I 113th CONGRESS 2d Session H. R. 5340 IN THE HOUSE OF REPRESENTATIVES July 31, 2014 Ms. Frankel of Florida (for herself and Mr. Keating ) introduced the following bill; which was referred to the Committee on Energy and Commerce , and in addition to the Committee on Ways and Means , 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 amend title XI of the Social Security Act to expand the permissive exclusion from Federal health programs to include certain individuals with prior interest in sanctioned entities and entities affiliated with sanctioned entities and to provide a criminal penalty for the illegal distribution of Medicare, Medicaid, or CHIP beneficiary identification or provider numbers, and for other purposes.

1. Short title This Act may be cited as the Fighting Medicare Fraud Act of 2014 . 2. Permissive exclusion from Federal health programs expanded to certain individuals with prior interest in sanctioned entities and entities affiliated with sanctioned entities Paragraph (15) of section 1128(b) of the Social Security 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 following: (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 entity (or was a person with such an ownership or control interest at the time of any of the conduct that formed a basis for the conviction or exclusion described in subparagraph (B)); and (II) knows or should have known (as defined in section 1128A(i)(7)) (or knew or should have known) of such conduct. (ii) Any individual who is an officer or managing employee (as defined in section 1126(b)) of a sanctioned entity or affiliated entity 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 conviction 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 participation 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 subparagraph (B)) affiliated with such sanctioned entity, and includes an entity— (i) that is a person with an ownership or control interest in such sanctioned entity (or was such a person with respect to such sanctioned 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 entity is a person with an ownership or control interest in such entity (or was such a person with respect to such entity at the time of any conduct 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 entity; (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 sanctioned 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). . 3. Criminal penalty for illegal distribution of Medicare, Medicaid, or CHIP beneficiary 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: (4) Whoever knowingly and with the intent to defraud purchases, sells or distributes, or arranges for the purchase, sale, or distribution of two or more Medicare, Medicaid, or Children’s Health Insurance Program beneficiary identification numbers or provider numbers under title XVIII, XIX, or 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. . 4. Reports on incidences of fraud and abuse under Medicare parts C and D (a) In general Section 1857(d) of the Social Security 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 organization report to the Secretary (or to any person or organization designated by the Secretary for such purpose) any instances of probable 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 instance. (B) Guidance Not later than 90 days after the date of the enactment of this paragraph, 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 subparagraph (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 paragraph (7) of such section any reference to an MA organization, with respect to an MA plan, shall be deemed a reference to a PDP sponsor or MA organization, with respect to a prescription drug plan or MA–PD plan . (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.