaid fraud control programs;
(C) one shall be a State official directly re-
sponsible for regulation of health insurance;
(D) one shall be a representative of physi-
cians;
(E) one shall be a representative of hos-
pital administrators;
(F) one shall be a representative of health
insurance companies;
(G) one shall be a representative of em-
ployers who self-fund employee health benefit
plans;
(H) one shall be a representative of em-
ployers who purchase a health benefit plan from
a health insurance company;
(I) one shall be a representative of medi-
care carriers;
(J) one shall be a representative of medi-
care peer review organizations;
(K) one shall be a representative of health
care consumers;
(L) one shall be a representative of medi-
care beneficiaries; and
(M) one shall be a representative of labor
unions.
In making appointments under this paragraph of an
individual who is a representative of persons or or-
ganizations, the President shall consider the rec-
ommendations of national organizations that rep-
resent such persons or organizations. The President
shall report to Congress, within 90 days after the
date of the enactment of this Act, the names of the
members appointed under this paragraph.
(c) TERMS.—Each member shall be appointed for the
life of the Commission. A vacancy in the Commission shall
be filled in the manner in which the original appointment
was made.
SEC. 203. FUNCTIONS OF COMMISSION.
(a) IN GENERAL.—The Commission shall—
(1) investigate the nature, magnitude, and cost
of health care fraud and abuse in the United States,
and
(2) identify and develop the most effective
methods of preventing, detecting, and prosecuting or
litigating such fraud and abuse, with particular em-
phasis on coordinating public and private prevention,
detection, and enforcement efforts.
(b) PARTICULARS.—Among other items, the Commis-
sion shall examine at least the following:
(1) Mechanisms to provide greater standardiza-
tion of claims administration in order to accommo-
date fraud prevention and detection.
(2) Mechanisms to allow more freedom of
health benefit plans to exchange information for co-
ordinating case development and prosecution or liti-
gation efforts, without undermining patient and pro-
vider privacy protections or violating anti-trust laws.
(3) The extension to private health insurers of
administrative remedies currently available to public
insurers.
(4) Mechanisms for private insurers to organize
and finance investigation and litigation efforts when
more than one insurer may have received fraudulent
claims from a provider.
(5) Creating a model State statute for estab-
lishing State insurance fraud units and State laws to
strengthen insurers’ ability to pursue and recover
from fraudulent providers.
(6) The need for regulation of new types of
health care providers.
(7) Criteria for physician referrals to facilities
in which they (or family members) have a financial
interest.
(8) The availability of resources to law enforce-
ment authorities to combat health care fraud and
abuse.
(c) REPORT.—After approval by a majority vote, a
quorum being present, the Commission shall transmit to
Congress a report on its activities. The report shall be
transmitted not later than 18 months after the date that
a majority of the public members of the Commission have
been appointed. The report shall contain a detailed state-
ment of the Commission’s findings, together with such rec-
ommendations as the Commission considers appropriate.
SEC. 204. ORGANIZATION AND COMPENSATION.
(a) ORGANIZATION.—
(1) QUORUM.—A majority of the members of
the Commission shall constitute a quorum but a
lesser number may hold hearings.
(2) CHAIRMAN.—The Commission shall elect
one of its members to serve as chairman of the Com-
mission.
(3) MEETINGS.—The Commission shall meet at
the call of the chairman or a majority of its mem-
bers. Meetings of the Commission are open to the
public under section 10(a)(10) of the Federal Advi-
sory Committee Act, except that the Commission
may conduct meetings in executive session but only
if a majority of the members of the Commission (a
quorum being present) approve going into executive
session.
(b) COMPENSATION OF MEMBERS.—Members of the
Commission shall serve without compensation, but shall
be reimbursed for travel, subsistence, and other necessary
expenses incurred in the performance of their duties as
members of the Commission.
SEC. 205. STAFF OF COMMISSION.
(a) IN GENERAL.—The Commission may appoint and
fix the compensation of a staff director and such other
additional personnel as may be necessary to enable the
Commission to carry out its functions, without regard to
the laws, rules, and regulations governing appointment
and compensation and other conditions of service in the
competitive service.
(b) DETAIL OF FEDERAL EMPLOYEES.—Upon re-
quest of the chairman, any Federal employee who is sub-
ject to such laws, rules, and regulations, may be detailed
to the Commission to assist it in carrying out its functions
under this title, and such detail shall be without interrup-
tion or loss of civil service status or privilege.
(c) EXPERTS AND CONSULTANTS.—The Commission
may procure temporary and intermittent services under
section 3109(b) of title 5, United States Code, but at rates
for individuals not to exceed the daily equivalent of 120
percent of the maximum annual rate of basic pay payable
for GS–15 of the General Schedule.
SEC. 206. AUTHORITY OF COMMISSION.
(a) HEARINGS
AND SESSIONS.—The Commission
may, for the purpose of carrying out this title, hold hear-
ings, sit and act at times and places, take testimony, and
receive evidence as the Commission considers appropriate.
The Commission may administer oaths or affirmations to
witnesses appearing before it.
(b) OBTAINING OFFICIAL DATA.—
(1) IN GENERAL.—The Commission may secure
directly from any department or agency of the
United States information necessary to enable it to
carry out this title. Upon request of the chairman of
the Commission, the head of that department or
agency shall furnish that information to the Com-
mission.
(2) ACCESS TO INFORMATION.—Information ob-
tained by the Commission is available to the public
in the same manner in which information may be
made available under sections 552 and 552a of title
5, United States Code.
(c) GIFTS, BEQUESTS, AND DEVISES.—The Commis-
sion may accept, use, and dispose of gifts, bequests, or
devises of services or property for the purpose of aiding
or facilitating the work of the Commission.
(d) MAILS.—The Commission may use the United
States mails in the same manner and under the same con-
ditions as other departments and agencies of the United
States.
(e) ADMINISTRATIVE SUPPORT SERVICES.—Upon
the request of the Commission, the Administrator of Gen-
eral Services shall provide to the Commission, on a reim-
bursable basis, the administrative support services nec-
essary for the Commission to carry out its responsibilities
under this title.
(f) SUBPOENA POWER.—
(1) IN GENERAL.—The Commission may issue
subpoenas requiring the attendance and testimony of
witnesses and the production of any evidence relat-
ing to any matter which the Commission is author-
ized to investigate under this title. The attendance
of witnesses and the production of evidence may be
required from any place within the United States at
any designated place of hearing within the United
States.
(2) FAILURE TO OBEY A SUBPOENA.—If a per-
son refuses to obey a subpoena issued under para-
graph (1), the Commission may apply to a United
States district court for an order requiring that per-
son to appear before the Commission to give testi-
mony, produce evidence, or both, relating to the
matter under investigation. The application may be
made within the judicial district where the hearing
is conducted or where that person is found, resides,
or transacts business. Any failure to obey the order
of the court may be punished by the court as civil
contempt.
(3) SERVICE OF SUBPOENAS.—The subpoenas
of the Commission shall be served in the manner
provided for subpoenas issued by a United States
district court under the Federal Rules of Civil Pro-
cedure for the United States district courts.
(4) SERVICE OF PROCESS.—All process of any
court to which application is to be made under para-
graph (2) may be served in the judicial district in
which the person required to be served resides or
may be found.
SEC. 207. TERMINATION.
The Commission shall terminate 90 days after the
date the report is submitted under section 203(c).
SEC. 208. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to the Com-
mission such sums as are necessary to carry out its func-
tions, to remain available until expended.
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