H. R. 1836
One Hundred Fifth Congress
of the
United States of America
AT THE SECOND SESSION
Begun and held at the City of Washington on Tuesday,
the twenty-seventh day of January, one thousand nine hundred and ninety-eight
An Act
To amend chapter 89 of title 5, United States Code, to improve administration
of sanctions against unfit health care providers under the Federal Employees
Health Benefits Program, and for other purposes.
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Federal Employees Health Care
Protection Act of 1998’’.
SEC. 2. DEBARMENT AND OTHER SANCTIONS.
(a) AMENDMENTS.—Section 8902a of title 5, United States Code,
is amended—
(1) in subsection (a)—
(A) in paragraph (1)—
(i) by striking ‘‘and’’ at the end of subparagraph
(B);
(ii) by striking the period at the end of subpara-
graph (C) and inserting ‘‘; and’’; and
(iii) by adding at the end the following:
‘‘(D) the term ‘should know’ means that a person, with
respect to information, acts in deliberate ignorance of, or in
reckless disregard of, the truth or falsity of the information,
and no proof of specific intent to defraud is required;’’; and
(B) in paragraph (2)(A), by striking ‘‘subsection (b)
or (c)’’ and inserting ‘‘subsection (b), (c), or (d)’’;
(2) in subsection (b)—
(A) by striking ‘‘The Office of Personnel Management
may bar’’ and inserting ‘‘The Office of Personnel Manage-
ment shall bar’’; and
(B) by amending paragraph (5) to read as follows:
‘‘(5) Any provider that is currently debarred, suspended,
or otherwise excluded from any procurement or nonprocurement
activity (within the meaning of section 2455 of the Federal
Acquisition Streamlining Act of 1994).’’;
(3) by redesignating subsections (c) through (i) as sub-
sections (d) through ( j), respectively, and by inserting after
subsection (b) the following:
‘‘(c) The Office may bar the following providers of health care
services from participating in the program under this chapter:
‘‘(1) Any provider—
‘‘(A) whose license to provide health care services or
supplies has been revoked, suspended, restricted, or not
renewed, by a State licensing authority for reasons relating
H. R. 1836—2
to the provider’s professional competence, professional
performance, or financial integrity; or
‘‘(B) that surrendered such a license while a formal
disciplinary proceeding was pending before such an author-
ity, if the proceeding concerned the provider’s professional
competence, professional performance, or financial integ-
rity.
‘‘(2) Any provider that is an entity directly or indirectly
owned, or with a control interest of 5 percent or more held,
by an individual who has been convicted of any offense
described in subsection (b), against whom a civil monetary
penalty has been assessed under subsection (d), or who has
been debarred from participation under this chapter.
‘‘(3) Any individual who directly or indirectly owns or has
a control interest in a sanctioned entity and who knows or
should know of the action constituting the basis for the entity’s
conviction of any offense described in subsection (b), assessment
with a civil monetary penalty under subsection (d), or debar-
ment from participation under this chapter.
‘‘(4) Any provider that the Office determines, in connection
with claims presented under this chapter, has charged for
health care services or supplies in an amount substantially
in excess of such provider’s customary charge for such services
or supplies (unless the Office finds there is good cause for
such charge), or charged for health care services or supplies
which are substantially in excess of the needs of the covered
individual or which are of a quality that fails to meet profes-
sionally recognized standards for such services or supplies.
‘‘(5) Any provider that the Office determines has committed
acts described in subsection (d).
Any determination under paragraph (4) relating to whether a charge
for health care services or supplies is substantially in excess of
the needs of the covered individual shall be made by trained review-
ers based on written medical protocols developed by physicians.
In the event such a determination cannot be made based on such
protocols, a physician in an appropriate specialty shall be con-
sulted.’’;
(4) in subsection (d) (as so redesignated by paragraph (3))
by amending paragraph (1) to read as follows:
‘‘(1) in connection with claims presented under this chapter,
that a provider has charged for a health care service or supply
which the provider knows or should have known involves—
‘‘(A) an item or service not provided as claimed;
‘‘(B) charges in violation of applicable charge limita-
tions under section 8904(b); or
‘‘(C) an item or service furnished during a period in
which the provider was debarred from participation under
this chapter pursuant to a determination by the Office
under this section, other than as permitted under sub-
section (g)(2)(B);’’;
(5) in subsection (f ) (as so redesignated by paragraph (3))
by inserting after ‘‘under this section’’ the first place it appears
the following: ‘‘(where such debarment is not mandatory)’’;
(6) in subsection (g) (as so redesignated by paragraph (3))—
(A) by striking ‘‘(g)(1)’’ and all that follows through
the end of paragraph (1) and inserting the following:
H. R. 1836—3
‘‘(g)(1)(A) Except as provided in subparagraph (B), debarment
of a provider under subsection (b) or (c) shall be effective at such
time and upon such reasonable notice to such provider, and to
carriers and covered individuals, as shall be specified in regulations
prescribed by the Office. Any such provider that is debarred from
participation may request a hearing in accordance with subsection
(h)(1).
‘‘(B) Unless the Office determines that the health or safety
of individuals receiving health care services warrants an earlier
effective date, the Office shall not make a determination adverse
to a provider under subsection (c)(5) or (d) until such provider
has been given reasonable notice and an opportunity for the deter-
mination to be made after a hearing as provided in accordance
with subsection (h)(1).’’;
(B) in paragraph (3)—
(i) by inserting ‘‘of debarment’’ after ‘‘notice’’; and
(ii) by adding at the end the following: ‘‘In the
case of a debarment under paragraph (1), (2), (3), or
(4) of subsection (b), the minimum period of debarment
shall not be less than 3 years, except as provided
in paragraph (4)(B)(ii).’’;
(C) in paragraph (4)(B)(i)(I) by striking ‘‘subsection
(b) or (c)’’ and inserting ‘‘subsection (b), (c), or (d)’’; and
(D) by striking paragraph (6);
(7) in subsection (h) (as so redesignated by paragraph (3))
by striking ‘‘(h)(1)’’ and all that follows through the end of
paragraph (2) and inserting the following:
‘‘(h)(1) Any provider of health care services or supplies that
is the subject of an adverse determination by the Office under
this section shall be entitled to reasonable notice and an opportunity
to request a hearing of record, and to judicial review as provided
in this subsection after the Office renders a final decision. The
Office shall grant a request for a hearing upon a showing that
due process rights have not previously been afforded with respect
to any finding of fact which is relied upon as a cause for an
adverse determination under this section. Such hearing shall be
conducted without regard to subchapter II of chapter 5 and chapter
7 of this title by a hearing officer who shall be designated by
the Director of the Office and who shall not otherwise have been
involved in the adverse determination being appealed. A request
for a hearing under this subsection shall be filed within such
period and in accordance with such procedures as the Office shall
prescribe by regulation.
‘‘(2) Any provider adversely affected by a final decision under
paragraph (1) made after a hearing to which such provider was
a party may seek review of such decision in the United States
District Court for the District of Columbia or for the district in
which the plaintiff resides or has his or her principal place of
business by filing a notice of appeal in such court within 60 days
after the date the decision is issued, and by simultaneously sending
copies of such notice by certified mail to the Director of the Office
and to the Attorney General. In answer to the appeal, the Director
of the Office shall promptly file in such court a certified copy
of the transcript of the record, if the Office conducted a hearing,
and other evidence upon which the findings and decision complained
of are based. The court shall have power to enter, upon the plead-
ings and evidence of record, a judgment affirming, modifying, or
H. R. 1836—4
setting aside, in whole or in part, the decision of the Office, with
or without remanding the case for a rehearing. The district court
shall not set aside or remand the decision of the Office unless
there is not substantial evidence on the record, taken as whole,
to support the findings by the Office of a cause for action under
this section or unless action taken by the Office constitutes an
abuse of discretion.’’; and
(8) in subsection (i) (as so redesignated by paragraph (3))—
(A) by striking ‘‘subsection (c)’’ and inserting ‘‘sub-
section (d)’’; and
(B) by adding at the end the following: ‘‘The amount
of a penalty or assessment as finally determined by the
Office, or other amount the Office may agree to in com-
promise, may be deducted from any sum then or later
owing by the United States to the party against whom
the penalty or assessment has been levied.’’.
(b) EFFECTIVE DATE.—
(1) IN GENERAL.—Except as provided in paragraph (2), the
amendments made by this section shall take effect on the
date of the enactment of this Act.
(2) EXCEPTIONS.—(A) Paragraphs (2), (3), and (5) of section
8902a(c) of title 5, United States Code, as amended by sub-
section (a)(3), shall apply only to the extent that the misconduct
which is the basis for debarment under paragraph (2), (3),
or (5), as applicable, occurs after the date of the enactment
of this Act.
(B) Paragraph (1)(B) of section 8902a(d) of title 5, United
States Code, as amended by subsection (a)(4), shall apply only
with respect to charges which violate section 8904(b) of such
title for items or services furnished after the date of the enact-
ment of this Act.
(C) Paragraph (3) of section 8902a(g) of title 5, United
States Code, as amended by subsection (a)(6)(B), shall apply
only with respect to debarments based on convictions occurring
after the date of the enactment of this Act.
SEC. 3. MISCELLANEOUS AMENDMENTS RELATING TO THE HEALTH
BENEFITS PROGRAM FOR FEDERAL EMPLOYEES.
(a) DEFINITION OF A CARRIER.—Paragraph (7) of section 8901
of title 5, United States Code, is amended by striking ‘‘organization;’’
and inserting ‘‘organization and an association of organizations
or other entities described in this paragraph sponsoring a health
benefits plan;’’.
(b) SERVICE BENEFIT PLAN.—Paragraph (1) of section 8903 of
title 5, United States Code, is amended by striking ‘‘plan,’’ and
inserting ‘‘plan, which may be underwritten by participating affili-
ates licensed in any number of States,’’.
(c) PREEMPTION.—Section 8902(m) of title 5, United States
Code, is amended by striking ‘‘(m)(1)’’ and all that follows through
the end of paragraph (1) and inserting the following:
‘‘(m)(1) The terms of any contract under this chapter which
relate to the nature, provision, or extent of coverage or benefits
(including payments with respect to benefits) shall supersede and
preempt any State or local law, or any regulation issued thereunder,
which relates to health insurance or plans.’’.
H. R. 1836—5
SEC. 4. CONTINUED HEALTH INSURANCE COVERAGE FOR CERTAIN
INDIVIDUALS.
(a) ENROLLMENT IN CHAPTER 89 PLAN.—For purposes of chapter
89 of title 5, United States Code, any period of enrollment—
(1) in a health benefits plan administered by the Federal
Deposit Insurance Corporation before the termination of such
plan on or before January 2, 1999; or
(2) subject to subsection (c), in a health benefits plan (not
under chapter 89 of such title) with respect to which the eligi-
bility of any employees or retired employees of the Board of
Governors of the Federal Reserve System terminates on or
before January 2, 1999,
shall be deemed to be a period of enrollment in a health benefits
plan under chapter 89 of such title.
(b) CONTINUED COVERAGE.—(1) Subject to subsection (c), any
individual who, on or before January 2, 1999, is enrolled in a
health benefits plan described in subsection (a)(1) or (2) may enroll
in an approved health benefits plan under chapter 89 of title 5,
United States Code, either as an individual or for self and family,
if, after taking into account the provisions of subsection (a), such
individual—
(A) meets the requirements of such chapter for eligibility
to become so enrolled as an employee, annuitant, or former
spouse (within the meaning of such chapter); or
(B) would meet those requirements if, to the extent such
requirements involve either retirement system under such title
5, such individual satisfies similar requirements or provisions
of the Retirement Plan for Employees of the Federal Reserve
System.
Any determination under subparagraph (B) shall be made under
guidelines which the Office of Personnel Management shall estab-
lish in consultation with the Board of Governors of the Federal
Reserve System.
(2) Subject to subsection (c), any individual who, on or before
January 2, 1999, is entitled to continued coverage under a health
benefits plan described in subsection (a)(1) or (2) shall be deemed
to be entitled to continued coverage under section 8905a of title
5, United States Code, but only for the same remaining period
as would have been allowable under the health benefits plan in
which such individual was enrolled on or before January 2, 1999,
if—
(A) such individual had remained enrolled in such plan;
and
(B) such plan did not terminate, or the eligibility of such
individual with respect to such plan did not terminate, as
described in subsection (a).
(3) Subject to subsection (c), any individual (other than an
individual under paragraph (2)) who, on or before January 2, 1999,
is covered under a health benefits plan described in subsection
(a)(1) or (2) as an unmarried dependent child, but who does not
then qualify for coverage under chapter 89 of title 5, United States
Code, as a family member (within the meaning of such chapter)
shall be deemed to be entitled to continued coverage under section
8905a of such title, to the same extent and in the same manner
as if such individual had, on or before January 2, 1999, ceased
to meet the requirements for being considered an unmarried
dependent child of an enrollee under such chapter.
H. R. 1836—6
(4) Coverage under chapter 89 of title 5, United States Code,
pursuant to an enrollment under this section shall become effective
on January 3, 1999 or such earlier date as established by the
Office of Personnel Management after consultation with the Federal
Deposit Insurance Corporation or the Board of Governors of the
Federal Reserve System, as appropriate.
(c) ELIGIBILITY FOR FEHBP LIMITED TO INDIVIDUALS LOSING
ELIGIBILITY UNDER FORMER HEALTH PLAN.—Nothing in subsection
(a)(2) or any paragraph of subsection (b) (to the extent such para-
graph relates to the plan described in subsection (a)(2)) shall be
considered to apply with respect to any individual whose eligibility
for coverage under such plan does not involuntarily terminate on
or before January 2, 1999.
(d) TRANSFERS TO THE EMPLOYEES HEALTH BENEFITS FUND.—
The Federal Deposit Insurance Corporation and the Board of Gov-
ernors of the Federal Reserve System shall transfer to the Employ-
ees Health Benefits Fund under section 8909 of title 5, United
States Code, amounts determined by the Director of the Office
of Personnel Management, after consultation with the Federal
Deposit Insurance Corporation and the Board of Governors of the
Federal Reserve System, to be necessary to reimburse the Fund
for the cost of providing benefits under this section not otherwise
paid for by the individuals covered by this section. The amounts
so transferred shall be held in the Fund and used by the Office
of Personnel Management in addition to amounts available under
section 8906(g)(1) of such title.
(e) ADMINISTRATION AND REGULATIONS.—The Office of Person-
nel Management—
(1) shall administer the provisions of this section to provide
for—
(A) a period of notice and open enrollment for individ-
uals affected by this section; and
(B) no lapse of health coverage for individuals who
enroll in a health benefits plan under chapter 89 of title
5, United States Code, in accordance with this section;
and
(2) may prescribe regulations to implement this section.
SEC. 5. FULL DISCLOSURE IN HEALTH PLAN CONTRACTS.
The Office of Personnel Management shall encourage carriers
offering health benefits plans described by section 8903 or section
8903a of title 5, United States Code, with respect to contractual
arrangements made by such carriers with any person for purposes
of obtaining discounts from providers for health care services or
supplies furnished to individuals enrolled in such plan, to seek
assurance that the conditions for such discounts are fully disclosed
to the providers who grant them.
SEC. 6. PROVISIONS RELATING TO CERTAIN PLANS THAT HAVE
DISCONTINUED THEIR PARTICIPATION IN FEHBP.
(a) AUTHORITY TO READMIT.—
(1) IN GENERAL.—Chapter 89 of title 5, United States Code,
is amended by inserting after section 8903a the following:
‘‘§ 8903b. Authority to readmit an employee organization plan
‘‘(a) In the event that a plan described by section 8903(3)
or 8903a is discontinued under this chapter (other than in the
circumstance described in section 8909(d)), that discontinuation
H. R. 1836—7
shall be disregarded, for purposes of any determination as to that
plan’s eligibility to be considered an approved plan under this
chapter, but only for purposes of any contract year later than
the third contract year beginning after such plan is so discontinued.
‘‘(b) A contract for a plan approved under this section shall
require the carrier—
‘‘(1) to demonstrate experience in service delivery within
a managed care system (including provider networks) through-
out the United States; and
‘‘(2) if the carrier involved would not otherwise be subject
to the requirement set forth in section 8903a(c)(1), to satisfy
such requirement.’’.
(2) CONFORMING
AMENDMENT.—The analysis for chapter
89 of title 5, United States Code, is amended by inserting
after the item relating to section 8903a the following:
‘‘8903b. Authority to readmit an employee organization plan.’’.
(3) APPLICABILITY.—
(A) IN GENERAL.—The amendments made by this sub-
section shall apply as of the date of the enactment of
this Act, including with respect to any plan which has
been discontinued as of such date.
(B) TRANSITION RULE.—For purposes of applying sec-
tion 8903b(a) of title 5, United States Code (as amended
by this subsection) with respect to any plan seeking to
be readmitted for purposes of any contract year beginning
before January 1, 2000, such section shall be applied by
substituting ‘‘second contract year’’ for ‘‘third contract year’’.
(b) TREATMENT OF THE CONTINGENCY RESERVE OF A DISCON-
TINUED PLAN.—
(1) IN GENERAL.—Subsection (e) of section 8909 of title
5, United States Code, is amended by striking ‘‘(e)’’ and insert-
ing ‘‘(e)(1)’’ and by adding at the end the following:
‘‘(2) Any crediting required under paragraph (1) pursuant to
the discontinuation of any plan under this chapter shall be com-
pleted by the end of the second contract year beginning after such
plan is so discontinued.
‘‘(3) The Office shall prescribe regulations in accordance with
which this subsection shall be applied in the case of any plan
which is discontinued before being credited with the full amount
to which it would otherwise be entitled based on the discontinuation
of any other plan.’’.
(2) TRANSITION RULE.—In the case of any amounts remain-
ing as of the date of the enactment of this Act in the contingency
reserve of a discontinued plan, such amounts shall be disposed
of in accordance with section 8909(e) of title 5, United States
Code, as amended by this subsection, by—
(A) the deadline set forth in section 8909(e) of such
title (as so amended); or
(B) if later, the end of the 6-month period beginning
on such date of enactment.
SEC. 7. MAXIMUM PHYSICIANS COMPARABILITY ALLOWANCE PAY-
ABLE.
(a) IN GENERAL.—Paragraph (2) of section 5948(a) of title 5,
United States Code, is amended by striking ‘‘$20,000’’ and inserting
‘‘$30,000’’.
(b) AUTHORITY TO MODIFY EXISTING AGREEMENTS.—
H. R. 1836—8
(1) IN GENERAL.—Any service agreement under section 5948
of title 5, United States Code, which is in effect on the date
of the enactment of this Act may, with respect to any period
of service remaining in such agreement, be modified based
on the amendment made by subsection (a).
(2) LIMITATION.—A modification taking effect under this
subsection in any year shall not cause an allowance to be
increased to a rate which, if applied throughout such year,
would cause the limitation under section 5948(a)(2) of such
title (as amended by this section), or any other applicable
limitation, to be exceeded.
(c) RULE OF CONSTRUCTION.—Nothing in this section shall be
considered to authorize additional or supplemental appropriations
for the fiscal year in which occurs the date of the enactment
of this Act.
SEC. 8. CLARIFICATION RELATING TO SECTION 8902(k).
Section 8902(k) of title 5, United States Code, is amended—
(1) by redesignating paragraph (2) as paragraph (3); and
(2) by inserting after paragraph (1) the following:
‘‘(2) Nothing in this subsection shall be considered to preclude
a health benefits plan from providing direct access or direct payment
or reimbursement to a provider in a health care practice or profes-
sion other than a practice or profession listed in paragraph (1),
if such provider is licensed or certified as such under Federal
or State law.’’.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.