[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1770 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 1770

    To prevent fraud, abuse, and waste in the Medicare and Medicaid 
                   Programs, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              June 3, 1997

Mr. Stark (for himself, Mr. McDermott, and Mr. Weygand) introduced the 
following bill; which was referred to the Committee on Ways and Means, 
and in addition to the Committees on Commerce 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 prevent fraud, abuse, and waste in the Medicare and Medicaid 
                   Programs, and for other purposes.

    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; REFERENCES IN ACT.

    (a) Short Title.--This Act may be cited as the ``Medicare and 
Medicaid Fraud, Abuse, and Waste Prevention Amendments of 1997''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents; references in Act.
              TITLE I--ACCOUNTABILITY OF SERVICE PROVIDERS

                       Part A--Sanction Authority

Sec. 101. Exclusion of entity controlled by family member of a 
                            sanctioned individual.
Sec. 102. Civil money penalties (CMPs) for kickbacks.
Sec. 103. CMPs for persons that contract with excluded individuals.
Sec. 104. CMPs for services ordered or prescribed by an excluded 
                            individual or entity.
Sec. 105. CMPs for false certification of eligibility to receive 
                            partial hospitalization and hospice 
                            services.
Sec. 106. Extension of subpoena and injunction authority.
Sec. 107. Kickback penalties for knowing violations.
Sec. 108. Elimination of exception of Federal Employees Health Benefits 
                            Program from definition of Federal health 
                            care program.
Sec. 109. Amounts of CMPs.
Sec. 110. Liability of physicians in specialty hospitals.
Sec. 111. Expansion of criminal penalties for kickbacks.
                  Part B--Provider Enrollment Process

Sec. 121. Requirements to disclose employer identification numbers 
                            (EINs) and social security numbers (SSNs).
Sec. 122. Fees for agreements with Medicare providers and suppliers.
Sec. 123. Authority to refuse to enter into Medicare or Medicaid 
                            agreements with individuals or entities 
                            convicted of felonies.
Sec. 124. Fees and requirements for issuance of standard health care 
                            identifiers.
          TITLE II--PROVIDER REIMBURSEMENT AND RELATED MATTERS

                  Part A--Coverage and Payment Limits

Sec. 201. No home health benefits based solely on drawing blood.
Sec. 202. Monthly certification for hospice care after first six 
                            months.
Sec. 203. Payment for home hospice care on basis of geographic location 
                            of home.
Sec. 204. Limitation on hospice care liability for individuals not in 
                            fact terminally ill.
Sec. 205. Medicare capital asset sales price equal to book value.
Sec. 206. Repeal of moratorium on bad debt policy.
                     Part B--Bankruptcy Provisions

Sec. 221. Application of certain provisions of the bankruptcy code.
   TITLE III--MEDICARE MENTAL HEALTH PARTIAL HOSPITALIZATION SERVICES

Sec. 301. Services not to be furnished in residential settings.
Sec. 302. Additional requirements for community mental health centers.
Sec. 303. Prospective payment system.
                TITLE IV--MEDICARE RURAL HEALTH CLINICS

Sec. 401. Per-visit payment limits for provider-based clinics.
Sec. 402. Assurance of quality services.
Sec. 403. Waiver of certain staffing requirements limited to clinics in 
                            program.
Sec. 404. Refinement of shortage area requirements.
Sec. 405. Decreased beneficiary cost sharing for RHC services.
Sec. 406. Prospective payment system for RHC services.
    (c) Reference to Social Security Act.--Except as otherwise 
specifically provided, whenever in this act an amendment is expressed 
in terms of an amendment to or repeal of a section or other provision, 
the reference is considered to be made to that section or other 
provision of the Social Security Act.

              TITLE I--ACCOUNTABILITY OF SERVICE PROVIDERS

                       PART A--SANCTION AUTHORITY

SEC. 101. EXCLUSION OF ENTITY CONTROLLED BY FAMILY MEMBER OF A 
              SANCTIONED INDIVIDUAL.

    Section 1128 (42 U.S.C. 1320a-7) is amended--
            (1) in subsection (b)(8), by inserting ``, or an immediate 
        family member of such person (as defined in section 1128(j)), 
        or a member of the household of such person (as defined in 
        section 1128(k))'' after ``the Secretary determines that a 
        person''; and
            (2) by adding after subsection (i) the following new 
        subsections:
    ``(j) Definition of Immediate Family Member.--For purposes of 
subsection (b)(8), the term `immediate family member' means a husband 
or wife; natural or adoptive parent, child, or sibling; stepparent, 
stepchild, stepbrother, or stepsister; father-, mother-, daughter-, 
son-, brother-, or sister-in-law; grandparent or grandchild; or spouse 
of a grandparent or grandchild.
    ``(k) Definition of Member of the Household.--For purposes of 
subsection (b)(8), the term `member of the household' means any person 
sharing a common abode as part of a single family unit, including 
domestic employees and others who live together as a family unit, but 
not including a roomer or boarder.''.

SEC. 102. CIVIL MONEY PENALTIES (CMPS) FOR KICKBACKS.

    (a) Permitting Secretary To Impose Civil Monetary Penalty.--Section 
1128A(a) (42 U.S.C. 1320a-7a(a)) is amended--
            (1) by striking ``or'' at the end of paragraph (4);
            (2) by adding ``or'' at the end of paragraph (5); and
            (3) by adding after paragraph (5) the following new 
        paragraph:
            ``(6) commits an act described in paragraph (1) or (2) of 
        section 1128B(b);''.
    (b) Description of Civil Monetary Penalty Applicable.--Section 
1128A(a) (42 U.S.C. 1320a-7a(a)) is amended--
            (1) by striking ``occurs).'' in the matter following 
        paragraph (6) and inserting ``occurs; or, in cases under 
        paragraph (6), $50,000 for each such violation).''; and
            (2) by striking ``claim.'' in the matter following 
        paragraph (6) and inserting ``claim (or, in cases under 
        paragraph (6), damages of not more than three times the total 
        amount of remuneration offered, paid, solicited, or received, 
        without regard to whether a portion of such remuneration was 
        offered, paid, solicited, or received for a lawful purpose).''.

SEC. 103. CMPS FOR PERSONS THAT CONTRACT WITH EXCLUDED INDIVIDUALS.

    Section 1128A(a) (42 U.S.C. 1320a-7a(a)), as amended by section 
102, is amended--
            (1) by striking ``or'' at the end of paragraph (5);
            (2) by adding ``or'' at the end of paragraph (6); and
            (3) by adding after paragraph (6) the following new 
        paragraph:
            ``(7) arranges or contracts (by employment or otherwise) 
        with an individual or entity that the person knows or should 
        know is excluded from participation in a Federal health care 
        program (as defined in section 1128B(f)), for the provision of 
        items or services for which payment may be made under such a 
        program;''.

SEC. 104. CMPS FOR SERVICES ORDERED OR PRESCRIBED BY AN EXCLUDED 
              INDIVIDUAL OR ENTITY.

    Section 1128A(a)(1) (42 U.S.C. 1320a-7a(a)(1)), as amended by 
section 102, is amended--
            (1) in subparagraph (D)--
                    (A) by inserting ``, ordered, or prescribed by such 
                person'' after ``other item or service furnished'';
                    (B) by inserting ``(pursuant to this title or title 
                XVIII)'' after ``period in which the person was 
                excluded'';
                    (C) by striking ``pursuant to a determination by 
                the Secretary'' and all that follows through ``the 
                provisions of section 1842(j)''; and
                    (D) by striking ``or'' at the end; and
            (2) by redesignating subparagraph (E) as subparagraph (F); 
        and
            (3) by adding after subparagraph (D) the following new 
        subparagraph:
                    ``(E) is for a medical or other item or service 
                ordered or prescribed by a person excluded (pursuant to 
                this title or title XVIII) from the program under which 
                the claim was made, and the person furnishing such item 
                or service knows or should know of such exclusion, 
                or''.

SEC. 105. CMPS FOR FALSE CERTIFICATION OF ELIGIBILITY TO RECEIVE 
              PARTIAL HOSPITALIZATION AND HOSPICE SERVICES.

    Section 1128A(b)(3) (42 U.S.C. 1320a-7a(b)(3)) is amended--
            (1) in subparagraph (A)(ii), by inserting ``, hospice care, 
        or partial hospitalization services'' after ``home health 
        services''; and
            (2) in subparagraph (B), by inserting ``, section 
        1814(a)(7) in the case of hospice care, or section 
        1835(a)(2)(F) in the case of partial hospitalization services'' 
        after ``home health services''.

SEC. 106. EXTENSION OF SUBPOENA AND INJUNCTION AUTHORITY.

    (a) Subpoena Authority.--Section 1128A(j)(1) (42 U.S.C. 1320a-
7a(j)(1)) is amended by inserting ``and section 1128'' after ``with 
respect to this section''.
    (b) Injunction Authority.--Section 1128A(k) (42 U.S.C. 1320a-7a(k)) 
is amended by inserting ``or an exclusion under section 1128,'' after 
``subject to a civil monetary penalty under this section,''.
    (c) Clarifying Amendments.--Section 1128A(j) (42 U.S.C. 1320a-
7a(j)) is amended--
            (1) in paragraph (1)--
                    (A) by inserting ``, except that, in so applying 
                such sections, any reference therein to the 
                Commissioner of Social Security or the Social Security 
                Administration shall be considered a reference to the 
                Secretary or the Department of Health and Human 
                Services, respectively'' after ``with respect to title 
                II''; and
                    (B) by striking the second sentence; and
            (2) in paragraph (2), to read as follows:
    ``(2) The Secretary may delegate to the Inspector General of the 
Department of Health and Human Services any or all authority granted 
under this section or under section 1128.''.
    (d) Conforming Amendment.--Section 1128 (42 U.S.C. 1320a-7) is 
amended by adding at the end the following new subsection:
    ``(j) Reference to Laws Directly Affecting This Section.--For 
provisions of law concerning the Secretary's subpoena and injunction 
authority under this section, see section 1128A(j) and (k).''.

SEC. 107. KICKBACK PENALTIES FOR KNOWING VIOLATIONS.

    Section 1128B(b) (42 U.S.C. 1320a-7b(b)) is amended by striking 
``and willfully'' each place it occurs.

SEC. 108. ELIMINATION OF EXCEPTION OF FEDERAL EMPLOYEES HEALTH BENEFITS 
              PROGRAM FROM DEFINITION OF FEDERAL HEALTH CARE PROGRAM.

    Section 1128B(f)(1) (42 U.S.C. 1320a-7b(f)(1)) is amended by 
striking ``(other than the health insurance program under chapter 89 of 
title 5, United States Code)''.

SEC. 109. AMOUNTS OF CMPS.

    Section 1842(j)(2) (42 U.S.C. 1395u(j)(2)) is amended in the second 
sentence--
            (1) by striking ``(other than the first 2 sentences of 
        subsection (a) and other than subsection (b))''; and
            (2) by inserting before the period ``(and for the purpose 
        of so applying section 1128A(a), each violative act by a person 
        with respect to an item or service shall be treated as a claim 
        for payment for that item or service, and the amount of such 
        claim shall be considered to be the amount of the request for 
        payment made by that person with respect to that item or 
        service)''.

SEC. 110. LIABILITY OF PHYSICIANS IN SPECIALTY HOSPITALS.

    Section 1867(d)(1)(B) (42 U.S.C. 1395dd(d)(1)(B)) is amended--
            (1) by inserting ``or a physician working at or on-call at 
        a hospital that is subject to the requirements of subsection 
        (g),'' after ``physician on-call for the care of such an 
        individual,'';
            (2) by striking ``or'' at the end of clause (i); and
            (3) by adding after clause (ii) the following new clauses:
                            ``(iii) fails or refuses to appear within a 
                        reasonable time at a hospital subject to the 
                        requirements of subsection (g) in order to 
                        provide an appropriate medical screening 
                        examination as required by subsection (a), or 
                        necessary stabilizing treatment as required by 
                        subsection (b), or
                            ``(iv) fails or refuses to accept an 
                        appropriate transfer of a patient to a hospital 
                        that has specialized capabilities or facilities 
                        as defined in subsection (g),''.

SEC. 111. EXPANSION OF CRIMINAL PENALTIES FOR KICKBACKS.

    (a) Application of Criminal Penalty Authority to All Health Care 
Benefit Programs.--Section 1128B(b) (42 U.S.C. 1320a-7b(b)) is amended 
by striking ``Federal health care program'' each place it appears and 
inserting ``health care benefit program''.
    (b) Attorney General's Authority To Seek Civil Penalties.--Section 
1128B (42 U.S.C. 1320a-7b) is further amended by adding at the end the 
following new subsection:
    ``(g)(1) The Attorney General may bring an action in the district 
courts to impose upon any person who carries out any activity in 
violation of this section with respect to a Federal health care program 
a civil penalty of $25,000 to $50,000 for each such violation, and 
damages of three times the total remuneration offered, paid, solicited, 
or received.
    ``(2) A violation exists under paragraph (1) is one or more 
purposes of the remuneration is unlawful, and the damages shall be the 
full amount of such remuneration.
    ``(3) The procedures for actions under paragraph (1) with regard to 
subpoenas, statute of limitations, standard of proof, and collateral 
estoppel shall be governed by 31 U.S.C. 3731, and the Federal Rules of 
Civil Procedure shall apply to actions brought under this section.
    ``(4) This provision does not affect the availability of other 
criminal and civil remedies for such violations.''.
    (c) Attorney General's Injunction Authority.--Section 1128B (42 
U.S.C. 1320a-7b) is further amended by adding at the end the following 
new subsection:
    ``(h) If the Attorney General has reason to believe that a person 
is engaging in conduct constituting an offense under subsection (b) or 
(g), the Attorney General may petition an appropriate United States 
district court for an order prohibiting that person from engaging in 
such conduct. The court may issue an order prohibiting that person from 
engaging in such conduct if the court finds that the conduct 
constitutes such an offense. The filing of a petition under this 
section does not preclude any other remedy which is available by law to 
the United States or any other person.''.
    (d) Definition.--Section 1128B(f) (42 U.S.C. 1320a-7b(f)) is 
amended--
            (1) by redesignating paragraphs (1) and (2) as 
        subparagraphs (A) and (B);
            (2) by striking ``(f)'' and inserting ``(f)(1)''; and
            (3) by adding at the end the following new paragraph:
    ``(2) For purposes of this section, the term ``health care benefit 
program'' has the meaning given such term in 18 U.S.C. 24(b).''.
    (e) Conforming Amendments.--
            (1) Section 1128A(a) (42 U.S.C. 1320a-7a(a)) is amended in 
        the final sentence by striking ``1128B(f)(1)'' and inserting 
        ``1128B(f)(1)(A)''; and
            (2) Section 24(a) of title 18 of the United States Code is 
        amended--
                    (A) by striking the period at the end of paragraph 
                (2) and adding a semicolon; and
                    (B) by adding after paragraph (2) the following new 
                paragraph:
            ``(3) section 1128B of the Social Security Act.''.

                  PART B--PROVIDER ENROLLMENT PROCESS

SEC. 121. REQUIREMENTS TO DISCLOSE EMPLOYER IDENTIFICATION NUMBERS 
              (EINS) AND SOCIAL SECURITY NUMBERS (SSNS).

    (a) Disclosing Entities, Owners, and Controlling Interests.--
Section 1124 (42 U.S.C. 1320a-3) is amended by adding after subsection 
(b) the following new subsection:
    ``(c) Requirement To Furnish Social Security Numbers and Employer 
Identification Numbers.--No payment may be made to any disclosing 
entity under title V, XVIII, or XIX unless such disclosing entity 
furnishes to the Secretary both the employer identification number and 
social security number of--
            ``(1) the disclosing entity;
            ``(2) each person with an ownership or control interest (as 
        defined in subsection (a)(3)); and
            ``(3) any subcontractor in which the entity directly or 
        indirectly has a 5 percent or more ownership interest.''.
    (b) Other Medicare Providers.--Section 1124A (42 U.S.C. 1320a-3a) 
is amended--
            (1) in subsection (a)--
                    (A) by striking ``and'' at the end of paragraph 
                (1);
                    (B) by striking the period at the end of paragraph 
                (2) and inserting ``; and''; and
                    (C) by adding after paragraph (2) the following new 
                paragraph:
            ``(3) including the employer identification number and 
        social security number of the disclosing part B provider and 
        any person, managing employee, or other entity identified under 
        paragraph (1) or (2).''; and
            (2) in subsection (c) by inserting ``(or, for purposes of 
        subsection (a)(3), any entity receiving payment)'' after ``on 
        an assignment-related basis''.
    (c) Verification by Social Security Administration (SSA).--Section 
1124A (42 U.S.C. 1320a-3a) is amended--
            (1) by redesignating subsection (c) as subsection (d); and
            (2) by adding after subsection (b) the following new 
        subsection:
    ``(c) Verification by Social Security Administration.--
            ``(1) Transmittal by hhs.--The Secretary shall transmit to 
        the Social Security Administration information concerning each 
        social security number and employer identification number 
        supplied to the Secretary pursuant to subsection (a)(3) or 
        section 1124(c) to the extent necessary for verification of 
        such information in accordance with paragraph (2).
            ``(2) Verification by ssa.--The Social Security 
        Administration shall verify the accuracy of, or correct, the 
        information supplied by the Secretary pursuant to paragraph 
        (1), and shall report such verifications or corrections to the 
        Secretary.
            ``(3) Fees for ssa verification.--The Secretary shall 
        reimburse the Commissioner of Social Security, at a rate 
        negotiated between the Secretary and the Commissioner, for the 
        costs incurred by the Commissioner in performing the 
        verification and correction services described in this 
        subsection.''.

SEC. 122. FEES FOR AGREEMENTS WITH MEDICARE PROVIDERS AND SUPPLIERS.

    (a) Fees Related to Medicare Provider and Supplier Enrollment and 
Reenrollment.--Section 1866 is amended--
            (1) in the heading, by adding ``AND ENROLLMENT OF OTHER 
        PERSONS FURNISHING SERVICES'' after ``PROVIDERS OF SERVICES''; 
        and
            (2) by adding at the end the following new subsection:
    ``(j) Enrollment Procedures and Fees.--
            ``(1) Enrollment.--The Secretary is authorized to establish 
        a procedure for enrollment (and periodic reenrollment) of 
        individuals or entities that are not providers of services 
        subject to the provisions of subsection (a) but that furnish 
        health care items or services under this title.
            ``(2) Fees.--The Secretary is authorized to impose fees for 
        initiation and renewal of provider agreements and for 
        enrollment and periodic reenrollment of other individuals and 
        entities furnishing health care items or services under this 
        title, in amounts up to the full amount which the Secretary 
        reasonably estimates to be sufficient to cover the Secretary's 
        costs related to the process for initiating and reviewing such 
        agreements and enrollments. Fees collected pursuant to this 
        paragraph shall be credited to a special fund of the United 
        States Treasury, and shall remain available until expended, to 
        the extent and in such amounts as provided in advance in 
appropriations acts, for necessary expenses for these purposes, 
including costs of establishing and maintaining procedures and records 
systems; processing applications; and background investigations.''.

SEC. 123. AUTHORITY TO REFUSE TO ENTER INTO MEDICARE OR MEDICAID 
              AGREEMENTS WITH INDIVIDUALS OR ENTITIES CONVICTED OF 
              FELONIES.

    (a) Medicare Part A.--Section 1866(b)(2) (42 U.S.C. 1395cc(b)(2)) 
is amended--
            (1) by striking ``or'' at the end of subparagraph (B);
            (2) by striking the period at the end of subparagraph (C) 
        and inserting ``, or''; and
            (3) by adding after subparagraph (C) the following new 
        subparagraph:
                    ``(D) has ascertained that the provider has been 
                convicted of a felony under Federal or State law for an 
                offense which the Secretary determines is inconsistent 
                with the best interests of program beneficiaries.''.
    (b) Medicare Part B.--section 1842 (42 U.S.C. 1395u) is amended by 
adding after subsection (r) the following new subsection:
    ``(s) The Secretary may refuse to enter into an agreement with a 
physician or supplier under subsection (h) or may terminate or refuse 
to renew such agreement, in the event that such physician or supplier 
has been convicted of a felony under Federal or State law for an 
offense which the Secretary determines is inconsistent with the best 
interests of program beneficiaries.''.
    (c) Medicaid.--Section 1902(a)(23) (42 U.S.C. 1396(a)) is amended--
            (1) by relocating the matter that precedes ``provide that, 
        (A)'' immediately before the semicolon;
            (2) by inserting a semicolon immediately after ``1915'';
            (3) by striking the comma after ``Guam'' and inserting a 
        semicolon; and
            (4) by inserting before the semicolon at the end ``and 
        except that this provision does not require a State to provide 
        medical assistance for such services furnished by a person or 
        entity convicted of a felony under Federal or State law for an 
        offense which the State agency determines is inconsistent with 
        the best interests of beneficiaries under the State plan''.

SEC. 124. FEES AND REQUIREMENTS FOR ISSUANCE OF STANDARD HEALTH CARE 
              IDENTIFIERS.

    Section 1173(b) is amended by adding after paragraph (2) the 
following new paragraphs:
            ``(3) Requirement to furnish social security numbers and 
        employer identification numbers.--The Secretary shall, as 
        appropriate, require such individuals and entities to provide 
        their social security numbers and employer identification 
        numbers as a condition to receiving such identifiers.
            ``(4) Fees.--The Secretary may impose fees for issuing such 
        identifiers, in amounts which the Secretary reasonably 
        estimates to be sufficient to cover all costs to the Secretary 
        associated with such activity. Physicians subject to fees under 
        section 1842(r) shall not be subject to fees under this 
        paragraph. Fees collected pursuant to this paragraph shall be 
        credited to a special fund of the United States Treasury, and 
        shall remain available until expended, to the extent and in 
        such amounts as provided in advance in appropriations acts, for 
        costs incurred by the Secretary in issuing such identifiers, 
        including costs of establishing and maintaining an automated 
        database and procedures; processing applications; and verifying 
        information provided.''.

          TITLE II--PROVIDER REIMBURSEMENT AND RELATED MATTERS

                  PART A--COVERAGE AND PAYMENT LIMITS

SEC. 201. NO HOME HEALTH BENEFITS BASED SOLELY ON DRAWING BLOOD.

    (a) In General.--Sections 1814(a)(2)(C) and 1835(a)(2)(A) (42 
U.S.C. 1395f(a)(2)(C) and 1395n(a)(2)(A)) are each amended by inserting 
``(other than solely venipuncture for the purpose of obtaining a blood 
sample)'' after ``skilled nursing care''.
    (b) Effective Date.--The amendments made by subsection (a) apply to 
home health services furnished after the sixth month beginning after 
the date of enactment of this Act.

SEC. 202. MONTHLY CERTIFICATION FOR HOSPICE CARE AFTER FIRST SIX 
              MONTHS.

    (a) In General.--Sections 1812(a)(4) (42 U.S.C. 1395d(a)(4)) is 
amended by striking ``a subsequent period of 30 days, and a subsequent 
extension period'' and inserting ``and subsequent periods of 30 days 
each,''.
    (b) Conforming Amendments.--
            (1) Section 1812(d).--Section 1812(d) (42 U.S.C. 1395d(d)) 
        is amended--
                    (A) in paragraph (1), by striking ``only during two 
                periods of 90 days each'' and all that follows through 
                ``with respect to each such period, if'' and inserting 
                ``during a particular period only if, with respect to 
                that period,''; and
                    (B) in the matter in paragraph (2)(B) preceding 
                clause (i), by striking ``90-day or 30-day period or a 
                subsequent extension''.
            (2) Section 1814(a).--Section 1814(a)(7)(A) (42 U.S.C. 
        1395f(a)(7)(A)) is amended--
                    (A) by adding ``and'' at the end of clause (i);
                    (B) by striking ``, and'' at the end of clause (ii) 
                and adding a semicolon; and
                    (C) by striking clause (iii).
    (c) Effective Date.--The amendments made by the preceding 
subsections apply to hospice care furnished after the sixth month 
beginning after the date of enactment of this Act.

SEC. 203. PAYMENT FOR HOME HOSPICE CARE BASED ON LOCATION WHERE CARE IS 
              FURNISHED.

    (a) In General.--Section 1814(i)(2) (42 U.S.C. 1395f(i)(2)) is 
amended by adding at the end the following:
    ``(D) A hospice program shall submit claims for payment for hospice 
care furnished in an individual's home under this title only on the 
basis of the geographic location at which the service is furnished, as 
determined by the Secretary.''.
    (b) Effective Date.--The amendment made by subsection (a) applies 
to cost reporting periods beginning on or after October 1, 1997.

SEC. 204. LIMITATION ON HOSPICE CARE LIABILITY FOR INDIVIDUALS NOT IN 
              FACT TERMINALLY ILL.

    (a) In General.--Section 1879(g) (42 U.S.C. 1395pp(g)) is amended 
to read as follows:
    ``(g) A coverage denial described in this subsection is--
            ``(1) with respect to the provision of home health services 
        to an individual, a failure to meet the requirements of section 
        1814(a)(2)(C) or section 1835(a)(2)(A) in that the individual--
                    ``(A) is or was not confined to his home; or
                    ``(B) does or did not need skilled nursing care on 
                an intermittent basis; and
            ``(2) with respect to the provision of hospice care to an 
        individual, a failure to meet the requirement of section 
        1861(dd)(3)(A).''.
    (b) Conforming Amendment.--Section 1879(f)(4)(A) (42 U.S.C. 
1395pp(f)(4)(A)) is amended by striking ``subsection (g)'' and 
inserting ``subsection (g)(1)''.
    (c) Effective Date.--The amendments made by the preceding 
subsections apply to services furnished after the date of enactment of 
this Act.

SEC. 205. MEDICARE CAPITAL ASSET SALES PRICE EQUAL TO BOOK VALUE.

    (a) In General.--Section 1861(v)(1)(o) (42 U.S.C. 1395x(v)(1)(O)) 
is amended--
            (1) in clause (i)--
                    (A) by striking ``and (if applicable) a return on 
                equity capital'';
                    (B) by striking ``hospital or skilled nursing 
                facility'' and inserting ``provider of services'';
                    (C) by striking ``clause (iv)'' and inserting 
                ``clause (iii)''; and
                    (D) by striking ``the lesser of the allowable 
                acquisition cost'' and all that follows up to the 
                period and inserting ``the historical cost of the 
                asset, as recognized under this title, less 
                depreciation allowed, to the owner of record as of the 
                date of enactment of the Medicare and Medicaid Fraud, 
                Abuse and Waste Prevention Amendments of 1997 (or, in 
                the case of an asset not in existence as of that date, 
                the first owner of record of the asset after that 
                date)'';
            (2) by striking clause (ii); and
            (3) by renumbering clauses (iii) and (iv) as (ii) and 
        (iii), respectively.
    (b) Effective Date.--The amendments made by subsection (a) apply to 
changes of ownership that occur after the third month beginning after 
the date of enactment of this Act.

SEC. 206. REPEAL OF MORATORIUM ON BAD DEBT POLICY.

    Section 4008(c) of the Omnibus Budget Reconciliation Act of 1987 
(42 U.S.C. 1395f note) is repealed.

                     PART B--BANKRUPTCY PROVISIONS

SEC. 221. APPLICATION OF CERTAIN PROVISIONS OF THE BANKRUPTCY CODE.

    (a) Restricted Applicability of Bankruptcy Stay, Discharge, and 
Preferential Transfer Provisions to Medicare and Medicaid Debts.--Title 
XI is amended by inserting after section 1143 the following new 
section:

       ``application of certain provisions of the bankruptcy code

    ``Sec. 1144. (a) Medicare and Medicaid-Related Actions Not Stayed 
by Bankruptcy Proceedings.--The commencement or continuation of any 
action against a debtor under this title or title XVIII or XIX (other 
than an action with respect to health care services for the debtor 
under title XVIII), including any action or proceeding to exclude or 
suspend the debtor from program participation, assess civil money 
penalties, recoup or set off overpayments, or deny or suspend payment 
of claims shall not be subject to the provisions of section 362(a) of 
title 11 of the United States Code.
    ``(b) Medicare- and Medicaid-Related Debt Not Dischargeable in 
Bankruptcy.--A debt owed to the United States or to a State for an 
overpayment under title XVIII or XIX (other than an overpayment for 
health care services for the debtor under title XVIII), or for a 
penalty, fine, or assessment under this title or title XVIII or XIX, 
shall not be dischargeable under any provision of title 11 of the 
United States Code.
    ``(c) Repayment of Certain Debts Considered Final.--Payments made 
to repay a debt to the United States or to a State with respect to 
items or services provided, or claims for payment made, under title 
XVIII or XIX (including repayment of an overpayment (other than an 
overpayment for health care services for the debtor under such title 
XVIII)), or to pay a penalty, fine, or assessment under this title or 
title XVIII or XIX, shall be considered final and not preferential 
transfers under section 547 of title 11 of the United States Code.''.
    (b) Medicare Rules Applicable to Bankruptcy Proceedings.--Title 
XVIII is amended by adding at the end the following new section:

           ``application of provisions of the bankruptcy code

    ``Sec. 1894. (a) Use of Medicare Standards and Procedures.--
Notwithstanding any provision of title 11 of the United States Code or 
any other provision of law, in the case of claims by a debtor in 
bankruptcy for payment under this title, the determination of whether 
the claim is allowable, and of the amount payable, shall be made in 
accordance with the provisions of this title and title XI and 
implementing regulations.
    ``(b) Notice to Creditor of Bankruptcy Petitioner.--In the case of 
a debt owed to the United States with respect to items or services 
provided, or claims for payment made, under this title (including a 
debt arising from an overpayment or a penalty, fine, or assessment 
under title XI of this title), the notices to the creditor of 
bankruptcy petitions, proceedings, and relief required under title 11 
of the United States Code (including under section 342 of that title 
and section 2002(j) of the Federal Rules of Bankruptcy Procedure) shall 
be given to the Secretary. Provision of such notice to a fiscal agent 
of the Secretary shall not be considered to satisfy this requirement.
    ``(c) Turnover of Property to the Bankruptcy Estate.--For purposes 
of section 542(b) of title 11 of the United States Code, a claim for 
payment under this title shall not be considered to be a matured debt 
payable to the estate of a debtor until such claim has been allowed by 
the Secretary in accordance with procedures under this title.''.

   TITLE III--MEDICARE MENTAL HEALTH PARTIAL HOSPITALIZATION SERVICES

SEC. 301. SERVICES NOT TO BE FURNISHED IN RESIDENTIAL SETTINGS.

    (a) In General.--Section 1861(ff)(3)(A) (42 U.S.C. 1395x(ff)(3)(A)) 
is amended by inserting ``other than in an individual's home or in an 
inpatient or residential setting'' before the period.
    (b) Effective Date.--The amendment made by subsection (a) applies 
to services furnished after the sixth month beginning after the date of 
enactment of this Act.

SEC. 302. ADDITIONAL REQUIREMENTS FOR COMMUNITY MENTAL HEALTH CENTERS.

    (a) Criteria for Providing Services.--Section 1861(ff)(3)(B) (42 
U.S.C. 1395x(ff)(3)(B)) is amended by striking ``entity--'' and all 
that follows and inserting the following:
``entity that--
            ``(i) provides the community mental health services 
        specified in section 1913(c)(1)) of the Public Health Service 
        Act;
            ``(ii) meets applicable certification or licensing 
        requirements for community mental health centers in the State 
        in which it is located;
            ``(iii) is providing a significant share of its services to 
        individuals who are not eligible for benefits under this title; 
        and
            ``(iv) meets such additional conditions as the Secretary 
        may specify in the interest of the health and safety of 
        individuals furnished services, or for the effective or 
        efficient furnishing of services.''.
    (b) Effective Date.--The amendments made by subsection (a) apply to 
services furnished after the sixth month beginning after the date of 
enactment of this Act.

SEC. 303. PROSPECTIVE PAYMENT SYSTEM.

    (a) Establishment of System.--Section 1833 (42 U.S.C. 13951) is 
amended by inserting after subsection (o) the following new subsection:
    ``(p) Prospective Payment System for Partial Hospitalization 
Services Provided by a Community Mental Health Center.--The Secretary 
may establish by regulation a prospective payment system for partial 
hospitalization services provided by a community mental health center. 
The system shall provide for appropriate payment levels for efficient 
centers and take into account payment levels for similar services 
furnished by other entities.''.
    (b) Coinsurance at 20 Percent of Prospective Payment Basis.--
Section 1866(a)(2)(A) (42 U.S.C. 1395cc(a)(2)(A)) is amended by adding 
at the end the following: ``In the case of services described in 
section 1832(a)(2)(J), clause (ii) of the first sentence of this 
subparagraph shall be applied by substituting the payment basis 
established under section 1833(p) for the reasonable charges.''.
    (c) Conforming Amendments.--Section 1833(a) (42 U.S.C. 1395l(a)) is 
amended--
            (1) in the matter in paragraph (2) preceding subparagraph 
        (A), by striking ``and (I)'' and inserting ``(I), and (J)'';
            (2) by striking ``and'' at the end of paragraph (6);
            (3) by striking the period at the end of paragraph (7) and 
        adding ``; and''; and
            (4) by adding at the end the following new paragraph:
            ``(8) in the case of services described in section 
        1832(a)(2)(J), 80 percent of the payment basis under the 
        prospective payment system established under section 
        1833(p).''.
    (d) Effective Date.--The amendments made by subsections (b) and (c) 
apply to services furnished after the first calendar year that ends at 
least six months after the date on which regulations are issued under 
section 1833(p) of the Social Security Act (42 U.S.C. 1395l(p)).

                TITLE IV--MEDICARE RURAL HEALTH CLINICS

SEC. 401. PER-VISIT PAYMENT LIMITS FOR PROVIDER-BASED CLINICS.

    (a) Extension of Limit.--
            (1) Amendment.--The matter in section 1833(f) (42 U.S.C. 
        1395l(f)) preceding paragraph (1) is amended by striking 
        ``independent rural health clinics'' and inserting ``rural 
        health clinics (other than such clinics in rural hospitals with 
        less than 50 beds)''.
            (2) Effective date.--The amendment made by paragraph (1) 
        applies to services furnished after 1997.
    (b) Technical Clarification.--Section 1833(f)(1) (42 U.S.C. 
1395l(f)(1)) is amended by inserting ``per visit'' after ``$46''.

SEC. 402. ASSURANCE OF QUALITY SERVICES.

    (a) In General.--Subparagraph (I) of the first sentence of section 
1861(aa)(2) (42 U.S.C. 1395x(aa)(2)) is amended to read as follows:
            ``(I) has a quality assessment and performance improvement 
        program, and appropriate procedures for review of utilization 
        of clinic services, as the Secretary may specify,''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on January 1, 1998.

SEC. 403. WAIVER OF CERTAIN STAFFING REQUIREMENTS LIMITED TO CLINICS IN 
              PROGRAM.

    (a) In General.--Section 1861(aa)(7)(B) (42 U.S.C. 1395x(aa)(7)(B)) 
is amended by inserting ``, or if the facility has not yet been 
determined to meet the requirements (including subparagraph (J) of the 
first sentence of paragraph (2)) of a rural health clinic.''.
    (b) Effective Date.--The amendment made by subsection (a) applies 
to waiver requests made after 1997.

SEC. 404. REFINEMENT OF SHORTAGE AREA REQUIREMENTS.

    (a) Designation Reviewed Triennially.--Section 1861(aa)(2) (42 
U.S.C. 1395x(aa)(2)) is amended in the second sentence, in the matter 
in clause (i) preceding subclause (I)--
            (1) by striking ``and that is designated'' and inserting 
        ``and that, within the previous three-year period, has been 
        designated''; and
            (2) by striking ``or that is designated'' and inserting 
        ``or designated''.
    (b) Area Must Have Shortage of Health Care Practitioners.--Section 
1861(aa)(2) (42 U.S.C. 1395x(aa)(2)), as amended by subsection (a), is 
further amended in the second sentence, in the matter in clause (i) 
preceding subclause (I)--
            (1) by striking the comma after ``personal health 
        services''; and
            (2) by inserting ``and in which there are insufficient 
        numbers of needed health care practitioners (as determined by 
        the Secretary),'' after ``Bureau of the Census)''.
    (c) Previously Qualifying Clinics Grandfathered Only to Prevent 
Shortage.--Section 1861(aa)(2) (42 U.S.C. 1395x(aa)(2)) is amended in 
the third sentence by inserting before the period ``if it is 
determined, in accordance with criteria established by the Secretary in 
regulations, to be essential to the delivery of primary care services 
that would otherwise be unavailable in the geographic area served by 
the clinic''.
    (d) Effective Dates; Implementing Regulations.--
            (1) In general.--Except as otherwise provided, the 
        amendments made by the preceding subsections take effect on 
        January 1 of the first calendar year beginning at least one 
        month after enactment of this Act.
            (2) Current rural health clinics.--The amendments made by 
        the preceding subsections take effect, with respect to entities 
        that are rural health clinics under title XVIII of the Social 
        Security Act on the date of enactment of this Act, on January 1 
        of the second calendar year following the calendar year 
        specified in paragraph (1).
            (3) Grandfathered clincs.--
                    (A) In general.--The amendment made by subsection 
                (c) shall take effect on the effective date of 
                regulations issued by the Secretary under subparagraph 
                (B).
                    (B) Regulations.--The Secretary shall issue final 
                regulations implementing subsection (c) that shall take 
                effect no later than January 1 of the third calendar 
                year beginning at least one month after enactment of 
                this Act.

SEC. 405. DECREASED BENEFICIARY COST SHARING FOR RHC SERVICES.

    (a) In General.--Clause (ii) of the second sentence of section 
1861(aa)(2) (42 U.S.C. 1395x(aa)(2)) is amended by striking ``pursuant 
to subsections (a) and (b) of section 1833'' and inserting ``described 
in section 1833(b) or clause (ii) of the first sentence of section 
1866(a)(2)(A) (but any coinsurance amount shall not exceed 20 percent 
of the limit described in section 1833(f), and no coinsurance amount 
shall be imposed for items and services described in section 
1861(s)(10)(A))''.
    (b) Conforming and Technical Amendment.--Section 1833(a)(3) (42 
U.S.C. 1395l(a)(3)) is amended to read as follows:
            ``(3)(A) in the case of rural health clinic services, the 
        costs which--
                    ``(i) are (I) reasonable and related to the cost of 
                furnishing such services or (II) based on such other 
                tests of reasonableness as the Secretary may prescribe 
                in regulations, including those authorized under 
                section 1861(v)(1)(A);
                    ``(ii) do not exceed the limit under subsection 
                (f);
                    ``(iii) are reduced by any deductible or 
                coinsurance amount a clinic or center may charge as 
                described in clause (ii) of the second sentence of 
                section 1861(aa)(2); and
                    ``(iv) do not exceed 80 percent of such costs 
                determined under the preceding clauses (other than for 
                items and services described in section 
                1861(s)(10)(A)); and
            ``(B) in the case of Federally qualified health center 
        services and services described in subparagraph (E) of section 
        1832(a)(2), the costs which--
                    ``(i) are (I) reasonable and related to the cost of 
                furnishing such services or (II) based on such other 
                tests of reasonableness as the Secretary may 
prescribe in regulations, including those authorized under section 
1861(v)(1)(A);
                    ``(ii) are reduced by the amount a provider may 
                charge as described in clause (ii) of section 
                1866(a)(2)(A); and
                    ``(iii) do not exceed 80 percent of such costs 
                determined under the preceding clauses (other than for 
                items and services described in section 
                1861(s)(10)(A));''.
    (c) Effective Date.--The amendments made by the preceding 
subsections apply to services furnished after 1997.

SEC. 406. PROSPECTIVE PAYMENT SYSTEM FOR RHC SERVICES.

    (a) Establishment of System.--Section 1833 (42 U.S.C. 1395l) is 
amended by adding at the end the following new subsection:
    ``(t) Rural Health Clinic Services.--
            ``(1) Establishment of prospective payment system.--The 
        Secretary shall establish by regulation (which may be an 
        interim final regulation) a prospective payment system for 
        rural health clinic services. The regulation shall be issued no 
        later than June 30, 2000.
            ``(2) Adjustments for inappropriate utilization.--The 
        Secretary may provide for adjustments to the payment levels 
        under the prospective payment system to take into account 
        excessive utilization (if any) of rural health clinic services.
            ``(3) Annual update.--The Secretary shall provide for an 
        annual update to the payment levels under the prospective 
        payment system.
            ``(4) Budget neutral payments.--The Secretary shall 
        establish the initial payment levels under paragraph (1) in a 
        manner that results in aggregate payments (including payments 
        by individuals to whom services are provided) for the first 
        year, as estimated by the Secretary, approximately equal to the 
        aggregate payments that would have otherwise been made under 
        this part.''.
    (b) Coinsurance at 20 Percent of Prospective Payment Basis.--Clause 
(ii) of the second sentence of section 1861(aa)(2) (42 U.S.C. 
1395x(aa)(2)) (as amended by section 405(a) of this Act) is further 
amended by striking ``described in section 1833(b) or clause (ii) of 
the first sentence of section 1866(a)(2)(A) (but any coinsurance amount 
shall not exceed 20 percent of the limit described in section 1833(f), 
and'' and inserting ``described in section 1833(b) (for any deductible 
amount) and 20 percent of the payment basis under the prospective 
payment system established under section 1833(t) (for any coinsurance 
amount, but''.
    (c) Conforming Amendments.--
            (1) Sec. 1833(a)(3)(A).--Section 1833(a)(3)(A) (42 U.S.C. 
        1395l(a)(3)(A)) (as enacted by section 405(b) of this Act) is 
        amended by striking everything after ``rural health clinic 
        services,'' and inserting ``80 percent of the payment basis 
        under the prospective payment system established under section 
        1833(t) (or 100 percent, for items and services described in 
        section 1861(s)(10)(A)); and''.
            (2) Sec. 1833(f).--Section 1833(f) (42 U.S.C. 1395l(f)) is 
        repealed.
    (d) Effective Date.--The amendments made by subsections (b) and (c) 
apply to services furnished after the first calendar year that ends at 
least six months after the date on which regulations are issued under 
section 1833(t) of the Social Security Act (42 U.S.C. 1395l(t)).
                                 <all>