I
105TH CONGRESS
1ST SESSION
H. R. 1761
To provide for improved coordination, communication, and enforcement relat-
ed to health care fraud, waste, and abuse, to create a point of order
against legislation which diverts savings achieved through Medicare
waste, fraud, and abuse enforcement activities for purposes other than
improving the solvency of the Federal Hospital Insurance Trust Fund
under title XVIII of the Social Security Act, to ensure the integrity
of such trust fund, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JUNE 3, 1997
Mr. DAVIS of Florida introduced the following bill; which was referred to the
Committee on Ways and Means, and in addition to the Committees on
Commerce, and the Judiciary, 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 committee concerned
A BILL
To provide for improved coordination, communication, and
enforcement related to health care fraud, waste, and
abuse, to create a point of order against legislation which
diverts savings achieved through Medicare waste, fraud,
and abuse enforcement activities for purposes other than
improving the solvency of the Federal Hospital Insurance
Trust Fund under title XVIII of the Social Security
Act, to ensure the integrity of such trust fund, and
for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; REFERENCES IN ACT; TABLE OF
CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Medicare Antifraud Act of 1997’’.
(b) AMENDMENTS TO SOCIAL SECURITY ACT.—Ex-
cept as otherwise specifically provided, whenever in this
Act an amendment is expressed in terms of an amendment
to, or repeal of, a section or other provision, the reference
shall be considered to be made to that section or other
provision of the Social Security Act.
(c) TABLE OF CONTENTS.—The table of contents of
this Act is as follows:
Sec. 1. Short title; references in act; table of contents.
TITLE I—PROTECTING PROGRAM INTEGRITY
Sec. 101. Disclosure of information and surety bond requirements.
Sec. 102. Requirements to disclose employer identification numbers and social
security numbers.
Sec. 103. Requirement to furnish diagnostic information.
Sec. 104. Replacement of reasonable charge methodology by fee schedules.
Sec. 105. Application of inherent reasonableness.
Sec. 106. Exclusion of entity controlled by family member of a sanctioned indi-
vidual.
Sec. 107. Liability of medicare carriers and fiscal intermediaries and States for
claims submitted by excluded providers.
Sec. 108. Authority to refuse to enter into medicare or medicaid agreements
with individuals or entities convicted of felonies.
Sec. 109. Application of certain provisions of the bankruptcy code.
Sec. 110. Inspector general access to national practitioner data bank.
Sec. 111. State health care fraud control units.
Sec. 112. Ensuring the integrity of the Federal hospital insurance trust fund.
Sec. 113. Requirement for annual GAO report.
Sec. 114. Prohibition on consideration of legislation that diverts savings
achieved through medicare waste, fraud, and abuse enforce-
ment activities for purposes other than improving the solvency
of the Federal hospital insurance trust fund.
TITLE II—SANCTIONS FOR FRAUD AND ABUSE
Sec. 201. Civil monetary penalties for kickbacks.
Sec. 202. Civil monetary penalties for persons that contract with excluded indi-
viduals.
Sec. 203. Civil monetary penalties for services ordered or prescribed by an ex-
cluded individual or entity.
TITLE III—TECHNICAL CLARIFICATIONS AND CORRECTIONS
Sec. 301. Definition of the term conviction.
Sec. 302. Proper reference in advisory opinions.
Sec. 303. Ensuring proper implementation of Federal health care program ex-
clusions.
TITLE IV—COORDINATION OF BENEFITS
Sec. 401. Permanent extension of certain secondary payer provisions.
Sec. 402. Technical changes concerning minimum sizes of group health plans.
Sec. 403. Information requirements.
Sec. 404. Clarification of time and filing limitations.
Sec. 405. Clarification of liability of third party administrators.
Sec. 406. Clarification of payment amounts to medicare.
TITLE I—PROTECTING
PROGRAM INTEGRITY
SEC. 101. DISCLOSURE OF INFORMATION AND SURETY
BOND REQUIREMENTS.
(a) DISCLOSURE
OF INFORMATION
AND SURETY
BOND REQUIREMENT FOR SUPPLIERS OF DURABLE MED-
ICAL
EQUIPMENT.—Section 
1834(a) 
(42 
U.S.C.
1395m(a)) is amended by inserting after paragraph (15)
the following:
‘‘(16) DISCLOSURE OF INFORMATION.—
‘‘(A) IN
GENERAL.—The Secretary shall not
provide for the issuance (or renewal) of a provider
number for a supplier of durable medical equipment,
for purposes of payment under this part for durable
medical equipment furnished by the supplier, unless
the supplier provides the Secretary on a continuing
basis with—
‘‘(i)(I) full and complete information as to
the identity of each person with an ownership
or control interest (as defined in section
1124(a)(3)) in the supplier or in any sub-
contractor (as defined by the Secretary in regu-
lations) in which the supplier directly or indi-
rectly has a 5 percent or more ownership inter-
est, and
‘‘(II) to the extent determined to be fea-
sible under regulations of the Secretary, the
name of any disclosing entity (as defined in sec-
tion 1124(a)(2)) with respect to which a person
with such an ownership or control interest in
the supplier is a person with such an ownership
or control interest in the disclosing entity; and
‘‘(ii) a surety bond in a form specified by
the Secretary and in an amount that is not less
than $50,000.’’.
(b) SURETY
BOND
REQUIREMENT
FOR
HOME
HEALTH AGENCIES.—
(1) IN
GENERAL.—Section 1861(o)(7) (42
U.S.C. 1395x(o)(7)) is amended by inserting ‘‘and
including providing the Secretary on a continuing
basis with a surety bond in a form specified by the
Secretary and in an amount that is not less than
$50,000’’ after ‘‘financial security of the program’’.
(2) 
CONFORMING
AMENDMENTS.—Section
1861(v)(1)(H) 
(42 
U.S.C. 
1395x(v)(1)(H)) 
is
amended by striking ‘‘the financial security require-
ment’’ and inserting ‘‘the financial security and sur-
ety bond requirements’’ each place it appears in
clauses (i) and (ii).
(c) AUTHORIZING APPLICATION OF DISCLOSURE AND
SURETY BOND REQUIREMENTS TO AMBULANCE SERV-
ICES AND CERTAIN CLINICS.—Section 1834(a)(16) (42
U.S.C. 1395m(a)(16)) (as added by subsection (a) of this
section) is amended by adding at the end the following:
‘‘(B) APPLICATION TO AMBULANCE SERVICES
AND CERTAIN CLINICS.—The Secretary, in the Sec-
retary’s discretion, may impose the requirements of
the previous sentence with respect to some or all
classes of suppliers of ambulance services described
in section 1861(s)(7) and clinics that furnish medi-
cal and other health services (other than physicians’
services) under this part.’’.
(d) EFFECTIVE DATES.—
(1) SUBSECTION (a).—The amendment made
by subsection (a) shall apply to suppliers of durable
medical equipment with respect to such equipment
furnished on or after January 1, 1998.
(2) SUBSECTION (b).—
(A) IN GENERAL.—The amendments made
by subsection (b) shall apply to home health
agencies with respect to services furnished on or
after January 1, 1998.
(B) PARTICIPATION
AGREEMENTS.—The
Secretary of Health and Human Services shall
modify participation agreements under section
1866(a)(1) of the Social Security Act with re-
spect to home health agencies to provide for im-
plementation of such amendments on a timely
basis.
(3) SUBSECTION (c).—The amendment made
by subsection (c) shall take effect on the date of en-
actment of this Act and may be applied with respect
to items and services furnished on or after the date
specified in paragraph (1).
SEC. 102. REQUIREMENTS TO DISCLOSE EMPLOYER IDEN-
TIFICATION NUMBERS AND SOCIAL SECU-
RITY NUMBERS.
(a) DISCLOSING ENTITIES, OWNERS, AND CONTROL-
LING INTERESTS.—Section 1124 (42 U.S.C. 1320a–3) is
amended by adding at the end the following:
‘‘(c) REQUIREMENT TO FURNISH SOCIAL SECURITY
NUMBERS AND EMPLOYER IDENTIFICATION NUMBERS.—
A payment shall not be made to a disclosing entity under
title V, XVIII, or XIX unless the disclosing entity fur-
nishes to the Secretary the employer identification number
and social security number of—
‘‘(1) the disclosing entity;
‘‘(2) each person with an ownership or control
interest; and
‘‘(3) any subcontractor in which the entity di-
rectly or indirectly has a 5 percent or more owner-
ship interest.’’.
(b) OTHER MEDICARE PROVIDERS.—Section 1124A
(42 U.S.C. 1320a–3a) is amended—
(1) in subsection (a)—
(A) in paragraph (1), by striking ‘‘and’’ at
the end;
(B) in paragraph (2), by striking the pe-
riod at the end and inserting ‘‘; and’’; and
(C) by adding at the end the following:
‘‘(3) including the employer identification num-
ber and social security number of the disclosing part
B provider and any person, managing employee, or
other entity identified under paragraph (1) or (2).’’;
and
(2) in subsection (c)(1) by inserting ‘‘(or, for
purposes of subsection (a)(3), any entity receiving
payment)’’ after ‘‘on an assignment-related basis’’.
(c) VERIFICATION BY SOCIAL SECURITY ADMINIS-
TRATION.—Section 1124A (42 U.S.C. 1320a–3a) is
amended—
(1) by redesignating subsection (c) as sub-
section (d); and
(2) by inserting after subsection (b) the follow-
ing:
‘‘(c) VERIFICATION BY SOCIAL SECURITY ADMINIS-
TRATION.—
‘‘(1) TRANSMITTAL
BY
HHS.—The Secretary
shall transmit to the Social Security Administration
information concerning each social security number
and employer identification number supplied to the
Secretary under to subsection (a)(3) or section
1124(c) as necessary for verification of the informa-
tion required under paragraph (2).
‘‘(2) VERIFICATION BY SSA.—The Social Secu-
rity Administration shall verify the accuracy of and
correct, if necessary, the information supplied by the
Secretary under paragraph (1) and shall report the
verification to the Secretary.
‘‘(3) FEES FOR SSA VERIFICATION.—The Sec-
retary shall reimburse the Commissioner of Social
Security, at a rate negotiated between the Secretary
and the Commissioner, for the costs incurred by the
Commissioner in performing the verification and cor-
rection services described in this subsection.’’.
SEC. 103. REQUIREMENT TO FURNISH DIAGNOSTIC INFOR-
MATION.
(a) INCLUSION OF NON-PHYSICIAN PRACTITIONERS
IN REQUIREMENT TO PROVIDE DIAGNOSTIC CODES FOR
PHYSICIAN SERVICES.—Paragraphs (1) and (2) of section
1842(p) (42 U.S.C. 1395u(p)) are each amended by in-
serting 
‘‘or 
practitioner 
described 
in 
subsection
(b)(18)(C)’’ after ‘‘ by a physician’’.
(b) REQUIREMENT TO PROVIDE DIAGNOSTIC INFOR-
MATION WHEN ORDERING CERTAIN ITEMS OR SERVICES
FURNISHED BY ANOTHER ENTITY.—Section 1842(p) (42
U.S.C. 1395u(p)), as amended by subsection (a), is
amended by adding at the end the following:
‘‘(4) In the case of an item of service (as described
in paragraph (3), (6), (8), or (9) of subsection 1861(s))
ordered by a physician or a practitioner described in sub-
section (b)(18)(C), but furnished by another entity, if the
Secretary (or fiscal agent of the Secretary) requires the
entity furnishing the item or service to provide diagnostic