cial Security Act (42 U.S.C. 1395d(f)) of
extended care services for individuals with
a condition that is classifiable within a di-
agnosis-related group identified by the Sec-
retary under subparagraph (B) in the geo-
graphic areas selected under subparagraph
(C); and
(ii) collect the data described in sub-
paragraph (D).
(B) DRGS
IDENTIFIED.—The Secretary
shall identify those diagnosis-related groups for
which waiver of the 3-day hospitalization stay
requirement is likely to reduce the total of pay-
ments made under the Medicare Program.
(C) SELECTION OF GEOGRAPHIC AREAS.—
The geographic areas selected under this sub-
paragraph are those geographic areas that the
Secretary expects—
(i) to maximize the provision of appro-
priate statistically relevant data on the
cost of—
(I) extended care services pro-
vided in skilled nursing facilities; and
(II) inpatient hospital services
(as defined in section 1861(b) of the
Social 
Security 
Act 
(42 
U.S.C.
1395x(b))); and
(ii) to minimize regional differences in
the practice of medicine.
(D) COLLECTION
OF
DATA.—The Sec-
retary shall collect appropriate statistically rel-
evant data on the cost of extended care services
and inpatient hospital services provided—
(i) in the geographic areas selected
under subparagraph (C)—
(I) before the implementation of
the demonstration programs under
this subsection; and
(II) after the implementation of
such programs; and
(ii) in the geographic areas not se-
lected under such subparagraph for the pe-
riods described in subclauses (I) and (II)
of clause (i).
(3) REPORT.—
(A) IN GENERAL.—Not later than January
1, 2002, the Secretary shall submit to the ap-
propriate committees of Congress a report—
(i) on the demonstration programs
conducted under paragraph (2); and
(ii) comparing the effect of the waiver
of 3-day prior hospitalization requirement
for coverage of extended care services—
(I) among geographic areas; and
(II) before and after the imple-
mentation of the programs established
under paragraph (2).
(B) CONTENTS.—The report submitted
under subparagraph (A) shall contain—
(i) a description of each diagnosis-re-
lated group for which a demonstration pro-
gram is implemented under paragraph (2);
and
(ii) a determination as to whether
waiving the 3-day hospitalization stay re-
quirement with respect to each diagnosis-
related group would reduce the total of
payments made under the Medicare Pro-
gram.
(C) CONSIDERATION
OF
DATA.—In pre-
paring such report, the Secretary shall consider
the data collected under paragraph (2)(D).
(e) IDENTIFICATION OF ADDITIONAL DRGS.—The
diagnosis related groups described in this subsection are
those diagnosis-related groups not otherwise identified
under this section that the Secretary determines would re-
duce the total of payments made under the Medicare Pro-
gram if such diagnosis-related group were identified under
subsection (b).
(f) REQUIREMENT OF HOSPITAL DEDUCTIBLES AND
COINSURANCE.—
(1) IN GENERAL.—For purposes of this section,
when the requirement for a 3-day hospitalization
stay has been waived under this section, the Sec-
retary 
shall 
require 
the 
application 
of 
any
deductibles and coinsurance under section 1813 of
the Social Security Act (42 U.S.C. 1395e) beginning
with the first day of extended care services provided
in a skilled nursing facility.
(2) REDUCTION
OF
AMOUNT.—The Secretary
shall reduce the amount of any deductible or coin-
surance applied under this subsection based on the
best estimate of the Secretary of the difference be-
tween the average cost of hospital inpatient services
for the individual involved and the average cost of
services provided to that individual in a skilled nurs-
ing facility.
(g) RECOVERY OF INCREASED PAYMENTS.—If the
Secretary determines that the application of this section
in a fiscal year has resulted in any increase in the total
of payments made under the Medicare Program for the
fiscal year above the total of such payments that would
have been made in the fiscal year if this section did not
apply (taking into account any reduction in the total of
payments made under such program as a result of the
elimination of or a reduction in the length of hospitaliza-
tion), the Secretary—
(1) shall, notwithstanding any other provision
of law, provide for a reduction in the amounts other-
wise payable under part A of such title (42 U.S.C.
1395 et seq.) for post-hospital extended care services
(as defined in section 1861(i) of the Social Security
Act (42 U.S.C. 1395x(i))) in the following fiscal
year by such proportion as will reduce the total of
payments made in such fiscal year under such part
by the total amount of such an increase in the pre-
vious fiscal year; and
(2) may rescind the selection of any diagnosis-
related group identified under subsection (b) if the
application of this section with respect to such group
has resulted in an increase in the total of payments
made under the Medicare Program.
(h) SPECIAL RULE FOR DUAL ELIGIBLES.—In the
case of an individual eligible for assistance for nursing fa-
cility services under title XIX of the Social Security Act
(42 U.S.C. 1396 et seq.), the provisions of such title shall
apply as if this section had not been enacted.
SEC. 504. EXTENSION OF CERTAIN MEDICARE COMMUNITY
NURSING ORGANIZATION DEMONSTRATION
PROJECTS.
Notwithstanding any other provision of law, dem-
onstration projects conducted under section 4079 of the
Omnibus Budget Reconciliation Act of 1987 may be con-
ducted for an additional period of 5 years, and the dead-
line for any report required relating to the results of such
projects shall be not later than 6 months before the end
of such additional period.
TITLE VI—COST-EFFICIENT
HOME HEALTH PROVIDERS
SEC. 601. DELAY IN CONTINGENCY REDUCTION.
(a) IN GENERAL.—Section 4603(e) of the Balanced
Budget Act of 1997 (42 U.S.C. 1395fff note), as amended
by section 5101(c)(3) of the Tax and Trade Relief Exten-
sion Act of 1998 (contained in division J of Public Law
105–277), is amended—
(1) by striking ‘‘described in subsection (d),’’
and inserting ‘‘beginning on or after September 30,
2001’’; and
(2) by striking ‘‘September 30, 2000’’ and in-
serting ‘‘September 30, 2001’’.
(b) EFFECTIVE DATE.—The amendments made by
this section take effect as if included in the enactment of
the Balanced Budget Act of 1997 (Public Law 105–33;
111 Stat. 251).
SEC. 602. ELIMINATION OF 15-MINUTE REPORTING RE-
QUIREMENT.
(a) IN GENERAL.—Section 1895(c)(2) (42 U.S.C.
1395fff(c)(2)) is amended by striking ‘‘, as measured in
15 minute increments’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) takes effect as if included in the amend-
ments made by section 4603 of the Balanced Budget Act
of 1997 (Public Law 105–33; 111 Stat. 467).
SEC. 603. RECOUPMENT OF OVERPAYMENTS.
(a) 36-MONTH REPAYMENT PERIOD.—
(1) IN GENERAL.—Except as provided in para-
graph (2), in the case of an overpayment by the Sec-
retary of Health and Human Services to a home
health agency for home health services furnished
during a cost reporting period beginning on or after
October 1, 1997, as a result of payment limitations
provided for under clause (v), (vi), or (viii) of section
1861(v)(1)(L) of the Social Security Act (42 U.S.C.
1395x(v)(1)(L)), the home health agency may elect
to repay the amount of such overpayment over a 36-
month period beginning on the date of notification
of such overpayment.
(2) EXCEPTION.—No home health agency may
make an election under paragraph (1) if any final
adverse action (as defined in section 1128E(g)(1) of
such Act (42 U.S.C. 1320a–7e(g)(1))) has been
taken against such agency.
(b) NO INTEREST ON OVERPAYMENT AMOUNTS.—In
the case of an agency that makes an election under sub-
section (a), no interest shall accrue on the outstanding
balance of the amount of overpayment during such 36-
month period.
(c) TERMINATION.—No election under subsection (a)
may be made for cost reporting periods (or portions there-
of) beginning on or after the date of implementation of
the prospective payment system for home health services
under section 1895 of the Social Security Act (42 U.S.C.
1395fff).
(d) EFFECTIVE DATE.—The provisions of subsection
(a) take effect as if included in the enactment of the Bal-
anced Budget Act of 1997 (Public Law 105–33; 111 Stat.
251).
SEC. 604. INCREASE IN PER VISIT LIMIT.
Section 
1861(v)(1)(L)(i) 
(42 
U.S.C.
1395x(v)(1)(L)(i)), as amended by section 5101(b) of the
Tax and Trade Relief Extension Act of 1998 (contained
in division J of Public Law 105–277), is amended—
(1) in subclause (IV), by striking ‘‘or’’;
(2) in subclause (V)—
(A) by inserting ‘‘and before October 1,
1999,’’ after ‘‘October 1, 1998,’’; and
(B) by striking the period and inserting ‘‘,
or’’; and
(3) by adding at the end the following:
‘‘(VI) October 1, 1999, 112 percent of such me-
dian.’’.
TITLE 
VII—MEDICARE+CHOICE
AND MEDIGAP PROTECTIONS
FOR SENIORS AND THE DIS-
ABLED
SEC. 701. TWO-YEAR MEDICARE+CHOICE TRIAL PERIOD.
(a) IN GENERAL.—Section 1882(s)(3)(B) (42 U.S.C.
1395ss(s)(3)(B)) is amended—
(1) in clause (v)(III), by striking ‘‘12’’ and in-
serting ‘‘24’’; and
(2) in clause (vi), by striking ‘‘12’’ and insert-
ing ‘‘24’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection 
(a) 
applies 
to 
terminations 
and
discontinuations occurring on or after the date of enact-
ment of this Act.
SEC. 702. PERMITTING ENROLLMENT IN ALTERNATIVE
PLANS 
UPON 
RECEIPT 
OF 
NOTICE 
OF
MEDICARE+CHOICE PLAN TERMINATION.
(a) MEDICARE+CHOICE PLANS.—Section 1851(e)(4)
(42 U.S.C. 1395w–21(e)(4)) is amended by striking sub-
paragraph (A) and inserting the following:
‘‘(A)(i) the certification of the organization
or plan under this part has been terminated, or
the organization or plan has notified the indi-
vidual of an impending termination of such cer-
tification; or
‘‘(ii) the organization has terminated or
otherwise discontinued providing the plan in the
area in which the individual resides, or has no-
tified the individual of an impending termi-
nation or discontinuation of such plan;’’.
(b) MEDIGAP PLANS.—
(1) IN GENERAL.—Section 1882(s)(3)(A) (42
U.S.C. 1395ss(s)(3)(A)) is amended in the matter
following clause (iii)—
(A) by inserting ‘‘(92 days in the case of
a termination or discontinuation of coverage
under the types of circumstances described in
section 1851(e)(4)(A))’’ after ‘‘63 days’’;
(B) by inserting ‘‘(or, if elected by the in-
dividual, the date of notification of the indi-
vidual by the plan or organization of the im-
pending termination or discontinuance of the
plan in the area in which the individual re-
sides)’’ after ‘‘the date of the termination of en-
rollment described in such subparagraph’’; and
(C) by inserting ‘‘(or date of such notifica-
tion)’’ after ‘‘the date of termination or
disenrollment’’.
(2) EFFECTIVE DATE.—The amendments made
by this subsection apply to notices of intended termi-
nation 
made 
by 
group 
health 
plans 
and
Medicare+Choice organizations after the date of en-
actment of this Act.
SEC. 703. GUARANTEED ISSUANCE OF CERTAIN MEDIGAP
POLICIES 
IN 
CASES 
OF 
A 
SUBSTANTIAL
CHANGE 
IN 
BENEFITS 
UNDER 
A
MEDICARE+CHOICE PLAN.
(a) IN GENERAL.—Section 1851(e)(4)(C) (42 U.S.C.
1395w–21(e)(4)(C)) is amended—
(1) in clause (i), by striking ‘‘or’’ at the end;
and
(2) by adding at the end the following:
‘‘(iii) the organization offering the
plan substantially changed the benefits of-
fered under the plan in which the indi-
vidual enrolled; or’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection 
(a) 
applies 
to 
terminations 
and
discontinuations occurring on or after the date of enact-
ment of this Act.
SEC. 704. GUARANTEED ISSUANCE OF CERTAIN MEDIGAP
POLICIES TO DISABLED MEDICARE+CHOICE
DISENROLLEES.
(a) IN GENERAL.—Section 1882(s)(3)(C) (42 U.S.C.
1395ss(s)(3)(C)) is amended by adding at the end the fol-
lowing:
‘‘(E) For purposes of this paragraph, in the case of
an individual otherwise described in subparagraph (B)(v)
except that such individual is under age 65, such indi-
vidual shall be deemed to be an individual described in
such subparagraph’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection 
(a) 
applies 
to 
terminations 
and
discontinuations occurring on or after the date of enact-
ment of this Act.
SEC. 705. ISSUANCE OF SAME MEDIGAP BENEFIT PACKAGE
GUARANTEED 
FOR 
CERTAIN
MEDICARE+CHOICE DISENROLLEES.
(a) IN GENERAL.—Section 1882(s)(3)(C)(ii) (42
U.S.C. 1395ss(s)(3)(C)(ii)) is amended by striking ‘‘, if
available from the same issuer, or, if not so available,’’
and inserting ‘‘or, if not available,’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection 
(a) 
applies 
to 
terminations 
and
discontinuations occurring on or after the date of enact-
ment of this Act.
SEC. 706. PROHIBITION OF ATTAINED-AGE RATING OF PRE-
MIUMS FOR MEDIGAP POLICIES.
Section 1882 (42 U.S.C. 1395ss) is amended by add-
ing at the end the following:
‘‘(v)(1) A Medicare supplemental policy may not be
issued or renewed (or otherwise provide coverage after the
deadline established under paragraph (2)) in any State
unless the premiums for the policy do not increase for an
individual under the policy based on the aging of the indi-
vidual.
‘‘(2) The requirement of paragraph (1) shall apply
to premiums for policies under a timetable, recognized by
the Secretary, that provides for an appropriate phase-in
of such requirement. The Secretary shall recognize as the
timetable such timetable as the National Association of
Insurance Commissioners may recommend to the Sec-
retary within 9 months after the date of enactment of this
subsection.’’.
TITLE VIII—MEDICARE PRESER-
VATION 
THROUGH 
FRAUD
PREVENTION
SEC. 801. SITE INSPECTIONS AND BACKGROUND CHECKS.
(a) SITE INSPECTIONS FOR DME SUPPLIERS, COM-
MUNITY MENTAL HEALTH CENTERS, AND OTHER PRO-
VIDER GROUPS.—Title XVIII (42 U.S.C. 1395 et seq.) is
amended by adding at the end the following:
‘‘SITE INSPECTIONS FOR DME SUPPLIERS, COMMUNITY
MENTAL HEALTH CENTERS, AND OTHER PROVIDER
GROUPS
‘‘SEC. 1897. (a) SITE INSPECTIONS.—
‘‘(1) IN GENERAL.—The Secretary shall con-
duct a site inspection for each applicable provider
(as defined in paragraph (2)) that applies for a pro-
vider number in order to provide items or services
under this title. Such site inspection shall be in addi-
tion to any other site inspection that the Secretary
would otherwise conduct with regard to an applica-
ble provider.
‘‘(2) APPLICABLE PROVIDER DEFINED.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraph (B), in this section, the term ‘ap-
plicable provider’ means—
‘‘(i) a supplier of durable medical
equipment (including items described in
section 1834(a)(13));
‘‘(ii) 
a 
supplier 
of 
prosthetics,
orthotics, or supplies (including items de-
scribed in paragraphs (8) and (9) of sec-
tion 1861(s));
‘‘(iii) a community mental health cen-
ter; or
‘‘(iv) any other provider group, as de-
termined by the Secretary.
‘‘(B) EXCEPTION.—In this section, the
term ‘applicable provider’ does not include—
‘‘(i) a physician that provides durable
medical equipment (as so described) or
prosthetics, orthotics, or supplies (as so de-
scribed) to an individual as incident to an
office visit by such individual; or
‘‘(ii) a hospital that provides durable
medical equipment (as described in sub-
paragraph (A)(i)) or prosthetics, orthotics,
or supplies (as described in subparagraph
(A)(ii)) to an individual as incident to an
emergency room visit by such individual.
‘‘(b) STANDARDS
AND REQUIREMENTS.—In con-
ducting the site inspection pursuant to subsection (a), the
Secretary shall ensure that the site being inspected is in
full compliance with all the conditions and standards of
participation and requirements for obtaining Medicare
billing privileges under this title.
‘‘(c) TIME.—The Secretary shall conduct the site in-
spection for an applicable provider prior to the issuance
of a provider number to such provider.
‘‘(d) TIMELY REVIEW.—The Secretary shall provide
for procedures to ensure that the site inspection required
under this section does not unreasonably delay the
issuance of a provider number to an applicable provider.’’.
(b) BACKGROUND CHECKS.—Title XVIII (42 U.S.C.
1395 et seq.) (as amended by subsection (a)) is amended
by adding at the end the following:
‘‘BACKGROUND CHECKS
‘‘SEC. 1898. (a) BACKGROUND CHECK REQUIRED.—
Except as provided in subsection (b), the Secretary shall
conduct a background check on any individual or entity
that applies to the Secretary for a provider number for
the purpose of furnishing any item or service under this
title. In performing the background check, the Secretary
shall—
‘‘(1) conduct the background check before
issuing a provider number to an individual or entity;
‘‘(2) include a search of criminal records in the
background check; and
‘‘(3) provide for procedures that ensure the
background check does not unreasonably delay the
issuance of a provider number to an eligible indi-
vidual or entity.
‘‘(b) USE OF STATE LICENSING PROCEDURE.—The
Secretary may use the results of a State licensing proce-
dure as a background check under subsection (a) if the
State licensing procedure meets the requirements of sub-
section (a).
‘‘(c) ATTORNEY GENERAL REQUIRED TO PROVIDE
INFORMATION.—
‘‘(1) IN GENERAL.—Upon request of the Sec-
retary, the Attorney General shall provide the crimi-
nal background check information referred to in sub-
section (a)(2) to the Secretary.
‘‘(2) RESTRICTION ON USE OF DISCLOSED IN-
FORMATION.—The Secretary may only use the infor-
mation disclosed under subsection (a) for the pur-
pose of carrying out the Secretary’s responsibilities
under this title.
‘‘(d) REFUSAL TO ISSUE PROVIDER NUMBER.—
‘‘(1) AUTHORITY.—In addition to any other
remedy available to the Secretary, the Secretary may
refuse to issue a provider number to an individual
or entity if the Secretary determines, after a back-
ground check conducted under this section, that
such individual or entity has a history of acts that
indicate issuance of a provider number to such indi-
vidual or entity would be detrimental to the best in-
terests of the program or program beneficiaries.
Such acts may include, but are not limited to—
‘‘(A) any bankruptcy;
‘‘(B) any act resulting in a civil judgment
against such individual or entity; or
‘‘(C) any felony conviction under Federal
or State law.
‘‘(2) REPORTING OF REFUSAL TO ISSUE PRO-
VIDER NUMBER TO THE HEALTH INTEGRITY PRO-
TECTION
DATABASE
(HIPDB).—A determination to
refuse to issue a provider number to an individual
or entity as a result of a background check con-
ducted under this section shall be reported to the
health integrity protection database established
under section 1128E in accordance with the proce-
dures for reporting final adverse actions taken
against a health care provider, supplier, or practi-
tioner under that section.’’.
(c) REGULATIONS; EFFECTIVE DATE.—
(1) REGULATIONS.—Not later than 1 year after
the date of enactment of this Act, the Secretary of
Health and Human Services shall promulgate such
regulations as are necessary to implement the
amendments made by subsections (a) and (b).
(2) EFFECTIVE DATE.—The amendments made
by subsections (a) and (b) apply to applications re-
ceived by the Secretary of Health and Human Serv-
ices on or after January 1, 2000.
(d) USE
OF
MEDICARE
INTEGRITY
PROGRAM
FUNDS.—The Secretary of Health and Human Services
may use funds appropriated or transferred for purposes
of carrying out the Medicare integrity program established
under section 1893 of the Social Security Act (42 U.S.C.
1395ddd) to carry out the provisions of sections 1897 and
1898 of that Act (as added by subsections (a) and (b)).
SEC. 802. REGISTRATION OF BILLING AGENCIES.
(a) REGISTRATION OF BILLING AGENCIES AND INDI-
VIDUALS.—Title XVIII (42 U.S.C. 1395 et seq.) (as
amended by section 801(b)) is amended by adding at the
end the following:
‘‘REGISTRATION OF BILLING AGENCIES AND INDIVIDUALS
‘‘SEC. 1899. (a) REGISTRATION.—The Secretary
shall establish procedures for the registration of all appli-
cable persons.
‘‘(b) REQUIRED APPLICATION.—Each applicable per-
son shall submit a registration application to the Secretary
at such time, in such manner, and accompanied by such
information as the Secretary may require.
‘‘(c) IDENTIFICATION NUMBER.—If the Secretary ap-
proves an application submitted under subsection (b), the
Secretary shall assign a unique identification number to
the applicable person.
‘‘(d) REQUIREMENT.—Every claim for reimburse-
ment under this title that is compiled and submitted by
an applicable person shall contain the identification num-
ber that is assigned to the applicable person pursuant to
subsection (c).
‘‘(e) TIMELY REVIEW.—The Secretary shall provide
for procedures that ensure the timely consideration and
determination regarding approval of applications under
this section.
‘‘(f) DEFINITION OF APPLICABLE PERSON.—In this
section, the term ‘applicable person’ means an individual
or an entity that compiles and submits claims for reim-
bursement under this title to the Secretary on behalf of
any individual or entity.’’.
(b) PERMISSIVE EXCLUSION.—Section 1128(b) (42
U.S.C. 1320a–7(b)) is amended by adding at the end the
following:
‘‘(16) FRAUD BY APPLICABLE PERSON.—An ap-
plicable person (as defined in section 1899(f)) that
the Secretary determines knowingly submitted or
caused to be submitted a claim for reimbursement
under title XVIII that the applicable person knows
or should know is false or fraudulent.’’.
(c) REGULATIONS; EFFECTIVE DATE.—
(1) REGULATIONS.—Not later than 1 year after
the date of enactment of this Act, the Secretary of
Health and Human Services shall promulgate such
regulations as are necessary to implement the
amendments made by subsections (a) and (b).
(2) EFFECTIVE DATE.—The amendments made
by subsections (a) and (b) take effect on January 1,
2000.
SEC. 803. EXPANDED ACCESS TO THE HEALTH INTEGRITY
PROTECTION DATABASE (HIPDB).
(a) IN GENERAL.—Section 1128E(d)(1) (42 U.S.C.
1320a–7e(d)(1)) is amended to read as follows:
‘‘(1) AVAILABILITY.—The information in the
database maintained under this section shall be
available to—
‘‘(A) Federal and State government agen-
cies and health plans, and any health care pro-
vider, supplier, or practitioner entering an em-
ployment or contractual relationship with an in-
dividual or entity who could potentially be the
subject of a final adverse action, in any case in
which the contract involves the furnishing of
items or services reimbursed by 1 or more Fed-
eral health care programs (regardless of wheth-
er the individual or entity is paid by the pro-
grams directly, or whether the items or services
are reimbursed directly or indirectly through
the claims of a direct provider); and
‘‘(B) utilization and quality control peer
review organizations and accreditation entities
as defined by the Secretary, including but not
limited to organizations described in part B of
this title and in section 1154(a)(4)(C).’’.
(b) CRIMINAL PENALTY FOR MISUSE OF INFORMA-
TION.—Section 1128B(b) (42 U.S.C. 1320a–7b(b)) is
amended by adding at the end the following:
‘‘(4) Whoever knowingly uses information maintained
in the health integrity protection database maintained in
accordance with section 1128E for a purpose other than
a purpose authorized under that section shall be impris-
oned for not more than 3 years or fined under title 18,
United States Code, or both.’’.
(c) EFFECTIVE DATES.—
(1) AVAILABILITY.—The amendment made by
subsection (a) takes effect on the date of enactment
of this Act.
(2) CRIMINAL PENALTY FOR MISUSE OF INFOR-
MATION.—The amendment made by subsection (b)
takes effect on the date of enactment of this Act and
applies to acts committed on or after the date of en-
actment of this Act.
SEC. 804. LIABILITY OF MEDICARE CARRIERS AND FISCAL
INTERMEDIARIES FOR CLAIMS SUBMITTED
BY EXCLUDED PROVIDERS.
(a) REIMBURSEMENT
TO
THE
SECRETARY
FOR
AMOUNTS PAID TO EXCLUDED PROVIDERS.—
(1) 
REQUIREMENTS
FOR
FISCAL
INTER-
MEDIARIES.—
(A) IN
GENERAL.—Section 1816 (42
U.S.C. 1395h) is amended by adding at the end
the following:
‘‘(m) An agreement with an agency or organization
under this section shall require that such agency or orga-
nization reimburse the Secretary for any amounts paid by
the agency or organization for a service under this title
which is furnished by an individual or entity during any
period for which the individual or entity is excluded, pur-
suant to section 1128, 1128A, or 1156, from participation
in the health care program under this title if the amounts
are paid to the individual or entity excluded from
participation—
‘‘(1) after the 60-day period beginning on the
date the Secretary provides notice of the exclusion to
the agency or organization, unless the payment was
made as a result of incorrect information provided
by the Secretary; or
‘‘(2) which has concealed or altered their iden-
tity.’’.
(B) CONFORMING
AMENDMENT.—Section
1816(i) (42 U.S.C. 1395h(i)) is amended by
adding at the end the following:
‘‘(4) Nothing in this subsection shall be con-
strued to prohibit reimbursement by an agency or
organization pursuant to subsection (m).’’.
(2) REQUIREMENTS
FOR
CARRIERS.—Section
1842(b)(3) (42 U.S.C. 1395u(b)(3)) is amended—
(A) by striking ‘‘and’’ at the end of sub-
paragraph (I); and
(B) by inserting after subparagraph (I) the
following:
‘‘(J) will reimburse the Secretary for any
amounts paid by the carrier for an item or service
under this part which is furnished by an individual
or entity during any period for which the individual
or entity is excluded, pursuant to section 1128,
1128A, or 1156, from participation in the health
care program under this title if the amounts are
paid to the individual or entity excluded from
participation—
‘‘(1) after the 60-day period beginning on
the date the Secretary provides notice of the ex-
clusion to the agency or organization, unless the
payment was made as a result of incorrect in-
formation provided by the Secretary; or
‘‘(2) which has concealed or altered their
identity; and’’.
(b) CONFORMING REPEAL OF MANDATORY PAYMENT
RULE.—Section 
1862(e) 
(42 
U.S.C. 
1395y(e)) 
is
amended—
(1) in paragraph (1)(B), by striking ‘‘and when
the person’’ and all that follows through ‘‘person)’’;
and
(2) by amending paragraph (2) to read as fol-
lows:
‘‘(2) No individual or entity may bill (or collect any
amount from) any individual for any item or service for
which payment is denied under paragraph (1). No indi-
vidual is liable for payment of any amounts billed for such
an item or service in violation of the preceding sentence.’’.
(c) EFFECTIVE DATE.—
(1) IN GENERAL.—The amendments made by
this section apply to claims for payment submitted
on or after the date of enactment of this Act.
(2) CONTRACT MODIFICATION.—The Secretary
of Health and Human Services shall take such steps
as may be necessary to modify contracts and agree-
ments entered into, renewed, or extended prior to
the date of enactment of this Act to conform such
contracts or agreements to the provisions of this sec-
tion.
SEC. 805. COMMUNITY MENTAL HEALTH CENTERS.
(a) IN
GENERAL.—Section 1861(ff)(3)(B) (42
U.S.C. 1395x(ff)(3)(B)) is amended by striking ‘‘entity’’