I
103D CONGRESS
2D SESSION
H. R. 5258
To improve Federal enforcement against health care fraud and abuse.
IN THE HOUSE OF REPRESENTATIVES
OCTOBER 7, 1994
Mr. CONYERS introduced the following bill; which was referred to the
Committee on Government Operations
A BILL
To improve Federal enforcement against health care fraud
and abuse.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Health Fraud and
Abuse Act of 1994’’.
SEC. 2. HEALTH CARE FRAUD AND ABUSE.
(a) FEDERAL ENFORCEMENT BY INSPECTORS GEN-
ERAL.—
(1) AUDITS, INVESTIGATIONS, INSPECTIONS,
AND EVALUATIONS.—
(A) IN GENERAL.—Except as provided in
subparagraph (B), the Inspector General of
each of the Department of Health and Human
Services, the Department of Defense, the De-
partment of Labor, the Office of Personnel
Management, and the Department of Veterans
Affairs shall conduct audits, civil and criminal
investigations, inspections, and evaluations re-
lating to the prevention, detection, and control
of health care fraud and abuse in violation of
any Federal law.
(B) LIMITATION.—An Inspector General,
other than the Inspector General of the Depart-
ment of Health and Human Services, may not
conduct any audit, investigation, inspection, or
evaluation under subparagraph (A) with respect
to health care fraud or abuse under title V, XI,
XVIII, XIX, or XX of the Social Security Act.
(2) POWERS.—For purposes of carrying out du-
ties and responsibilities under paragraph (1), each
Inspector General referred to in paragraph (1) may
exercise powers that are available to the Inspector
General for purposes of audits, investigations, and
other activities under the Inspector General Act of
1978 (5 U.S.C. App.).
(3) COORDINATION AND REVIEW OF ACTIVITIES
OF
OTHER
FEDERAL, STATE, AND
LOCAL
AGEN-
CIES.—
(A) PROGRAM.—The Inspector General
shall—
(i) jointly establish, on the effective
date specified in subsection (j)(1), a pro-
gram to prevent, detect, and control health
care fraud and abuse in violation of any
Federal law, which considers the activities
of Federal, State, and local law enforce-
ment agencies, Federal and State agencies
responsible for the licensing and certifi-
cation of health care providers, and State
agencies 
designated 
under 
subsection
(b)(1)(A); and
(ii) publish a description of the pro-
gram in the Federal Register, by not later
than June 30, 1995.
(B) ANNUAL INVESTIGATIVE PLAN.—Each
Inspector General referred to in paragraph (1)
shall develop an annual investigative plan for
the prevention, detection, and control of health
care fraud and abuse in accordance with the
program established under subparagraph (A).
(4) CONSULTATIONS.—Each of the Inspectors
General referred to in paragraph (1) shall regularly
consult with each other, with Federal, State, and
local law enforcement agencies, with Federal and
State agencies responsible for the licensing and cer-
tification of health care providers, and with Health
Care Fraud and Abuse Control Units, in order to
assist in coordinating the prevention, detection, and
control of health care fraud and abuse in violation
of any Federal law.
(b) STATE ENFORCEMENT.—
(1) DESIGNATION OF STATE AGENCIES AND ES-
TABLISHMENT OF HEALTH CARE FRAUD AND ABUSE
CONTROL UNIT.—The Governor of each State—
(A) shall, consistent with State law, des-
ignate agencies of the State which conduct, su-
pervise, and coordinate audits, civil and crimi-
nal investigations, inspections, and evaluations
relating to the prevention, detection, and con-
trol of health care fraud and abuse in violation
of any Federal law in the State; and
(B) may establish and maintain in accord-
ance with paragraph (2) a State agency to act
as a Health Care Fraud and Abuse Control
Unit for purposes of this section.
(2) HEALTH CARE FRAUD AND ABUSE CONTROL
UNIT REQUIREMENTS.—A Health Care Fraud and
Abuse Control Unit established by a State under
paragraph (1)(B) shall be a single identifiable entity
of State government which is separate and distinct
from any State agency with principal responsibility
for the administration of health care programs, and
which meets the following requirements:
(A) The entity—
(i) is a unit of the office of the State
Attorney General or of another department
of State government that possesses state-
wide authority to prosecute individuals for
criminal violations;
(ii) is in a State the constitution of
which does not provide for the criminal
prosecution of individuals by a statewide
authority, and has formal procedures, ap-
proved by the Secretary, that assure it will
refer suspected criminal violations relating
to health care fraud or abuse in violation
of any Federal law to the appropriate au-
thority or authorities of the State for pros-
ecution and assure it will assist such au-
thority or authorities in such prosecutions;
or
(iii) has a formal working relationship
with the office of the State Attorney Gen-
eral or the appropriate authority or au-
thorities for prosecution and has formal
procedures (including procedures under
which it will refer suspected criminal viola-
tions to such office), that provide effective
coordination of activities between the
Health Care Fraud and Abuse Control
Unit and such office with respect to the
detection, investigation, and prosecution of
suspected health care fraud or abuse in
violation of any Federal law.
(B) The entity conducts a statewide pro-
gram for the investigation and prosecution of
violations of all applicable State laws regarding
any and all aspects of health care fraud and
abuse in violation of any Federal law.
(C) The entity has procedures for—
(i) reviewing complaints of the abuse
or neglect of patients of health care facili-
ties in the State, and
(1) IN GENERAL.—For each year for which a
State has a plan approved under subsection (b)(4),
and subject to the availability of appropriations, the
Inspector General shall pay to the State for each
quarter an amount equal to 75 percent of the sums
expended during the quarter by agencies designated
by the Governor of the State under subsection
(b)(1)(A) in conducting activities described in that
subsection.
(2) TIME OF PAYMENT.—The Inspector General
shall make a payment under paragraph (1) for a
quarter by not later than 30 days after the end of
the quarter.
(3) PAYMENTS ARE ADDITIONAL.—Payments to
a State under this subsection shall be in addition to
any amounts paid under subsection (g).
(d) DATA SHARING.—The Inspector General shall es-
tablish a program for the sharing among Federal agencies,
State and local law enforcement agencies, and health care
providers and insurers, consistent with data sharing provi-
sions of subtitle B, of data related to possible health care
fraud and abuse in violation of any Federal law.
(e) HEALTH CARE FRAUD AND ABUSE CONTROL AC-
COUNT.—
(1) ESTABLISHMENT.—There is established on
the books of the Treasury of the United States a
separate account, which shall be known as the
Health Care Fraud and Abuse Control Account. The
Account shall consist of—
(A) the Health Care Fraud and Abuse Ex-
penses Subaccount; and
(B) the Health Care Fraud and Abuse Re-
serve Subaccount.
(2) EXPENSES SUBACCOUNT.—
(A) 
CONTENTS.—The 
Expenses 
Sub-
account consists of—
(i) amounts deposited under subpara-
graph (B); and
(ii) amounts transferred from the Re-
serve Subaccount and deposited under
paragraph (3)(B).
(B) DEPOSITS.—Except as provided in
paragraph (3)(A), there shall be deposited in
the Expenses Subaccount all amounts received
by the United States as—
(i) fines for health care fraud and
abuse in violation of any Federal law;
(ii) civil penalties or damages (other
than restitution) in actions under section
3729 or 3730 of title 31, United States
Code (commonly referred to as the ‘‘False
Claims Act’’), that are based on health
care fraud and abuse in violation of any
Federal law;
(iii) administrative penalties under the
Social Security Act;
(iv) proceeds of seizures and forfeit-
ures of property for acts or omissions that
constitute health care fraud or abuse in
violation of any Federal law; and
(v) money and proceeds of property
that are accepted under subsection (f).
(C) USE.—Amounts in the Expenses Sub-
account shall be available to the Inspector Gen-
eral, under such terms and conditions as the
Inspector General determines to be appropriate,
for—
(i) paying expenses incurred by their
respective agencies in carrying out activi-
ties under subsection (a); and
(ii) making reimbursements to other
Inspectors General and Federal, State, and
local agencies in accordance with sub-
section (g).
(3) RESERVE SUBACCOUNT.—
(A) DEPOSITS.—An amount otherwise re-
quired under paragraph (2)(A) to be deposited
in the Expenses Subaccount in a fiscal year
shall be deposited in the Reserve Subaccount,
if—
(i) the amount in the Expenses Sub-
account is greater than $500,000,000; and
(ii) the deposit of that amount in the
Expenses Subaccount would result in the
amount in the Expenses Subaccount ex-
ceeding 110 percent of the total amount
deposited in the Expenses Subaccount in
the preceding fiscal year.
(B) 
TRANSFERS
TO
EXPENSES
SUB-
ACCOUNT.—
(i) ESTIMATION OF SHORTFALL.—Not
later than the first day of the last quarter
of each fiscal year, the Inspector General
shall estimate whether sufficient amounts
will be available during such quarter in the
Expenses Subaccount for the uses de-
scribed in paragraph (2)(C).
(ii) TRANSFER
TO
COVER
SHORT-
FALL.—If the Inspector General estimates
under clause (i) that there will not be
available sufficient amounts in the Ex-
penses Subaccount during the last quarter
of a fiscal year, there shall be transferred
from the Reserve Subaccount and depos-
ited in the Expenses Subaccount such
amount as the Inspector General estimates
is required to ensure that sufficient
amounts are available in the Expenses
Subaccount during such quarter.
(C) LIMITATION
ON
AMOUNT
CARRIED
OVER
TO
SUCCEEDING
FISCAL
YEAR.—There
shall be transferred to the general fund of the
Treasury any amount remaining in the Reserve
Subaccount at the end of a fiscal year (after
any transfer made under subparagraph (B)) in
excess of 10 percent of the total amount au-
thorized to be deposited in the Expenses Sub-
account (consistent with subparagraph (A))
during the fiscal year.
(f) ACCEPTANCE OF GIFTS, BEQUESTS, AND DE-
VISES.—Any Inspector General referred to in subsection
(a)(1) may accept, use, and dispose of gifts, bequests, or
devises of services or property (real or personal), for the
purpose of aiding or facilitating activities under this sec-