[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1912 Introduced in House (IH)]







104th CONGRESS
  1st Session
                                H. R. 1912

 To deter and penalize health care fraud and abuse and to simplify the 
                administration of health benefit plans.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 22, 1995

  Mr. Stark introduced the following bill; which was referred to the 
 Committee on Commerce, and in addition to the Committees on Ways and 
Means, and the Judiciary, 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 deter and penalize health care fraud and abuse and to simplify the 
                administration of health benefit plans.
    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Health Care Fraud 
Prevention and Paperwork Reduction Act of 1995''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Inapplicability of McCarran-Ferguson Act.
Sec. 4. Definitions.
                        TITLE I--FRAUD AND ABUSE

Subtitle A--Amendments to Anti-Fraud and Abuse Provisions Applicable to 
           Medicare, Medicaid, and State Health Care Programs

Sec. 101. Anti-kickback statutory provisions.
Sec. 102. Civil money penalties.
Sec. 103. Private right of action.
Sec. 104. Amendments to exclusionary provisions in fraud and abuse 
                            program.
Sec. 105. Sanctions against practitioners and persons for failure to 
                            comply with statutory obligations relating 
                            to quality of care.
Sec. 106. Revisions to criminal penalties.
Sec. 107. Effective date.
  Subtitle B--Establishment of All-Payer Health Care Fraud and Abuse 
                            Control Program

Sec. 111. All-payer health care fraud and abuse control program.
Sec. 112. Establishment of all-payer health care fraud and abuse 
                            control account.
Subtitle C--Application of Fraud and Abuse Authorities Under the Social 
                      Security Act to Other Payers

Sec. 121. Application of civil money penalties to all payers.
Sec. 122. Application of certain criminal penalties to all payers.
Sec. 123. Construction of social security act references.
      Subtitle D--Advisory Opinions on Kickbacks and Self-Referral

Sec. 131. Establishment of process for issuance of advisory opinions.
Sec. 132. Imposition of fees.
        Subtitle E--Preemption of State Corporate Practice Laws

Sec. 141. Preemption of State laws prohibiting corporate practice of 
                            medicine.
    TITLE II--INFORMATION SYSTEMS AND ADMINISTRATIVE SIMPLIFICATION

Sec. 201. Requirement for health benefit cards.
Sec. 202. National enrollment verification system.
Sec. 203. Requirements for uniform claims and electronic claims data 
                            set.
Sec. 204. Reporting of uniform clinical data sets.
Sec. 205. Uniform hospital cost reporting.
Sec. 206. Use of task forces.
SEC. 2. FINDINGS.

    The Congress finds as follows:
            (1) The costs of health care consume more than 14 percent 
        of the gross domestic product of the United States, 
        significantly affecting interstate commerce and the budget of 
        the Federal Government.
            (2) Federal outlays for the medicare program alone totaled 
        $162,500,000,000 in fiscal year 1994 and are expected to exceed 
        $177,000,000,000 in fiscal year 1995 and $198,000,000,000 in 
        fiscal year 1996.
            (3) According to the General Accounting Office, as much as 
        10 percent of all health care expenditures in the United 
        States, or $100,000,000,000, is lost each year to health care 
        fraud and abuse.
            (4) As a direct provider of health care and as a source of 
        payment for health care, the Federal Government has a 
        significant interest in assessing the quality and costs of 
        health care through the evaluative activities of several 
        Federal agencies.
            (5) The health care system existing throughout the United 
        States has a significant effect on the amount, distribution, 
        and use of Federal funds because of the large numbers of--
                    (A) individuals who receive health care benefits 
                under programs operated or financed in whole or in part 
                by the Federal Government;
                    (B) individuals who benefit because of the 
                exclusion from Federal taxes of the amounts spent by 
                their employers to provide them with health insurance 
                benefits;
                    (C) health care providers and professionals who 
                provide items and services for which the Federal 
                Government makes payments; and
                    (D) health care providers and professionals who 
                have received direct or indirect financial assistance 
                from the Federal Government because of their status as 
                such a provider or professional.
            (6) It is in the interest of the United States that there 
        be a national ``all-payer'' anti-fraud program, and a national 
        administrative simplification program, for our health care 
        industry.

SEC. 3. INAPPLICABILITY OF MCCARRAN-FERGUSON ACT.

    For purposes of section 2(b) of the Act of March 9, 1945 (15 U.S.C. 
1012(b); commonly known as the McCarran-Ferguson Act), this Act shall 
be considered to specifically relate to the business of insurance.

SEC. 4. DEFINITIONS.

    For purposes of this Act:
            (1) Carrier.--The term ``carrier'' means a licensed 
        insurance company, a hospital or medical service corporation 
        (including an existing Blue Cross or Blue Shield organization, 
        within the meaning of
         section 833(c)(2) of the Internal Revenue Code of 1986), a 
health maintenance organization, or other entity licensed or certified 
by a State to provide health insurance or health benefits. The 
Secretary may issue regulations that provide for affiliated carriers to 
be treated as a single carrier where appropriate under this title.
            (2) Health benefit plan.--
                    (A) In general.--The term ``health benefit plan'' 
                means--
                            (i) a health plan, other than a plan 
                        described in subparagraph (B);
                            (ii) the medicare program;
                            (ii) medicare supplemental health 
                        insurance;
                            (iii) the medicaid program; and
                            (iv) except as the Secretary may provide, 
                        other Federal or State programs that provide 
                        for payments for health care services (other 
                        than coverage or insurance described in 
                        subparagraph (B)).
                    (B) Exception.--The term ``health benefit plan'' 
                does not include any of the following (or any 
                combination thereof):
                            (i) Coverage only for accident, dental, 
                        vision, disability income, or long-term care 
                        insurance, or any combination thereof.
                            (ii) Coverage issued as a supplement to 
                        liability insurance.
                            (iii) Liability insurance, including 
                        general liability insurance and automobile 
                        liability insurance.
                            (iv) Worker's compensation or similar 
                        insurance.
                            (v) Automobile medical-payment insurance.
                            (vi) Coverage for a specified disease or 
                        illness.
                            (vii) A hospital or fixed indemnity policy.
            (3) Health benefit plan sponsor.--The term ``health benefit 
        plan sponsor'' means, in relation to a health benefit plan 
        that--
                    (A) is an insured plan, the carrier providing the 
                plan; or
                    (B) is a self-insured plan, the entity that 
                sponsors the plan (as defined by the Secretary).
            (4) Health care provider.--The term ``health care 
        provider'' includes a provider of services (as defined in 
        section 1861(u) of the Social Security Act), a physician, a 
        laboratory (as defined in section 353(a) of the Public Health 
        Service Act), a supplier, and any other person furnishing 
        health care in a State. Such term includes a Federal or State 
        program that provides directly for the provision of health care 
        to beneficiaries.
            (5) Health plan.--The term ``health plan'' means--
                    (A) any contract of health insurance, including any 
                hospital or medical service policy or certificate, 
                hospital or medical service plan contract, or health 
                maintenance organization group contract, that is 
                provided by a carrier in a State; or
                    (B) an employee welfare benefit plan or other 
                arrangement insofar as the plan or arrangement provides 
                health benefits in a State and is funded in a manner 
                other than through the purchase of one or more policies 
                or contracts described in subparagraph (A).
            (6) Managed care plan.--The term ``managed care plan'' 
        means a health plan that provides for items and services 
        covered under the plan primarily through providers in the 
        provider network of the plan.
            (7) Point-of-service plan.--The term ``point-of-service 
        plan'' means a health plan other than a managed care plan that 
        permits an enrollee to receive benefits through a provider 
        network.
            (8) Provider network.--The term ``provider network'' means, 
        with respect to a health plan, providers who have entered into 
        an agreement with the plan under which such providers are 
        obligated to provide items and services covered under the plan 
        to individuals enrolled in the plan.
            (9) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (10) Self-insured.--The term ``self-insured'' means, with 
        respect to a health plan, a plan that is described in paragraph 
        (5)(B).
            (11) State.--The term ``State'' means the 50 States, the 
        District of Columbia, Puerto Rico, the Virgin Islands, Guam, 
        the Northern Mariana Islands, and American Samoa.
                        TITLE I--FRAUD AND ABUSE

Subtitle A--Amendments to Anti-Fraud and Abuse Provisions Applicable to 
           Medicare, Medicaid, and State Health Care Programs

SEC. 101. ANTI-KICKBACK STATUTORY PROVISIONS.

    (a) Revision to Penalties.--
            (1) Permitting secretary to impose civil monetary 
        penalty.--Section 1128A(a) of the Social Security Act (42 
        U.S.C. 1320a-7a(a)) is amended--
                    (A) by striking ``or'' at the end of paragraphs (1) 
                and (2);
                    (B) by striking the semicolon at the end of 
                paragraph (3) and inserting ``; or''; and
                    (C) by inserting after paragraph (3) the following 
                new paragraph:
            ``(4) carries out any activity in violation of paragraph 
        (1) or (2) of section 1128B(b);''.
            (2) Description of civil monetary penalty applicable.--
        Section 1128A(a) of such Act (42 U.S.C. 1320a-7a(a)) is 
        amended--
                    (A) by striking ``given).'' at the end of the first 
                sentence and inserting the following: ``given or, in 
                cases under paragraph (4), $50,000 for each such 
                violation).''; and
                    (B) by striking ``claim.'' at the end of the second 
                sentence and inserting the following: ``claim (or, in 
                cases under paragraph (4), damages of not more than 
                three times the total amount of remuneration offered, 
                paid, solicited, or received.''.
            (3) Increase in criminal penalty.--Paragraphs (1) and (2) 
        of section 1128B(b) of such Act (42 U.S.C. 1320a-7b(b)) are 
        each amended--
                    (A) by striking ``$25,000'' and inserting 
                ``$50,000''; and
                    (B) by striking the period at the end and inserting 
                the following: ``, and shall be subject to damages of 
                not more than three times the total remuneration 
                offered, paid, solicited, or received.''.
    (b) Revisions to Exceptions.--
            (1) Exception for discounts.--Section 1128B(b)(3)(A) of 
        such Act (42 U.S.C. 1320a-7b(b)(3)(A)) is amended by striking 
        ``program;'' and inserting ``program and is not in the form of 
        a cash payment;''.
            (2) Exception for payments to employees.--Section 
        1128B(b)(3)(B) of such Act (42 U.S.C. 1320a-7b(b)(3)(B)) is 
        amended by inserting at the end ``if the amount of remuneration 
        under the arrangement is consistent with the fair market value 
        of the services and is not determined in a manner that takes 
        into account (directly or indirectly) the volume or value of 
        any referrals, except that such employee can be paid 
        remuneration in the form of a productivity bonus based on 
        services personally performed by the employee.''.
            (3) Exception for waiver of coinsurance by certain 
        providers.--Section 1128B(b)(3)(D) of such Act (42 U.S.C. 
        1320a-7b(b)(3)(D)) is amended to read as follows:
            ``(D) a waiver or reduction of any coinsurance or other 
        copayment if--
                    ``(i) the waiver or reduction is made pursuant to a 
                public schedule of discounts which the person is 
                obligated as a matter of law to apply to certain 
                individuals,
                    ``(ii) the waiver or reduction is made pursuant to 
                an established program and applies to a defined group 
                of individuals whose incomes do not exceed 150 percent 
                (or such higher percentage as the Secretary may permit) 
                of the official poverty line (as defined by the Office 
                of Management and Budget, and revised annually in 
                accordance with section 673(2) of the Omnibus Budget 
                Reconciliation Act of 1981) applicable to a family of 
                the size involved,
                    ``(iii) the waiver or reduction of coinsurance is 
                not offered as part of any advertisement or 
                solicitation and the person offering the waiver or 
                reduction determines in good faith that the individual 
                is in financial need,
                    ``(iv) the person offering the waiver or reduction 
                fails to collect the coinsurance or other payment after 
                making reasonable collection efforts, or
                    ``(v) the waiver or reduction of coinsurance is in 
                accordance with a cost sharing schedule or a 
                supplemental benefit package which may be offered by a 
                managed care plan (as defined in section 4 of the 
                Health Care Fraud Prevention and Paperwork Reduction 
                Act of 1995); and''.
            (4) New exception for capitated payments.--Section 
        1128B(b)(3) of such Act (42 U.S.C. 1320a-7b(b)(3)) is amended--
                    (A) by striking ``and'' at the end of subparagraph 
                (D);
                    (B) by striking the period at the end of 
                subparagraph (E) and inserting ``; and''; and
                    (C) by adding at the end the following new 
                subparagraphs:
            ``(F) any reduction in cost sharing or increased benefits 
        given to an individual, any amounts paid to a provider for an 
        item or service furnished to an individual, or any discount or 
        reduction in price given by the provider for such an item or 
        service, if the individual is enrolled with and such item or 
        service is covered under any of the following:
                    ``(i) A health plan which is furnishing items or 
                services under a risk-sharing contract under section 
                1876 or section 1903(m).
                    ``(ii) A health plan receiving payments on a 
                prepaid basis, under a demonstration project under 
                section 402(a) of the Social Security Amendments of 
                1967 or under section 222(a) of the Social Security 
                Amendments of 1972; and
            ``(G) any amounts paid to a provider for an item or service 
        furnished to an individual or any discount or reduction in 
        price given by the provider for such an item or service, if the 
        individual is enrolled with and such item or service is covered 
        under a health plan under which the provider furnishing the 
        item or service is paid by the health plan for furnishing the 
        item or service only on a capitated basis pursuant to a written 
        arrangement between the plan and the provider in which the 
        provider assumes financial risk for furnishing the item or 
        service.''.
    (c) Authorization for the Secretary To Issue Regulations.--Section 
1128B(b) of such Act (42 U.S.C. 1320a-7b(b)) is amended by adding at 
the end the following new paragraph:
    ``(4) The Secretary is authorized to impose by regulation such 
other requirements as needed to protect against program or patient 
abuse with respect to any of the exceptions described in paragraph 
(3).''.
    (d) Clarification of Other Elements of Offense.--Section 1128B(b) 
of such Act (42 U.S.C. 1320a-7b(b)) is amended--
            (1) in paragraph (1)(A), by striking ``in return for 
        referring'' and inserting ``to refer'';
            (2) in paragraph (1)(B), by striking ``in return for 
        purchasing, leasing, ordering, or arranging for or 
        recommending'' and inserting ``to purchase, lease, order, or 
        arrange for or recommend''; and
            (3) by adding at the end of paragraphs (1) and (2) the 
        following sentence: ``A violation exists under this paragraph 
        if one or more purposes of the remuneration is unlawful under 
        this paragraph.''.

SEC. 102. CIVIL MONEY PENALTIES.

    (a) Prohibition Against Offering Inducements to Individuals 
Enrolled Under Plans.--
            (1) Offer of remuneration.--Section 1128A(a) of the Social 
        Security Act (42 U.S.C. 1320a-7a(a)), as amended by section 
        101(a)(1), is amended--
                    (A) by striking ``; or'' at the end of paragraph 
                (3) and inserting a semicolon;
                    (B) by striking the semicolon at the end of 
                paragraph (4) and inserting ``; or''; and
                    (C) by inserting after paragraph (4) the following 
                new paragraph:
            ``(5) offers, pays, or transfers remuneration to any 
        individual eligible for benefits under title XVIII of this Act, 
        or under a State health care program (as defined in section 
        1128(h)) that such person knows or should know is likely to 
        influence such individual to order or receive from a particular 
        provider, practitioner, or supplier any item or service for 
        which payment may be made, in whole or in part, under title 
        XVIII, or a State health care program, other than to influence 
        an individual enrolled in a managed care plan or a point-of-
        service plan (as defined in section 4 of the Health Care Fraud 
        Prevention and Paperwork Reduction Act of 1995 to receive 
        benefits under the plan in accordance with established practice 
        patterns for the delivery of medically necessary services;''.
            (2) Remuneration defined.--Section 1128A(i) of such Act (42 
        U.S.C. 1320a-7a(i)) is amended by adding at the end the 
        following new paragraph:
            ``(6) The term `remuneration' includes the waiver or 
        reduction of coinsurance amounts, and transfers of items or 
        services for free or for other than fair market value, except 
        that such term does not include the waiver or reduction of 
        coinsurance amounts by a person or entity, if--
                    ``(A) the waiver or reduction is made pursuant to a 
                public schedule of discounts which the person is 
                obligated as a matter of law to apply to certain 
                individuals,
                    ``(B) the waiver or reduction is made pursuant to 
                an established program and applies to a defined group 
                of individuals whose incomes do
                 not exceed 150 percent (or such higher percentage as 
the Secretary may permit) of the official poverty line (as defined by 
the Office of Management and Budget, and revised annually in accordance 
with section 673(2) of the Omnibus Budget Reconciliation Act of 1981) 
applicable to a family of the size involved,
                    ``(C) the waiver or reduction of coinsurance is not 
                offered as part of any advertisement or solicitation 
                and the person offering the waiver or reduction 
                determines in good faith that the individual is in 
                financial need,
                    ``(D) the person offering the waiver or reduction 
                fails to collect the coinsurance or other payment after 
                making reasonable collection efforts, or
                    ``(E) the waiver or reduction of coinsurance is in 
                accordance with a cost sharing schedule or a 
                supplemental benefit package which may be offered by a 
                managed care plan under section 4 of the Health Care 
                Fraud Prevention and Paperwork Reduction Act of 
                1995.''.
    (b) Additional Offenses.--Section 1128A(a) of such Act, as amended 
by section 101(a)(1) and subsection (a)(1), is further amended--
            (1) by striking ``or'' at the end of paragraph (4);
            (2) by striking the semicolon at the end of paragraph (5) 
        and inserting ``; or''; and
            (3) by inserting after paragraph (5) the following new 
        paragraphs:
            ``(6) engages in a practice which has the effect of 
        limiting or discouraging (as compared to other plan enrollees) 
        the utilization of medically necessary health care services 
        covered by law or under the service contract by title XIX or 
        other publicly subsidized patients, including but not limited 
        to differential standards for the location and hours of service 
        offered by providers participating in the plan;
            ``(7) substantially fails to cooperate with a quality 
        assurance program or a utilization review activity;
            ``(8) engaging in a pattern of failing substantially to 
        provide or authorize medically necessary items and services 
        that are required to be provided to an individual covered under 
        a health plan (as defined in section 4 of the Health Care Fraud 
        Prevention and Paperwork Reduction Act of 1995) or public 
        program for the delivery of or payment for health care items or 
        services, if the failure has adversely affected (or had a 
        substantial likelihood of adversely affecting) the individual; 
        or
            ``(9) submits false or fraudulent statements, data or 
        information on claims to the Secretary, a State health care 
        agency, or any other Federal, State or local agency charged 
        with implementation or oversight of a health plan or a public 
        program that the person knows or should know is fraudulent;''.
    (c) Modifications of Amounts of Penalties and Assessments.--Section 
1128A(a) of such Act (42 U.S.C. 1320a-7a(a)), as amended by section 
101(a), subsection (a)(1), and subsection (b), is amended in the matter 
following paragraph (9)--
            (1) by striking ``$2,000'' and inserting ``$10,000'';
            (2) by inserting after ``under paragraph (4), $50,000 for 
        each such violation'' the following: ``; in cases under 
        paragraph (5), $10,000 for each such offer, payment, or 
        transfer; in cases under paragraphs (6) through (9), an amount 
        not to exceed $10,000 for each such determination by the 
        Secretary''; and
            (3) by striking ``twice the amount'' and inserting ``three 
        times the amount''.
    (d) Interest on Penalties.--Section 1128A(f) of such Act (42 U.S.C. 
1320a-7a(f)) is amended by adding after the first sentence the 
following: ``Interest shall accrue on the penalties and assessments 
imposed by a final determination of the Secretary in accordance with an 
annual rate established by the Secretary under the Federal Claims 
Collection Act. The rate of interest charged shall be the rate in 
effect on the date the determination becomes final and shall remain 
fixed at that rate until the entire amount due is paid. In addition, 
the Secretary is authorized to recover the costs of collection in any 
case where the penalties and assessments are not paid within 30 days 
after the determination becomes final, or in the case of a compromised 
amount, where payments are more than 90 days past due. In lieu of 
actual costs, the Secretary is authorized to impose a charge of up to 
10 percent of the amount of penalties and assessments owed to cover the 
costs of collection.''.
    (e) Authorization To Act.--
            (1) In general.--The first sentence of section 1128A(c)(1) 
        of such Act (42 U.S.C. 1320a-7a(c)(1)) is amended by striking 
        all that follows ``(b)'' and inserting the following: ``unless, 
        within one year after the date the Secretary presents a case to 
        the Attorney General for consideration, the Attorney General 
        brings an action in a district court of the United States.''.
            (2) Effective date.--The amendment made by this paragraph 
        (1) shall apply to cases presented by the Secretary of Health 
        and Human Services for consideration on or after the date of 
        the enactment of this Act.
    (f) Deposit of Penalties Collected into All-Payer Account.--Section 
1128A(f)(3) of such Act (42 U.S.C. 1320a-7a(f)(3)) is amended by 
striking ``as miscellaneous receipts of the Treasury of the United 
States'' and inserting ``in the All-Payer Health Care Fraud and Abuse 
Control Account established under section 112 of the Health Care Fraud 
Prevention and Paperwork Reduction Act of 1995''.
    (g) Clarification of Penalty Imposed on Excluded Provider 
Furnishing Services.--Section 1128A(a)(1)(D) of such Act (42 U.S.C. 
1320a-7a(a)(1)(D)) is amended by inserting ``who furnished the 
service'' after ``in which the person''.

SEC. 103. PRIVATE RIGHT OF ACTION.

    Section 1128A of the Social Security Act (42 U.S.C. 1320a-7a) is 
amended by adding at the end the following new subsection:
    ``(m)(1) Subject to paragraphs (2) and (3), a carrier offering an 
insured health plan and the sponsor of a self-insured health plan that 
suffers financial harm as a direct result of the submission of claims 
by an individual or entity for payment for items and services furnished 
under the plan which makes the individual or entity subject to a civil 
monetary penalty under this section may, in a civil action against the 
individual or entity in the United States District Court, obtain 
damages against the individual or entity and such equitable relief as 
is appropriate.
    ``(2) A carrier or sponsor may bring a civil action under this 
subsection only if the carrier or sponsor provides the Secretary and 
the Attorney General with written notice of the intent to bring an 
action under this subsection, the identities of the individuals or 
entities the carrier or sponsor intends to name as defendants to the 
action, and all information the carrier or sponsor possesses regarding 
the activity that is the subject of the action that may materially 
affect the Secretary's decision to initiate a proceeding to impose a 
civil monetary penalty under this section against the defendants.
    ``(3) A carrier or sponsor may bring a civil action under this 
subsection only if any of the following conditions are met:
            ``(A) During the 60-day period that begins on the date the 
        Secretary receives the written notice described in paragraph 
        (2), the Secretary does not notify the carrier or sponsor that 
        the Secretary intends to initiate a proceeding to impose a 
        civil monetary penalty under this section against the 
        defendants.
            ``(B) If the Secretary notifies the carrier or sponsor 
        during the 60-day period described in subparagraph (A) that the 
        Secretary intends to initiate a proceeding to impose a civil 
        monetary penalty under this section against the defendants, the 
        Secretary subsequently notifies the carrier or sponsor that the 
        Secretary no longer intends to initiate such a proceeding 
        against the defendants.
            ``(C) After the expiration of the 2-year period that begins 
        on the date the Secretary notifies the carrier or sponsor that 
        the Secretary intends to initiate a proceeding to impose a 
        civil monetary penalty under this section against the 
        defendants, the Secretary has not made a good faith effort to 
        initiate such a proceeding against the defendants.
    ``(4) If a carrier or sponsor is awarded any amounts in an action 
brought under this subsection that are in excess of the damages 
suffered by the carrier or sponsor as a result of the defendant's 
activities, 10 percent of such amounts shall be withheld from the 
carrier or sponsor for payment into the All-Payer Health Care Fraud and 
Abuse Control Account established under section 112 of the Health Care 
Fraud Prevention and Paperwork Reduction Act of 1995.
    ``(5) No action may be brought under this subsection more than 6 
years after the date of the activity with respect to which the action 
is brought.''.

SEC. 104. AMENDMENTS TO EXCLUSIONARY PROVISIONS IN FRAUD AND ABUSE 
              PROGRAM.

    (a) Mandatory Exclusion of Individual Convicted of Criminal Offense 
Related to Health Care Fraud.--
            (1) In general.--Section 1128(a) of the Social Security Act 
        (42 U.S.C. 1320a-7(a)) is amended by adding at the end the 
        following new paragraph:
            ``(3) Felony conviction relating to fraud.--Any individual 
        or entity that has been convicted under Federal or State law, 
        in connection with the delivery of a health care item or 
        service on or after January 1, 1997, or with respect to any act 
        or omission on or after such date in a program operated by or 
        financed in whole or in part by any Federal, State, or local 
        government agency, of a criminal offense consisting of a felony 
        relating to fraud, theft, embezzlement, breach of fiduciary 
        responsibility, or other financial misconduct.''.
            (2) Conforming amendment.--Section 1128(b)(1) of such Act 
        (42 U.S.C. 1320a-7(b)(1)) is amended--
                    (A) in the heading, by striking ``Conviction'' and 
                inserting ``Misdemeanor conviction''; and
                    (B) by striking ``criminal offense'' and inserting 
                ``criminal offense consisting of a misdemeanor''.
    (b) Establishment of Minimum Period of Exclusion for Certain 
Individuals and Entities Subject to Permissive Exclusion From Medicare 
and State Health Care Programs.--
            (1) In general.--Section 1128(c)(3) of such Act (42 U.S.C. 
        1320a-7(c)(3)) is amended by adding at the end the following 
        new subparagraphs:
    ``(D) In the case of an exclusion of an individual or entity under 
paragraphs (1), (2), or (3) of subsection (b), the period of exclusion 
shall be a minimum of 3 years, unless the Secretary determines that an 
alternative period is appropriate because of aggravating or mitigating 
circumstances.
    ``(E) In the case of an exclusion of an individual or entity under 
paragraph (4) or (5) of subsection (b), the period of the exclusion 
shall not be less than the period during which the individual's or 
entity's license to provide health care is revoked, suspended, or 
surrendered, or the individual or the entity is excluded or suspended 
from a Federal or State health care program.
    ``(F) In the case of an exclusion of an individual or entity under 
subsection (b)(6)(B), the period of the exclusion shall be not less 
than 1 year.''.
            (2) Conforming amendment.--Section 1128(c)(3)(A) of such 
        Act (42 U.S.C. 1320a-7(c)(3)(A)) is amended by striking 
        ``subsection (b)(12)'' and inserting ``paragraph (1), (2), (3), 
        (4), (6)(B), or (12) of subsection (b)''.

SEC. 105. SANCTIONS AGAINST PRACTITIONERS AND PERSONS FOR FAILURE TO 
              COMPLY WITH STATUTORY OBLIGATIONS RELATING TO QUALITY OF 
              CARE.

    (a) Minimum Period of Exclusion for Practitioners and Persons 
Failing To Meet Statutory Obligations.--
            (1) In general.--The second sentence of section 1156(b)(1) 
        of the Social Security Act (42 U.S.C. 1320c-5(b)(1)) is amended 
        by striking ``may prescribe)'' and inserting ``may prescribe, 
        except that such period may not be less than one year)''.
            (2) Conforming amendment.--Section 1156(b)(2) of such Act 
        (42 U.S.C. 1320c-5(b)(2)) is amended by striking ``shall 
        remain'' and inserting ``shall (subject to the minimum period 
        specified in the second sentence of paragraph (1)) remain''.
    (b) Amount of Civil Money Penalty.--Section 1156(b)(3) of such Act 
(42 U.S.C. 1320c-5(b)(3)) is amended by striking ``the actual or 
estimated cost'' and inserting the following: ``$10,000 for each 
instance''.
    (c) Repeal of ``Unwilling or Unable'' Condition for Imposition of 
Sanction.--Section 1156(b)(1) of such Act (42 U.S.C. 1320c-5(b)(1)) is 
amended--
            (1) in the second sentence, by striking ``and determines'' 
        and all that follows through ``such obligations,'' and
            (2) by striking the third sentence.

SEC. 106. REVISIONS TO CRIMINAL PENALTIES.

    (a) Treble Damages for Criminal Sanctions.--Section 1128B of the 
Social Security Act (42 U.S.C. 1320a-7b) is amended by adding at the 
end the following new subsection:
    ``(f) In addition to the fines that may be imposed under subsection 
(a) or (c) any individual found to have violated the provisions of any 
of such subsections may be subject to treble damages.''.
    (b) Identification of Community Service Opportunities.--Section 
1128B of such Act (42 U.S.C. 1320a-7b), as amended by subsection (a), 
is further amended by adding at the end the following new subsection:
    ``(g) The Secretary shall--
            ``(1) in consultation with State and local health care 
        officials, identify opportunities for the satisfaction of 
        community service obligations that a court may impose upon the 
        conviction of an offense under this section, and
            ``(2) make information concerning such opportunities 
        available to Federal and State law enforcement officers and 
        State and local health care officials.''.

SEC. 107. EFFECTIVE DATE.

    The amendments made by this subtitle shall take effect January 1, 
1997.

  Subtitle B--Establishment of All-Payer Health Care Fraud and Abuse 
                            Control Program

SEC. 111. ALL-PAYER HEALTH CARE FRAUD AND ABUSE CONTROL PROGRAM.

    (a) In General.--Not later than January 1, 1997, the Secretary 
(acting through the Inspector General of the Department of Health and 
Human Services) and the Attorney General shall establish a program--
            (1) to coordinate the functions of the Attorney General, 
        the Secretary, and other organizations with respect to the 
        prevention, detection, and control of health care fraud and 
        abuse,
            (2)(A) to conduct investigations, audits, evaluations, and 
        inspections relating to the delivery of and payment for health 
        care services in the United States which are not subject to 
        investigation, audit, evaluation, and inspection by the 
        Inspector General of another executive department, and (B) to 
        facilitate the conducting of such investigations, audits, 
        evaluations, and inspections relating to the delivery of and 
        payment for other health care services in the United States, 
        and
            (3) to facilitate the enforcement of this subtitle and 
        other statutes applicable to health care fraud and abuse.
    (b) Coordination With Law Enforcement Agencies.--In carrying out 
the program under subsection (a), the Secretary and Attorney General 
shall consult with, and arrange for the sharing of data and resources 
with Federal, State and local law enforcement agencies, State Medicaid 
Fraud Control Units, and State agencies responsible for the licensing 
and certification of health care providers.
    (c) Coordination With Health Plans.--In carrying out the program 
under subsection (a), the Secretary and Attorney General shall consult 
with, and arrange for the sharing of data with representatives of 
qualified health plans.
    (d) Authorities of Attorney General and Inspector General.--In 
carrying out duties under subsection (a), the Attorney General and the 
Inspector General are authorized--
            (1) to conduct, supervise, and coordinate audits, civil and 
        criminal investigations, inspections, and evaluations relating 
        to the program established under such subsection; and
            (2) to have access (including on-line access as requested 
        and available) to all records available to qualified health 
        plans relating to the activities described in paragraph (1) 
        (subject to restrictions based on the confidentiality of 
        certain information under section 204(a)).
    (e) Failure to Provide Information as Grounds for Permissive 
Exclusion Under Medicare and Medicaid.--Section 1128(b)(9) of the 
Social Security Act (42 U.S.C. 1320a-7(b)(9)) is amended by striking 
the period at the end and inserting ``, or provide any information 
requested by the Attorney General or the Inspector General of the 
Department of Health and Human Services to carry out the All-Payer 
Health Care Fraud and Abuse Control Program established under section 
111 of the Health Care Fraud Prevention and Paperwork Reduction Act of 
1995.'';
    (f) Qualified Immunity for Providing Information.--The provisions 
of section 1157(a) of the Social Security Act (relating to limitation 
on liability) shall apply to a person providing information or 
communications to the Secretary or Attorney General in conjunction with 
their performance of duties under this section, in the same manner as 
such section applies to information provided to organizations with a 
contract under part B of title XI of such Act.
    (g) Authorizations of Appropriations for Investigators and Other 
Personnel.--In addition to any other amounts authorized to be 
appropriated to the Secretary and the Attorney General for health care 
anti-fraud and abuse activities for a fiscal year, there are authorized 
to be appropriated such additional amounts as may be necessary to 
enable the Secretary and the Attorney General to conduct 
investigations, audits, evaluations, and inspections of allegations of 
health care fraud and abuse and otherwise carry out the program 
established under subsection (a) in a fiscal year.
    (h) Use of Powers Under Inspector General Act of 1978.--In carrying 
out duties and responsibilities under the program established under 
subsection (a), the Inspector General is authorized to exercise all 
powers granted under the Inspector General Act of 1978 to the same 
manner and extent as provided in that Act.
    (i) Definition.--In this subtitle, the term ``Inspector General'' 
means the Inspector General of the Department of Health and Human 
Services.

SEC. 112. ESTABLISHMENT OF ALL-PAYER HEALTH CARE FRAUD AND ABUSE 
              CONTROL ACCOUNT.

    (a) Establishment.--
            (1) In general.--There is hereby created on the books of 
        the Treasury of the United States an account to be known as the 
        ``All-Payer Health Care Fraud and Abuse Control Account'' (in 
        this section referred to as the ``Anti-Fraud Account''). The 
        Anti-Fraud Account shall consist of such gifts and bequests as 
        may be made as provided in paragraph (2) and such amounts as 
        may be deposited in such Anti-Fraud Account as provided in 
        section 122(d)(2) and title XI of the Social Security Act. It 
        shall also include the following:
                    (A) All criminal fines imposed in cases involving a 
                Federal health care offense (as defined in subsection 
                (d)).
                    (B) Penalties and damages imposed under the False 
                Claims Act (31 U.S.C. 3729 et seq.), in cases involving 
                claims related to the provision of health care items 
                and services (other than funds awarded to a relator or 
                for restitution).
                    (C) Administrative penalties and assessments 
                imposed under titles XI, XVIII, and XIX of the Social 
                Security Act and section 122 (except as otherwise 
                provided by law).
                    (D) Amounts resulting from the forfeiture of 
                property by reason of a Federal health care offense.
                    (E) Amounts received from the payment of fees to 
                the Secretary of Health and Human Services and the 
                Attorney General under section 132 by individuals and 
                entities requesting advisory opinions under section 
                131.
        Any such funds received on or after the date of the enactment 
        of this Act shall be deposited in the Anti-Fraud Account.
            (2) Authorization to accept gifts.--The Anti-Fraud Account 
        is authorized to accept on behalf of the United States money 
        gifts and bequests made unconditionally to the Anti-Fraud 
        Account, for the benefit of the Anti-Fraud Account or any 
        activity financed through the Anti-Fraud Account.
            (3) Administration through board of trustees.--The Anti-
        Fraud Account shall have a Board of Trustees consisting of the 
        Secretary of Treasury, the Attorney General, the Secretary of 
        Health and Human Services, the Inspector General, and a State 
        Attorney General selected by the Inspector General. The Board 
        of Trustees shall allocate and dispense funds in the Account 
        and generally administer the operations of the Account.
    (b) Use of Funds.--
            (1) In general.--Amounts in the Anti-Fraud Account shall be 
        available without appropriation and until expended as 
        determined jointly by the Secretary and Attorney General in 
        carrying out the All-Payer Health Care Fraud and Abuse Control 
        Program established under section 111 (including the 
        administration of the Program), and may be used to cover costs 
        incurred in operating the Program, including--
                    (A) costs of prosecuting health care matters 
                (through criminal, civil and administrative 
                proceedings);
                    (B) costs of investigations (including equipment, 
                salaries, administratively uncontrollable work, travel, 
                and training of law enforcement personnel);
                    (C) costs of financial and performance audits of 
                health care programs and operations; and
                    (D) costs of inspections and other evaluations.
            (2) Funds used to supplement agency appropriations.--It is 
        intended that disbursements made from the Anti-Fraud Account to 
        any Federal agency be used to increase and not supplant the 
        recipient agency's appropriated operating budget.
            (3) Use of funds for educational activities.--Amounts in 
        the Anti-Fraud Account may be used to carry out activities 
        designed to educate providers of health care services about the 
        provisions of this subtitle (and the provisions of law amended 
        by this subtitle).
            (4) Start-up costs of process for issuance of advisory 
        opinions.--Amounts in the Anti-Fraud Account may be used to 
        establish the process described in section 131 for the issuance 
        of advisory opinions by the Secretary of Health and Human 
        Services and the Attorney General, but only during the first 
        year for which the process is in operation.
    (c) Annual Report.--The Board of Trustees shall submit an annual 
report to Congress on the amount of revenue which is generated and 
disbursed by the Anti-Fraud Account in each fiscal year.
    (d) Federal Health Care Offense Defined.--The term ``Federal health 
care offense'' means a violation of, or a criminal conspiracy to 
violate--
            (1) sections 226, 668, 1033, or 1347 of title 18, United 
        States Code;
            (2) section 1128B of the Social Security Act;
            (3) sections 287, 371, 664, 666, 1001, 1027, 1341, 1343, or 
        1954 of title 18, United States Code, if the violation or 
        conspiracy relates to health care fraud;
            (4) sections 501 or 511 of the Employee Retirement Income 
        Security Act of 1974, if the violation or conspiracy relates to 
        health care fraud; or
            (5) sections 301, 303(a)(2), or 303(b) or (e) of the 
        Federal Food, Drug and Cosmetic Act, if the violation or 
        conspiracy relates to health care fraud.

Subtitle C--Application of Fraud and Abuse Authorities Under the Social 
                      Security Act to Other Payers
SEC. 121. APPLICATION OF CIVIL MONEY PENALTIES TO ALL PAYERS.

    (a) Actions Subject to Penalty.--Any person who is determined by 
the Secretary to have committed any of the following actions with 
respect to a qualified health
 plan shall be subject to a penalty in accordance with subsection (b):
            (1) Actions subject to penalty under medicare, medicaid, 
        and other social security health programs.--Any action that 
        would subject the person to a penalty under paragraphs (1) 
        through (9) of section 1128A(a) of the Social Security Act if 
        the action was taken with respect to title V, XVIII, XIX, or XX 
        of such Act.
            (2) Discriminating on basis of medical condition.--The 
        engagement in any practice that would reasonably be expected to 
        have the effect of denying or discouraging the initial or 
        continued enrollment in a health plan by individuals whose 
        medical condition or history indicates a need for substantial 
        future medical services.
            (3) Inducing enrollment on false pretenses.--The engagement 
        in any practice to induce enrollment in a health plan through 
        representations to individuals which the person knows or should 
        know are false or fraudulent.
    (b) Penalties Described.--
            (1) General rule.--Any person who the Secretary determines 
        has committed an action described in paragraphs (2) through (4) 
        of subsection (a) shall be subject to a civil monetary penalty 
        in an amount not to exceed $10,000 for each such determination.
            (2) Actions subject to penalties under social security 
        act.--In the case of a person who the Secretary determines has 
        committed an action described in paragraph (1) of subsection 
        (a), the person shall be subject to the civil monetary penalty 
        (together with any additional assessment) to which the person 
        would be subject under section 1128A of the Social Security Act 
        if the action on which the determination is based had been 
        committed with respect to title V, XVIII, XIX, or XX of such 
        Act.
    (c) Applicability of Procedures Under Social Security Act.--The 
provisions of section 1128A of the Social Security Act (other than 
subsections (a) and (b) and the second sentence of subsection (f)) 
shall apply to the imposition of a civil monetary penalty or assessment 
under this section in the same manner as such provisions apply with 
respect to the imposition of a penalty or assessment under section 
1128A of such Act.
    (d) Treatment of Amounts Recovered.--Any amounts recovered under 
this section shall be paid to the Secretary and disposed of as follows:
            (1) Such portions of the amounts recovered as is determined 
        to have been improperly paid from a qualified health plan for 
        the delivery of or payment for health care items or services 
        shall be repaid to such plan.
            (2) The remainder of the amounts recovered shall be 
        deposited in the All-Payer Health Care Fraud and Abuse Control 
        Account established under section 112.
    (e) Notification of Licensing Authorities.--Whenever the 
Secretary's determination to impose a penalty or assessment under this 
section becomes final, the Secretary shall notify the appropriate State 
or local licensing agency or organization (including the agency 
specified in section 1864(a) and 1902(a)(33) of the Social Security 
Act) that such a penalty or assessment has become final and the reasons 
therefore.

SEC. 122. APPLICATION OF CERTAIN CRIMINAL PENALTIES TO ALL PAYERS.

    Any person who is determined by the Attorney General (in 
consultation with the Secretary) to have committed any action with 
respect to a qualified health plan that would subject the person to a 
penalty under subsection (a) or (b) of section 1128B of the Social 
Security Act if the action was taken with respect to title V, XVIII, 
XIX, or XX of such Act shall be subject to the penalty (together
 with any assessment) that would apply if the action was taken with 
respect to any such title.

SEC. 123. CONSTRUCTION OF SOCIAL SECURITY ACT REFERENCES.

    (a) Incorporation of Other Amendments.--Any reference in this 
subtitle to a provision of the Social Security Act shall be considered 
a reference to the provision as amended under subtitle A.
    (b) Effect of Subsequent Amendments.--Except as provided in 
subsection (a), any reference to a provision of the Social Security Act 
in this subtitle shall be deemed to be a reference to such provision as 
in effect on the date of the enactment of this Act, and (except as 
Congress may otherwise provide) any amendments made to such provisions 
after such date shall not be taken into account in determining the 
applicability of such provisions to individuals and entities under this 
Act.

      Subtitle D--Advisory Opinions on Kickbacks and Self-Referral

SEC. 131. ESTABLISHMENT OF PROCESS FOR ISSUANCE OF ADVISORY OPINIONS.

    (a) Establishment.--Not later than 1 year after the date of the 
enactment of this Act, the Secretary of Health and Human Services (in 
consultation with the Attorney General) shall establish a process under 
which individuals and entities may submit a request to the Secretary 
for an advisory opinion regarding whether any conduct of the individual 
or entity--
            (1) constitutes grounds for the imposition of a sanction 
        under section 1128B(b) (relating to kickbacks, bribes, and 
        rebates) of the Social Security Act or under subtitle C through 
        the application of such section; or
            (2) would result in the denial of payment for a service 
        furnished by the individual or entity, or the imposition of a 
        civil money penalty, on the basis described in section 1877 of 
        the Social Security Act.
    (b) Deadline for Response.--The Secretary of Health and Human 
Services shall respond to a request for an advisory opinion submitted 
under subsection (a) not later than 90 days after receiving the 
request.
    (c) Opinions Limited to Questions of Fact.--An advisory opinion 
issued under subsection (a) may only respond to the facts presented by 
the individual or entity requesting the advisory opinion.
    (d) Issuance of Regulations.--The Secretary may issue such 
regulations as the Secretary considers appropriate to carry out this 
subtitle, including regulations concerning the process under which 
individuals and entities submit and the Secretary responds to requests 
for advisory opinions.

SEC. 132. IMPOSITION OF FEES.

    (a) In General.--The Secretary of Health and Human Services and the 
Attorney General shall require an individual or entity requesting an 
advisory opinion under section 131 to submit a fee.
    (b) Amount.--The amount of the fee required under subsection (a) 
shall be equal to the costs incurred by the Secretary and the Attorney 
General in responding to the request.

        Subtitle E--Preemption of State Corporate Practice Laws

SEC. 141. PREEMPTION OF STATE LAWS PROHIBITING CORPORATE PRACTICE OF 
              MEDICINE.

    No provision of State or local law shall apply that prohibits a 
corporation from practicing medicine.

    TITLE II--INFORMATION SYSTEMS AND ADMINISTRATIVE SIMPLIFICATION

SEC. 201. REQUIREMENT FOR HEALTH BENEFIT CARDS.

    (a) Health Benefit Cards.--
            (1) Requirement.--Each health benefit plan sponsor shall 
        issue a health benefit card that meets the requirements of 
        subsection (c) for each individual who is entitled to benefits 
        under a health benefit plan provided or sponsored by the 
        sponsor.
            (2) Deadline for application of requirement.--The deadline 
        specified under this paragraph for the requirement under 
        paragraph (1) is 12 months after the date the standards are 
        established under subsection (c).
    (b) Enforcement Through Civil Money Penalties.--
            (1) In general.--In the case of a health benefit plan 
        sponsor that fails to issue a health benefit card in accordance 
        with subsection (a)(1), the sponsor is subject to a civil money 
        penalty not to exceed $100 for each such violation. The 
        provisions of section 1128A of the Social Security Act (other 
        than subsections (a) and (b)) shall apply to a civil money 
        penalty under this subsection in the same manner as such 
        provisions apply to a penalty or proceeding under section 
        1128A(a) of such Act.
            (2) Effective date.--No penalty may be imposed under 
        paragraph (1) for any failure occurring before the deadline 
        specified in subsection (a)(2).
    (c) Health Benefit Cards.--
            (1) In general.--The Secretary shall establish standards 
        consistent with this subsection respecting
         the form and information to be contained on health benefit 
cards (for purposes of subsection (a)).
            (2) Electronic.--
                    (A) In general.--Subject to subparagraph (B), the 
                card shall be in a form similar to that of a credit 
                card and shall have, encoded in electronic form--
                            (i) the identity of the individual entitled 
                        to health benefits;
                            (ii) the health benefit plan in which the 
                        individual is enrolled;
                            (iii) the identity of each principal 
                        insured (as defined by the Secretary) for the 
                        family that includes the individual, in the 
                        case of an individual who is enrolled under a 
                        family class of enrollment;
                            (iv) the telephone number or numbers to be 
                        used for the submission electronically of 
                        claims under the plan under section 203; and
                            (v) information relating to organ donation.
                    (B) Use of electronic read-and-write cards.--The 
                Secretary may provide for cards in an electronic form 
                that permits information on the card to be readily 
                changed. Such information may include information 
                relating to the health coverage status of the 
                individual and the medical history of the individual.
                    (C) Personal identifier.--For purposes of 
                subparagraph (A) and for purposes of claims processing 
                and related purposes under section 203, the Social 
                Security account number of the individual or, in the 
                case of an infant or other individual to whom such a 
                number has not been issued, such a Social Security 
                account number of a parent or guardian or other number 
                as the Secretary shall specify, shall be used as the 
                personal identifier for the individual.
            (3) Additional information.--The card shall include such 
        additional information, in electronic or other form, as the 
        Secretary may require to carry out the purposes of this Act. In 
        addition, the health benefit plan sponsor issuing the card may 
        include such additional information on the card as the sponsor 
        desires, subject to such limitations as the Secretary may 
        provide.
            (4) Permissible uses of card.--A health benefit card that 
        is issued to an individual who is entitled to benefits under a 
        health benefit plan may be used by an individual or entity only 
        for the purpose of providing or assisting the individual 
        entitled to benefits in obtaining an item or service that is 
        covered under such plan.
            (5) Deadline.--The Secretary shall first establish the 
        standards for health benefit cards under this subsection by not 
        later than 18 months after the date of the enactment of this 
        Act.
    (d) Application to Medicare and Medicaid Program.--
            (1) Medicare program.--The Secretary shall provide, in 
        regulations promulgated to carry out the medicare program, that 
        identification cards issued under that program are modified to 
        the extent required to conform to the standards established 
        under subsection (c), by not later than the deadline specified 
        in subsection (a)(2).
            (2) State medicaid plans.--As a condition for the approval 
        of a State plan under the medicaid program, effective for 
        calendar quarters beginning on or after the deadline specified 
        in subsection (a)(2), each such plan shall provide, in 
        accordance with regulations of the Secretary, that 
        identification cards issued under the plan are modified to the 
        extent required to conform to subsection (c).
SEC. 202. NATIONAL ENROLLMENT VERIFICATION SYSTEM.

    (a) Establishment.--The Secretary shall establish a national 
enrollment verification system for the verification of an individual's 
enrollment in a health benefit plan and entitlement to benefits under 
such plan. The system shall assist in the identification of, and 
collection from, parties responsible for the payment for health care 
items and services furnished to individuals enrolled under a health 
benefit plan.
    (b) Information in System.--The enrollment verification system 
shall contain such information submitted by health benefit plan 
sponsors, employers, and other individuals and entities specified by 
the Secretary as the Secretary shall determine in standards established 
under this section. The information shall include the following with 
respect to each individual enrolled in a health benefit plan 
(regardless of whether the individual is enrolled under an individual 
or a family class of enrollment):
            (1) The name, address, and personal identifier of the 
        individual and the identity of each principal insured (as 
        defined by the Secretary under section 201(c)(2)(A)(iii)) for 
        the family that includes the individual, in the case of an 
        individual who is enrolled under a family class of enrollment.
            (2) The name, address, and telephone number of each health 
        benefit plan in which the individual is enrolled.
            (3) The type of coverage elected.
            (4) Race and ethnicity data.
            (5) The period for which such coverage is elected.
            (6) The status of individuals with respect to deductibles, 
        copayments, coinsurance, or out-of-pocket limits on cost 
        sharing.
            (7) Coordination of benefit information appropriate in 
        determining liability in cases in which benefits may be payable 
        under 2 or more health benefit plans.
    (c) Periodicity of Submissions.--The standards established by the 
Secretary under this subsection shall require the submission of 
information to the national enrollment verification system on a 
periodic basis (as determined by the Secretary) in order to report 
applicable changes with respect to enrollment status or eligibility.
    (d) Form of Inquiry.--The verification system shall be capable of 
accepting inquiries from health care providers, health benefit plan 
sponsors (and any other individual or entity determined appropriate by 
the Secretary) in a variety of electronic and other forms, including--
            (1) through electronic transmission of information on the 
        health benefit card (in a manner similar to that for 
        verification of credit card purchases);
            (2) through the use of a touch-tone telephone line; and
            (3) through the use of a computer modem.
    (e) Form of Response.--The system shall be capable of responding to 
inquiries under subsection (d) in a variety of electronic and other 
forms, including--
            (1) through modem transmission of information;
            (2) through computer synthesized voice communication; and
            (3) through transmission of information to a facsimile 
        (fax) machine.
    (f) Limits on Disclosure of Information Reported.--The disclosure 
of information reported to the national enrollment verification system 
shall be restricted by the Secretary under standards established by the 
Secretary.
    (g) Fees.--The Secretary may impose a fee for the acceptance of, or 
response to, an inquiry to the verification system.
    (h) Public Domain Software to Providers.--The Secretary shall 
provide for the development, and shall make available without charge to 
health care providers, such computer software as will enable such 
providers to make inquiries to, and receive responses from, the 
national enrollment verification system in electronic form.
    (i) Deadline.--The Secretary shall establish the system and 
standards under this section (and shall develop and make available the 
software under subsection (h)) by not later than 12 months after the 
date of the enactment of this Act.
    (j) Civil Money Penalty.--In the case of a failure of an individual 
or entity to report information to the enrollment verification system 
under a standard established by the Secretary under this section, the 
individual or entity shall be subject, in addition to any other 
penalties that may be prescribed by law, to a civil money penalty of 
not more than $100 for each day in which such failure persists. The 
provisions of section 1128A of the Social Security Act (other than 
subsections (a) and (b)) shall apply to a civil money penalty under 
this subsection in the same manner as such provisions apply to a 
penalty or proceeding under section 1128A(a) of such Act.
    (k) Elimination of Employer Requirement to Report Certain 
Information to Medicare and Medicaid Coverage Data Bank.--Effective 
upon full implementation of the national enrollment verification system 
under this section--
            (1) no employer is required to make any reports under 
        section 1144(c) of the Social Security Act; and
            (2) information and functions previously in or performed by 
        the Medicare and Medicaid Coverage Data Bank under section 1144 
        of such Act shall be subsumed by the enrollment verification 
        system.

SEC. 203. REQUIREMENTS FOR UNIFORM CLAIMS AND ELECTRONIC CLAIMS DATA 
              SET.

    (a) Requirements.--
            (1) Submission of claims.--Each health care provider that 
        furnishes services in the United States for which payment may 
        be made under a health benefit plan shall submit any claim for 
        payment for such services only in a form and manner consistent 
        with the standards established under subsection (c).
            (2) Acceptance of claims.--A health benefit plan sponsor 
        may not reject a claim for payment under the health benefit 
        plan provided on the basis of the form or manner in which the 
        claim is submitted if the claim is submitted in accordance with 
        the standards established under subsection (c).
            (3) Effective date.--This subsection shall apply to claims 
        for services furnished on or after the date that is 6 months 
        after the date standards are established under subsection (c).
    (b) Enforcement Through Civil Money Penalties.--
            (1) In general.--
                    (A) Providers.--In the case of a health care 
                provider that submits a claim in violation of 
                subsection (a)(1), the provider is subject to a civil 
                money penalty of not to exceed $100 (or, if greater, 
                the amount of the claim) for each such violation.
                    (B) Health benefit plan sponsors.--In the case of a 
                health benefit plan sponsor that rejects a claim in 
                violation of subsection (a)(2), the sponsor is subject 
                to a civil money penalty of not to exceed $100 (or, if 
                greater, the amount of the claim) for each such 
                violation.
            (2) Process.--The provisions of section 1128A of the Social 
        Security Act (other than subsections (a) and (b)) shall apply 
        to a civil money penalty under paragraph (1) in the same manner 
        as such provisions apply to a penalty or proceeding under 
        section 1128A(a) of such Act.
    (c) Standards Relating to Uniform Claims and Electronic Claims Data 
Set.--
            (1) Establishment of standards.--The Secretary shall 
        establish standards that relate to the form and manner of 
        submission of claims for benefits under a health benefit plan. 
        The standards--
                    (A) shall require that such claims be submitted 
                electronically;
                    (B) shall define the data elements to be contained 
                in a uniform electronic claims data set to be used with 
                respect to such claims;
                    (C) establish a uniform electronic format for the 
                electronic transmission of such elements;
                    (D) shall include instructions on record keeping in 
                support of claims submitted; and
                    (E) shall ensure the suitability of electronic data 
                as evidence in a court of law.
            (2) Scope of information.--
                    (A) In general.--The standards under this 
                subsection are intended to cover substantially most 
                claims that are filed under health benefit plans. Such 
                information need not include all elements that may 
                potentially be required to be reported under 
                utilization review provisions of plans.
                    (B) Ensuring accountability for claims submitted 
                electronically.--In establishing such standards, the 
                Secretary, in consultation with appropriate agencies, 
                shall include such methods of ensuring provider 
                responsibility and accountability for claims submitted 
                electronically that are designed to control fraud and 
                abuse in the submission of such claims.
                    (C) Components.--In establishing such standards the 
                Secretary shall--
                            (i) with respect to data elements, define 
                        data fields, formats, and medical nomenclature, 
                        and plan benefit and insurance information; and
                            (ii) develop a single, uniform, up-to-date 
                        coding system for procedures, services, and 
                        diagnoses based, to the maximum extent 
                        possible, on the American Medical Association's 
                        Common Procedural Terminology, Fourth Edition 
                        or a revised version of such text (with respect 
                        to procedures and services) and the 
                        International Classification of Diseases, 9th 
                        Revision, Clinical Modification, Third Edition 
                        or a revised version of such text (with respect 
                        to diagnoses), with additional coding developed 
                        as necessary by the Secretary.
            (3) Coordination with standards for electronic medical 
        records.--In establishing standards under this subsection, the 
        Secretary shall assure that--
                    (A) the development of such standards is 
                coordinated with the development of the standards for 
                reporting uniform clinical data sets under section 204; 
                and
                    (B) the coding of data elements under the uniform 
                electronic claims data set and the coding of the same 
                elements in the uniform hospital clinical data set and 
                the uniform patient information data set developed 
                under section 204 are consistent.
            (4) Uniform, unique provider identification codes.--In 
        establishing standards under this subsection--
                    (A) the Secretary shall provide for a unique 
                identifier code for each health care provider and group 
                practice that furnishes services
                 for which a claim may be submitted under a health 
benefit plan; and
                    (B) in the case of a provider that has a unique 
                identifier issued for purposes of the medicare program, 
                the code provided under subparagraph (A) shall be the 
                same as such unique identifier.
            (5) Public domain software to providers.--The Secretary 
        shall provide for the development, and shall make available 
        without charge to health care providers, such computer software 
        as will enable the providers to submit claims and to receive 
        verification of claims status electronically.
            (6) Standards for claims for clinical laboratory tests.--
        The standards shall provide that claims for clinical laboratory 
        tests for which benefits are provided under a health benefit 
        plan shall be submitted directly by the person or entity that 
        performed (or supervised the performance of) the tests to the 
        plan in a manner consistent with (and subject to such 
        exceptions as are provided under) the requirement for direct 
        submission of such claims under the medicare program.
            (7) Deadline.--The Secretary shall first provide for the 
        standards for the uniform claims under this subsection (and 
        shall develop and make available the software under paragraph 
        (6)) by not later than 1 year after the date of the enactment 
        of this Act.
    (d) Use Under Medicare and Medicaid Programs.--
            (1) Requirement for providers.--In the case of a health 
        care provider that submits a claim for services furnished under 
        the medicare program or medicaid program in violation of 
        subsection (a)(1), no payment shall be made under such program 
        for such services.
            (2) Requirements of intermediaries and carriers under 
        medicare program.--The Secretary shall provide, in regulations 
        promulgated to carry out title XVIII of the Social Security 
        Act, that the claims process provided under that title is 
        modified to the extent required to conform to the standards 
        established under subsection (c).
            (3) Requirements of state medicaid plans.--As a condition 
        for the approval of State plans under the medicaid program, 
        effective as of the effective date specified in subsection 
        (a)(3), each such plan shall provide, in accordance with 
        regulations of the Secretary, that the claims process provided 
        under the plan is modified to the extent required to conform to 
        the standards established under subsection (c).

SEC. 204. REPORTING OF UNIFORM CLINICAL DATA SETS.

    (a) Standards for Electronic Reporting of Uniform Clinical Data 
Sets.--
            (1) Promulgation of standards.--
                    (A) In general.--Not later than the deadlines 
                provided in paragraph (5), the Secretary shall 
                promulgate standards described in paragraph (2) 
                concerning the uniform clinical data sets described in 
                such paragraph.
                    (B) Revision.--The Secretary may from time to time 
                revise the standards promulgated under this paragraph.
            (2) Contents of standards.--The standards promulgated under 
        paragraph (1) shall include at least the following:
                    (A) A definition of a uniform hospital clinical 
                data set, including a definition of the set of 
                comprehensive data elements, for use by utilization and 
                quality control peer review organizations.
                    (B) A definition of a uniform patient information 
                data set including data obtained at the point of care, 
                for use by utilization and quality control peer review 
                organizations with respect to physician care.
                    (C) A specification of, and manner of presentation 
                of, the individual data elements of the sets under this 
                paragraph.
                    (D) Standards concerning the electronic 
                transmission of such data sets.
                    (E) Standards relating to confidentiality of health 
                information reported under this section, which include 
                the physical security of electronic data and the use of 
                keys, passwords, encryption, and other means to ensure 
                the protection of the confidentiality and privacy of 
                electronic data.
                    (F) Standards to ensure the suitability of 
                electronic data as evidence in a court of law.
            (3) Coordination with standards for uniform electronic 
        claims data set.--In establishing standards under this 
        subsection, the Secretary shall ensure that--
                    (A) the development of the standards is coordinated 
                with the development of the standards for the uniform 
                electronic claims data set under section 203;
                    (B) the coding of the same data elements under the 
                uniform hospital clinical data set, the uniform patient 
                information data set, and the uniform electronic claims 
                data set is consistent; and
                    (C) the standards under this subsection are 
                consistent, to the maximum extent practicable, with 
                other standards existing at the time the standards 
                under this subsection are established, including any 
                standard set by the American National Standards 
                Institute.
            (4) Consultation.--in establishing standards under this 
        subsection, the Secretary shall--
                    (A) consult with the American National Standards 
                Institute, health care providers, health benefit plan 
                sponsors, and other interested parties; and
                    (B) take into consideration the data set used by 
                the utilization and quality control peer review program 
                under part B of title XI of the Social Security Act.
            (5) Deadlines.--The Secretary shall promulgate standards 
        described in paragraph (2) concerning the uniform hospital 
        clinical data set prior to the expiration of the 1-year period 
        beginning on the date of the enactment of this Act. The 
        Secretary shall promulgate standards described in paragraph (2) 
        concerning the uniform patient information clinical data set 
        prior to January 1, 2001.
    (b) Requirement for Application of Electronic Records Standards to 
Hospitals.--
            (1) As condition of medicare participation.--As of January 
        1, 2001, each hospital, as a requirement of each participation 
        agreement under section 1866 of the Social Security Act, shall, 
        in accordance with the standards promulgated under subsection 
        (a)(1)--
                    (A) maintain clinical data included in the uniform 
                hospital clinical data set under subsection (a)(2)(A) 
                in electronic form on all inpatients;
                    (B) upon request of the Secretary or of a 
                utilization and quality control peer review 
                organization (with which the Secretary has entered into 
                a contract under part B of title XI of such Act), 
                transmit electronically data requested from such data 
                set; and
                    (C) upon request of the Secretary, or of a fiscal 
                intermediary or carrier, transmit electronically any 
                data (with respect to a claim) from such data set.
            (2) Application of presentation and transmission standards 
        to electronic transmission to federal agencies.--Effective 
        January 1, 2001, if a hospital is required under a Federal 
        program to transmit a data element included in the uniform 
        hospital clinical data set that is subject to a standard, 
        promulgated under subsection (a)(1), described in subparagraph 
        (C) or (D) of subsection (a)(2), the head of the Federal agency 
        responsible for such program (if not otherwise authorized) is 
        authorized to require the provider to present and transmit the 
        data element electronically in accordance with such a standard.
    (c) Limitation on Data Requirements Where Standards In Effect.--
            (1) In general.--On or after January 1, 2001, a health 
        benefit plan sponsor may not require, for the purpose of 
        utilization review or as a condition of providing benefits or 
        making payments under the plan provided, that a hospital--
                    (A) provide any data element not in the uniform 
                hospital clinical data set specified under the 
                standards promulgated under subsection (a); or
                    (B) transmit or present any such data element in a 
                manner inconsistent with such standards applicable to 
                such transmission or presentation.
            (2) Compliance.--The Secretary may impose a civil money 
        penalty on any health benefit plan sponsor that fails to comply 
        with paragraph (1) in an amount not to exceed $100 for each 
        such failure. The provisions of section 1128A of the Social 
        Security Act (other than the first sentence of subsection (a) 
        and other than subsection (b)) shall apply to a civil money 
        penalty under this paragraph in the same manner as such 
        provisions apply to a penalty or proceeding under section 
        1128A(a) of such Act.
            (3) Application to medicare program.--Effective as of 
        January 1, 2001, neither the Secretary, nor any carrier or 
        fiscal intermediary, nor any utilization and quality control 
        peer review organization may require, for the purpose of 
        utilization review or as a condition of providing benefits or 
        making payments under the medicare program, that a hospital--
                    (A) provide any data element not in the uniform 
                hospital clinical data set specified under the 
                standards promulgated under subsection (a); or
                    (B) transmit or present any such data element in a 
                manner inconsistent with such standards applicable to 
                such transmission or presentation.
            (4) Application to medicaid program.--As a condition for 
        the approval of State plans under the medicaid program and in 
        accordance with regulations of the Secretary, effective as of 
        January 1, 2001, each such plan may not require that a 
        hospital, for the purpose of utilization review or as a 
        condition of providing benefits or making payments under the 
        plan--
                    (A) provide any data element not in the uniform 
                hospital clinical data set specified under the 
                standards promulgated under subsection (a), or
                    (B) transmit or present any such data element in a 
                manner inconsistent with such standards applicable to 
                such transmission or presentation.
    (d) Preemption of State Quill Pen Laws.--
            (1) In general.--Any provision of State law that requires 
        medical or health insurance records (including billing 
        information) to be maintained in written, rather than 
        electronic, form is deemed to be satisfied if the records are 
        maintained in an electronic form that meets standards 
        established by the Secretary under paragraph (2).
            (2) Secretarial authority.--Not later than 1 year after the 
        date of the enactment of this Act, the Secretary shall issue 
        regulations to carry out paragraph (1). The regulations shall 
        provide for an electronic substitute that is in the form of a 
        unique identifier (assigned to each authorized individual) that 
        serves the functional equivalent of a signature. The 
        regulations may provide for such exceptions to paragraph (1) as 
        the Secretary determines to be necessary to prevent fraud and 
        abuse, to prevent the illegal distribution of controlled 
        substances, and in such other cases as the Secretary deems 
        appropriate.
            (3) Effective date.--Paragraph (1) shall take effect on the 
        first day of the first month that begins more than 30 days 
        after the date the Secretary issues the regulations referred to 
        in paragraph (2).

SEC. 205. UNIFORM HOSPITAL COST REPORTING.

    Each hospital, as a requirement under a participation agreement 
under section 1866(a) of the Social Security Act for each cost 
reporting period beginning during or after fiscal year 1996, shall 
provide for the reporting of information to the Secretary with respect 
to any hospital care provided in a uniform manner consistent with 
standards established by the Secretary to carry out section 4007(c) of 
the Omnibus Budget Reconciliation Act of 1987 and in an electronic form 
consistent with standards established by the Secretary.

SEC. 206. USE OF TASK FORCES.

    In adopting standards under this title, the Secretary--
            (1) shall take into account the recommendations of--
                    (A) current task forces, including at least the 
                Workgroup on Electronic Data Interchange, National 
                Uniform Billing Committee, the Uniform Claim Task 
                Force, and the Computer-based Patient Record Institute; 
                and
                    (B) national organizations representing health care 
                financial managers; and
            (2) shall provide that electronic transmission standards 
        are consistent, to the extent practicable, with the applicable 
        standards established by the Accredited Standards Committee X-
        12 of the American National Standards Institute.
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