[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5258 Introduced in House (IH)]

103d CONGRESS
  2d Session
                                H. R. 5258

  To improve Federal enforcement against health care fraud and abuse.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 7, 1994

 Mr. Conyers introduced the following bill; which was referred to the 
                   Committee on Government Operations

_______________________________________________________________________

                                 A BILL


 
  To improve Federal enforcement against health care fraud and abuse.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Health Fraud and Abuse Act of 
1994''.

SEC. 2. HEALTH CARE FRAUD AND ABUSE.

    (a) Federal Enforcement by Inspectors General.--
            (1) Audits, investigations, inspections, and evaluations.--
                    (A) In general.--Except as provided in subparagraph 
                (B), the Inspector General of each of the Department of 
                Health and Human Services, the Department of Defense, 
                the Department of Labor, the Office of Personnel 
                Management, and the Department of Veterans Affairs 
                shall conduct audits, civil and criminal 
                investigations, inspections, and evaluations relating 
                to the prevention, detection, and control of health 
                care fraud and abuse in violation of any Federal law.
                    (B) Limitation.--An Inspector General, other than 
                the Inspector General of the Department of Health and 
                Human Services, may not conduct any audit, 
                investigation, inspection, or evaluation under 
                subparagraph (A) with respect to health care fraud or 
                abuse under title V, XI, XVIII, XIX, or XX of the 
                Social Security Act.
            (2) Powers.--For purposes of carrying out duties and 
        responsibilities under paragraph (1), each Inspector General 
        referred to in paragraph (1) may exercise powers that are 
        available to the Inspector General for purposes of audits, 
        investigations, and other activities under the Inspector 
        General Act of 1978 (5 U.S.C. App.).
            (3) Coordination and review of activities of other federal, 
        state, and local agencies.--
                    (A) Program.--The Inspector General shall--
                            (i) jointly establish, on the effective 
                        date specified in subsection (j)(1), a program 
                        to prevent, detect, and control health care 
                        fraud and abuse in violation of any Federal 
                        law, which considers the activities of Federal, 
                        State, and local law enforcement agencies, 
                        Federal and State agencies responsible for the 
                        licensing and certification of health care 
                        providers, and State agencies designated under 
                        subsection (b)(1)(A); and
                            (ii) publish a description of the program 
                        in the Federal Register, by not later than June 
                        30, 1995.
                    (B) Annual investigative plan.--Each Inspector 
                General referred to in paragraph (1) shall develop an 
                annual investigative plan for the prevention, 
                detection, and control of health care fraud and abuse 
                in accordance with the program established under 
                subparagraph (A).
            (4) Consultations.--Each of the Inspectors General referred 
        to in paragraph (1) shall regularly consult with each other, 
        with Federal, State, and local law enforcement agencies, with 
        Federal and State agencies responsible for the licensing and 
        certification of health care providers, and with Health Care 
        Fraud and Abuse Control Units, in order to assist in 
        coordinating the prevention, detection, and control of health 
        care fraud and abuse in violation of any Federal law.
    (b) State Enforcement.--
            (1) Designation of state agencies and establishment of 
        health care fraud and abuse control unit.--The Governor of each 
        State--
                    (A) shall, consistent with State law, designate 
                agencies of the State which conduct, supervise, and 
                coordinate audits, civil and criminal investigations, 
                inspections, and evaluations relating to the 
                prevention, detection, and control of health care fraud 
                and abuse in violation of any Federal law in the State; 
                and
                    (B) may establish and maintain in accordance with 
                paragraph (2) a State agency to act as a Health Care 
                Fraud and Abuse Control Unit for purposes of this 
                section.
            (2) Health care fraud and abuse control unit 
        requirements.--A Health Care Fraud and Abuse Control Unit 
        established by a State under paragraph (1)(B) shall be a single 
        identifiable entity of State government which is separate and 
        distinct from any State agency with principal responsibility 
        for the administration of health care programs, and which meets 
        the following requirements:
                    (A) The entity--
                            (i) is a unit of the office of the State 
                        Attorney General or of another department of 
                        State government that possesses statewide 
                        authority to prosecute individuals for criminal 
                        violations;
                            (ii) is in a State the constitution of 
                        which does not provide for the criminal 
                        prosecution of individuals by a statewide 
                        authority, and has formal procedures, approved 
                        by the Secretary, that assure it will refer 
                        suspected criminal violations relating to 
                        health care fraud or abuse in violation of any 
                        Federal law to the appropriate authority or 
                        authorities of the State for prosecution and 
                        assure it will assist such authority or 
                        authorities in such prosecutions; or
                            (iii) has a formal working relationship 
                        with the office of the State Attorney General 
                        or the appropriate authority or authorities for 
                        prosecution and has formal procedures 
                        (including procedures under which it will refer 
                        suspected criminal violations to such office), 
                        that provide effective coordination of 
                        activities between the Health Care Fraud and 
                        Abuse Control Unit and such office with respect 
                        to the detection, investigation, and 
                        prosecution of suspected health care fraud or 
                        abuse in violation of any Federal law.
                    (B) The entity conducts a statewide program for the 
                investigation and prosecution of violations of all 
                applicable State laws regarding any and all aspects of 
                health care fraud and abuse in violation of any Federal 
                law.
                    (C) The entity has procedures for--
                            (i) reviewing complaints of the abuse or 
                        neglect of patients of health care facilities 
                        in the State, and
                            (ii) where appropriate, investigating and 
                        prosecuting such complaints under the criminal 
                        laws of the State or for referring the 
                        complaints to other State or Federal agencies 
                        for action.
                    (D) The entity provides for the collection, or 
                referral for collection to the appropriate agency, of 
                overpayments that--
                            (i) are made under any federally funded or 
                        mandated health care program required by this 
                        Act, and
                            (ii) it discovers in carrying out its 
                        activities.
                    (E) The entity employs attorneys, auditors, 
                investigators, and other necessary personnel, is 
                organized in such a manner, and provides sufficient 
                resources, as is necessary to promote the effective and 
                efficient conduct of its activities.
            (3) Submission of annual plan.--Each Health Care Fraud and 
        Abuse Control Unit may submit each year to the Inspector 
        General a plan for preventing, detecting, and controlling, 
        consistent with the program established under subsection 
        (a)(3)(A), health care fraud and abuse in violation of any 
        Federal law.
            (4) Approval of annual plan.--The Inspector General shall 
        approve a plan submitted under paragraph (3) by the Health Care 
        Fraud and Abuse Control Unit of a State, unless the Inspector 
        General establishes that the plan--
                    (A) is inconsistent with the program established 
                under subsection (a)(3)(A); or
                    (B) will not enable the agencies of the State 
                designated under paragraph (1)(A) to prevent, detect, 
                and control health care fraud and abuse in violation of 
                any Federal law.
            (5) Reports.--Each Health Care Fraud and Abuse Control Unit 
        shall submit to the Inspector General an annual report 
        containing such information as the Inspector General determines 
        to be necessary.
            (6) Semiannual reports of inspector general of health and 
        human services.--The Inspector General shall include in each 
        semiannual report of the Inspector General to the Congress 
        under section 5(a) of the Inspector General Act of 1978 (5 
        U.S.C. App.) an assessment of the Inspector General of how well 
        States are preventing, detecting, and controlling health care 
        fraud and abuse.
    (c) Payments to States.--
            (1) In general.--For each year for which a State has a plan 
        approved under subsection (b)(4), and subject to the 
        availability of appropriations, the Inspector General shall pay 
        to the State for each quarter an amount equal to 75 percent of 
        the sums expended during the quarter by agencies designated by 
        the Governor of the State under subsection (b)(1)(A) in 
        conducting activities described in that subsection.
            (2) Time of payment.--The Inspector General shall make a 
        payment under paragraph (1) for a quarter by not later than 30 
        days after the end of the quarter.
            (3) Payments are additional.--Payments to a State under 
        this subsection shall be in addition to any amounts paid under 
        subsection (g).
    (d) Data Sharing.--The Inspector General shall establish a program 
for the sharing among Federal agencies, State and local law enforcement 
agencies, and health care providers and insurers, consistent with data 
sharing provisions of subtitle B, of data related to possible health 
care fraud and abuse in violation of any Federal law.
    (e) Health Care Fraud and Abuse Control Account.--
            (1) Establishment.--There is established on the books of 
        the Treasury of the United States a separate account, which 
        shall be known as the Health Care Fraud and Abuse Control 
        Account. The Account shall consist of--
                    (A) the Health Care Fraud and Abuse Expenses 
                Subaccount; and
                    (B) the Health Care Fraud and Abuse Reserve 
                Subaccount.
            (2) Expenses subaccount.--
                    (A) Contents.--The Expenses Subaccount consists 
                of--
                            (i) amounts deposited under subparagraph 
                        (B); and
                            (ii) amounts transferred from the Reserve 
                        Subaccount and deposited under paragraph 
                        (3)(B).
                    (B) Deposits.--Except as provided in paragraph 
                (3)(A), there shall be deposited in the Expenses 
                Subaccount all amounts received by the United States 
                as--
                            (i) fines for health care fraud and abuse 
                        in violation of any Federal law;
                            (ii) civil penalties or damages (other than 
                        restitution) in actions under section 3729 or 
                        3730 of title 31, United States Code (commonly 
                        referred to as the ``False Claims Act''), that 
                        are based on health care fraud and abuse in 
                        violation of any Federal law;
                            (iii) administrative penalties under the 
                        Social Security Act;
                            (iv) proceeds of seizures and forfeitures 
                        of property for acts or omissions that 
                        constitute health care fraud or abuse in 
                        violation of any Federal law; and
                            (v) money and proceeds of property that are 
                        accepted under subsection (f).
                    (C) Use.--Amounts in the Expenses Subaccount shall 
                be available to the Inspector General, under such terms 
                and conditions as the Inspector General determines to 
                be appropriate, for--
                            (i) paying expenses incurred by their 
                        respective agencies in carrying out activities 
                        under subsection (a); and
                            (ii) making reimbursements to other 
                        Inspectors General and Federal, State, and 
                        local agencies in accordance with subsection 
                        (g).
            (3) Reserve subaccount.--
                    (A) Deposits.--An amount otherwise required under 
                paragraph (2)(A) to be deposited in the Expenses 
                Subaccount in a fiscal year shall be deposited in the 
                Reserve Subaccount, if--
                            (i) the amount in the Expenses Subaccount 
                        is greater than $500,000,000; and
                            (ii) the deposit of that amount in the 
                        Expenses Subaccount would result in the amount 
                        in the Expenses Subaccount exceeding 110 
                        percent of the total amount deposited in the 
                        Expenses Subaccount in the preceding fiscal 
                        year.
                    (B) Transfers to expenses subaccount.--
                            (i) Estimation of shortfall.--Not later 
                        than the first day of the last quarter of each 
                        fiscal year, the Inspector General shall 
                        estimate whether sufficient amounts will be 
                        available during such quarter in the Expenses 
                        Subaccount for the uses described in paragraph 
                        (2)(C).
                            (ii) Transfer to cover shortfall.--If the 
                        Inspector General estimates under clause (i) 
                        that there will not be available sufficient 
                        amounts in the Expenses Subaccount during the 
                        last quarter of a fiscal year, there shall be 
                        transferred from the Reserve Subaccount and 
                        deposited in the Expenses Subaccount such 
                        amount as the Inspector General estimates is 
                        required to ensure that sufficient amounts are 
                        available in the Expenses Subaccount during 
                        such quarter.
                    (C) Limitation on amount carried over to succeeding 
                fiscal year.--There shall be transferred to the general 
                fund of the Treasury any amount remaining in the 
                Reserve Subaccount at the end of a fiscal year (after 
                any transfer made under subparagraph (B)) in excess of 
                10 percent of the total amount authorized to be 
                deposited in the Expenses Subaccount (consistent with 
                subparagraph (A)) during the fiscal year.
    (f) Acceptance of Gifts, Bequests, and Devises.--Any Inspector 
General referred to in subsection (a)(1) may accept, use, and dispose 
of gifts, bequests, or devises of services or property (real or 
personal), for the purpose of aiding or facilitating activities under 
this section regarding health care fraud and abuse. Gifts, bequests, or 
devises of money and proceeds from sales of other property received as 
gifts, bequests, or devises shall be deposited in the Account and shall 
be available for use in accordance with subsection (e)(2)(C).
    (g) Reimbursements of Expenses and Other Payments to Participating 
Agencies.--
            (1) Reimbursement of expenses of federal agencies.--The 
        Inspector General, subject to the availability of amounts in 
        the Account, shall promptly reimburse Federal agencies for 
        expenses incurred in carrying out subsection (a).
            (2) Payments to state and local law enforcement agencies.--
        The Inspector General, subject to the availability of amounts 
        in the Account, shall promptly pay to any State or local law 
        enforcement agency that participated directly in any activity 
        which led to deposits in the Account, or property the proceeds 
        of which are deposited in the Account, an amount that reflects 
        generally and equitably the participation of the agency in the 
        activity.
            (3) Funds used to supplement agency appropriations.--It is 
        intended that disbursements made from the Account to any 
        Federal agency be used to increase and not supplant the 
        recipient agency's appropriated operating budget.
    (h) Account Payments Advisory Board.--
            (1) Establishment.--There is established the Account 
        Payments Advisory Board, which shall make recommendations to 
        the Inspector General regarding the equitable allocation of 
        payments from the Account.
            (2) Membership.--The Board shall consist of--
                    (A) each of the Inspectors General referred to in 
                subsection (a)(1), other than the Inspector General of 
                the Department of Health and Human Services; and
                    (B) 10 members appointed by the Inspector General 
                of the Department of Health and Human Services to 
                represent Health Care Fraud and Abuse Control Units, of 
                whom one shall be appointed--
                            (i) for each of the 10 regions established 
                        by the Director of the Office of Management and 
                        Budget under Office of Management and Budget 
                        Circular A-105, to represent Units in that 
                        region; and
                            (ii) from among individuals recommended by 
                        the heads of those agencies in that region.
            (3) Terms.--The term of a member of the Board appointed 
        under paragraph (2)(B) shall be 3 years, except that of such 
        members first appointed 3 members shall serve an initial term 
        of one year and 3 members shall serve an initial term of 2 
        years, as specified by the Inspector General at the time of 
        appointment.
            (4) Vacancies.--A vacancy on the Board shall be filled in 
        the same manner in which the original appointment was made, 
        except that an individual appointed to fill a vacancy occurring 
        before the expiration of the term for which the individual is 
        appointed shall be appointed only for the remainder of that 
        term.
            (5) Chairperson and bylaws.--The Board shall elect one of 
        its members as chairperson and shall adopt bylaws.
            (6) Compensation and expenses.--Members of the Board shall 
        serve without compensation, except that the Inspector General 
        may pay the expenses reasonably incurred by the Board in 
        carrying out its functions under this section.
            (7) No termination.--Section 14(a)(2) of the Federal 
        Advisory Committee Act (5 U.S.C. App.) does not apply to the 
        Board.
    (i) Definitions.--In this section:
            (1) Account.--The term ``Account'' means the Health Care 
        Fraud and Abuse Control Account established by subsection 
        (e)(1).
            (2) Expenses subaccount.--The term ``Expenses Subaccount'' 
        means the Health Care Fraud and Abuse Expenses Subaccount of 
        the Account.
            (3) Health care fraud and abuse control unit.--The term 
        ``Health Care Fraud and Abuse Control Unit'' means such a unit 
        established by a State in accordance with subsection (b)(2).
            (4) Inspector general.--Except as otherwise provided, the 
        term ``Inspector General'' means the Inspector General of the 
        Department of Health and Human Services.
            (5) Reserve subaccount.--The term ``Reserve Subaccount'' 
        means the Health Care Fraud and Abuse Reserve Subaccount of the 
        Account.
    (j) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), this 
        section shall take effect on January 1, 1996.
            (2) Development and publication of description of 
        program.--Subsection (a)(3)(A) shall take effect on the date of 
        the enactment of this Act.
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HR 5258 IH----2