I
105TH CONGRESS
1ST SESSION
H. R. 1836
To amend chapter 89 of title 5, United States Code, to improve administra-
tion of sanctions against unfit health care providers under the Federal
Employees Health Benefits Program, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JUNE 10, 1997
Mr. BURTON of Indiana (for himself and Mr. MICA) introduced the following
bill; which was referred to the Committee on Government Reform and
Oversight
A BILL
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 Ben-
efits Program, 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.
This Act may be cited as the ‘‘Federal Employees
Health Care Protection Act of 1997’’.
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
and inserting ‘‘; and’’; and
(iii) by adding at the end the follow-
ing:
‘‘(D) the term ‘should know’ means that a per-
son, 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 ‘‘sub-
section (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 Of-
fice of Personnel Management shall bar’’; and
(B) by amending paragraph (5) to read as
follows:
‘‘(5) Any provider that is currently suspended
or excluded from participation under any program of
the Federal Government involving procurement or
nonprocurement activities.’’;
(3) by redesignating subsections (c) through (i)
as subsections (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services or supplies has been revoked, sus-
pended, restricted, or not renewed, by a State
licensing authority for reasons relating 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 authority, if the proceeding con-
cerned the provider’s professional competence,
professional performance, or financial integrity.
‘‘(2) Any provider that is an entity directly or
indirectly owned, or with a 5 percent or more con-
trolling interest, by an individual who is 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 controlling interest in an 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 (un-
less the Office finds there is good cause for such
charge), or charged for health care services or sup-
plies which are substantially in excess of the needs
of the covered individual or which are of a quality
that fails to meet professionally recognized stand-
ards for such services or supplies.
‘‘(5) Any provider that the Office determines
has committed acts described in subsection (d).’’;
(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 limitations 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 subsection
(g)(2)(B);’’;
(5) in subsection (f) (as so redesignated by
paragraph (3)) by inserting after ‘‘under this sec-
tion’’ 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 fol-
lows through the end of paragraph (1) and in-
serting the following:
‘‘(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 Of-
fice. 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 war-
rants 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 determination to be
made after a hearing as provided in accordance with sub-
section (h)(1).’’;
(B) in paragraph (3)—
(i) by inserting ‘‘of debarment’’ after
‘‘notice’’; and
(ii) by adding at the end the follow-
ing: ‘‘In the case of a debarment under
paragraph (1), (2), (3), or (4) of sub-
section (b), the minimum period of debar-
ment shall not be less than 3 years, except
as provided in paragraph (4)(B)(ii).’’;
in accordance with such procedures as the Office shall pre-
scribe by regulation.
‘‘(2) Any provider adversely affected by a final deci-
sion under paragraph (1) made after a hearing to which
such provider was a party may seek review of such deci-
sion in the United States District Court for the District
of Columbia or for the district in which the plaintiff re-
sides 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 pleadings
and evidence of record, a judgment affirming, modifying,
or setting aside, in whole or in part, the decision of the
Office, with or without remanding the case for a rehear-
ing. The district court shall not set aside or remand the
decision of the Office unless there is not substantial evi-
dence on the record, taken as whole, to support the find-
ings 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 in-
serting ‘‘subsection (d)’’; and
(B) by adding at the end the following:
‘‘The amount of a penalty or assessment as fi-
nally determined by the Office, or other amount
the Office may agree to in compromise, 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 para-
graph (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 subsection (a)(3), shall apply
only to the extent that the misconduct which is the
basis for debarment under such paragraph (2), (3),
or (5), as applicable, occurs after the date of the en-
actment of this Act.
(B) Paragraph (1)(B) of section 8902a(d) of
title 5, United States Code, as amended by sub-
section (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
enactment 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 described in this para-
graph, sponsoring the Government-wide service benefit
plan;’’.
(b) SERVICE BENEFIT PLAN.—Paragraph (1) of sec-
tion 8903 of title 5, United States Code, is amended by
striking ‘‘plan,’’ and inserting ‘‘plan, underwritten by par-
ticipating affiliates licensed in any number of States,’’.
(c) PREEMPTION.—Section 8902(m) of title 5, Unit-
ed States Code, is amended by striking ‘‘(m)(1)’’ and all
that follows through the end of paragraph (1) and insert-
ing 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.’’.
SEC. 4. CONSISTENT COVERAGE FOR INDIVIDUALS EN-
ROLLED IN A HEALTH PLAN ADMINISTERED
BY THE FEDERAL BANKING AGENCIES.
Section 5 of the FEGLI Living Benefits Act (Public
Law 103–409; 5 U.S.C. 8901 note) is amended—
(1) by inserting ‘‘and the Federal Deposit In-
surance Corporation and the Board of Governors of
the Federal Reserve System’’ after ‘‘Office of the
Comptroller of the Currency and the Office of Thrift
Supervision’’ each place it appears;
(2) in subsection (a), by inserting ‘‘under a
health benefits plan administered by the Federal De-
posit Insurance Corporation before the termination
of such plan on January 3, 1998, or under a health
benefits plan not governed by chapter 89 of such
title in which employees and retirees of the Board of
Governors of the Federal Reserve System partici-
pated before January 3, 1998,’’ after ‘‘January 7,
1995,’’;
(3) in subsection (b)—
(A) by inserting ‘‘(in the case of the Comp-
troller of the Currency and the Office of Thrift
Supervision), or on January 3, 1998 (in the
case of the Federal Deposit Insurance Corpora-
tion and the Board of Governors of the Federal
Reserve System)’’ after ‘‘on January 7, 1995’’
each place it appears;
(B) by inserting ‘‘or the Federal Deposit
Insurance Corporation, or in which employees
and retirees of the Board of Governors of the
Federal Reserve System participate’’ after ‘‘Of-
fice of the Comptroller of the Currency or the
Office of Thrift Supervision’’ each place it ap-
pears; and
(C) by inserting ‘‘(in the case of the Comp-
troller of the Currency and the Office of Thrift
Supervision), or on and after January 4, 1998
(in the case of the Federal Deposit Insurance
Corporation and the Board of Governors of the
Federal Reserve System)’’ after ‘‘January 8,
1995’’ each place it appears;
(4) in subsection (b)(1)(A), by striking ‘‘title;’’
and inserting ‘‘title, or a retiree (as defined in sub-
section (e));’’;
(5) by adding at the end the following:
‘‘(e) DEFINITION.—For purposes of this section, the
term ‘retiree’ shall mean an individual who is receiving
benefits under the Retirement Plan for Employees of the
Federal Reserve System.’’; and
(6) in the heading, by striking ‘‘OFFICE OF
THE
COMPTROLLER
OF
THE
CURRENCY
OR
THE OFFICE OF THRIFT SUPERVISION’’ and in-
serting ‘‘FEDERAL BANKING AGENCIES’’.
SEC. 5. FULL DISCLOSURE IN HEALTH PLAN CONTRACTS.
(a) IN GENERAL.—A contract for a plan described
by paragraph (1), (2), or (3) of section 8903 of title 5,
United States Code, or section 8903a of such title, shall
require the carrier and its subcontractors to include in any
discounted rate agreements entered into with health care
providers advance written disclosure if such carrier or its
subcontractors—
(1) do not require financial incentives which are
made known to the employee, annuitant, family
member or other eligible persons prior to their use
of such contracted health care providers, and
(2) do not use other forms of steerage to direct
the employee, annuitant, family member, or other el-
igible persons to use such contracted health care
providers.
(b) PROHIBITION.—Any carrier (and its subcontrac-
tors) described in subsection (a) shall be prohibited from
accessing discounted rate agreements entered into with
health care providers in violation of subsection (a) for
health care services provided to an employee, family mem-
ber, annuitant, or other eligible person.
(c) EFFECTIVE DATE.—This section shall apply with
respect to contracts effective on or after January 1, 1998.
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