I 115th CONGRESS 1st Session H. R. 3173 IN THE HOUSE OF REPRESENTATIVES July 10, 2017 Mr. Marchant (for himself, Mr. Kind , and Mr. Meehan ) 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 XVIII of the Social Security Act to create alternative sanctions for technical noncompliance with the Stark rule under Medicare, and for other purposes.

1. Short title This Act may be cited as the Stark Administrative Simplification Act of 2017 . 2. Alternative sanctions for technical noncompliance with Stark rule under Medicare Section 1877(g) of the Social Security Act ( 42 U.S.C. 1395nn(g) ) is amended— (1) in paragraph (1), by striking No and inserting Subject to paragraph (7), no ; (2) in paragraph (2), by striking If and inserting Subject to paragraph (7), if ; (3) in paragraph (3), by striking Any and inserting Subject to paragraph (7), any ; and (4) by adding at the end the following new paragraph: (7) Alternative sanctions for technical noncompliance (A) Single penalty for compensation arrangements in technical noncompliance In the case of a compensation arrangement between a physician (or an immediate family member of such physician) and a person or entity that is in violation of subsection (a)(1) solely due to technical noncompliance, instead of the sanctions described in paragraphs (1), (2), and (3) for any such violation, the person or entity with respect to such arrangement shall be subject to a single civil monetary penalty under this paragraph in an amount that does not exceed— (i) in the case in which the disclosure of the violation is submitted to the Secretary not later than the date that is one year after the initial date of noncompliance, $5,000; and (ii) in the case in which the disclosure of the violation is submitted to the Secretary after the date that is one year after the initial date of noncompliance, $10,000. (B) Acceptance of voluntary disclosures (i) In general Beginning as of the date of the enactment of this paragraph, the Secretary shall accept the voluntary disclosure of a technically noncompliant compensation arrangement if such voluntary disclosure is made as described in clause (iii). The Secretary may accept and reasonably rely on information provided by a person or entity that is in violation of subsection (a)(1) only because of a compensation arrangement that is technically noncompliant. (ii) Acceptance of disclosure The Secretary may reject any voluntary disclosure submitted under clause (iii) within 90 days after the receipt of the disclosure only if the Secretary determines that the disclosure does not conform to the requirements described in clause (iii). If the Secretary fails to reject a voluntary disclosure within such 90-day period, the voluntary disclosure is deemed to be accepted. (iii) Voluntary disclosure A voluntary disclosure described in this clause is a disclosure concerning a compensation arrangement that is submitted to the Secretary by a party to such arrangement that contains the following: (I) The identification of the disclosing party and all other parties to the disclosed compensation arrangement. (II) A description of the compensation paid under the arrangement and the dates of noncompliance. (III) A certification by the disclosing party that the compensation arrangement satisfies the requirements described in clause (v). (IV) Payment for the full amount of the civil monetary penalty under clause (i) or (ii), as applicable, of subparagraph (A). (iv) Settlement of liability and payment of claims A voluntary disclosure of a technically noncompliant compensation arrangement that is made and accepted under this subparagraph shall constitute a full and complete settlement of liability under this subsection to the extent such liability is with respect to such technically noncompliant compensation arrangement. Any bill or claim for payment related to a technically noncompliant compensation arrangement shall not be subject to the sanctions under this subsection and shall be payable after a voluntary disclosure is made as described in clause (iii). (v) Compensation arrangement requirements For purposes of clause (iii)(III), the requirements described in this clause, with respect to a compensation arrangement, are the following: (I) The compensation arrangement is technically noncompliant (as defined by subparagraph (C)). (II) The compensation arrangement has been cured of the technical noncompliance, or is otherwise terminated. (III) In the case of technical noncompliance described in subparagraph (C)(i), the compensation arrangement is consistent with fair market value, and the remuneration under the arrangement is not determined in a manner that takes into account directly or indirectly the volume or value of any referrals. (C) Definition technical noncompliance For purposes of this paragraph, the term technical noncompliance means, with respect to a compensation arrangement, such an arrangement that is in violation of subsection (a)(1) only because— (i) the arrangement is not set forth in writing; (ii) the arrangement is not signed by one or more parties to the arrangement; or (iii) the arrangement became in violation of such subsection by reason of its expiration. (D) Applicability to pre-enactment disclosures to relieve backlog In addition to the application of this paragraph to technically noncompliant compensation arrangements disclosed on or after the date of the enactment of this paragraph, the Secretary shall provide for the application of this paragraph to any technically noncompliant compensation arrangement that has been disclosed, and to which there has not been a final settlement, as of the date of enactment of this paragraph. (E) Report Not later than 24 months after the date of enactment of this paragraph, the Administrator of the Centers for Medicare & Medicaid Services shall submit to Congress a report on the implementation of this paragraph. Such report shall include— (i) the number of persons or entities making disclosures of technical noncompliance under this paragraph; (ii) the amount and type of alternative sanctions collected or imposed for technical noncompliance; (iii) the types of violations disclosed; and (iv) such other information as the Inspector General determines may be necessary to evaluate the impact of this paragraph. . 3. Clarification of the writing requirement and signature requirement for arrangements pursuant to the Stark rule under Medicare (a) Writing requirement Section 1877(h)(1) of the Social Security Act ( 42 U.S.C. 1395nn(h)(1) ) is amended by adding at the end the following new subparagraph: (D) Written requirement clarified In the case of any requirement pursuant to this section for a compensation arrangement to be in writing, such requirement shall be satisfied by such means as determined by the Secretary, including by a collection of documents, including contemporaneous documents evidencing the course of conduct between the parties involved. . (b) Signature requirement Section 1877(e) of the Social Security Act ( 42 U.S.C. 1395nn(e) ) is amended— (1) in paragraph (1)(A)(i), by inserting before or not later than 90 days after the effective date of the lease after signed by the parties ; (2) in paragraph (1)(B)(i), by inserting before or not later than 90 days after the effective date of the lease after signed by the parties ; and (3) in paragraph (3)(A)(i), by inserting before or not later than 90 days after the effective date of the arrangement after signed by the parties . 4. Indefinite holdover for lease arrangements and personal services arrangements pursuant to the Stark rule under Medicare Section 1877 of the Social Security Act ( 42 U.S.C. 1395nn ) is amended— (1) in subsection (e)— (A) in paragraph (1), by adding at the end the following new subparagraph: (C) Holdover lease arrangements In the case of a holdover lease arrangement for the lease of office space or equipment, which immediately follows a lease arrangement described in subparagraph (A) for the use of such office space or subparagraph (B) for the use of such equipment and that expired after a term of at least one year, payments made by the lessee to the lessor pursuant to such holdover lease arrangement, if— (i) the lease arrangement met the conditions of subparagraph (A) for the lease of office space or subparagraph (B) for the use of equipment when the arrangement expired; (ii) the holdover lease arrangement is on the same terms and conditions as the immediately preceding arrangement; and (iii) the holdover arrangement continues to satisfy the conditions of subparagraph (A) for the lease of office space or subparagraph (B) for the use of equipment. ; and (B) in paragraph (3), by adding at the end the following new subparagraph: (C) Holdover personal service arrangement In the case of a holdover personal service arrangement, which immediately follows an arrangement described in subparagraph (A) that expired after a term of at least one year, remuneration from an entity pursuant to such holdover personal service arrangement, if— (i) the personal service arrangement hmet the conditions of subparagraph (A) when the arrangement expired; (ii) the holdover personal service arrangement is on the same terms and conditions as the immediately preceding arrangement; and (iii) the holdover arrangement continues to satisfy the conditions of subparagraph (A). ; and (2) in subsection (h)(1), as amended by section 3(a)— (A) in the heading, by inserting ; holdover arrangement after remuneration ; and (B) by adding at the end the following new subparagraph: (E) Holdover arrangement The term holdover arrangement means an arrangement, with respect to an agreement (including a lease or other arrangement) that has expired but as of the date of such expiration had been in compliance with the applicable requirements of this section, under which the parties to such expired agreement have, since such date of expiration, continued to perform under the terms and conditions of such expired agreement. .