[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2584 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 2584

To provide a Federal response to fraud in connection with the provision 
   of or receipt of payment for health care services, and for other 
                               purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 30, 1997

 Ms. DeLauro (for herself, Mr. Frost, Mr. McGovern, Mr. Hinojosa, Mr. 
 Schumer, Mr. Baldacci, Mr. Frank of Massachusetts, Mrs. Thurman, Mr. 
  Manton, Mr. Olver, and Mr. Dellums) introduced the following bill; 
 which was referred to the Committee on the Judiciary, and in addition 
     to the Committee on Commerce, 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 provide a Federal response to fraud in connection with the provision 
   of or receipt of payment for health care services, and for other 
                               purposes.

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

                 TITLE I--HEALTH CARE FRAUD PROSECUTION

SEC. 101. SHORT TITLE.

    This title may be cited as the ``Health Care Fraud Prosecution Act 
of 1997''.

SEC. 102. INCREASED PENALTIES FOR HEALTH CARE FRAUD.

    (a) Offense.--Part I of title 18, United States Code, is amended by 
inserting after chapter 50A the following new chapter:

                    ``CHAPTER 50B--HEALTH CARE FRAUD

``Sec.
``1101. Health care fraud.
``1102. Penalties.
``1103. Restitution.
``Sec. 1101. Health care fraud
    ``(a) Offense.--A health care provider that engages in conduct 
constituting an offense under section 1341 or 1343 of this title for 
the purpose of or in connection with the provision of health care 
services or supplies or the payment therefor or reimbursement of the 
costs thereof, when--
            ``(1) the amount of loss caused by the fraudulent conduct 
        exceeds $10,000; or
            ``(2) the offender had previously been convicted of fraud 
        in Federal or State court,
shall be fined under this title, imprisoned in accordance with section 
1102 of this title, or both.
    ``(b) Definition.--In this section, the term `health care provider' 
means--
            ``(1) a physician, nurse, dentist, therapist, pharmacist, 
        or other professional provider of health care; and
            ``(2) a hospital, health maintenance organization, 
        pharmacy, laboratory, clinic, or other health care facility or 
        a provider of medical services, medical devices, medical 
        equipment, or other medical supplies.
``Sec. 1102. Penalties
    ``(a) In General.--In the case of an offense under section 1101 of 
this title not described in subsection (b) or (c) of this section, the 
offender shall be sentenced to a term of imprisonment of not more than 
10 years.
    ``(b) Serious Physical Injury or Endangerment of Life of Patient.--
In the case of an offense under section 1101 of this title that--
            ``(1) caused serious physical injury to a patient; or
            ``(2) endangered the life of a patient,
the offender shall be sentenced to a term of imprisonment of not more 
than 20 years.
    ``(c) Death of Patient.--In the case of an offense under section 
1101 of this title that caused the death of a patient, the offender 
shall be sentenced to a term of imprisonment of not more than life.
``Sec. 1103. Restitution
    ``(a) In General.--In sentencing a person convicted of an offense 
under section 1101 of this title, the court shall order the offender to 
pay restitution to the patient and any payor, such as an insurer, 
employer health benefit plan, or government program, for economic loss 
sustained as a result of the offense.
    ``(b) Restitution Procedure.--Except to the extent inconsistent 
with this section, sections 3363 and 3364 of this title apply to 
restitution made under this section.''.
    (b) Clerical Amendment.--The table of chapters at the beginning of 
part I of title 18, United States Code, is amended by inserting after 
the item relating to chapter 50A the following new item:

``50B. Health care fraud.''.

SEC. 103. CRIMINAL FORFEITURE OF HEALTH CARE FRAUD PROCEEDS.

    Section 982(a) of title 18, United States Code, is amended by 
adding at the end the following new paragraph:
    ``(8) The court, in imposing sentence on a person convicted of an 
offense under section 1101 of this title, shall order that the offender 
forfeit to the United States any real or personal property constituting 
or derived from proceeds that the offender obtained directly or 
indirectly as the result of the offense.''.

SEC. 104. REWARDS FOR INFORMATION LEADING TO PROSECUTION AND 
              CONVICTION.

    Section 3059(c)(1) of title 18, United States Code, is amended by 
inserting ``1101 or'' before ``2326''.

SEC. 105. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated for the purposes of 
carrying out the amendments made by this title--
            (1) for fiscal year 1998--
                    (A) $25,000,000 for the Federal Bureau of 
                Investigation to hire, equip, and train no fewer than 
                250 special agents and support staff to investigate 
                health-care fraud cases;
                    (B) $5,000,000 to hire, equip, and train no fewer 
                than 50 assistant United States Attorneys and support 
                staff to prosecute health-care fraud cases; and
                    (C) $5,000,000 to hire, equip, and train no fewer 
                than 50 investigators in the Office of Inspector 
                General, Department of Health and Human Services, to be 
                devoted exclusively to health-care fraud cases; and
            (2) for each fiscal year thereafter, such sums as may be 
        necessary.

            TITLE II--HEALTH CARE FRAUD AND ABUSE COMMISSION

SEC. 201. SHORT TITLE.

    This title may be cited as the ``Health Care Fraud and Abuse 
Commission Act of 1997''.

SEC. 202. ESTABLISHMENT OF HEALTH CARE FRAUD AND ABUSE COMMISSION.

    (a) In General.--There is established a commission to be known as 
the ``Health Care Fraud and Abuse Commission'' (in this title referred 
to as the ``Commission'').
    (b) Composition.--The Commission shall be composed of 18 members as 
follows:
            (1) Officials.--
                    (A) The Secretary of Health and Human Services (or 
                the Secretary's designee).
                    (B) The Inspector General of the Department of 
                Health and Human Services (or the Inspector General's 
                designee).
                    (C) The Attorney General (or the Attorney General's 
                designee).
                    (D) The Director of the Federal Bureau of 
                Investigation (or the Director's designee).
                    (E) The Administrator of the Health Care Financing 
                Administration (or the Administrator's designee).
            (2) Public members.--Thirteen members, appointed by the 
        President, of which--
                    (A) one shall be an Attorney General of a State;
                    (B) one shall be a representative of State medicaid 
                fraud control programs;
                    (C) one shall be a State official directly 
                responsible for regulation of health insurance;
                    (D) one shall be a representative of physicians;
                    (E) one shall be a representative of hospital 
                administrators;
                    (F) one shall be a representative of health 
                insurance companies;
                    (G) one shall be a representative of employers who 
                self-fund employee health benefit plans;
                    (H) one shall be a representative of employers who 
                purchase a health benefit plan from a health insurance 
                company;
                    (I) one shall be a representative of medicare 
                carriers;
                    (J) one shall be a representative of medicare peer 
                review organizations;
                    (K) one shall be a representative of health care 
                consumers;
                    (L) one shall be a representative of medicare 
                beneficiaries; and
                    (M) one shall be a representative of labor unions.
        In making appointments under this paragraph of an individual 
        who is a representative of persons or organizations, the 
        President shall consider the recommendations of national 
        organizations that represent such persons or organizations. The 
        President shall report to Congress, within 90 days after the 
        date of the enactment of this Act, the names of the members 
        appointed under this paragraph.
    (c) Terms.--Each member shall be appointed for the life of the 
Commission. A vacancy in the Commission shall be filled in the manner 
in which the original appointment was made.

SEC. 203. FUNCTIONS OF COMMISSION.

    (a) In General.--The Commission shall--
            (1) investigate the nature, magnitude, and cost of health 
        care fraud and abuse in the United States, and
            (2) identify and develop the most effective methods of 
        preventing, detecting, and prosecuting or litigating such fraud 
        and abuse, with particular emphasis on coordinating public and 
        private prevention, detection, and enforcement efforts.
    (b) Particulars.--Among other items, the Commission shall examine 
at least the following:
            (1) Mechanisms to provide greater standardization of claims 
        administration in order to accommodate fraud prevention and 
        detection.
            (2) Mechanisms to allow more freedom of health benefit 
        plans to exchange information for coordinating case development 
        and prosecution or litigation efforts, without undermining 
        patient and provider privacy protections or violating anti-
        trust laws.
            (3) The extension to private health insurers of 
        administrative remedies currently available to public insurers.
            (4) Mechanisms for private insurers to organize and finance 
        investigation and litigation efforts when more than one insurer 
        may have received fraudulent claims from a provider.
            (5) Creating a model State statute for establishing State 
        insurance fraud units and State laws to strengthen insurers' 
        ability to pursue and recover from fraudulent providers.
            (6) The need for regulation of new types of health care 
        providers.
            (7) Criteria for physician referrals to facilities in which 
        they (or family members) have a financial interest.
            (8) The availability of resources to law enforcement 
        authorities to combat health care fraud and abuse.
    (c) Report.--After approval by a majority vote, a quorum being 
present, the Commission shall transmit to Congress a report on its 
activities. The report shall be transmitted not later than 18 months 
after the date that a majority of the public members of the Commission 
have been appointed. The report shall contain a detailed statement of 
the Commission's findings, together with such recommendations as the 
Commission considers appropriate.

SEC. 204. ORGANIZATION AND COMPENSATION.

    (a) Organization.--
            (1) Quorum.--A majority of the members of the Commission 
        shall constitute a quorum but a lesser number may hold 
        hearings.
            (2) Chairman.--The Commission shall elect one of its 
        members to serve as chairman of the Commission.
            (3) Meetings.--The Commission shall meet at the call of the 
        chairman or a majority of its members. Meetings of the 
        Commission are open to the public under section 10(a)(10) of 
        the Federal Advisory Committee Act, except that the Commission 
        may conduct meetings in executive session but only if a 
        majority of the members of the Commission (a quorum being 
        present) approve going into executive session.
    (b) Compensation of Members.--Members of the Commission shall serve 
without compensation, but shall be reimbursed for travel, subsistence, 
and other necessary expenses incurred in the performance of their 
duties as members of the Commission.

SEC. 205. STAFF OF COMMISSION.

    (a) In General.--The Commission may appoint and fix the 
compensation of a staff director and such other additional personnel as 
may be necessary to enable the Commission to carry out its functions, 
without regard to the laws, rules, and regulations governing 
appointment and compensation and other conditions of service in the 
competitive service.
    (b) Detail of Federal Employees.--Upon request of the chairman, any 
Federal employee who is subject to such laws, rules, and regulations, 
may be detailed to the Commission to assist it in carrying out its 
functions under this title, and such detail shall be without 
interruption or loss of civil service status or privilege.
    (c) Experts and Consultants.--The Commission may procure temporary 
and intermittent services under section 3109(b) of title 5, United 
States Code, but at rates for individuals not to exceed the daily 
equivalent of 120 percent of the maximum annual rate of basic pay 
payable for GS-15 of the General Schedule.

SEC. 206. AUTHORITY OF COMMISSION.

    (a) Hearings and Sessions.--The Commission may, for the purpose of 
carrying out this title, hold hearings, sit and act at times and 
places, take testimony, and receive evidence as the Commission 
considers appropriate. The Commission may administer oaths or 
affirmations to witnesses appearing before it.
    (b) Obtaining Official Data.--
            (1) In general.--The Commission may secure directly from 
        any department or agency of the United States information 
        necessary to enable it to carry out this title. Upon request of 
        the chairman of the Commission, the head of that department or 
        agency shall furnish that information to the Commission.
            (2) Access to information.--Information obtained by the 
        Commission is available to the public in the same manner in 
        which information may be made available under sections 552 and 
        552a of title 5, United States Code.
    (c) Gifts, Bequests, and Devises.--The Commission may accept, use, 
and dispose of gifts, bequests, or devises of services or property for 
the purpose of aiding or facilitating the work of the Commission.
    (d) Mails.--The Commission may use the United States mails in the 
same manner and under the same conditions as other departments and 
agencies of the United States.
    (e) Administrative Support Services.--Upon the request of the 
Commission, the Administrator of General Services shall provide to the 
Commission, on a reimbursable basis, the administrative support 
services necessary for the Commission to carry out its responsibilities 
under this title.
    (f) Subpoena Power.--
            (1) In general.--The Commission may issue subpoenas 
        requiring the attendance and testimony of witnesses and the 
        production of any evidence relating to any matter which the 
        Commission is authorized to investigate under this title. The 
        attendance of witnesses and the production of evidence may be 
        required from any place within the United States at any 
        designated place of hearing within the United States.
            (2) Failure to obey a subpoena.--If a person refuses to 
        obey a subpoena issued under paragraph (1), the Commission may 
        apply to a United States district court for an order requiring 
        that person to appear before the Commission to give testimony, 
        produce evidence, or both, relating to the matter under 
        investigation. The application may be made within the judicial 
        district where the hearing is conducted or where that person is 
        found, resides, or transacts business. Any failure to obey the 
        order of the court may be punished by the court as civil 
        contempt.
            (3) Service of subpoenas.--The subpoenas of the Commission 
        shall be served in the manner provided for subpoenas issued by 
        a United States district court under the Federal Rules of Civil 
        Procedure for the United States district courts.
            (4) Service of process.--All process of any court to which 
        application is to be made under paragraph (2) may be served in 
        the judicial district in which the person required to be served 
        resides or may be found.

SEC. 207. TERMINATION.

    The Commission shall terminate 90 days after the date the report is 
submitted under section 203(c).

SEC. 208. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to the Commission such sums 
as are necessary to carry out its functions, to remain available until 
expended.
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