mental health, disability insurance, vocational rehabilita-
tion, the regulation of food and drugs, and all other mat-
ters pertaining to health, the Secretary of Health and 
Human Services shall direct all activities of the Depart-
ment of Health and Human Services toward contributions 
to the health of the people complementary to this Act. 
Subtitle B—Control Over Fraud 
and Abuse 
SEC. 411. APPLICATION OF FEDERAL SANCTIONS TO ALL 
FRAUD 
AND 
ABUSE 
UNDER 
AMERICAN 
HEALTH SECURITY PROGRAM. 
The following sections of the Social Security Act shall 
apply to State health security programs in the same man-
ner as they apply to State medical assistance plans under 
title XIX of such Act (except that in applying such provi-
sions any reference to the Secretary is deemed a reference 
to the Board): 
(1) Section 1128 (relating to exclusion of indi-
viduals and entities). 
(2) Section 1128A (civil monetary penalties). 
(3) Section 1128B (criminal penalties). 
(4) Section 1124 (relating to disclosure of own-
ership and related information). 
(5) Section 1126 (relating to disclosure of cer-
tain owners). 
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SEC. 412. REQUIREMENTS FOR OPERATION OF STATE 
HEALTH CARE FRAUD AND ABUSE CONTROL 
UNITS. 
(a) REQUIREMENT.—In order to meet the require-
ment of section 404(b)(1)(K), each State health security 
program must establish and maintain a health care fraud 
and abuse control unit (in this section referred to as a 
‘‘fraud unit’’) that meets requirements of this section and 
other requirements of the Board. Such a unit may be a 
State medicaid fraud control unit (described in section 
1903(q) of the Social Security Act). 
(b) STRUCTURE OF UNIT.—The fraud unit must— 
(1) be a single identifiable entity of the State 
government; 
(2) be separate and distinct from the State 
agency with principal responsibility for the adminis-
tration of the State health security program; and 
(3) meet 1 of the following requirements: 
(A) It must be a unit of the office of the 
State Attorney General or of another depart-
ment of State government which possesses 
statewide authority to prosecute individuals for 
criminal violations. 
(B) If it is in a State the constitution of 
which does not provide for the criminal prosecu-
tion of individuals by a statewide authority and 
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has formal procedures, approved by the Board, 
that— 
(i) assure its referral of suspected 
criminal violations relating to the State 
health insurance plan to the appropriate 
authority or authorities in the States for 
prosecution; and 
(ii) assure its assistance of, and co-
ordination with, such authority or authori-
ties in such prosecutions. 
(C) It must have a formal working rela-
tionship with the office of the State Attorney 
General and have formal procedures (including 
procedures for its referral of suspected criminal 
violations to such office) which are approved by 
the Board and which provide effective coordina-
tion of activities between the fraud unit and 
such office with respect to the detection, inves-
tigation, and prosecution of suspected criminal 
violations relating to the State health insurance 
plan. 
(c) FUNCTIONS.—The fraud unit must— 
(1) have the function of conducting a statewide 
program for the investigation and prosecution of vio-
lations of all applicable State laws regarding any 
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and all aspects of fraud in connection with any as-
pect of the provision of health care services and ac-
tivities of providers of such services under the State 
health security program; 
(2) have procedures for reviewing complaints of 
the abuse and neglect of patients of providers and 
facilities that receive payments under the State 
health security program, and, where appropriate, for 
acting upon such complaints under the criminal laws 
of the State or for referring them to other State 
agencies for action; and 
(3) provide for the collection, or referral for col-
lection to a single State agency, of overpayments 
that are made under the State health security pro-
gram to providers and that are discovered by the 
fraud unit in carrying out its activities. 
(d) RESOURCES.—The fraud unit must— 
(1) employ such auditors, attorneys, investiga-
tors, and other necessary personnel; 
(2) be organized in such a manner; and 
(3) provide sufficient resources (as specified by 
the Board), 
as is necessary to promote the effective and efficient con-
duct of the unit’s activities. 
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