SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Fighting Medicare 
Fraud Act of 2016’’. 
SEC. 2. PERMISSIVE EXCLUSION FROM FEDERAL HEALTH 
PROGRAMS EXPANDED TO CERTAIN INDIVID-
UALS WITH PRIOR INTEREST IN SANCTIONED 
ENTITIES AND ENTITIES AFFILIATED WITH 
SANCTIONED ENTITIES. 
Paragraph (15) of section 1128(b) of the Social Secu-
rity Act (42 U.S.C. 1320a–7(b)) is amended to read as 
follows: 
‘‘(15) INDIVIDUALS AND ENTITIES AFFILIATED 
WITH A SANCTIONED ENTITY.—(A) Any of the fol-
lowing: 
‘‘(i) Any individual who— 
‘‘(I) is a person with an ownership or 
control interest in a sanctioned entity or 
an affiliated entity of such sanctioned enti-
ty (or was a person with such an owner-
ship or control interest at the time of any 
of the conduct that formed a basis for the 
conviction or exclusion described in sub-
paragraph (B)); and 
‘‘(II) knows or should have known (as 
defined in section 1128A(i)(7)) (or knew or 
should have known) of such conduct. 
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‘‘(ii) Any individual who is an officer or 
managing employee (as defined in section 
1126(b)) of a sanctioned entity or affiliated en-
tity of such sanctioned entity (or was such an 
officer or managing employee at the time of any 
of the conduct that formed a basis for the con-
viction or exclusion described in subparagraph 
(B)). 
‘‘(iii) Any affiliated entity of a sanctioned 
entity. 
‘‘(B) For purposes of this paragraph, the term 
‘sanctioned entity’ means an entity— 
‘‘(i) that has been convicted of any offense 
described in subsection (a) of this section or in 
paragraph (1), (2), or (3) of this subsection; or 
‘‘(ii) that has been excluded from partici-
pation under a program under title XVIII or 
under a State health care program. 
‘‘(C) For purposes of subparagraph (A), the 
term ‘affiliated entity’ means, with respect to a 
sanctioned entity, an entity that is (or was at the 
time of any of the conduct that formed the basis for 
the conviction or exclusion described in subpara-
graph (B)) affiliated with such sanctioned entity, 
and includes an entity— 
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‘‘(i) that is a person with an ownership or 
control interest in such sanctioned entity (or 
was such a person with respect to such sanc-
tioned entity at the time of any conduct that 
formed the basis for the conviction described in 
subparagraph (B)); 
‘‘(ii) with respect to which a sanctioned en-
tity is a person with an ownership or control in-
terest in such entity (or was such a person with 
respect to such entity at the time of any con-
duct that formed the basis for the conviction 
described in subparagraph (B)); 
‘‘(iii) with respect to which a person with 
an ownership or control interest in such entity 
also has such an interest in such sanctioned en-
tity; or 
‘‘(iv) with respect to which a person who is 
an officer or managing employee (as defined in 
section 1126(b)) of such entity also is such an 
officer or managing employee of such sanc-
tioned entity. 
‘‘(D) For purposes of this paragraph, the term 
‘person with an ownership or control interest’ has 
the 
meaning 
given 
such 
term 
in 
section 
1124(a)(3).’’. 
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SEC. 3. CRIMINAL PENALTY FOR ILLEGAL DISTRIBUTION 
OF MEDICARE, MEDICAID, OR CHIP BENE-
FICIARY 
IDENTIFICATION 
OR 
PROVIDER 
NUMBERS. 
Section 1128B(b) of the Social Security Act (42 
U.S.C. 1320a–7b(b)) is amended by adding at the end the 
following: 
‘‘(5) Whoever knowingly and with the intent to de-
fraud purchases, sells or distributes, or arranges for the 
purchase, sale, or distribution of two or more beneficiary 
identification numbers or unique health identifier for a 
health care provider under title XVIII, title XIX, or title 
XXI shall be imprisoned for not more than 15 years or 
fined under title 18, United States Code (or, if greater, 
an amount equal to the monetary loss to the Federal and 
any State government as a result of such acts), or both.’’. 
SEC. 4. REPORTS ON INCIDENCES OF FRAUD AND ABUSE 
UNDER MEDICARE PARTS C AND D. 
(a) IN GENERAL.—Section 1857(d) of the Social Se-
curity Act (42 U.S.C. 1395w–27(d)) is amended by adding 
at the end the following new paragraph: 
‘‘(7) REPORT ON INCIDENCES OF FRAUD AND 
ABUSE.— 
‘‘(A) IN GENERAL.—A contract under this 
section with an MA organization offering an 
MA plan shall provide that such MA organiza-
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tion report to the Secretary (or to any person 
or organization designated by the Secretary for 
such purpose) any instances of fraud or abuse 
related to the payment or delivery of health 
benefits under such contract not later than 60 
days after such organization identifies such in-
stance. 
‘‘(B) GUIDANCE.—Not later than 90 days 
after the date of the enactment of this para-
graph, the Secretary, in consultation with the 
Inspector General of the Department of Health 
and Human Services and the Attorney General, 
shall issue to MA organizations (and PDP 
sponsors) guidance for defining the terms 
‘fraud’ and ‘abuse’ for purposes of subpara-
graph (A).’’. 
(b) CONFORMING AMENDMENT TO PART D.—Section 
1860D–12(b)(3)(C) of the Social Security Act (42 U.S.C. 
1395w–112(b)(3)(C)) is amended by inserting before the 
period at the end the following: ‘‘, except in applying para-
graph (7) of such section any reference to an MA organi-
zation, with respect to an MA plan, shall be deemed a ref-
erence to a PDP sponsor or MA organization, with respect 
to a prescription drug plan or MA–PD plan’’. 
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(c) EFFECTIVE DATE.—The amendments made by 
subsections (a) and (b) shall apply with respect to plan 
years beginning on or after the date of the enactment of 
this Act. 
Æ 
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