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103d congress 
1st Session 



To amend title XI of the Social Security Act to extend the penalties for 
fraud and abuse assessed against providers under the medicare program 
and State health care programs to providers under all health care plans, 
and for other purposes. 



S.867 



IN THE SENATE OF THE UNITED STATES 

May 4 (legislative day, April 19), 1993 

Mr. Cohen introduced the folloAving bill; which was read twice and referred 
to the Committee on Finance 



A BILL 

To amend title XI of the Social Security Act to extend 
the penalties for fraud and abuse assessed against pro- 
viders under the medicare program and State health 
care programs to providers under all health care plans, 
and for other purposes. 

1 Be it enacted hy the Senate and House of Representa- 

2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) Short Title. — This Act may be cited as the 

5 "National Health Care Anti-Fraud and Abuse Act of 

6 1993". 



(b) Table of Contents. — The table of contents of 



this Act is as follows: : / 

Sec. 1. Short title; table of contents. 

TITLE I— ALL-PAYER FRAUD AND ABUSE CONTROL PROGRAM 
Sec. 101. All-payer fraud and abuse control program. 

Sec. 102. Application of Federal health anti-fraud and abuse sanctions to all 

fraud and abuse against any health benefit plan. 
Sec. 103. Public reporting of fraudulent actions. 

TITLE II— REVISIONS TO CURRENT SANCTIONS FOR FRAUD AND 

ABUSE 

Sec. 201. Mandatory exclusion from participation in medicare and State health 
care programs. 

Sec. 202. Establishment of minimum period of exclusion for certain individuals 
and entities subject to permissive exclusion from medicare and 
State health care programs. 

Sec. 203. Permissive exclusion of individuals with ownership or control interest 
in sanctioned entities. 

Sec. 204. Civil monetary penalties. 

Sec. 205. Actions subject to criminal penalties. 

Sec. 206. Sanctions against practitioners and persons for failure to follow cor- 
rective action plan of peer review organization. 

Sec. 207. Intermediate sanctions for medicare health maintenance organiza- 
tions. 

Sec. 208. Effective date. 
TITLE III— ADMINISTRATIVE AND MISCELLANEOUS PROVISIONS 

Sec. 301. Requirements for uniform claims and electronic claims data set. 
Sec. 302. National data collection program for final adverse actions. 
Sec. 303. Quarterly publication of adverse actions taken. 

TITLE I— ALL-PAYER FRAUD AND 
ABUSE CONTROL PROGRAM 

SEC. 101. ALL PAYER FRAUD AND ABUSE CONTROL PRO- 
GRAM. 

(a) ESTABLISHMENT OF PROGRAM. — 

(1) In GENERAL. — Not later than January 1, 
1995, the Secretary of Health and Human Services 
(in this section referred to as the ''Secretary") shall 
establish in the Office of the Inspector General of 

•S 867 IS 



3 

1 the Department of Health and Human Services a 

2 program — 

3 (A) to coordinate Federal, State, and local 

4 law enforcement programs to control fraud and 

5 abuse with respect to the delivery of and pay- 

6 ment for health care in the United States, ^ 

7 .fc'/ (B) to conduct investigations, audits, eval- 

8 nations, and inspections relating to the delivery 

9 of and payment for health care in the United 

10 States, and 

11 (C) to facilitate the enforcement of the 

12 provisions of sections 1128, 1128A, and 1128B 

13 of the Social Security Act and other statutes 

14 applicable to health care fraud and abuse. 

15 (2) Coordination with law enforcement 

16 AGENCIES. — In carrjdng out the program established 

17 under paragraph (1), the Secretary shall consult 

18 with, and arrange for the sharing of data and re- 

19 sources with the Attorney General, State law en- 

20 forcement agencies, State medicaid fraud and abuse 

21 units, and State agencies responsible for the licens- 

22 ing and certification of health care providers. 

23 (3) Coordination with health care 

24 PLANS. — In carrying out the program established 

25 under paragraph (1), the Secretary shall consult 



•S 867 IS 



4 

1 with, and arrange for the sharing of data with rep- 

2 resentatives of health care plans. ; : ' 

3 (4) Regulations. — 

4 (A) In general. — The Secretary shall by 

5 regulation establish standards to carry out the 

6 program under paragraph (1). a 

7 (B) Information standards. — 

8 (i) In general. — Such standards 

9 shall include standards relating to the fur- 

10 nishing of information by health care 

11 plans, providers, and others to enable the 

12 Secretary to carry out the program (in- 

13 eluding coordination with law enforcement 

14 agencies under paragraph (2) and health 

15 care plans under paragraph (3)). 

16 (ii) Confidentiality. — Such stand- 

17 ards shall include procedures to assure 

18 that such information is provided and uti- 

19 lized in a manner that appropriately pro- 

20 tects the confidentiality of the information 

21 and the privacy of individuals receiving 

22 health care services and items. 

23 (iii) Qualified immunity for pro- 

24 VIDING information. — The provisions of 

25 section 1157(a) of the Social Security Act 



•S 867 IS 



5 

1 (relating to limitation on liability) shall 

2 apply to a person providing information to 

3 the Secretary under the program under 

4 this section, with respect to the Secretary's 

5 ' .J performance of duties under the program, 

6 in the same manner as such section applies 

7 to information provided to organizations 

8 with a contract under part B of title XI of 

9 such Act, with respect to the performance 

10 of such a contract. 

11 (C) Disclosure of ownership infor- 

12 MATION. — -x- y'l ' i) 

13 (i) In general. — Such standards 

14 shall include standards relating to the dis- 

15 closure of ownership information described 

16 in clause (ii) by any entity providing health 

17 care services and items. 

18 (ii) Ownership information de- 

19 scribed. — The ownership information de- 

20 scribed in this clause includes — 

21 (I) a description of such items 

22 and services provided by such entity; 

23 (II) the names and unique physi- 

24 cian identification numbers of all phy- 

25 sicians with a financial relationship 



•S 867 IS 



6 

1 (as defined in section 1877(a)(2) of 

2 the Social Security Act) with such 

3 :'i entity; 

4 (III) the names of ali other indi- 

5 viduals with such an ownership or in- 

6 vestment interest in such entity; and 

7 (IV) any other ownership and re- 

8 lated information required to be dis- 

9 closed by such entity under section 

10 1124 or section 1124A of the Social 

11 Security Act. 

12 (D) Integrity of issuance of pro- 

13 viDER IDENTIFICATION CODES. — Such stand- 

14 ards shall, insofar as they relate to the issuance 

15 of unique provider codes (described in section 

16 301(c)(4))— 

17 (i) include standards relating to the 

18 information (including ownership informa- 

19 tion described in subparagraph (C)(ii) and 

20 other information needed in the adminis- 

21 tration of the program) to be required for 

22 the issuance of such codes, and v*-^ 

23 (ii) provide for the issuance of such a 

24 code upon the presentation of such infor- 

25 mation as would be sufficient to provide 



>S 867 IS 



7 

1 for the issuance of similar codes under the 

2 medicare program. 

3 (5) Authorization of appropriations for 

4 im^STIGATORS AND OTHER PERSONNEL. — In addi- 

5 tion to any other amounts authorized to be appro- 

6 priated to the Secretary for health care anti-fraud 

7 and abuse activities for a fiscal year, there are au- 

8 thorized to be appropriated additional amounts as 

9 may be necessary to enable the Secretary to conduct 

10 investigations and audits of allegations of health 

11 care fraud and abuse and otherwise carry out the 

12 program estabhshed under paragraph (1) in a fiscal 

13 year. 

14 (6) Ensuring access to documentation. — 

15 (A) In general. — The Inspector General 

16 of the Department of Health and Human Serv- 

17 ices is authorized to exercise the authority de- 

18 scribed in paragraphs (4) and (5) of section 6 

19 of the Inspector General Act of 1978 (relating 

20 to subpoenas and administration of oaths) with 

21 respect to the activities under the all-payer 

22 fraud and abuse control program established 

23 under this subsection to the same extent as 

24 such Inspector General may exercise such au- 



>S 867 IS 



8 

1 thorities to perform the functions assigned by 

2 such Act. 

3 (B) Permissive exclusion. — Section 

4 1128(b) of the Social Security Act (42 U.S.C. 

5 1320a-7(b)) is amended by adding at the end 

6 the following new paragraph: 

7 "(15) Failure to supply requested infor- 

8 MATION TO THE INSPECTOR GENERAL. — ^Any indi- 

9 vidual or entity that fails fully and accurately to pro- 

10 vide, upon request of the Inspector General of the 

1 1 Department of Health and Human Services, records, 

12 documents, and other information necessary for the 

13 purposes of carrying out activities under the all- 

14 payer fraud and abuse control program established 

15 under section 101 of the National Health Care Anti- 

16 Fraud and Abuse Act of 1993.". ' ^ 

17 (7) Health care plan defined. — For the 

18 purposes of this subsection, the term ''health care 

19 plan" shall have the meaning given such term in sec- 

20 tion 1128(i) of the Social Security Act. 

21 (b) Establishment of Anti-Fraud and Abuse 

22 Trust Fund. — 

23 (1) Establishment. — 

24 (A) In general. — There is hereby created 

25 on the books of the Treasury of the United 



•S 867 IS 



:.;J r'\fij fif 



#1 

1 States a trust fund to be known as the "Anti- 

2 Fraud and Abuse Trust Fund" (in this section 

3 referred to as the "Trust Fund"). The Trust 

4 Fund shall consist of such gifts and bequests as 

5 may be made as provided in subparagraph (B) 

6 and such amounts as may be deposited in, or 

7 appropriated to, such Trust Fund as provided 

8 in paragraph (3)(C), and title XI of the Social 

9 Security Act. , , 

10 (B) Authorization to accept gifts. — 

11 The Managing Trustee of the Trust Fund is 

12 authorized to accept on behalf of the United 

13 States money gifts and bequests made uncondi- 

14 tionally to the Trust Fund, for the benefit of 

15 the Trust Fund, or any activity financed 

16 through the Trust Fund. 

17 (2) Management. — i 

18 (A) In general. — The Trust Fund shall 

19 be managed by the Secretary through a Manag- 

20 ing Trustee designated by the Secretary. 

21 (B) Investment of funds. — c 

22 (i) In genekvl. — It shall be the duty 

23 of the Managing Trustee to invest such 

24 portion of the Trust Fund as is not, in the 



s. 



867 IS - 2 



10 

1 Managing Trustee's judgment, required to 

2 meet current withdrawals. ' 

3 (ii) General form of invest- 

4 MENT. — Investments described in clause (i) 

5 may be made only in interest-bearing obli- 

6 gations of the United States or in obliga- 

7 tions guaranteed as to both principal and 

8 interest by the United States. For such 

9 purpose such obligations may be acquired 

10 (I) on original issue at the issue price, or 

11 (II) by purchase of outstanding obligations 

12 at market price. 

13 (iii) Issuance of public-debt obli- 

14 GATIONS. — The purposes for which obliga- 

15 tions of the United States may be issued 

16 under chapter 31 of title 31, United States 

17 Code, are hereby extended to authorize the 

18 issuance at par of public-debt obligations 

19 for purchase by the Trust Fund. Such obli- 

20 gations issued for purchase by the Trust 

21 Fund shall have maturities fixed with due 

22 regard for the needs of the Trust Fhind 

23 and shall bear interest at a rate equal to 

24 the average market yield (computed by the 

25 Managing Trustee on the basis of market 



11 

1 quotations as of the end of the calendar 

2 month next preceding the date of such 

3 issue) on all marketable interest-bearing 

4 obligations of the United States then form- 

5 ing a part of the public debt which are not 

6 due or callable until after the expiration of 

7 4 years from the end of such calendar 

8 ' ^- month, except that where such average is 

9 not a multiple of Vs of 1 percent, the rate 

10 of interest on such obligations shall be the 

11 multiple of Vs of 1 percent nearest such 

12 market yield. ' 

13 - (iv) Purchases of other obliga- 

14 TIONS. — The Managing Trustee may pur- 

15 chase other interest-bearing obligations of 

16 the United States or obligations guaran- 

17 teed as to both principal and interest by 

18 the United States, on original issue or at 

19 the market price, only where the Managing 

20 Trustee determines that the purchase of 

21 such other obligations is in the public 

22 interest. 

23 (C) Sale of obligations. — ^Any obliga- 

24 tions acquired by the Trust Fund (except pub- 

25 lie-debt obligations issued exclusively to the 



•S 867 IS 



12 

1 . Trust Fund) may be sold by the Managing 

2 Trustee at the market price, and such pubUc- 

3 debt obligations may be redeemed at par plus 

4 ; accrued interest. j„ 

5 (D) Interest on obligations and pro- 

6 CEEDS FROM SALE OR REDEMPTION OF OBLI- 

7 GATIONS. — The interest on, and the proceeds 

8 , from the sale or redemption of, any obhgations 

9 held in the Trust Fund shall be credited to and 

10 form a part of the Trust Fund. 

11 (E) Receipts and disbursements not 

12 included in united states government 

13 BUDGET TOTALS. — The receipts and disburse- 

14 ments of the Secretary in the discharge of the 

15 functions of the Secretary under the all-payer 

16 fraud and abuse control program established 

17 under subsection (a) shall not be included in 

18 the totals of the budget of the United States 

19 Government. For purposes of part C of the Bal- 

20 anced Budget and Emergency Deficit Control 

21 Act of 1985, the Secretary and the Trust Fund 

22 shall be treated in the same manner as the 

23 Federal Retirement Thrift Investment Board 

24 and the Thrift Savings Fund, respectively. The 



•S 867 IS 



13 

1 United States is not liable for any obligation or 

2 liability incurred by the Trust Fund. 

3 (3) Use of funds. — 

4 (A) In general. — ^Amounts in the Trust 

5 FHind shall be used without regard to fiscal year 

6 limitation to assist the Inspector General of the 

7 Department of Health and Human Services in 

8 carrying out the all-payer fraud and abuse con- 

9 trol program established under subsection (a). 

10 (B) Overall administration. — The 

11 Managing Trustee shall also pay from time to 

12 time from the Trust Fund such amounts as the 

13 Secretary certifies are necessary to carry out 

14 the all-payer fraud and abuse control program 

15 established under subsection (a). 

16 (4) Annual report. — The Managing Trustee 

17 shall be required to submit an annual report to Con- 

18 gress on the amount of revenue which is generated 

19 and disbursed by the Trust Fund in each fiscal year. 

20 Such report shall include an estimate of the amount 

21 of additional appropriations authorized under sub- 

22 section (a)(5) necessary for the Secretary to conduct 

23 the all-payer fraud and abuse program established 

24 under subsection (a) in the next fiscal year. 



•S 867 IS 



14 

1 SEC. 102. APPLICATION OF FEDERAL HEALTH ANTI-FRAUD 

2 AND ABUSE SANCTIONS TO ALL FRAUD AND 

3 ABUSE AGAINST ANY HEALTH CARE PLAN. 

4 (a) Civil Monetary Penalties, — Section 1128A 

5 of the Social Security Act (42 U.S.C. 1320a-7a) is 

6 amended as follows: 

7 (1) In subsection (a)(1), by inserting "or of any 

8 health care plan (as defined in section 1128(i))," 

9 after "subsection (i)(l)),". 

10 (2) In subsection (b)(1)(A), by inserting "or 

11 under a health care plan" after "title XIX". 

12 (3) In subsection (f) — 

13 (A) by redesignating paragraph (3) as 

14 paragraph (4); and 

15 (B) by inserting after paragraph (2) the 

16 following new paragraph: 

17 "(3) With respect to amounts recovered arising 

18 out of a claim under a health care plan, the portion 

19 of such amounts as is determined to have been paid 

20 by the plan shall be repaid to the plan.". , 

21 (4) In subsection (f)(4) (as redesignated by 

22 paragraph (3) (A)), by striking "as miscellaneous re- 

23 ceipts of the Treasury of the United States" and in- 

24 serting "in the Anti-Fraud and Abuse Trust Fund". 

25 (5) In subsection (i) — 



•S 867 IS 



15 

1 (A) in paragraph (2), by inserting ''or 

2 under a health care plan" before the period at 

3 the end, and , 

4 (B) in paragraph (5), by inserting "or 

5 under a health care plan" after "or XX". 

6 (b) Crbies. — . J c 

7 (1) Social security act. — Section 1128B of 

8 such Act (42 U.S.C. 1320a-7b) is amended as 

9 follows: • - r 

10 (A) In the heading, by adding at the end 

11 the following: "OR HEALTH CARE PLANS". 

12 (B) In subsection (a)(1) — 

13 (i) by striking "title XVlll or" and 

14 inserting "title X\T:n,", and 

15 (ii) by adding at the end the follow- 

16 ing: "or a health care plan (as defined in 

17 section 1128(i)),". 

18 (C) In subsection (a)(5), by striking "title 

19 XVIII or a State health care program" and in- 

20 serting "title XVIII, a State health care pro- 

21 gram, or a health care plan". : 

22 (D) In the second sentence of subsection 

23 (a)— 

24 (i) by inserting after "title XEX" the 

25 following: "or a health care plan", and 



•S 867 IS 



16 

1 . (ii) by inserting after "the State" the 

2 following: "or the plan". ' 

3 (E) In subsection (b)(1), by striking "title 

4 XVIII or a State health care program" each 

5 place it appears and inserting "title XVIII, a 

6 State health care program, or a health care 

7 plan". 

8 (F) In subsection (b)(2), by striking "title 

9 XVIII or a State health care program" each 

10 place it appears and inserting "title XVIII, a 

11 State health care program, or a health care 

12 plan". i 

13 (G) In subsection (b)(3), by striking "title 

14 XVIII or a State health care program" each 

15 place it appears in subparagraphs (A) and (C) 

16 and inserting "title XVIII, a State health care 

17 program, or a health care plan". 

18 (H) In subsection (d)(2)— 

19 (i) by striking "title XEK," and insert- - 

20 ing "title XIX or under a health care 

21 plan,", and ' ^o. 

22 (ii) by striking "State plan," and in- 

23 serting "State plan or the health care 

24 ' plan,". 



•S 867 IS 



17 

1 (2) Identification of co:\diunity ser^^ce 

2 opportunities. — Section 1128B of such Act (42 

3 U.S.C. 1320a-7b) is further amended by adding at 

4 the end the foUo\^dng new subsection: 

5 "(f) The Secretary may— 

6 "(1) in consultation with State and local health 

7 care officials, identify opportunities for the satisfac- 

8 tion of community service obligations that a court 

9 may impose upon the conviction of an offense under 

10 this section, and 

11 "(2) make information concerning such oppor- 

12 tunities available to Federal and State law enforce- 

13 ment officers and State and local health care 

14 officials.". "> i';,r^ ' "■^i.A ^ T . - f . ; 

15 (c) Health Care Plan Defined. — Section 1128 of 

16 such Act (42 U.S.C. 1320a-7) is amended by redesignat- 

17 ing subsection (i) as subsection (j) and by inserting after 

18 subsection (h) the follomng new subsection: : f 

19 "(i) Health Care Plan Defined. — For purposes 

20 of sections 1128A and 1128B, the term 'health care plan' 

21 means a public or private program for the delivery of or 

22 payment for health care items or services other than the 

23 medicare program, the medicaid program, or a State 

24 health care program.". 



S. 867 IS - 3 



18 

1 (d) Effective Date. — The amendments made by 

2 this section shall take effect on January 1, 1995. 

3 SEC. 103. REPORTING OF FRAUDULENT ACTIONS UNDER 

4 MEDICARE. ^ 

5 Not later than 1 year after the date of the enactment 

6 of this Act, the Secretary of Health and Human Services 

7 shall establish a pro-am through which individuals enti- 

8 tied to benefits under the medicare program may report 

9 to the Secretary on a confidential basis (at the individual's 

10 request) instances of suspected fraudulent actions arising 

11 under the program by providers of items and services 

12 under the program. ' 

13 TITLE II— REVISIONS TO CUR- 

14 RENT SANCTIONS FOR FRAUD 

15 AND ABUSE 

16 SEC. 201. MANDATORY EXCLUSION FROM PARTICIPATION 

17 IN MEDICARE AND STATE HEALTH CARE PRO- 

18 GRAMS. ^ 

19 (a) Individual Convicted of Felony Relating 

20 TO Fraud. — 

21 (1) In general. — Section 1128(a) of the 

22 Social Security Act (42 U.S.C. 1320a-7(a)) is 

23 amended by adding at the end the following new 

24 paragraph: 



•S 867 IS 



19 

1 ''(3) Felony conviction relating to 

2 FRAUD. — Any individual or entity that has been con- 

3 victed, under Federal or State law, in connection 

4 with the delivery of a health care item or service or 

5 with respect to any act or omission in a program 

6 (other than those specifically described in paragraph 

7 (1)) operated by or financed in whole or in part by 

8 any Federal, State, or local government agency, of 

9 a criminal offense consisting of a felony relating to 

10 fraud, theft, embezzlement, breach of fiduciary re- 

11 sponsibihty, or other financial misconduct.". 

12 (2) Conforming amendment. — Section 

13 1128(b)(1) of such Act (42 U.S.C. 1320a-7(b)(l)) 

14 is amended — 

15 (A) in the heading, by striking "CONVIC- 

16 tion" and inserting "Misdemeanor convic- 

17 tion"; and 

18 (B) by striking "criminal offense" and in- 

19 serting "criminal offense consisting of a mis- 

20 demeanor". 

21 (b) Individual Convicted of Felony Relating 

22 TO Controlled Substance. — 

23 (1) In general. — Section 1128(a) of the So- 

24 cial Security Act (42 U.S.C. 1320a-7(a)), as amend- 



•S 867 IS 



20 

1 ed by subsection (a), is amended by adding at the 

2 end the following new paragraph: ^ r 

3 "(4) Felony conviction relating to con- 

4 TROLLED SUBSTANCE. — ^Any individual or entity 

5 that has been convicted, under Federal or State law, 

6 of a criminal offense consisting of a felony relating 

7 to the unlawful manufacture, distribution, prescrip- 

8 tion, or dispensing of a controlled substance.". 

9 - (2) Conforming amendment. — Section 

10 1128(b)(3) of such Act (42 U.S.C. 1320a-7(b)(3)) 

11 is amended — - ' - 

12 (A) in the heading, by striking "CONVIC- 

13 tion" and inserting ''Misdemeanor convic- 

14 tion"; and 

15 (B) by striking "criminal offense" and in- 

16 serting "criminal offense consisting of a mis- 

17 demeanor". / 

18 SEC. 202. ESTABLISHMENT OF MINIMUM PERIOD OF EX- 

19 CLUSION FOR certain INDIVIDUALS AND 

20 entities subject to permissive exclu- 

21 SION from medicare AND STATE HEALTH 

22 CARE PROGRAMS. v T 

23 Section 1128(c)(3) of the Social Security Act (42 

24 U.S.C. 1320a-7(c)(3)) is amended by adding at the end 

25 the following new subparagraphs: 



•S 867 IS 



21 

1 "(D) In the case of an exclusion of an individual or 

2 entity under paragraph (1), (2), or (3) of subsection (b), 

3 the period of the exclusion shall be 3 years, unless the 

4 Secretary determines in accordance with published regula- 

5 tions that a shorter period is appropriate because of miti- 

6 gating circumstances or that a longer period is appro- 

7 priate because of aggravating circumstances. 

8 "(E) In the case of an exclusion of an individual or 

9 entity under subsection (b)(4) or (b)(5), the period of the 

10 exclusion shall not be less than the period during which 

11 the individual's or entity's license to provide health care 

12 is revoked, suspended, or surrendered, or the individual 

13 or the entity is excluded or suspended from a Federal or 

14 State health care program. ^ • 

15 "(F) In the case of an exclusion of an individual or 

16 entity under subsection (b)(6)(B), the period of the exclu- 

17 sion shall be not less than 1 year.". 

18 SEC. 203. PERMISSIVE EXCLUSION OF INDIVIDUALS WITH 

19 OWNERSHIP OR CONTROL INTEREST IN 

20 SANCTIONED ENTITIES. 

21 Section 1128(b) of the Social Security Act (42 U.S.C. 

22 1320a-7(b)), as amended by section 101(a)(6)(B), is fur- 

23 ther amended by adding at the end the following new para- 

24 graph: 



•S 867 IS 



22 

1 "(16) Individuals controlling a sanc- 

2 TIONED ENTITY. — Any individual who has a direct 

3 or indirect ownership or control interest of 5 percent 

4 or more, or an ownership or control interest (as de- 

5 fined in section 1124(a)(3)) in, or who is an officer, 

6 director, agent, or managing employee (as defined in 

7 section 1126(b)) of, an entity — ' : 

8 "(A) that has been convicted of any of- 

9 fense described in subsection (a) or in para- 

10 graph (1), (2), or (3) of this subsection; 1 

11 "(B) against which a civil monetary pen- 

12 alty has been assessed under section 1128A; or 

13 "(C) that has been excluded from partiei- 

14 pation under a program under title XVIII or 

15 under a State health care program.". i 

16 SEC. 204. CIVIL MONETARY PENALTIES. 

17 (a) Prohibition Against Offering Inducements 

18 TO Individuals Enrolled Under or Employed By 

19 Programs OR Plans. — 

20 (1) Inducements to individuals enrolled 

21 under MEDICARE. — - 

22 (A) Offer of remuneration. — Section 

23 1128A(a) of the Social Security Act (42 U.S.C. 

24 1320a-7a(a)) is amended — • 



•S 867 IS 



2 a 

1 (i) by striking "or" at the end of 

2 paragraph (1)(D); ;^ ^i.^^ ;r 

3 (ii) by striking or" at the end of 

4 paragraph (2) and inserting a semicolon; 

5 (iii) by striking the semicolon at the 

6 end of paragraph (3) and inserting or"; 

7 and ,r 

8 (iv) by inserting after paragraph (3) 

9 the following new paragraph: >: 

10 "(4) offers to or transfers remuneration to any 

11 individual eligible for benefits under title XVIII of 

12 this Act, or under a State health care program (as 

13 defined in section 1128(h)) that such person knows 

14 or should know is likely to influence such individual 

15 to order or receive from a particular provider, practi- 

16 tioner, or supplier any item or service for which pay- 

17 ment may be made, in whole or in part, under title 

18 XVIII, or a State health care program;". 

19 (B) Remuneration defined. — Section 

20 1128A(i) is amended by adding the following 

21 new paragraph: ^ 

22 "(6) The term 'remuneration' includes the waiv- 

23 er of coinsurance and deductible amounts (or any 

24 part thereof), and transfers of items or services for 

25 free or for other than fair market value. The term 



>S 867 IS 



24 

1 'remuneration' does not include the waiver of coin- 

2 surance and deductible amounts by a person, if — 

3 "(A) the waiver is not offered as part of 

4 any advertisement or solicitation; 

5 ''(B) the person does not routinely waive 

6 coinsurance or deductible amounts; and 

7 "(C) the person — 

8 "(i) waives the coinsurance and de- 

9 ductible amounts after determining in good 

10 faith that the individual is indigent; 

11 "(ii) fails to collect coinsurance or de- 

12 ductible amounts after making reasonable 

13 collection efforts; or - ■ 

14 ''(iii) provides for any permissible 

15 waiver as specified in section 1128B(b)(3) 

16 or in regulations issued by the Secretary.". 

17 (2) Inducements to employees. — Section 

18 1128A(a) of such Act (42 U.S.C. 1320a-7a(a)), as 

19 amended by paragraph (1), is further amended — 

20 (A) by striking "or" at the end of para- 

21 graph (3); ^ - 

22 (B) by striking the semicolon at the end of 

23 paragraph (4) and inserting "; or"; and 

24 (C) by inserting after paragraph (4) the 

25 following new paragraph: ' 



•S 867 IS 



25 

1 "(5) pays a bonus, reward, or any other remu- 

2 neration, directly or indirectly, to an employee to in- 

3 duce the employee to encourage individuals to seek 

4 or obtain covered items or services for which pay- 

5 ment may be made under the medicare program, or 

6 a State health care program where the amount of 

7 the remuneration is determined in a manner that 

8 takes into account (directly or indirectly) the value 

9 or volume of any referrals by the employee to the 

10 employer for covered items or services;". 

11 (b) Excluded Individual Retaining Ownership 

12 OR Control Interest in Participating Entity. — 

13 Section 1128A(a) of such Act, as amended by subsection 

14 (a), is further amended — - . 

15 (1) by striking "or" at the end of paragraph 

16 (4); ' : :^ 

17 (2) by striking the semicolon at the end of 

18 paragraph (5) and inserting or"; and 

19 (3) by inserting after paragraph (5) the follow- 

20 ing new paragraph: 

21 "(6) in the case of a person who is not an orga- 

22 nization, agency, or other entity, is excluded from 

23 participating in a program under title XVTII or a 

24 State health care program in accordance with this 

25 subsection or under section 1128 and who, during 



S. 867 IS - 4 



26 

1 the period of exclusion, retains a direct or indirect 

2 ownership or control interest of 5 percent or more, 

3 or an ownership or control interest (as defined in 

4 section 1124(a)(3)) in, or who is an officer, director, 

5 agent, or managing employee (as defined in section 

6 1126(b)) of, an entity that is participating in a pro- 

7 gram under title XVIII or a State health care 

8 program;". ^ ; 

9 (c) Modifications of Amounts of Penalties 

10 AND Assessments. — Section 1128A(a) of such Act (42 

11 U.S.C. 1320a-7a(a)), as amended by subsections (a) and 

12 (b), is amended in the matter following paragraph (6) — 

13 (1) by striking "$2,000" and inserting 

14 "$10,000"; 

15 (2) by inserting "; in cases under paragraph 

16 (4), $10,000 for each such offer or transfer; in cases 

17 under paragraph (5), $10,000 for each such pay- 

18 ment; in cases under paragraph (6), $10,000 for 

19 each day the prohibited relationship occurs; in cases 

20 under paragraph (7), $10,000 per violation" after 

21 "false or misleading information was given"; 

22 (3) by striking "twice the amount" and insert- 

23 ing "3 times the amount"; and 

24 (4) by inserting "(or, in cases under paragraphs 

25 (4), (5), and (7), 3 times the amount of the illegal 



>S 867 IS 



27 

1 renmneration)" after "for each such item or serv- 

2 ice". 

3 (d) Claim for Item or Service Based on Incor- 

4 rect Coding or Medically Unnecessary Serv- 

5 ICES.— Section 1128A(a)(l) of such Act (42 U.S.C. 

6 1320a-7a(a)(l)) is amended — 

7 , (1) in subparagraph (A) by striking "claimed," 

8 and inserting the following: "claimed, including any 

9 person who presents or causes to be presented a 

10 claim for an item or service that is based on a code 

11 that the person knows or should know will result in 

12 a greater payment to the person than the code appli- 

13 cable to the item or service actually provided,"; 

14 (2) in subparagraph (C), by striking "or" at 

15 the end; 

16 (3) in subparagraph (D), by striking "; or" and 

17 inserting ", or"; and 

18 (4) by inserting after subparagraph (D) the 

19 following new subparagraph: : 

20 "(E) is for a medical or other item or serv- 

21 ice that a person knows or should know is not 

22 medically necessary; or". ; , 

23 (e) Permitting Parties To Bring Actions on 

24 Own Behalf.— Section 1128A of such Act (42 U.S.C. 



•S 867 IS 



28 

1 1320a-7a) is amended by adding at the end the following 

2 new subsection: 

3 "(m)(l) Subject to paragraphs (2) and (3), any per- 

4 son (including an organization, agency, or other entity, 

5 but excluding a beneficiary, as defined in subsection 

6 (i)(5)) that suffers harm or monetary loss as a result of 

7 any activity of an individual or entity which makes the 

8 individual or entity subject to a civil monetary penalty 

9 under this section may, in a civil action against the indi- 

10 vidual or entity in the United States District Court, obtain 

1 1 treble damages and costs including attorneys' fees against 

12 the individual or entity and such equitable relief as is 

13 appropriate. ' "* ^ 



14 "(2) A person may bring a civil action under this sub- 

15 section only if — 

16 "(A) the person provides the Secretary with 

17 written notice of — 

18 "(i) the person's intent to bring an action 

19 under this subsection, 

20 "(ii) the identities of the individuals or en- 

21 titles the person intends to name as defendants 

22 to the action, and 

23 "(iii) all information the person possesses 

24 regarding the activity that is the subject of the 

25 action that may materially affect the Sec- 



>S 867 IS 



29 

1 retails decision to initiate a proceeding to im- 

2 pose a civil monetary penalty under this section 

3 against the defendants, and 

4 "(B) one of the following conditions is met: ' 

5 "(i) During the 60-day period that begins 

6 on the date the Secretary receives the written 

7 notice described in subparagraph (A), the Sec- 

8 retary does not notify the person that the Sec- 

9 retary intends to initiate an investigation to de- 

10 termine whether to impose a civil monetary 

11 penalty under this section against the defend- 

12 ants. 

13 ^ "(ii) The Secretary notifies the person dur- 

14 ing the 60-day period described in clause (i) 

15 that the Secretary intends to initiate an inves- 

16 tigation to determine whether to impose a civil 

17 monetary penalty under this section against the 

18 defendants, and the Secretary subsequently no- 

19 tifies the person that the Secretary no longer 

20 intends to initiate an investigation or proceed- 

21 ing to impose a civil monetary penalty against 

22 the defendants. 

23 "(iii) After the expiration of the 2-year pe- 

24 riod that begins on the date written notice is 

25 provided to the Secretary, the Secretary has not 



•S 867 IS 



30 

1 initiated a proceeding to impose a civil mone- 

2 taiy penalty against the defendants. 

3 "(3) If a person is awarded any amounts in an action 

4 brought under this subsection that are in excess of the 

5 damages suffered by the person as a result of the defend- 

6 ant's activities, 20 percent of such amounts shall be with- 

7 held from the person for payment into the Anti-Fraud and 

8 Abuse Trust Fund established under section 101(b) of the 

9 National Health Care Anti-Fraud and Abuse Act of 1993. 

10 "(4) No action may be brought under this subsection 

1 1 more than 6 years after the date of the activity with re- 

12 spect to which the action is brought." r 

13 SEC. 205. ACTIONS SUBJECT TO CRIMINAL PENALTIES. 

14 (a) Permitting Secretary To Impose Civil Mon- 

15 ETARY Penalty. — Section 1128A(b) of the Social Secu- 

16 rity Act (42 U.S.C. 1320a-7a(a)) is amended by adding 

17 the following new paragraph: 

18 "(3) Any person (including any organization, 

19 agency, or other entity, but excluding a beneficiary 

20 as defined in subsection (i)(5)) who violates section 

21 1 128(B) (b) of this title shall be subject to a civil 

22 monetary penalty of not more than $10,000 for each 

23 such violation. In addition, such person shall be sub- 

24 ject to an assessment of not more than twice the 

25 total amount of the remuneration offered, paid, so- 



•S 867 IS 



fit'-- 



31 

1 licited, or received in violation of section 1128B(b). 

2 The total amount of remuneration subject to an as- 

3 sessment shall be calculated without regard to 

4 whether some portion thereof also may have been in- 

5 tended to serve a purpose other than one proscribed 

6 by section 1128B(b).". t 
1 (b) Restriction on Application of Exception 

8 FOR Amounts Paid to Employees. — Section 

9 1128B(b)(3)(B) of such Act (42 U.S.C. 1320a- 

10 7b(b)(3)(B)) is amended by striking "services;" and in- 

11 serting the following: "services, but only if the amount of 

12 remuneration under the arrangement is (i) consistent with 

13 fair market value; (ii) not determined in a manner that 

14 takes into account (directly or indirectly) the volume or 

15 value of any referrals by the employee to the employer for 

16 the furnishing (or arranging for the furnishing) of such 

17 items or services; and (iii) provided pursuant to an ar- 

18 rangement that would be commercially reasonable even if 

19 no referrals were made ;" . 

20 SEC. 206. SANCTIONS AGAINST PRACTITIONERS AND PER- 

21 SONS FOR FAILURE TO COMPLY WITH STATU- 

22 TORY obligations. 

23 (a) Minimum Period of Exclusion for Practi- 

24 tioners and Persons Failing To Meet Statutory 

25 Obligations. — 



>S 867 IS 



32 

1 (1) In general. — The second sentence of sec- 

2 tion 1156(b)(1) of the Social Security Act (42 

3 U.S.C. 1320c-5(b)(l)) is amended by striking "may 

4 prescribe)" and inserting "may prescribe, except 

5 that such period may not be less than 1 year)". 

6 (2) Conforming amendment. — Section 

7 1156(b)(2) of such Act (42 U.S.C. 1320c-5(b)(2)) is 

8 amended by striking "shall remain" and inserting 

9 "shall (subject to the minimum period specified in 

10 the second sentence of paragraph (1)) remain". 

11 (b) Repeal of "Unwilling or Unable" Condi- 

12 TION FOR Imposition of Sanction. — Section 1156(b)(1) 

13 of such Act (42 U.S.C. 1320c-5(b)(l)) is amended— 

14 - (1) in the second sentence, by striking "and de- 

15 termines" and all that follows through "such obliga- 

16 tions,"; and ^ ^ 3 

17 (2) by striking the third sentence. i^fu ? 11 

18 (c) Amount of Civil Money Penalty. — Section 



19 1156(b)(3) of such Act (42 U.S.C. 1320c-5(b)(3)) is 

20 amended by striking "the actual or estimated cost" and 

21 inserting the following: "up to $10,000 for each instance". 

22 sec. 207. intermediate sanctions for medicare 

23 health maintenance organizations. 

24 (a) Application of Intermediate Sanctions for 

25 Any Program Violations. — - : ; i j i 



>S 867 IS 



33 

1 (1) In general.— Section 1876(i)(l) of the 

2 Social Security Act (42 U.S.C. 1395mm(i)(l)) is 

3 amended by striking "the Secretary may terminate" 

4 and all that follows and inserting the following: "in 

5 accordance with procedures established under para- 

6 graph (9), the Secretary may at any time terminate 

7 any such contract or may impose the intermediate 

8 sanctions described in paragraph (6)(B) or (6)(C) 

9 (whichever is applicable) on the eligible organization 

10 if the Secretary determines that the organization — 

11 "(A) has failed substantially to carry out 

12 the contract; 

13 - "(B) is carrying out the contract in a man- 

14 ner inconsistent with the efficient and effective 

15 administration of this section; ' 

16 "(C) is operating in a manner that is not 

17 in the best interests of the individuals covered 

18 under the contract; or V ; 

19 "(D) no longer substantially meets the ap- 

20 plicable conditions of subsections (b), (c), (e), 

21 and (f).". 

22 (2) Other intermediate sanctions for 

23 MISCELLANEOUS PROGRAM VIOLATIONS. — Section 

24 1876(i)(6) of such Act (42 U.S.C. 1395mm(i)(6)) is 



>S 867 IS 



34 

1 amended by adding at the end the following new 

2 subparagraph: 

3 "(C) In the case of an eligible organization for which 

4 the Secretary makes a determination under paragraph (1) 

5 the basis of which is not described in subparagraph (A), 

6 the Secretary may apply the following intermediate sanc- 

7 tions: 

8 "(i) civil money penalties of not more than 

9 $25,000 for each determination under paragraph (1) 

10 if the deficiency that is the basis of the determina- 

11 tion has directly adversely affected (or has the sub- 

12 stantial likelihood of adversely affecting) an individ- 

13 ual covered under the organization's contract; 

14 "(ii) civil money penalties of not more than 

15 $10,000 for each week beginning after the initiation 

16 of procedures by the Secretary under paragraph (9) 

17 during which the deficiency that is the basis of a de- 

18 termination under paragraph (1) exists; and 

19 "(iii) suspension of enrollment of individuals 

20 under this section after the date the Secretary noti- 

21 fies the organization of a determination under para- 

22 graph (1) and until the Secretary is satisfied that 

23 the deficiency that is the basis for the determination 

24 has been corrected and is not likely to recur.". 



•S 867 IS 



35 

1 (3) Procedures for eviposing sanctions. — 

2 Section 1876(i) of such Act (42 U.S.C. 1395mm(i)) 

3 is amended by adding at the end the following new 

4 paragraph: 

5 "(9) The Secretary may terminate a contract wdth an 



6 eUgible organization under this section or may impose the 

7 intermediate sanctions described in paragraph (6) on the 

8 organization in accordance with formal investigation and 

9 compliance procedures established by the Secretary under 
10 which— 



11 "(A) the Secretary provides the organization 

12 with the opportunity to develop and implement a 

13 corrective action plan to correct the deficiencies that 

14 were the basis of the Secretary's determination 

15 under paragraph (1); ^> 

16 "(B) in deciding whether to impose sanctions, 

17 the Secretary considers aggravating factors such as 

1 8 whether an entity has a history of deficiencies or has 

19 not taken action to correct deficiencies the Secretary 

20 has brought to their attention; 

21 "(C) there are no unreasonable or unnecessary 

22 delays between the finding of a deficiency and the 

23 imposition of sanctions; and 

24 "(D) the Secretary provides the organization 

25 with reasonable notice and opportunity for hearing 



•S 867 IS 



36 

1 (including the right to appeal an initial decision) be- 

2 fore imposing any sanction or terminating the con- 
,3 tract.". -...^ ^- ^ rl 

4 (4) Conforming AMENDMENTS. — y 4% 

5 (A) In general.— Section 1876(i)(6)(B) 

6 of such Act (42 U.S.C. 1395mm(i)(6)(B)) is 

7 amended by striking the second sentence. 

8 (B) Procedural provisions. — Section 

9 1876(i)(6) of such Act (42 U.S.C. 

10 1395mm(i)(6)) is further amended by adding at 

1 1 the end the following new subparagraph: 

12 ''(D) The provisions of section 1128A (other than 



13 subsections (a) and (b)) shall apply to a civil money pen- 

14 alty under subparagraph (A) or (B) in the same manner 

15 as they apply to a civil money penalty or proceeding under 

16 section 1128A(a).". 



17 (b) Agreements With Peer Review Organiza- 

18 tions. — >u 

19 (1) Requirement for written agree- 

20 ment.— Section 1876(i)(7)(A) of the Social Security 

21 Act (42 U.S.C. 1395mm(i)(7)(A)) is amended by 

22 striking "an agreement" and inserting "a written 

23 agreement". ^"Z 

24 (2) Development of model agreement. — 

25 Not later than July 1, 1994, the Secretary of Health 



•S 867 IS 



37 

1 and Human Services shall develop a model of the 

2 agreement that an eligible organization with a risk- 

3 sharing contract under section 1876 of the Social 

4 Security Act must enter into with an entity provid- 

5 ing peer review services with respect to services pro- 

6 vided by the organization under section 

7 1876(i)(7)(A) of such Act. ^ ' 

8 (3) Report by gao. — 

9 (A) Study. — The Comptroller General 

10 shall conduct a study of the costs incurred by 

11 eligible organizations with risk-sharing con- 

12 tracts under section 1876(b) of such Act of 

13 complying with the requirement of entering into 

14 a written agreement with an entity providing 

15 peer review services with respect to services pro- 

16 vided by the organization, together with an 

17 analysis of how information generated by such 

18 entities is used by the Secretary of Health and 

19 Human Services to assess the quality of 

20 services provided by such eligible organizations. 

21 - (B) Report to congress. — Not later 

22 than July 1, 1996, the Comptroller General 

23 shall submit a report to the Committee on 

24 Ways and Means and the Committee on Energy 

25 and Commerce of the House of Representatives 



•S 867 IS 



38 

1 and the Committee on Finance and the Special 

2 Committee on Aging of the Senate on the study 

3 conducted under subparagraph (A). 

4 (c) Effective Date. — The amendments made by 

5 this section shall apply with respect to contract years be- 

6 ginning on or after January 1, 1995. vfi ; v 

7 SEC. 208. EFFECTIVE DATE. Hi T 

8 The amendments made by this title shall take effect 

9 January 1, 1995. 

10 TITLE III— ADMINISTRATIVE 

11 AND MISCELLANEOUS PROVI- 

12 SIGNS I 

13 SEC. 301. REQUIREMENTS FOR UNIFORM CLAIMS AND 



14 ELECTRONIC CLAIMS DATA SET. 

15 (a) Requirements. — ■ i 

16 (1) Submission of claims. — Each health serv- 

17 ice provider that furnishes services in the United 

18 States for which payment may be made under a 

19 health benefit plan shall submit any claim for pay- 

20 ment for such services only in a form and manner 

21 consistent with standards established under sub- 

22 section (b). . / 

23 (2) Acceptance of claims.— A health benefit 

24 plan may not reject a claim for payment under the 

25 plan on the basis of the form or manner in which 



•S 867 IS 



39 

1 the claim is submitted if the claim is submitted in 

2 accordance with the standards estabhshed under 

3 subsection (b). 

4 (3) Effective date. — This subsection shall 

5 apply to claims for services furnished on or after the 

6 date that is 6 months after the date standards are 

7 established under subsection (b). 

8 (b) Standakds Relating to Uniform Clabis. — 

9 (1) ESTABLISmiENT OF STANDARDS. — The 

10 Secretary shall establish standards that relate to the 

11 form and manner of submission of claims for bene- 

12 fits under a health benefit plan. \ 

13 (2) Scope of inforisiation. — 

14 , r . (A) In general. — The standards under 

15 this subsection are intended to cover substan- 

16 , tially most claims that are filed under health 

17 benefit plans. Such information need not in- 

18 elude all elements that may potentially be re- 

19 quired to be reported under utilization review 

20 provisions of plans. 

21 (B) Ensuring accountability for 

22 clabis submitted electronically. — In es- 

23 tablishing such standards, the Secretary, in 

24 consultation with appropriate agencies, includ- 

25 ing the Department of Justice, shall include 



•S 867 IS 



40 

1 such methods of ensuring provider responsibil- 

2 . ^ ity and accountabihty for claims submitted elec- 

3 tronically that are designed to control fraud 

4 and abuse in the submission of such claims. 

5 (C) Components. — In estabhshing such 

6 standards the Secretary shall — ^ 

7 (i) with respect to data elements, de- 

8 fine data fields, formats, and medical no- 

9 menelature, and plan benefit and insurance 

10 information; and 

11 (ii) develop a single, uniform coding 

12 system for diagnostic and procedure codes. 

13 (3) Use of task forces. — In adopting stand- 

14 ards under this subsection, the Secretary shall take 

15 into account the recommendations of current task 

16 forces, including at least the Workgroup on Elec- 

17 tronic Data Interchange, National Uniform Billing 

18 Committee, the Uniform Claim Task Force, and the 

19 Computer-based Patient Record Institute. 

20 (4) Uniform, unique provider identifica- 

21 . TION CODES. — In establishing standards under this 

22 subsection — « ^ 

23 \ (A) the Secretary shall provide for a 

24 unique identifier code for each health service 

25 provider that furnishes services for which a 



>S 867 IS 



1 claim may be submitted under a health benefit 

2 plan, and ^ „ . 

3 (B) in the case of a provider that has a 

4 , (;\ unique identifier issued for purposes of the 

5 medicare program, the code provided under 

6 subparagraph (A) shall be the same as such 

7 ^ ; . unique identifier. , ; 

8 (5) Deadline. — The Secretary shall first pro- 

9 vide for the standards for the uniform claims under 

10 this subsection by not later than 1 year after the 

11 date of the enactment of this Act. . 

12 (c) Use Under Medicare and Medicaid Pro- 

13 GRAMS. — 

14 (1) Requirement for providers. — In the 

15 case of a health service provider that submits a 

16 claim for services furnished under the medicare pro- 

17 gram or medicaid program in violation of subsection 

18 (a)(1), no payment shall be made under such pro- 

19 gram for such services. 

20 (2) Requirements of intermediaries and 

21 CARRIERS under MEDICARE PROGRAM. — The Sec- 

22 retary shall provide, in regulations promulgated to 

23 carry out title XVIII of the Social Security Act, that 

24 the claims process provided under that title is modi- 



•S 867 IS 



42 

1 fied to the extent required to conform to the stand- 

2 ards estabUshed under subsection (b). 

3 (3) Requirements of state medicaid 

4 PLANS. — As a condition for the approval of State 

5 plans under the medicaid program, effective as of 

6 the effective date specified in subsection (a)(3), each 

7 such plan shall provide, in accordance with regula- 

8 tions of the Secretary, that the claims process pro- 

9 vided under the plan is modified to the extent re- 

10 quired to conform to the standards established under 

11 subsection (b). - ' 

12 (d) Definitions. — 

13 (1) Health benefit plan. — In this section: 

14 (A) In general. — The term ''health bene- 

15 fit plan" means, except as provided in subpara- 

16 graphs (B) through (D), any public or private 

17 entity or program that provides for payments 

18 for health care services, including — 

19 (i) a group health plan (as defined in 

20 section 5000(b)(1) of the Internal Revenue 

21 Code of 1986), ' • ' 

22 (ii) any other health insurance ar- 

23 rangement, including any arrangement 

24 consisting of a hospital or medical expense 

25 incurred policy or certificate, hospital or 



>S 867 IS 



43 

1 medical service plan contract, or health 

2 maintenance organization subscriber con- 

3 tract, and 

4 (iii) the medicare program and State 

5 ' ' health care programs (as defined in section 

6 1128(h) of the Social Security Act). 

7 (B) Plans excluded. — Such term does 

8 not include — ■ ■ 

9 (i) accident-only, credit, or disability 

10 " income insurance; - 

11 ' (ii) coverage issued as a supplement 

12 - to liability insurance; > . 

13 (iii) an individual making payment on 

14 .^r y : the individual's own behalf (or on behalf of 

15 a relative or other individual) for 

16 deductibles, coinsurance, or services not 

17 covered under a health benefit plan; and 

18 (iv) such other plans as the Secretary 

19 may determine, because of the limitation of 

20 benefits to a single type or kind of health 

21 care, such as dental services, or other rea- 

22 sons should not be subject to the require- 

23 ments of this section. 

24 (C) Plans included. — Such term 

25 includes — 



•S 867 IS 



44 

1 (i) worker's compensation or similar 

2 insurance, and - ,r. 

3 (ii) automobile medical-payment in- 

4 surance. ,ti 

5 (D) Treatment of direct federal 

6 . PROVISION OF services. — Such term does not 

7 include a Federal program that provides di- 

8 rectly for the provision of health services to 

9 . beneficiaries. - 

10 (2) Health service provider. — In this sec- 

11 tion, the term "health service provider" includes a 

12 provider of services (as defined in section 1861(u) of 

13 . the Social Security Act), physician, supplier, and 

14 other person furnishing health care services. 

15 (3) Secretary. — In this section, the term 

16 "Secretary" means the Secretary of Health and 

17 Human Services. - : ■ , , i^j. 

18 SEC. 302. ESTABLISHMENT OF THE HEALTH CARE FRAUD 

19 AND ABUSE DATA COLLECTION PROGRAM. 

20 (a) Findings. — The Congress finds the following: 

21 (1) Fraud and abuse with respect to the deliv- 

22 ery of and payment for health care services is a sig- 

23 nificant contributor to the growing costs of the 

24 Nation's health care. ' m 



>S 867 IS 



45 

1 (2) Control of fraud and abuse in health care 

2 services warrants greater efforts of coordination 

3 than those that can be undertaken by individual 

4 States or the various Federal, State, and local law 

5 enforcement programs. 

6 (3) There is a national need to coordinate infor- 

7 mation about health care providers and entities that 

8 have engaged in fraud and abuse in the delivery of 

9 and payment for health care services. ' 

10 (4) There is no comprehensive national data 

11 collection program for the reporting of public infor- 

12 mation about final adverse actions against health 

13 care providers, suppliers, or licensed health care 

14 practitioners that have engaged in fraud and abuse 

15 in the deliver of and payment for health care 

16 services. 

17 (5) A comprehensive national data collection 

18 program for the reporting of public information 

19 about final adverse actions will facilitate the enforce- 

20 ment of the provisions of the Social Security Act and 

21 other statutes applicable to health care fraud and 

22 abuse. 

23 (b) General Purpose. — Not later than January 1, 



24 1995, the Secretary shall establish a national health care 

25 fraud and abuse data collection program for the reporting 



•S 867 IS 



46 

1 of final adverse actions against health care providers, sup- 

2 pliers, or practitioners as required by subsection (c), with 

3 access as set forth in subsection (d). ; ^^va 



4 (c) Reporting OF Information. — - ov ;P 

5 (1) In general. — Each government agency 

6 and health care plan shall report any final adverse 

7 action taken against a health care provider, supplier, 

8 or practitioner. " ^J, 

9 (2) Information to be reported. — The in- 
10 formation to be reported under paragraph (1) 
11.. , includes: J U 

12 (A) The name of any health care provider, 

13 supplier, or practitioner who is the subject of a 

14 final adverse action. 

15 (B) The name (if known) of any health 

16 care entity with which a health care provider, 

17 supplier, or practitioner is affiliated or associ- 

18 ated! - ; . 

19 (C) The nature of the final adverse action. 

20 (D) A description of the acts or omissions 

21 and injuries upon which the final adverse action 

22 was based, and such other information as the 

23 Secretary determines by regulation is required 

24 for appropriate interpretation of information re- 

25 ported under this section. ' : * 



•S 867 IS 



1 (3) Confidentiality. — In determining what 

2 information is required, the Secretary shall include 

3 procedures to assure that the privacy of individuals 

4 receiving health care services is appropriately pro- 

5 tected. >a 

6 (4) TimNG AND FORM OF REPORTING. — The 

7 information required to be reported under this sub- 

8 section shall be reported regularly (but not less often 

9 than monthly) and in such form and manner as the 

10 Secretary prescribes. Such information shall first be 

11 required to be reported on a date specified by the 

12 Secretary. 

13 (5) To WHOM REPORTED. — The information re- 

14 quired to be reported under this subsection shall be 

15 reported to the Secretary or, in the Secretary's dis- 

16 cretion, to an appropriate private or public agency 

17 which has made suitable arrangements with the Sec- 

18 retary with respect to receipt, storage, protection of 

19 confidentiality of patients, and dissemination of the 

20 information described in paragraph (2). 

21 (d) Disclosure and Correction of Informa- 

22 TION. — 

23 (1) Disclosure. — ^With respect to the informa- 

24 tion about final adverse actions reported to the Sec- 

25 retary under this section respecting a health care 



>8 867 IS 



48 

1 provider, supplier, or practitioner, the Secretary 

2 shall, by reflation, provide for — 

3 (A) disclosure of the information, upon re- 

4 quest, to the health care provider, supplier, or 

5 licensed practitioner, and i € 

6 (B) procedures in the case of disputed ac- 

7 curacy of the information. 

8 (2) Corrections. — Each Government agency 

9 and health care plan shall report corrections of in- 

10 formation already reported about any final adverse 

11 action taken against a health care provider, suppher, 

12 or practitioner, in such form and manner that the 

13 Secretary prescribes by regulation. £ ' 

14 (e) Access to Reported Information. — 

15 (1) Availability. — The information in this 

16 database shall be available to the public. Federal 

17 and State government agencies, and health care 

18 plans pursuant to procedures that the Secretary 

19 shall provide by regulation. v / 

20 (2) Fees for disclosure. — The Secretary 

21 may establish or approve reasonable fees for the dis- 

22 closure of information in this database. The amount 

23 of such a fee may not exceed the costs of processing 

24 the requests for disclosure and of providing such in- 

25 formation. Such fees shall be available to the Sec- 



•S 867 IS 



49 

1 retar}^ or, in the Secretary's discretion to the agency 

2 designated under this section to cover such costs. 

3 (f) Protection From Liability for Report- 



4 ING. — No person or entity, including the agency des- 

5 ignated by the Secretary in subsection (c)(5) shall be held 

6 hable in any civil action with respect to any report made 

7 as required by this section, without knowledge of the fal- 

8 sity of the information contained in the report. 



9 (g) Definitions and Special Rules. — For pur- 

10 poses of this section: 

11 (1) The term "Secretary" means the Secretary 

12 of the Department of Health and Human Services. 

13 (2) The term "final adverse action" includes: 

14 (A) Civil judgments in Federal or State 

15 court related to the delivery of a health care 

16 item or service. 

17 (B) Federal or State criminal convictions 

18 related to the delivery of a health care item or 

19 service. 

20 (C) Actions by State or Federal agencies 

21 responsible for the licensing and certification of 

22 health care providers, suppliers, and licensed 

23 health care practitioners, including — 

24 (i) formal or official actions, such as 

25 revocation or suspension of a license (and 



>S 867 IS 



50 

1 the length of any such suspension), rep- 

2 rimand, censure or probation, 

3 ■ (ii) any other loss of license of the 

4 provider, supplier, or practitioner, whether 

5 by operation of law, voluntary surrender or 

6 otherwise, or v^^ir 

7 (iii) any other negative action or find- 

8 ing by such State or Federal agency that 

9 is publicly available information. 

10 (D) Exclusion from participation in Fed- 

1 1 eral or State health care programs. 

12 (E) Any other actions that the Secretary 

13 shall establish by regulation. 

14 (3) The terms ''licensed health care practi- 

15 tioner", "licensed practitioner", and "practitioner" 

16 mean, with respect to a State, an individual who is 

17 licensed or otherwise authorized by the State to pro- 

18 vide health care services (or any individual who, 

19 without authority holds himself or herself out to be 

20 so licensed or authorized). - 0^ 

21 (4) The term "health care provider" means a 

22 provider of services as defined in section 1861(u) of 

23 the Social Security Act, and any entity, including a 

24 health maintenance organization, group medical 



•S 867 IS 



51 

1 practice, or any other entity listed by the Secretary 

2 in regulation, that provides health care services. 

3 (5) The term ''supplier" means a supplier of 

4 health care items and services described in sections 

5 1819 (a) and (b), and section 1861 of the Social 

6 Security Act. 

7 (6) The term "Government agency" shall in- 

8 elude: 

9 (A) The Department of Justice. 

10 (B) The Department of Health and 

11 Human Services. 

12 (C) Any other Federal agency that either 

13 administers or provides payment for the deliv- 

14 ery of health care services, including, but not 

15 limited to the Department of Defense and the 

16 Veterans' Administration. 

17 (D) State law enforcement agencies. 

18 (E) State medicaid fraud and abuse units. 

19 (F) State or Federal agencies responsible 

20 for the licensing and certification of health care 

21 providers and licensed health care practitioners. 

22 (7) The term "health care plan" has the mean- 

23 ing given to such term by section 1128(i) of the 

24 Social Security Act. 



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1 V (8) For purposes of paragraph (2), the exist- 

2 ence of a conviction shall be determined under para- 

3 graph (4) of section 1128(j) of the Social Security 

4 - Act.:. ■:: : ■ 

5 (h) Conforming Ajviendment. — Section 1921(d) of 

6 the Social Security Act is amended by inserting "and sec- 

7 tion 301 of the National Health Care Anti-Fraud and 

8 Abuse Act of 1993" after "section 422 of the Health Care 

9 Quahty Improvement Act of 1986". ; 

10 SEC. 303. QUARTERLY PUBLICATION OF ADVERSE ACTIONS 

11 TAKEN. ? 

12 (a) In General. — Part A of title XI of the Social 

13 Security Act (42 U.S.C. 1301 et seq.) is amended by 

14 adding at the end the following new section: 

15 "QUARTERLY PUBLICATION OF ADVERSE ACTIONS TAKEN 

16 "Sec 1144. Not later than 30 days after the end 

17 of each calendar quarter, the Secretary shall publish in 

18 the Federal Register a listing of all final adverse actions 

19 taken during the quarter under this part (including pen- 

20 alties imposed under section 1107, exclusions under sec- 

21 tion 1128, the imposition of civil monetary penalties under 

22 section 1128A, and the imposition of criminal penalties 

23 under section 1128B) and under section 1156.". 

24 (b) Effective Date. — The amendment made by 

25 subsection (a) shall apply to calendar quarters beginning 

26 on or after January 1, 1995. 

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