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against the medicare program for which there is a
sanction provided under law. The program shall dis-
courage provision of, and not consider, information
which is frivolous or otherwise not relevant or mate-
rial to the imposition of such a sanction.
(2) PAYMENT
OF
PORTION
OF
AMOUNTS
COL-
LECTED.—If an individual reports information to the
Secretary under the program established under para-
graph (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 Secu-
rity 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 indi-
viduals 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
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submit to the Secretary suggestions on methods to im-
prove the efficiency of the medicare program.
(2) PAYMENT
OF
PORTION
OF
PROGRAM
SAV-
INGS.—If an individual submits a suggestion to the
Secretary under the program established under para-
graph (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. 504. APPLICATION OF CERTAIN HEALTH ANTI-FRAUD
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 PROGRAMS’’.
(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’’.
(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’’.
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(4) In the second sentence of subsection (a)—
(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
(notwithstanding any other provision of that
title or of such plan)’’ and inserting ‘‘the admin-
istrator of such program may at its option (not-
withstanding any other provision of such pro-
gram)’’.
(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 pro-
gram’’.
(7) By adding at the end the following new sub-
section:
‘‘(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 other-
wise, which is funded directly, in whole or in part,
by the United States Government (other than the
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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. 505. GUIDANCE REGARDING APPLICATION OF HEALTH
CARE FRAUD AND ABUSE SANCTIONS.
Title XI (42 U.S.C. 1301 et seq.), as amended by sec-
tion 501, 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
MODIFICATIONS 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 Federal
Register soliciting proposals, which will be ac-
cepted during a 60-day period, for—
‘‘(i) modifications to existing safe har-
bors issued pursuant to section 14(a) of the
Medicare and Medicaid Patient and Pro-
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gram 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) interpretive rulings to be issued
pursuant to subsection (b); and
‘‘(iv) special fraud alerts to be issued
pursuant to subsection (c).
‘‘(B) PUBLICATION OF PROPOSED MODIFICA-
TIONS AND PROPOSED ADDITIONAL SAFE HAR-
BORS.—After considering the proposals described
in clauses (i) and (ii) of subparagraph (A), the
Secretary, in consultation with the Attorney
General, shall publish in the Federal Register
proposed modifications to existing safe harbors
and proposed additional safe harbors, if appro-
priate, with a 60-day comment period. After
considering any public comments received dur-
ing this period, the Secretary shall issue final
rules modifying the existing safe harbors and es-
tablishing new safe harbors, as appropriate.
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‘‘(C) REPORT.—The Inspector General of
the Department of Health and Human Services
(in this section referred to as the ‘Inspector Gen-
eral’) shall, in an annual report to Congress or
as part of the year-end semiannual report re-
quired 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 subpara-
graph (A) and explain which proposals were in-
cluded in the publication described in subpara-
graph (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 ESTABLISH-
ING SAFE HARBORS.—In modifying and establishing
safe harbors under paragraph (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 free-
dom of choice among health care providers.
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‘‘(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 un-
derserved populations.
‘‘(F) An increase or decrease in the cost to
Federal health care programs (as defined in sec-
tion 1128B(f)).
‘‘(G) An increase or decrease in the poten-
tial overutilization of health care services.
‘‘(H) The existence or nonexistence of any
potential financial benefit to a health care pro-
fessional 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 particu-
lar 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) INTERPRETIVE RULINGS.—
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‘‘(1) IN GENERAL.—
‘‘(A) REQUEST
FOR
INTERPRETIVE
RUL-
ING.—Any person may present, at any time, a
request to the Inspector General for a statement
of the Inspector General’s current interpretation
of the meaning of a specific aspect of the appli-
cation of sections 1128A and 1128B (in this sec-
tion referred to as an ‘interpretive ruling’).
‘‘(B) ISSUANCE AND EFFECT OF INTERPRE-
TIVE RULING.—
‘‘(i) IN GENERAL.—If appropriate, the
Inspector General shall in consultation with
the Attorney General, issue an interpretive
ruling not later than 90 days after receiv-
ing a request described in subparagraph
(A). Interpretive rulings shall not have the
force of law and shall be treated as an in-
terpretive rule within the meaning of sec-
tion 553(b) of title 5, United States Code.
All interpretive rulings issued pursuant to
this clause shall be published in the Federal
Register or otherwise made available for
public inspection.
‘‘(ii) REASONS
FOR
DENIAL.—If the
Inspector General does not issue an inter-
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pretive ruling in response to a request de-
scribed in subparagraph (A), the Inspector
General shall notify the requesting party of
such decision not later than 60 days after
receiving such a request and shall identify
the reasons for such decision.
‘‘(2) CRITERIA FOR INTERPRETIVE RULINGS.—
‘‘(A) IN GENERAL.—In determining whether
to issue an interpretive ruling under paragraph
(1)(B), the Inspector General may consider—
‘‘(i) whether and to what extent the re-
quest identifies an ambiguity within the
language of the statute, the existing safe
harbors, or previous interpretive rulings;
and
‘‘(ii) whether the subject of the re-
quested interpretive ruling can be ade-
quately addressed by interpretation of the
language of the statute, the existing safe
harbor rules, or previous interpretive rul-
ings, or whether the request would require a
substantive ruling (as defined in section
552 of title 5, United States Code) not au-
thorized under this subsection.
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‘‘(B) NO RULINGS ON FACTUAL ISSUES.—
The Inspector General shall not give an interpre-
tive ruling on any factual issue, including the
intent of the parties or the fair market value of
particular leased space or equipment.
‘‘(c) SPECIAL FRAUD ALERTS.—
‘‘(1) IN GENERAL.—
‘‘(A) 
REQUEST
FOR
SPECIAL
FRAUD
ALERTS.—Any person may present, at any time,
a request to the Inspector General for a notice
which informs the public of practices which the
Inspector General considers to be suspect or of
particular concern under the medicare program
or a State health care program, as defined in
section 1128(h) (in this subsection referred to as
a ‘special fraud alert’).
‘‘(B) ISSUANCE AND PUBLICATION OF SPE-
CIAL FRAUD ALERTS.—Upon receipt of a request
described in subparagraph (A), the Inspector
General shall investigate the subject matter of the
request to determine whether a special fraud
alert should be issued. If appropriate, the Inspec-
tor General shall issue a special fraud alert in
response to the request. All special fraud alerts
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issued pursuant to this subparagraph shall be
published in the Federal Register.
‘‘(2) CRITERIA FOR SPECIAL FRAUD ALERTS.—In
determining whether to issue a special fraud alert
upon a request described in paragraph (1), the In-
spector General may consider—
‘‘(A) whether and to what extent the prac-
tices that would be identified in the special fraud
alert may result in any of the consequences de-
scribed in subsection (a)(2); and
‘‘(B) the volume and frequency of the con-
duct that would be identified in the special fraud
alert.’’.
Subtitle B—Revisions to Current
Sanctions for Fraud and Abuse
SEC. 511. MANDATORY EXCLUSION FROM PARTICIPATION
IN MEDICARE AND STATE HEALTH CARE PRO-
GRAMS.
(a) INDIVIDUAL CONVICTED OF FELONY RELATING TO
HEALTH CARE FRAUD.—
(1) IN GENERAL.—Section 1128(a) (42 U.S.C.
1320a–7(a)) is amended by adding at the end the fol-
lowing new paragraph:
‘‘(3) FELONY CONVICTION RELATING TO HEALTH
CARE
FRAUD.—Any individual or entity that has
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been convicted after the date of the enactment of the
Health Insurance Reform Act of 1996, under Federal
or State law, in connection with the delivery of a
health care item or service or with respect to any act
or omission in a health care program (other than
those specifically described in paragraph (1)) oper-
ated by or financed in whole or in part by any Fed-
eral, State, or local government agency, of a criminal
offense consisting of a felony relating to fraud, theft,
embezzlement, breach of fiduciary responsibility, or
other financial misconduct.’’.
(2) CONFORMING AMENDMENT.—Paragraph (1)
of section 1128(b) (42 U.S.C. 1320a–7(b)) is amended
to read as follows:
‘‘(1) CONVICTION RELATING TO FRAUD.—Any in-
dividual or entity that has been convicted after the
date of the enactment of the Health Insurance Reform
Act of 1996, under Federal or State law—
‘‘(A) of a criminal offense consisting of a
misdemeanor relating to fraud, theft, embezzle-
ment, breach of fiduciary responsibility, or other
financial misconduct—
‘‘(i) in connection with the delivery of
a health care item or service, or
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‘‘(ii) with respect to any act or omis-
sion in a health care program (other than
those specifically described in subsection
(a)(1)) operated by or financed in whole or
in part by any Federal, State, or local gov-
ernment agency; or
‘‘(B) of a criminal offense relating to fraud,
theft, embezzlement, breach of fiduciary respon-
sibility, or other financial misconduct with re-
spect to any act or omission in a program (other
than a health care program) operated by or fi-
nanced in whole or in part by any Federal,
State, or local government agency.’’.
(b) INDIVIDUAL CONVICTED OF FELONY RELATING TO
CONTROLLED SUBSTANCE.—
(1) IN GENERAL.—Section 1128(a) (42 U.S.C.
1320a–7(a)), as amended by subsection (a), is amend-
ed by adding at the end the following new paragraph:
‘‘(4) FELONY
CONVICTION
RELATING
TO
CON-
TROLLED SUBSTANCE.—Any individual or entity that
has been convicted after the date of the enactment of
the Health Insurance Reform Act of 1996, under Fed-
eral or State law, of a criminal offense consisting of
a felony relating to the unlawful manufacture, dis-
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tribution, prescription, or dispensing of a controlled
substance.’’.
(2) 
CONFORMING
AMENDMENT.—Section
1128(b)(3) (42 U.S.C. 1320a–7(b)(3)) is amended—
(A) in the heading, by striking ‘‘CONVIC-
TION’’ and inserting ‘‘MISDEMEANOR
CONVIC-
TION’’; and
(B) by striking ‘‘criminal offense’’ and in-
serting ‘‘criminal offense consisting of a mis-
demeanor’’.
SEC. 512. ESTABLISHMENT OF MINIMUM PERIOD OF EXCLU-
SION FOR CERTAIN INDIVIDUALS AND ENTI-
TIES SUBJECT TO PERMISSIVE EXCLUSION
FROM MEDICARE AND STATE HEALTH CARE
PROGRAMS.
Section 1128(c)(3) (42 U.S.C. 1320a–7(c)(3)) is
amended by adding at the end the following new subpara-
graphs:
‘‘(D) In the case of an exclusion of an individual or
entity under paragraph (1), (2), or (3) of subsection (b),
the period of the exclusion shall be 3 years, unless the Sec-
retary determines in accordance with published regulations
that a shorter period is appropriate because of mitigating
circumstances or that a longer period is appropriate be-
cause of aggravating circumstances.
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‘‘(E) In the case of an exclusion of an individual or
entity under subsection (b)(4) or (b)(5), the period of the
exclusion shall not be less than the period during which the
individual’s or entity’s license to provide health care is re-
voked, suspended, or surrendered, or the individual or the
entity is excluded or suspended from a Federal or State
health care program.
‘‘(F) In the case of an exclusion of an individual or
entity under subsection (b)(6)(B), the period of the exclu-
sion shall be not less than 1 year.’’.
SEC. 513. PERMISSIVE EXCLUSION OF INDIVIDUALS WITH
OWNERSHIP 
OR 
CONTROL 
INTEREST 
IN
SANCTIONED ENTITIES.
Section 1128(b) (42 U.S.C. 1320a–7(b)) is amended by
adding at the end the following new paragraph:
‘‘(15) INDIVIDUALS CONTROLLING A SANCTIONED
ENTITY.—(A) Any individual—
‘‘(i) who has a direct or indirect ownership
or control interest in a sanctioned entity and
who knows or should know (as defined in section
1128A(i)(6)) of the action constituting the basis
for the conviction or exclusion described in sub-
paragraph (B); or
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‘‘(ii) who is an officer or managing em-
ployee (as defined in section 1126(b)) of such an
entity.
‘‘(B) For purposes of subparagraph (A), the term
‘sanctioned entity’ means an entity—
‘‘(i) that has been convicted of any offense
described in subsection (a) or in paragraph (1),
(2), or (3) of this subsection; or
‘‘(ii) that has been excluded from participa-
tion under a program under title XVIII or under
a State health care program.’’.
SEC. 514. SANCTIONS AGAINST PRACTITIONERS AND PER-
SONS FOR FAILURE TO COMPLY WITH STATU-
TORY OBLIGATIONS.
(a) MINIMUM PERIOD OF EXCLUSION FOR PRACTI-
TIONERS AND PERSONS FAILING TO MEET STATUTORY OB-
LIGATIONS.—
(1) IN GENERAL.—The second sentence of section
1156(b)(1) (42 U.S.C. 1320c–5(b)(1)) is amended by
striking ‘‘may prescribe)’’ and inserting ‘‘may pre-
scribe, except that such period may not be less than
1 year)’’.
(2) 
CONFORMING
AMENDMENT.—Section
1156(b)(2) (42 U.S.C. 1320c–5(b)(2)) is amended by
striking ‘‘shall remain’’ and inserting ‘‘shall (subject
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to the minimum period specified in the second sen-
tence of paragraph (1)) remain’’.
(b) REPEAL OF ‘‘UNWILLING OR UNABLE’’ CONDITION
FOR IMPOSITION OF SANCTION.—Section 1156(b)(1) (42
U.S.C. 1320c–5(b)(1)) is amended—
(1) in the second sentence, by striking ‘‘and de-
termines’’ and all that follows through ‘‘such obliga-
tions,’’; and
(2) by striking the third sentence.
SEC. 
515. 
INTERMEDIATE 
SANCTIONS 
FOR 
MEDICARE
HEALTH MAINTENANCE ORGANIZATIONS.
(a) APPLICATION OF INTERMEDIATE SANCTIONS FOR
ANY PROGRAM VIOLATIONS.—
(1) IN GENERAL.—Section 1876(i)(1) (42 U.S.C.
1395mm(i)(1)) is amended by striking ‘‘the Secretary
may terminate’’ and all that follows and inserting
‘‘in accordance with procedures established under
paragraph (9), the Secretary may at any time termi-
nate any such contract or may impose the intermedi-
ate sanctions described in paragraph (6)(B) or (6)(C)
(whichever is applicable) on the eligible organization
if the Secretary determines that the organization—
‘‘(A) has failed substantially to carry out
the contract;
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‘‘(B) is carrying out the contract in a man-
ner substantially inconsistent with the efficient
and effective administration of this section; or
‘‘(C) no longer substantially meets the ap-
plicable conditions of subsections (b), (c), (e),
and (f).’’.
(2) OTHER INTERMEDIATE SANCTIONS FOR MIS-
CELLANEOUS
PROGRAM
VIOLATIONS.—Section
1876(i)(6) (42 U.S.C. 1395mm(i)(6)) is amended by
adding at the end the following new subparagraph:
‘‘(C) In the case of an eligible organization for which
the Secretary makes a determination under paragraph (1)
the basis of which is not described in subparagraph (A),
the Secretary may apply the following intermediate sanc-
tions:
‘‘(i) Civil money penalties of not more than
$25,000 for each determination under paragraph (1)
if the deficiency that is the basis of the determination
has directly adversely affected (or has the substantial
likelihood of adversely affecting) an individual cov-
ered under the organization’s contract.
‘‘(ii) Civil money penalties of not more than
$10,000 for each week beginning after the initiation
of procedures by the Secretary under paragraph (9)
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during which the deficiency that is the basis of a de-
termination under paragraph (1) exists.
‘‘(iii) Suspension of enrollment of individuals
under this section after the date the Secretary notifies
the organization of a determination under paragraph
(1) and until the Secretary is satisfied that the defi-
ciency that is the basis for the determination has been
corrected and is not likely to recur.’’.
(3) PROCEDURES FOR IMPOSING SANCTIONS.—
Section 1876(i) (42 U.S.C. 1395mm(i)) is amended
by adding at the end the following new paragraph:
‘‘(9) The Secretary may terminate a contract with an
eligible organization under this section or may impose the
intermediate sanctions described in paragraph (6) on the
organization in accordance with formal investigation and
compliance procedures established by the Secretary under
which—
‘‘(A) the Secretary first provides the organiza-
tion with the reasonable opportunity to develop and
implement a corrective action plan to correct the defi-
ciencies that were the basis of the Secretary’s deter-
mination under paragraph (1) and the organization
fails to develop or implement such a plan;
‘‘(B) in deciding whether to impose sanctions,
the Secretary considers aggravating factors such as
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whether an organization has a history of deficiencies
or has not taken action to correct deficiencies the Sec-
retary has brought to the organization’s attention;
‘‘(C) there are no unreasonable or unnecessary
delays between the finding of a deficiency and the im-
position of sanctions; and
‘‘(D) the Secretary provides the organization
with reasonable notice and opportunity for hearing
(including the right to appeal an initial decision) be-
fore imposing any sanction or terminating the con-
tract.’’.
(4) 
CONFORMING
AMENDMENTS.—Section
1876(i)(6)(B) 
(42 
U.S.C. 
1395mm(i)(6)(B)) 
is
amended by striking the second sentence.
(b) AGREEMENTS WITH PEER REVIEW ORGANIZA-
TIONS.—Section 
1876(i)(7)(A) 
(42 
U.S.C.
1395mm(i)(7)(A)) is amended by striking ‘‘an agreement’’
and inserting ‘‘a written agreement’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply with respect to contract years beginning
on or after January 1, 1997.
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SEC. 516. ADDITIONAL EXCEPTIONS TO ANTI-KICKBACK
PENALTIES FOR RISK-SHARING ARRANGE-
MENTS.
(a) IN GENERAL.—Section 1128B(b)(3) (42 U.S.C.
1320a–7b(b)(3)) is amended—
(1) by striking ‘‘and’’ at the end of subpara-
graph (D);
(2) by striking the period at the end of subpara-
graph (E) and inserting ‘‘; and’’; and
(3) by adding at the end the following new sub-
paragraph:
‘‘(F) any remuneration between an organization
and an individual or entity providing items or serv-
ices pursuant to a written agreement between the or-
ganization and the individual or entity if the organi-
zation is an eligible organization under section 1876,
or if the written agreement places the individual or
entity at substantial financial risk for the cost or uti-
lization of the items or services, or a combination
thereof, which the individual or entity is obligated to
provide, whether through a withhold or capitation, or
other similar risk arrangements which places the in-
dividual or entity at substantial financial risk.’’.
(b) REGULATIONS.—Section 1128B(b) (42 U.S.C.
1320a–7b(b)) is amended by adding at the end the following
new paragraph:
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‘‘(4) The Secretary, in consultation with the Attorney
General, not later than 1 year after the date of enactment
of Health Insurance Reform Act of 1996, and not less than
every 2 years thereafter, shall promulgate regulations to de-
fine substantial financial risk as necessary to protect
against program or patient abuse.’’.
SEC. 517. EFFECTIVE DATE.
Except as otherwise provided, the amendments made
by this subtitle shall take effect January 1, 1997.
Subtitle C—Data Collection and
Miscellaneous Provisions
SEC. 521. ESTABLISHMENT OF THE HEALTH CARE FRAUD
AND ABUSE DATA COLLECTION PROGRAM.
(a) IN GENERAL.—Title XI (42 U.S.C. 1301 et seq.),
as amended by sections 501 and 505, is amended by insert-
ing after section 1128D the following new section:
‘‘HEALTH CARE FRAUD AND ABUSE DATA COLLECTION
PROGRAM
‘‘SEC. 1128E. (a) GENERAL PURPOSE.—Not later than
January 1, 1997, the Secretary shall establish a national
health care fraud and abuse data collection program for the
reporting of final adverse actions (not including settlements
in which no findings of liability have been made) against
health care providers, suppliers, or practitioners as required
by subsection (b), with access as set forth in subsection (c).
‘‘(b) REPORTING OF INFORMATION.—
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‘‘(1) IN
GENERAL.—Each Government agency
and health plan shall report any final adverse action
(not including settlements in which no findings of li-
ability have been made) taken against a health care
provider, supplier, or practitioner.
‘‘(2) INFORMATION TO BE REPORTED.—The in-
formation to be reported under paragraph (1) in-
cludes:
‘‘(A) The name and TIN (as defined in sec-
tion 7701(a)(41) of the Internal Revenue Code of
1986) of any health care provider, supplier, or
practitioner who is the subject of a final adverse
action.
‘‘(B) The name (if known) of any health
care entity with which a health care provider,
supplier, or practitioner is affiliated or associ-
ated.
‘‘(C) The nature of the final adverse action
and whether such action is on appeal.
‘‘(D) A description of the acts or omissions
and injuries upon which the final adverse action
was based, and such other information as the
Secretary determines by regulation is required
for appropriate interpretation of information re-
ported under this section.
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‘‘(3) CONFIDENTIALITY.—In determining what
information is required, the Secretary shall include
procedures to assure that the privacy of individuals
receiving health care services is appropriately pro-
tected.
‘‘(4) TIMING AND FORM OF REPORTING.—The in-
formation required to be reported under this sub-
section shall be reported regularly (but not less often
than monthly) and in such form and manner as the
Secretary prescribes. Such information shall first be
required to be reported on a date specified by the Sec-
retary.
‘‘(5) TO WHOM REPORTED.—The information re-
quired to be reported under this subsection shall be re-
ported to the Secretary.
‘‘(c) DISCLOSURE
AND CORRECTION
OF INFORMA-
TION.—
‘‘(1) DISCLOSURE.—With respect to the informa-
tion about final adverse actions (not including settle-
ments in which no findings of liability have been
made) reported to the Secretary under this section re-
specting a health care provider, supplier, or practi-
tioner, the Secretary shall, by regulation, provide
for—
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‘‘(A) disclosure of the information, upon re-
quest, to the health care provider, supplier, or li-
censed practitioner, and
‘‘(B) procedures in the case of disputed ac-
curacy of the information.
‘‘(2) CORRECTIONS.—Each Government agency
and health plan shall report corrections of informa-
tion already reported about any final adverse action
taken against a health care provider, supplier, or
practitioner, in such form and manner that the Sec-
retary prescribes by regulation.
‘‘(d) ACCESS TO REPORTED INFORMATION.—
‘‘(1) AVAILABILITY.—The information in this
database shall be available to Federal and State gov-
ernment agencies and health plans pursuant to proce-
dures that the Secretary shall provide by regulation.
‘‘(2) FEES
FOR
DISCLOSURE.—The Secretary
may establish or approve reasonable fees for the dis-
closure of information in this database (other than
with respect to requests by Federal agencies). The
amount of such a fee shall be sufficient to recover the
full costs of operating the database. Such fees shall be
available to the Secretary or, in the Secretary’s dis-
cretion to the agency designated under this section to
cover such costs.
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‘‘(e) PROTECTION FROM LIABILITY FOR REPORTING.—
No person or entity, including the agency designated by the
Secretary in subsection (b)(5) shall be held liable in any
civil action with respect to any report made as required
by this section, without knowledge of the falsity of the infor-
mation contained in the report.
‘‘(f) COORDINATION WITH NATIONAL PRACTITIONER
DATA BANK.—The Secretary shall implement this section
in such a manner as to avoid duplication with the report-
ing requirements established for the National Practitioner
Data Bank under the Health Care Quality Improvement
Act of 1986 (42 U.S.C. 11101 et seq.).
‘‘(g) DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this section:
‘‘(1) FINAL ADVERSE ACTION.—
‘‘(A) IN GENERAL.—The term ‘final adverse
action’ includes:
‘‘(i) Civil judgments against a health
care provider, supplier, or practitioner in
Federal or State court related to the deliv-
ery of a health care item or service.
‘‘(ii) Federal or State criminal convic-
tions related to the delivery of a health care
item or service.
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‘‘(iii) Actions by Federal or State
agencies responsible for the licensing and
certification of health care providers, sup-
pliers, and licensed health care practition-
ers, including—
‘‘(I) formal or official actions,
such as revocation or suspension of a
license (and the length of any such sus-
pension), reprimand, censure or proba-
tion,
‘‘(II) any other loss of license or
the right to apply for, or renew, a li-
cense of the provider, supplier, or prac-
titioner, whether by operation of law,
voluntary surrender, non-renewability,
or otherwise, or
‘‘(III) any other negative action
or finding by such Federal or State
agency that is publicly available infor-
mation.
‘‘(iv) Exclusion from participation in
Federal or State health care programs due
to program violations.
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‘‘(v) Any other adjudicated actions or
decisions that the Secretary shall establish
by regulation.
‘‘(B) EXCEPTION.—The term does not in-
clude any action with respect to a malpractice
claim.
‘‘(2) PRACTITIONER.—The terms ‘licensed health
care practitioner’, ‘licensed practitioner’, and ‘practi-
tioner’ mean, with respect to a State, an individual
who is licensed or otherwise authorized by the State
to provide health care services (or any individual
who, without authority holds himself or herself out to
be so licensed or authorized).
‘‘(3) GOVERNMENT AGENCY.—The term ‘Govern-
ment agency’ shall include:
‘‘(A) The Department of Justice.
‘‘(B) The Department of Health and
Human Services.
‘‘(C) Any other Federal agency that either
administers or provides payment for the delivery
of health care services, including, but not limited
to the Department of Defense and the Veterans’
Administration.
‘‘(D) State law enforcement agencies.
‘‘(E) State medicaid fraud control units.
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‘‘(F) Federal or State agencies responsible
for the licensing and certification of health care
providers and licensed health care practitioners.
‘‘(4) HEALTH PLAN.—The term ‘health plan’ has
the meaning given such term by section 1128C(c).
‘‘(5) DETERMINATION OF CONVICTION.—For pur-
poses of paragraph (1), the existence of a conviction
shall be determined under paragraph (4) of section
1128(i).’’.
(b) IMPROVED PREVENTION IN ISSUANCE OF MEDI-
CARE PROVIDER NUMBERS.—Section 1842(r) (42 U.S.C.
1395u(r)) is amended by adding at the end the following
new sentence: ‘‘Under such system, the Secretary may im-
pose appropriate fees on such physicians to cover the costs
of investigation and recertification activities with respect
to the issuance of the identifiers.’’.
Subtitle D—Civil Monetary
Penalties
SEC. 531. SOCIAL SECURITY ACT CIVIL MONETARY PEN-
ALTIES.
(a) GENERAL CIVIL MONETARY PENALTIES.—Section
1128A (42 U.S.C. 1320a–7a) is amended as follows:
(1) In the third sentence of subsection (a), by
striking ‘‘programs under title XVIII’’ and inserting
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‘‘Federal health care programs (as defined in section
1128B(f)(1))’’.
(2) In subsection (f)—
(A) by redesignating paragraph (3) as
paragraph (4); and
(B) by inserting after paragraph (2) the fol-
lowing new paragraph:
‘‘(3) With respect to amounts recovered arising
out of a claim under a Federal health care program
(as defined in section 1128B(f)), the portion of such
amounts as is determined to have been paid by the
program shall be repaid to the program, and the por-
tion of such amounts attributable to the amounts re-
covered under this section by reason of the amend-
ments made by the Health Insurance Reform Act of
1996 (as estimated by the Secretary) shall be depos-
ited into the Federal Hospital Insurance Trust Fund
pursuant to section 1817(k)(2)(C).’’.
(3) In subsection (i)—
(A) in paragraph (2), by striking ‘‘title V,
XVIII, XIX, or XX of this Act’’ and inserting ‘‘a
Federal health care program (as defined in sec-
tion 1128B(f))’’,
(B) in paragraph (4), by striking ‘‘a health
insurance or medical services program under
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title XVIII or XIX of this Act’’ and inserting ‘‘a
Federal health care program (as so defined)’’,
and
(C) in paragraph (5), by striking ‘‘title V,
XVIII, XIX, or XX’’ and inserting ‘‘a Federal
health care program (as so defined)’’.
(4) By adding at the end the following new sub-
section:
‘‘(m)(1) For purposes of this section, with respect to
a Federal health care program not contained in this Act,
references to the Secretary in this section shall be deemed
to be references to the Secretary or Administrator of the de-
partment or agency with jurisdiction over such program
and references to the Inspector General of the Department
of Health and Human Services in this section shall be
deemed to be references to the Inspector General of the appli-
cable department or agency.
‘‘(2)(A) The Secretary and Administrator of the de-
partments and agencies referred to in paragraph (1) may
include in any action pursuant to this section, claims with-
in the jurisdiction of other Federal departments or agencies
as long as the following conditions are satisfied:
‘‘(i) The case involves primarily claims submit-
ted to the Federal health care programs of the depart-
ment or agency initiating the action.
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‘‘(ii) The Secretary or Administrator of the de-
partment or agency initiating the action gives notice
and an opportunity to participate in the investiga-
tion to the Inspector General of the department or
agency with primary jurisdiction over the Federal
health care programs to which the claims were sub-
mitted.
‘‘(B) If the conditions specified in subparagraph (A)
are fulfilled, the Inspector General of the department or
agency initiating the action is authorized to exercise all
powers granted under the Inspector General Act of 1978
with respect to the claims submitted to the other depart-
ments or agencies to the same manner and extent as pro-
vided in that Act with respect to claims submitted to such
departments or agencies.’’.
(b) EXCLUDED INDIVIDUAL RETAINING OWNERSHIP
OR CONTROL INTEREST IN PARTICIPATING ENTITY.—Sec-
tion 1128A(a) (42 U.S.C. 1320a–7a(a)) is amended—
(1) by striking ‘‘or’’ at the end of paragraph
(1)(D);
(2) by striking ‘‘, or’’ at the end of paragraph
(2) and inserting a semicolon;
(3) by striking the semicolon at the end of para-
graph (3) and inserting ‘‘; or’’; and
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(4) by inserting after paragraph (3) the follow-
ing new paragraph:
‘‘(4) 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, at the time
of a violation of this subsection—
‘‘(i) retains a direct or indirect ownership
or control interest in an entity that is partici-
pating in a program under title XVIII or a
State health care program, and who knows or
should know of the action constituting the basis
for the exclusion; or
‘‘(ii) is an officer or managing employee (as
defined in section 1126(b)) of such an entity;’’.
(c) MODIFICATIONS OF AMOUNTS OF PENALTIES AND
ASSESSMENTS.—Section 1128A(a) (42 U.S.C. 1320a–
7a(a)), as amended by subsection (b), is amended in the
matter following paragraph (4)—
(1) 
by 
striking 
‘‘$2,000’’ 
and 
inserting
‘‘$10,000’’;
(2) by inserting ‘‘; in cases under paragraph (4),
$10,000 for each day the prohibited relationship oc-