H. R. 3103—59
‘‘(B) AUTHORIZATION
TO
ACCEPT
GIFTS.—The Trust
Fund is authorized to accept on behalf of the United States
money gifts and bequests made unconditionally to the Trust
Fund, for the benefit of the Account or any activity financed
through the Account.
‘‘(C) TRANSFER OF AMOUNTS.—The Managing Trustee
shall transfer to the Trust Fund, under rules similar to
the rules in section 9601 of the Internal Revenue Code
of 1986, an amount equal to the sum of the following:
‘‘(i) Criminal fines recovered in cases involving
a Federal health care offense (as defined in section
982(a)(6)(B) of title 18, United States Code).
‘‘(ii) Civil monetary penalties and assessments
imposed in health care cases, including amounts recov-
ered under titles XI, XVIII, and XIX, and chapter
38 of title 31, United States Code (except as otherwise
provided by law).
‘‘(iii) Amounts resulting from the forfeiture of prop-
erty by reason of a Federal health care offense.
‘‘(iv) Penalties and damages obtained and other-
wise creditable to miscellaneous receipts of the general
fund of the Treasury obtained under sections 3729
through 3733 of title 31, United States Code (known
as the False Claims Act), in cases involving claims
related to the provision of health care items and serv-
ices (other than funds awarded to a relator, for restitu-
tion or otherwise authorized by law).
‘‘(D) APPLICATION.—Nothing in subparagraph (C)(iii)
shall be construed to limit the availability of recoveries
and forfeitures obtained under title I of the Employee
Retirement Income Security Act of 1974 for the purpose
of providing equitable or remedial relief for employee wel-
fare benefit plans, and for participants and beneficiaries
under such plans, as authorized under such title.
‘‘(3) APPROPRIATED AMOUNTS TO ACCOUNT FOR FRAUD AND
ABUSE CONTROL PROGRAM, ETC.—
‘‘(A) DEPARTMENTS OF HEALTH AND HUMAN SERVICES
AND JUSTICE.—
‘‘(i) IN GENERAL.—There are hereby appropriated
to the Account from the Trust Fund such sums as
the Secretary and the Attorney General certify are
necessary to carry out the purposes described in
subparagraph (C), to be available without further
appropriation, in an amount not to exceed—
‘‘(I) for fiscal year 1997, $104,000,000,
‘‘(II) for each of the fiscal years 1998 through
2003, the limit for the preceding fiscal year,
increased by 15 percent; and
‘‘(III) for each fiscal year after fiscal year 2003,
the limit for fiscal year 2003.
‘‘(ii) MEDICARE
AND
MEDICAID
ACTIVITIES.—For
each fiscal year, of the amount appropriated in clause
(i), the following amounts shall be available only for
the purposes of the activities of the Office of the Inspec-
tor General of the Department of Health and Human
Services with respect to the Medicare and medicaid
programs—
H. R. 3103—60
‘‘(I) for fiscal year 1997, not less than
$60,000,000 and not more than $70,000,000;
‘‘(II) for fiscal year 1998, not less than
$80,000,000 and not more than $90,000,000;
‘‘(III) for fiscal year 1999, not less than
$90,000,000 and not more than $100,000,000;
‘‘(IV) for fiscal year 2000, not less than
$110,000,000 and not more than $120,000,000;
‘‘(V) for fiscal year 2001, not less than
$120,000,000 and not more than $130,000,000;
‘‘(VI) for fiscal year 2002, not less than
$140,000,000 and not more than $150,000,000; and
‘‘(VII) for each fiscal year after fiscal year
2002, not less than $150,000,000 and not more
than $160,000,000.
‘‘(B) FEDERAL BUREAU OF INVESTIGATION.—There are
hereby appropriated from the general fund of the United
States Treasury and hereby appropriated to the Account
for transfer to the Federal Bureau of Investigation to carry
out the purposes described in subparagraph (C), to be avail-
able without further appropriation—
‘‘(i) for fiscal year 1997, $47,000,000;
‘‘(ii) for fiscal year 1998, $56,000,000;
‘‘(iii) for fiscal year 1999, $66,000,000;
‘‘(iv) for fiscal year 2000, $76,000,000;
‘‘(v) for fiscal year 2001, $88,000,000;
‘‘(vi) for fiscal year 2002, $101,000,000; and
‘‘(vii) for each fiscal year after fiscal year 2002,
$114,000,000.
‘‘(C) USE OF FUNDS.—The purposes described in this
subparagraph are to cover the costs (including equipment,
salaries and benefits, and travel and training) of the
administration and operation of the health care fraud and
abuse control program established under section 1128C(a),
including the costs of—
‘‘(i) prosecuting health care matters (through crimi-
nal, civil, and administrative proceedings);
‘‘(ii) investigations;
‘‘(iii) financial and performance audits of health
care programs and operations;
‘‘(iv) inspections and other evaluations; and
‘‘(v) provider and consumer education regarding
compliance with the provisions of title XI.
‘‘(4) APPROPRIATED AMOUNTS TO ACCOUNT FOR MEDICARE
INTEGRITY PROGRAM.—
‘‘(A) IN GENERAL.—There are hereby appropriated to
the Account from the Trust Fund for each fiscal year such
amounts as are necessary to carry out the Medicare Integ-
rity Program under section 1893, subject to subparagraph
(B) and to be available without further appropriation.
‘‘(B) AMOUNTS SPECIFIED.—The amount appropriated
under subparagraph (A) for a fiscal year is as follows:
‘‘(i) For fiscal year 1997, such amount shall be
not less than $430,000,000 and not more than
$440,000,000.
H. R. 3103—61
‘‘(ii) For fiscal year 1998, such amount shall be
not less than $490,000,000 and not more than
$500,000,000.
‘‘(iii) For fiscal year 1999, such amount shall be
not less than $550,000,000 and not more than
$560,000,000.
‘‘(iv) For fiscal year 2000, such amount shall be
not less than $620,000,000 and not more than
$630,000,000.
‘‘(v) For fiscal year 2001, such amount shall be
not less than $670,000,000 and not more than
$680,000,000.
‘‘(vi) For fiscal year 2002, such amount shall be
not less than $690,000,000 and not more than
$700,000,000.
‘‘(vii) For each fiscal year after fiscal year 2002,
such amount shall be not less than $710,000,000 and
not more than $720,000,000.
‘‘(5) ANNUAL REPORT.—Not later than January 1, the Sec-
retary and the Attorney General shall submit jointly a report
to Congress which identifies—
‘‘(A) the amounts appropriated to the Trust Fund for
the previous fiscal year under paragraph (2)(A) and the
source of such amounts; and
‘‘(B) the amounts appropriated from the Trust Fund
for such year under paragraph (3) and the justification
for the expenditure of such amounts.
‘‘(6) GAO REPORT.—Not later than January 1 of 2000, 2002,
and 2004, the Comptroller General of the United States shall
submit a report to Congress which—
‘‘(A) identifies—
‘‘(i) the amounts appropriated to the Trust Fund
for the previous two fiscal years under paragraph (2)(A)
and the source of such amounts; and
‘‘(ii) the amounts appropriated from the Trust
Fund for such fiscal years under paragraph (3) and
the justification for the expenditure of such amounts;
‘‘(B) identifies any expenditures from the Trust Fund
with respect to activities not involving the Medicare pro-
gram under title XVIII;
‘‘(C) identifies any savings to the Trust Fund, and
any other savings, resulting from expenditures from the
Trust Fund; and
‘‘(D) analyzes such other aspects of the operation of
the Trust Fund as the Comptroller General of the United
States considers appropriate.’’.
SEC. 202. MEDICARE INTEGRITY PROGRAM.
(a) ESTABLISHMENT OF MEDICARE INTEGRITY PROGRAM.—Title
XVIII is amended by adding at the end the following new section:
‘‘MEDICARE INTEGRITY PROGRAM
‘‘SEC. 1893. (a) ESTABLISHMENT OF PROGRAM.—There is hereby
established the Medicare Integrity Program (in this section referred
to as the ‘Program’) under which the Secretary shall promote the
integrity of the Medicare program by entering into contracts in
H. R. 3103—62
accordance with this section with eligible entities to carry out
the activities described in subsection (b).
‘‘(b) ACTIVITIES DESCRIBED.—The activities described in this
subsection are as follows:
‘‘(1) Review of activities of providers of services or other
individuals and entities furnishing items and services for which
payment may be made under this title (including skilled nurs-
ing facilities and home health agencies), including medical and
utilization review and fraud review (employing similar stand-
ards, processes, and technologies used by private health plans,
including equipment and software technologies which surpass
the capability of the equipment and technologies used in the
review of claims under this title as of the date of the enactment
of this section).
‘‘(2) Audit of cost reports.
‘‘(3) Determinations as to whether payment should not
be, or should not have been, made under this title by reason
of section 1862(b), and recovery of payments that should not
have been made.
‘‘(4) Education of providers of services, beneficiaries, and
other persons with respect to payment integrity and benefit
quality assurance issues.
‘‘(5) Developing (and periodically updating) a list of items
of durable medical equipment in accordance with section
1834(a)(15) which are subject to prior authorization under such
section.
‘‘(c) ELIGIBILITY OF ENTITIES.—An entity is eligible to enter
into a contract under the Program to carry out any of the activities
described in subsection (b) if—
‘‘(1) the entity has demonstrated capability to carry out
such activities;
‘‘(2) in carrying out such activities, the entity agrees to
cooperate with the Inspector General of the Department of
Health and Human Services, the Attorney General, and other
law enforcement agencies, as appropriate, in the investigation
and deterrence of fraud and abuse in relation to this title
and in other cases arising out of such activities;
‘‘(3) the entity complies with such conflict of interest stand-
ards as are generally applicable to Federal acquisition and
procurement; and
‘‘(4) the entity meets such other requirements as the Sec-
retary may impose.
In the case of the activity described in subsection (b)(5), an entity
shall be deemed to be eligible to enter into a contract under the
Program to carry out the activity if the entity is a carrier with
a contract in effect under section 1842.
‘‘(d) PROCESS FOR ENTERING INTO CONTRACTS.—The Secretary
shall enter into contracts under the Program in accordance with
such procedures as the Secretary shall by regulation establish,
except that such procedures shall include the following:
‘‘(1) Procedures for identifying, evaluating, and resolving
organizational conflicts of interest that are generally applicable
to Federal acquisition and procurement.
‘‘(2) Competitive procedures to be used—
‘‘(A) when entering into new contracts under this
section;
H. R. 3103—63
‘‘(B) when entering into contracts that may result in
the elimination of responsibilities of an individual fiscal
intermediary or carrier under section 202(b) of the Health
Insurance Portability and Accountability Act of 1996; and
‘‘(C) at any other time considered appropriate by the
Secretary,
except that the Secretary may continue to contract with entities
that are carrying out the activities described in this section
pursuant to agreements under section 1816 or contracts under
section 1842 in effect on the date of the enactment of this
section.
‘‘(3) Procedures under which a contract under this section
may be renewed without regard to any provision of law requir-
ing competition if the contractor has met or exceeded the
performance requirements established in the current contract.
The Secretary may enter into such contracts without regard to
final rules having been promulgated.
‘‘(e) LIMITATION
ON CONTRACTOR LIABILITY.—The Secretary
shall by regulation provide for the limitation of a contractor’s liabil-
ity for actions taken to carry out a contract under the Program,
and such regulation shall, to the extent the Secretary finds appro-
priate, employ the same or comparable standards and other sub-
stantive and procedural provisions as are contained in section
1157.’’.
(b) ELIMINATION
OF FI AND CARRIER RESPONSIBILITY
FOR
CARRYING OUT ACTIVITIES SUBJECT TO PROGRAM.—
(1) RESPONSIBILITIES
OF
FISCAL
INTERMEDIARIES
UNDER
PART A.—Section 1816 (42 U.S.C. 1395h) is amended by adding
at the end the following new subsection:
‘‘(l) No agency or organization may carry out (or receive pay-
ment for carrying out) any activity pursuant to an agreement under
this section to the extent that the activity is carried out pursuant
to a contract under the Medicare Integrity Program under
section 1893.’’.
(2) RESPONSIBILITIES OF CARRIERS UNDER PART B.—Section
1842(c) (42 U.S.C. 1395u(c)) is amended by adding at the end
the following new paragraph:
‘‘(6) No carrier may carry out (or receive payment for carrying
out) any activity pursuant to a contract under this subsection
to the extent that the activity is carried out pursuant to a contract
under the Medicare Integrity Program under section 1893. The
previous sentence shall not apply with respect to the activity
described in section 1893(b)(5) (relating to prior authorization of
certain items of durable medical equipment under section
1834(a)(15)).’’.
SEC. 203. BENEFICIARY INCENTIVE PROGRAMS.
(a) CLARIFICATION OF REQUIREMENT TO PROVIDE EXPLANATION
OF MEDICARE BENEFITS.—The Secretary of Health and Human Serv-
ices (in this section referred to as the ‘‘Secretary’’) shall provide
an explanation of benefits under the Medicare program under title
XVIII of the Social Security Act with respect to each item or
service for which payment may be made under the program which
is furnished to an individual, without regard to whether or not
a deductible or coinsurance may be imposed against the individual
with respect to the item or service.
H. R. 3103—64
(b) PROGRAM
TO
COLLECT
INFORMATION
ON
FRAUD
AND
ABUSE.—
(1) ESTABLISHMENT OF PROGRAM.—Not later than 3 months
after the date of the enactment of this Act, the Secretary
shall establish a program under which the Secretary shall
encourage individuals to report to the Secretary information
on individuals and entities who are engaging in or who have
engaged in acts or omissions which constitute grounds for the
imposition of a sanction under section 1128, 1128A, or 1128B
of the Social Security Act, or who have otherwise engaged
in fraud and abuse against the Medicare program under title
XVIII of such act for which there is a sanction provided under
law. The program shall discourage provision of, and not con-
sider, information which is frivolous or otherwise not relevant
or material to the imposition of such a sanction.
(2) PAYMENT OF PORTION OF AMOUNTS COLLECTED.—If an
individual reports information to the Secretary under the pro-
gram established under paragraph (1) which serves as the
basis for the collection by the Secretary or the Attorney General
of any amount of at least $100 (other than any amount paid
as a penalty under section 1128B of the Social Security Act),
the Secretary may pay a portion of the amount collected to
the individual (under procedures similar to those applicable
under section 7623 of the Internal Revenue Code of 1986 to
payments to individuals providing information on violations
of such Code).
(c) 
PROGRAM
TO
COLLECT
INFORMATION
ON
PROGRAM
EFFICIENCY.—
(1) ESTABLISHMENT OF PROGRAM.—Not later than 3 months
after the date of the enactment of this Act, the Secretary
shall establish a program under which the Secretary shall
encourage individuals to submit to the Secretary suggestions
on methods to improve the efficiency of the Medicare program.
(2) PAYMENT
OF
PORTION
OF
PROGRAM
SAVINGS.—If an
individual submits a suggestion to the Secretary under the
program established under paragraph (1) which is adopted
by the Secretary and which results in savings to the program,
the Secretary may make a payment to the individual of such
amount as the Secretary considers appropriate.
SEC. 204. APPLICATION OF CERTAIN HEALTH ANTIFRAUD AND ABUSE
SANCTIONS TO FRAUD AND ABUSE AGAINST FEDERAL
HEALTH CARE PROGRAMS.
(a) IN
GENERAL.—Section 1128B (42 U.S.C. 1320a–7b) is
amended as follows:
(1) In the heading, by striking ‘‘MEDICARE OR STATE HEALTH
CARE PROGRAMS’’ and inserting ‘‘FEDERAL HEALTH CARE PRO-
GRAMS’’.
(2) In subsection (a)(1), by striking ‘‘a program under title
XVIII or a State health care program (as defined in section
1128(h))’’ and inserting ‘‘a Federal health care program (as
defined in subsection (f))’’.
(3) In subsection (a)(5), by striking ‘‘a program under title
XVIII or a State health care program’’ and inserting ‘‘a Federal
health care program’’.
(4) In the second sentence of subsection (a)—
H. R. 3103—65
(A) by striking ‘‘a State plan approved under title
XIX’’ and inserting ‘‘a Federal health care program’’, and
(B) by striking ‘‘the State may at its option (notwith-
standing any other provision of that title or of such plan)’’
and inserting ‘‘the administrator of such program may at
its option (notwithstanding any other provision of such
program)’’.
(5) In subsection (b), by striking ‘‘title XVIII or a State
health care program’’ each place it appears and inserting ‘‘a
Federal health care program’’.
(6) In subsection (c), by inserting ‘‘(as defined in section
1128(h))’’ after ‘‘a State health care program’’.
(7) By adding at the end the following new subsection:
‘‘(f) For purposes of this section, the term ‘Federal health care
program’ means—
‘‘(1) any plan or program that provides health benefits,
whether directly, through insurance, or otherwise, which is
funded directly, in whole or in part, by the United States
Government (other than the health insurance program under
chapter 89 of title 5, United States Code); or
‘‘(2) any State health care program, as defined in section
1128(h).’’.
(b) EFFECTIVE DATE.—The amendments made by this section
shall take effect on January 1, 1997.
SEC. 205. GUIDANCE REGARDING APPLICATION OF HEALTH CARE
FRAUD AND ABUSE SANCTIONS.
Title XI (42 U.S.C. 1301 et seq.), as amended by section 201,
is amended by inserting after section 1128C the following new
section:
‘‘GUIDANCE REGARDING APPLICATION OF HEALTH CARE FRAUD AND
ABUSE SANCTIONS
‘‘SEC. 1128D. (a) SOLICITATION AND PUBLICATION OF MODIFICA-
TIONS
TO EXISTING SAFE HARBORS
AND NEW SAFE HARBORS.—
‘‘(1) IN GENERAL.—
‘‘(A) SOLICITATION OF PROPOSALS FOR SAFE HARBORS.—
Not later than January 1, 1997, and not less than annually
thereafter, the Secretary shall publish a notice in the Fed-
eral Register soliciting proposals, which will be accepted
during a 60-day period, for—
‘‘(i) modifications to existing safe harbors issued
pursuant to section 14(a) of the Medicare and Medicaid
Patient and Program Protection Act of 1987 (42 U.S.C.
1320a–7b note);
‘‘(ii) additional safe harbors specifying payment
practices that shall not be treated as a criminal offense
under section 1128B(b) and shall not serve as the
basis for an exclusion under section 1128(b)(7);
‘‘(iii) advisory opinions to be issued pursuant to
subsection (b); and
‘‘(iv) special fraud alerts to be issued pursuant
to subsection (c).
‘‘(B) PUBLICATION
OF
PROPOSED
MODIFICATIONS
AND
PROPOSED
ADDITIONAL
SAFE
HARBORS.—After considering
the proposals described in clauses (i) and (ii) of subpara-
graph (A), the Secretary, in consultation with the Attorney
H. R. 3103—66
General, shall publish in the Federal Register proposed
modifications to existing safe harbors and proposed addi-
tional safe harbors, if appropriate, with a 60-day comment
period. After considering any public comments received
during this period, the Secretary shall issue final rules
modifying the existing safe harbors and establishing new
safe harbors, as appropriate.
‘‘(C) REPORT.—The Inspector General of the Depart-
ment of Health and Human Services (in this section
referred to as the ‘Inspector General’) shall, in an annual
report to Congress or as part of the year-end semiannual
report required by section 5 of the Inspector General Act
of 1978 (5 U.S.C. App.), describe the proposals received
under clauses (i) and (ii) of subparagraph (A) and explain
which proposals were included in the publication described
in subparagraph (B), which proposals were not included
in that publication, and the reasons for the rejection of
the proposals that were not included.
‘‘(2) CRITERIA FOR MODIFYING AND ESTABLISHING SAFE HAR-
BORS.—In modifying and establishing safe harbors under para-
graph (1)(B), the Secretary may consider the extent to which
providing a safe harbor for the specified payment practice may
result in any of the following:
‘‘(A) An increase or decrease in access to health care
services.
‘‘(B) An increase or decrease in the quality of health
care services.
‘‘(C) An increase or decrease in patient freedom of
choice among health care providers.
‘‘(D) An increase or decrease in competition among
health care providers.
‘‘(E) An increase or decrease in the ability of health
care facilities to provide services in medically underserved
areas or to medically underserved populations.
‘‘(F) An increase or decrease in the cost to Federal
health care programs (as defined in section 1128B(f)).
‘‘(G) An increase or decrease in the potential overutili-
zation of health care services.
‘‘(H) The existence or nonexistence of any potential
financial benefit to a health care professional or provider
which may vary based on their decisions of—
‘‘(i) whether to order a health care item or
service; or
‘‘(ii) whether to arrange for a referral of health
care items or services to a particular practitioner or
provider.
‘‘(I) Any other factors the Secretary deems appropriate
in the interest of preventing fraud and abuse in Federal
health care programs (as so defined).
‘‘(b) ADVISORY OPINIONS.—
‘‘(1) ISSUANCE OF ADVISORY OPINIONS.—The Secretary, in
consultation with the Attorney General, shall issue written
advisory opinions as provided in this subsection.
‘‘(2) MATTERS SUBJECT TO ADVISORY OPINIONS.—The Sec-
retary shall issue advisory opinions as to the following matters:
‘‘(A) What constitutes prohibited remuneration within
the meaning of section 1128B(b).
H. R. 3103—67
‘‘(B) Whether an arrangement or proposed arrangement
satisfies the criteria set forth in section 1128B(b)(3) for
activities which do not result in prohibited remuneration.
‘‘(C) Whether an arrangement or proposed arrangement
satisfies the criteria which the Secretary has established,
or shall establish by regulation for activities which do
not result in prohibited remuneration.
‘‘(D) What constitutes an inducement to reduce or limit
services to individuals entitled to benefits under title XVIII
or title XIX within the meaning of section 1128B(b).
‘‘(E) Whether any activity or proposed activity con-
stitutes grounds for the imposition of a sanction under
section 1128, 1128A, or 1128B.
‘‘(3) MATTERS NOT SUBJECT TO ADVISORY OPINIONS.—Such
advisory opinions shall not address the following matters:
‘‘(A) Whether the fair market value shall be, or was
paid or received for any goods, services or property.
‘‘(B) Whether an individual is a bona fide employee
within the requirements of section 3121(d)(2) of the
Internal Revenue Code of 1986.
‘‘(4) EFFECT OF ADVISORY OPINIONS.—
‘‘(A) 
BINDING
AS
TO
SECRETARY
AND
PARTIES
INVOLVED.—Each advisory opinion issued by the Secretary
shall be binding as to the Secretary and the party or
parties requesting the opinion.
‘‘(B) FAILURE TO SEEK OPINION.—The failure of a party
to seek an advisory opinion may not be introduced into
evidence to prove that the party intended to violate the
provisions of sections 1128, 1128A, or 1128B.
‘‘(5) REGULATIONS.—
‘‘(A) IN GENERAL.—Not later than 180 days after the
date of the enactment of this section, the Secretary shall
issue regulations to carry out this section. Such regulations
shall provide for—
‘‘(i) the procedure to be followed by a party apply-
ing for an advisory opinion;
‘‘(ii) the procedure to be followed by the Secretary
in responding to a request for an advisory opinion;
‘‘(iii) the interval in which the Secretary shall
respond;
‘‘(iv) the reasonable fee to be charged to the party
requesting an advisory opinion; and
‘‘(v) the manner in which advisory opinions will
be made available to the public.
‘‘(B) SPECIFIC
CONTENTS.—Under the regulations
promulgated pursuant to subparagraph (A)—
‘‘(i) the Secretary shall be required to issue to
a party requesting an advisory opinion by not later
than 60 days after the request is received; and
‘‘(ii) the fee charged to the party requesting an
advisory opinion shall be equal to the costs incurred
by the Secretary in responding to the request.
‘‘(6) APPLICATION OF SUBSECTION.—This subsection shall
apply to requests for advisory opinions made on or after the
date which is 6 months after the date of enactment of this
section and before the date which is 4 years after such date
of enactment.