[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2632 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 2632

To amend title XI and title XVIII of the Social Security Act to combat 
                      health care fraud and abuse.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 7, 1997

  Mr. Stark  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 amend title XI and title XVIII of the Social Security Act to combat 
                      health care fraud and abuse.

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

SECTION 1. SHORT TITLE; AMENDMENTS TO SOCIAL SECURITY ACT; TABLE OF 
              CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Medicare and 
Medicaid Beneficiary Protection Act of 1997''.
    (b) Amendments to Social Security Act.--Except as otherwise 
specifically provided, whenever in this title an amendment is expressed 
in terms of an amendment to or repeal of a section or other provision, 
the reference shall be considered to be made to that section or other 
provision of the Social Security Act.
    (c) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; amendments to Social Security Act; table of 
                            contents.
          TITLE I--REVISIONS TO SANCTIONS FOR FRAUD AND ABUSE

                    Subtitle A--Exclusion Authority

Sec. 101. Clarification of application of mandatory exclusion based on 
                            felony convictions relating to controlled 
                            substances to individuals involved in 
                            health care.
Sec. 102. Clarification of period of exclusion based on loss of 
                            license.
Sec. 103. Clarification of application of sanctions to Federal health 
                            care programs.
Sec. 104. Clarification of application of certain individuals who have 
                            had an ownership or control interest.
                  Subtitle B--Civil Monetary Penalties

Sec. 111. Repeal of clarification concerning levels of knowledge 
                            required for imposition of civil monetary 
                            penalties.
Sec. 112. Civil money penalties for services ordered or prescribed by 
                            an excluded individual or entity.
Sec. 113. Permitting HHS to pursue civil monetary penalty actions after 
                            consultation with the attorney general.
Sec. 114. Clarification of payment practice exception authority to 
                            definition of remuneration.
Sec. 115. Extension of subpoena and injunction authority.
Sec. 116. Amounts of civil monetary penalties.
Sec. 117. Applying anti-dumping sanctions against physicians who refuse 
                            an appropriate transfer at a hospital with 
                            specialized capabilities or facilities.
                     Subtitle C--Criminal Penalties

Sec. 121. Kickback penalties for knowing violations.
Sec. 122. Repeal of expanded exception for risk-sharing contract to 
                            anti-kickback provisions.
Sec. 123. Expansion of criminal penalties for kickbacks.
Sec. 124. Treatment of certain social security act crimes as Federal 
                            health care offenses.
                  Subtitle D--Miscellaneous Provision

Sec. 131. Repeal of HIPAA advisory opinion authority.
Sec. 132. Clarification of identification numbers to be used with 
                            adverse action data base.
Sec. 133. Access to information in adverse action data bank by entities 
                            provided information on licensing 
                            sanctions.
         TITLE II--IMPROVEMENTS IN PROTECTING PROGRAM INTEGRITY

                     Subtitle A--General Provisions

Sec. 201. Limiting the use of automatic stays and discharge in 
                            bankruptcy proceedings for provider 
                            liability for health care fraud.
Sec. 202. Requiring certain providers to fund annual financial and 
                            compliance audits as a condition of 
                            participation under the medicare and 
                            medicaid programs.
Sec. 203. Liability of medicare carriers and fiscal intermediaries and 
                            of State medicaid agencies for claims 
                            submitted by excluded providers.
Sec. 204. Medicare hospital outpatient payment policies.
Sec. 205. Standardization of forms used for certifications of medical 
                            necessity and certifications of terminal 
                            illness.
Sec. 206. No mark-up for drugs, biologicals, or nutrients; use of 
                            national drug code numbers in medicare 
                            claims.
Sec. 207. Adjustments in hospital payments to reflect excess payment 
                            resulting from a financial interest with 
                            down-stream facilities.
                      Subtitle B--Other Provisions

Sec. 211. Inclusion of cost of home health services in explanation of 
                            medicare benefits.
Sec. 212. Prohibition of ``cold call'' marketing for Medicare+Choice 
                            plans.
              TITLE III--PROVIDER ENROLLMENT PROCESS; FEES

Sec. 301. Fees for agreements with medicare providers and suppliers.
Sec. 302. Requirements and fees for issuance of standard health care 
                            identifiers.
Sec. 303. Administrative fees for medicare overpayment collection.
                     TITLE IV--PAYMENT IMPROVEMENTS

       Subtitle A--Mental Health Partial Hospitalization Services

Sec. 401. Limitation on location of provision of services.
Sec. 402. Qualifications for community mental health centers.
Sec. 403. Audit of providers of partial hospitalization services.
Sec. 404. Prospective payment system for partial hospitalization 
                            services.
Sec. 405. Demonstration for expanded partial hospitalization services.
                Subtitle B--Rural Health Clinic Services

Sec. 411. Decreased beneficiary cost sharing for rural health clinic 
                            services.
Sec. 412. Prospective payment system for rural health clinic services.

          TITLE I--REVISIONS TO SANCTIONS FOR FRAUD AND ABUSE

                    Subtitle A--Exclusion Authority

SEC. 101. CLARIFICATION OF APPLICATION OF MANDATORY EXCLUSION BASED ON 
              FELONY CONVICTIONS RELATING TO CONTROLLED SUBSTANCES TO 
              INDIVIDUALS INVOLVED IN HEALTH CARE.

    (a) In General.--Section 1128(a)(4) (42 U.S.C. 1320a-7(a)(4)) is 
amended--
            (1) by striking ``convicted for'' and inserting ``convicted 
        of'', and
            (2) by striking the period at the end and inserting the 
        following: ``if the individual or entity at the time of the 
        offense or conviction--
                    ``(A) is a health care practitioner, provider, or 
                supplier;
                    ``(B) is a person with an ownership or control 
                interest (as defined in section 1124(a)(3)) in an 
                entity that is a health care provider or supplier;
                    ``(C) is an officer, director, agent, or managing 
                employee (as defined in section 1126(b)) of such an 
                entity; or
                    ``(D) is employed in any capacity in the health 
                care industry.''.
    (b) Conforming Expansion of Discretionary Exclusion Authority.--
Section 1128(b)(3) (42 U.S.C. 1320a-7(b)(3)) is amended--
            (1) in the heading, by striking ``Misdemeanor conviction'' 
        and inserting ``Conviction'';
            (2) by inserting ``that is not described in subsection 
        (a)(3) and'' after ``Any individual or entity''; and
            (3) by striking ``consisting of a misdemeanor''.
    (c) Effective Date.--The amendments made by this section shall be 
effective as if included in the enactment of section 211(b) of the 
Health Insurance Portability and Accountability Act of 1996, but shall 
not apply to any action initiated before the date of the enactment of 
this Act.

SEC. 102. CLARIFICATION OF PERIOD OF EXCLUSION BASED ON LOSS OF 
              LICENSE.

    (a) In General.--Section 1128(c)(3)(E) (42 U.S.C. 1320a-7(c)(3)(E)) 
is amended--
            (1) by striking ``or surrendered'' and inserting ``or 
        otherwise lost, or surrendered during a formal disciplinary 
        proceeding,'', and
            (2) by inserting ``, or otherwise sanctioned under,'' after 
        ``suspended from''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to exclusions in effect on or after the date of the enactment of 
this Act.

SEC. 103. CLARIFICATION OF APPLICATION OF SANCTIONS TO FEDERAL HEALTH 
              CARE PROGRAMS.

    (a) Coverage of Employment.--Section 1128 (42 U.S.C. 1320a-7) is 
amended--
            (1) in subsection (a), by inserting ``(including employment 
        under)'' after ``participation in'', and
            (2) in subsection (b), by inserting ``(including 
        employment)'' after ``participation''.
    (b) Application Under Civil Money Penalty Authority.--Section 1128A 
(42 U.S.C. 1320a-7a) is amended--
            (1) in subsection (a)(4), by striking ``program under title 
        XVIII or a State health care program'' and inserting ``Federal 
        health care program'' each place it appears;
            (2) in subsection (a)(5)--
                    (A) by striking ``title XVIII of this Act, or under 
                a State health care program (as defined in section 
                1128(h))'' and inserting ``a Federal health care 
                program'', and
                    (B) by striking ``title XVIII, or a State health 
                care program (as so defined)'' and inserting ``such 
                program'';
            (3) in the last sentence of subsection (a), by striking 
        ``and to direct the appropriate State agency to exclude the 
        person from participation in any State health care program''; 
        and
            (4) in subsection (h), by striking ``State agency or 
        agencies administering or supervising the administration of 
        State health care programs (as defined in section 1128(h))'' 
        and inserting ``State or Federal State agency or agencies 
        administering or supervising the administration of Federal 
        health care programs''.
    (c) Application of Waiver Provisions to Federal Health Care 
Programs.--Section 1128 (42 U.S.C. 1320a-7) is amended--
            (1) in subsection (c)(3)(B), by striking ``upon the request 
        of a State'' and inserting ``upon the request of the director 
        of a Federal health care program'';
            (2) in subsection (d)(3)(B)(i)--
                    (A) by striking ``State health care program'' and 
                inserting ``Federal health care program'', and
                    (B) by striking ``State agency'' and inserting 
                ``State or Federal agency''; and
            (3) in subsection (d)(3)(B)(ii), by striking ``State health 
        care program'' and inserting ``Federal health care program 
        (other than under title XVIII)''.
    (d) Notice Provision Regarding Federal Health Care Programs.--
Section 1128 (42 U.S.C. 1320a-7) is amended--
            (1) in the heading of subsection (d), by striking ``to 
        State Agencies and Exclusion Under State Health Care Programs'' 
        and inserting ``and Exclusion Under Federal Health Care 
        Programs'';
            (2) in subsection (d)(1), by striking ``State'' and 
        inserting ``Federal'';
            (3) in subsection (d)(2)--
                    (A) by striking ``State agency'' and inserting 
                ``Federal or State agency'' each place it appears, and
                    (B) by striking ``State health care program'' and 
                inserting ``Federal health care program'' each place it 
                appears;
            (4) in subsection (d)(3)(A), by striking ``State'' and 
        inserting ``Federal''; and
            (5) in subsection (g)(3)--
                    (A) by striking ``State agency'' and inserting 
                ``Federal or State agency'', and
                    (B) by striking ``State health care program'' and 
                inserting ``Federal health care program''.
    (e) Use of Definition of Federal Health Care Program and Treatment 
of Federal Employees Health Benefits Program as a Federal Health Care 
Program.--Section 1128B(f)(1) (42 U.S.C. 1320a-7b(f)(1)), as amended by 
section 123(a)(2)(B), is amended--
            (1) by inserting ``and sections 1128, 1128A, and 1128B'' 
        after ``this section'', and
            (2) in subparagraph (A), by striking ``(other than the 
        health insurance program under chapter 89 of title 5, United 
        States Code)''.
    (f) Effective Date.--(1) Subject to paragraph (2), the amendments 
made by this section shall take effect on the date of the enactment of 
this Act.
    (2) The amendment made by subsection (e)(2) shall apply, with 
respect to convictions under the health insurance program under chapter 
89 of title 5, United States Code, that occur on or after the date of 
the enactment of this Act.

SEC. 104. CLARIFICATION OF APPLICATION TO CERTAIN INDIVIDUALS WHO HAVE 
              HAD AN OWNERSHIP OR CONTROL INTEREST.

    Section 1128(b)(15)(A)(i) (42 U.S.C. 1320a-7(b)(15)(A)(i)) is 
amended by inserting ``or has had'' after ``who has''.

                  Subtitle B--Civil Monetary Penalties

SEC. 111. REPEAL OF CLARIFICATION CONCERNING LEVELS OF KNOWLEDGE 
              REQUIRED FOR IMPOSITION OF CIVIL MONETARY PENALTIES.

    (a) Elimination of ``Knowing'' Standard.--Section 1128A(a) (42 
U.S.C. 1320a-7a(a)) is amended by striking ``knowingly'' in paragraphs 
(1), (2), and (3).
    (b) Elimination of Statutory Definition of ``Should Know''.--
Section 1128A(i) (42 U.S.C. 1320a-7a(i)) is amended by striking 
paragraph (7).
    (c) Effective Date.--The amendments made by this section shall 
apply to acts or omissions occurring on or after the date of the 
enactment of this Act.

SEC. 112. CIVIL MONEY PENALTIES FOR SERVICES ORDERED OR PRESCRIBED BY 
              AN EXCLUDED INDIVIDUAL OR ENTITY.

    (a) In General.--Section 1128A(a)(1) (42 U.S.C. 1320a-7a(a)(1)) 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)(2)''; and
                    (D) by striking ``or'' at the end;
            (2) by redesignating subparagraph (E) as subparagraph (F); 
        and
            (3) by inserting after subparagraph (D) the following:
                    ``(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''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to items and services furnished, ordered, or prescribed after the 
date of the enactment of this Act.

SEC. 113. PERMITTING HHS TO PURSUE CIVIL MONETARY PENALTY ACTIONS AFTER 
              CONSULTATION WITH THE ATTORNEY GENERAL.

    (a) In General.--The first sentence of section 1128A(c)(1) (42 
U.S.C. 1320a-7a(c)(1)) is amended by striking ``as authorized'' and all 
that follows up to the period at the end and inserting ``after 
consultation with the Attorney General''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to proceedings initiated on or after the date of the enactment of 
this Act.

SEC. 114. CLARIFICATION OF PAYMENT PRACTICE EXCEPTION AUTHORITY TO 
              DEFINITION OF REMUNERATION.

    Section 1128A(i)(6)(B) (42 U.S.C. 1320a-7a(i)(6)(B)) is amended by 
inserting ``or payment practice'' after ``permissible waiver''.

SEC. 115. 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.--(1) Section 1128A(j)(1) (42 U.S.C. 
1320a-7a(j)(1)) is amended--
            (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.
    (2) Section 1128A(j)(2) (42 U.S.C. 1320a-7a(j)(2)) is amended 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), as 
amended by section 4303(a)(2) of the Balanced Budget Act of 1997 
(Public Law 105-33), is amended by adding at the end the following new 
subsection:
    ``(k) For provisions of law concerning the Secretary's subpoena and 
injunction authority respect to activities under this section, see 
subsections (j) and (k) of section 1128A.''.

SEC. 116. AMOUNTS OF CIVIL MONETARY PENALTIES.

    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'';
            (2) by inserting before the period ``(and for the purpose 
        of so applying section 1128A(a), each act of a physician for 
        which a sanction may be applied 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 physician 
        with respect to that item or service)''.

SEC. 117. APPLYING ANTI-DUMPING SANCTIONS AGAINST PHYSICIANS WHO REFUSE 
              AN APPROPRIATE TRANSFER AT A HOSPITAL WITH SPECIALIZED 
              CAPABILITIES OR FACILITIES.

    (a) In General.--Section 1867(d)(1) (42 U.S.C. 1395dd(d)(1)) is 
amended by adding at the end the following new subparagraph:
            ``(D) Any physician (including a physician on-call) who--
                    ``(i) is responsible for the acceptance of an 
                individual at a hospital that is subject to the 
                requirements of subsection (g) and who fails or refuses 
                to accept a transfer of the individual to such hospital 
                in a case in which the hospital may not refuse to 
                accept the transfer under such subsection; or
                    ``(ii) is responsible for the treatment of an 
                individual at a hospital that is subject to the 
                requirements of subsection (g) and who fails or refuses 
                to appear within a reasonable period of time at the 
                hospital in order to provide treatment required in 
                connection with the transfer of the individual,
        is subject to a civil money penalty and exclusion in the same 
        manner as provided under subparagraph (B) in the case of a 
        negligent violation described in such subparagraph.''.
    (b) Effective Date.--The amendments made by subsection (a) apply to 
failures and refusals occurring on or after the date of the enactment 
of this Act.

                     Subtitle C--Criminal Penalties

SEC. 121. 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. 122. REPEAL OF EXPANDED EXCEPTION FOR RISK-SHARING CONTRACT TO 
              ANTI-KICKBACK PROVISIONS.

    (a) In General.--Section 1128B(b)(3) (42 U.S.C. 1320a-7b(b)(3)) is 
amended--
            (1) by adding ``and'' at the end of subparagraph (D);
            (2) by striking ``; and'' at the end of subparagraph (E) 
        and inserting a period; and
            (3) by striking subparagraph (F).
    (b) Elimination of Report.--Subsection (b) of section 216 of the 
Health Insurance Portability and Accountability Act of 1996 is 
repealed.
    (c) Effective Dates.--(1) The amendments made by subsection (a) 
shall apply to remuneration provided on or after the date of the 
enactment of this Act, regardless of whether it is pursuant to an 
agreement or arrangement entered into before such date.
    (2) Subsection (b) shall take effect on the date of the enactment 
of this Act.

SEC. 123. EXPANSION OF CRIMINAL PENALTIES FOR KICKBACKS.

    (a) Application of Criminal Penalty Authority to All Health Care 
Benefit Programs.--
            (1) In general.--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''.
            (2) Definition of health care benefit program.--Section 
        1128B(f) (42 U.S.C. 1320a-7b(f)) is amended--
                    (A) by redesignating paragraphs (1) and (2) as 
                subparagraphs (A) and (B);
                    (B) by striking ``(f)'' and inserting ``(f)(1)''; 
                and
                    (C) 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 section 24(b) of title 18, 
United States Code.''.
            (3) Conforming amendment.--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)''.

SEC. 124. TREATMENT OF CERTAIN SOCIAL SECURITY ACT CRIMES AS FEDERAL 
              HEALTH CARE OFFENSES.

    Section 24(a) of title 18, United States Code, is amended--
            (1) by striking the period at the end of paragraph (2) and 
        inserting ``; or''; and
            (2) by adding after paragraph (2) the following new 
        paragraph:
            ``(3) section 1128B of the Social Security Act.''.

                  Subtitle D--Miscellaneous Provision

SEC. 131. REPEAL OF HIPAA ADVISORY OPINION AUTHORITY.

    (a) General Authority.--Section 1128D (42 U.S.C. 1320a-7d) is 
amended by striking subsection (b).
    (b) Conforming Amendments.--
            (1) Section 1128D (42 U.S.C. 1320a-7d) is amended--
                    (A) in subsection (a)(1)(A)--
                            (i) by adding ``and'' at the end of clause 
                        (ii),
                            (ii) by striking clause (iii), and
                            (iii) by redesignating clause (iv) as 
                        clause (iii) and by striking ``subsection (c)'' 
                        and inserting ``subsection (b)''; and
                    (B) by redesignating subsection (c) as subsection 
                (b).
            (2) Section 1128C(a)(1)(D) (42 U.S.C. 1320a-7c(a)(1)(D)), 
        as inserted by section 201(a) of the Balanced Budget Act of 
        1997, is amended by striking ``advisory opinions and''.
    (c) Effective Date.--The amendments made by this section take 
effect on the date of the enactment of this Act, but shall not apply to 
advisory opinions issued before such date.

SEC. 132. CLARIFICATION OF IDENTIFICATION NUMBERS TO BE USED WITH 
              ADVERSE ACTION DATA BASE.

    (a) In General.--Section 1128E(b)(2)(A) (42 U.S.C. 1320a-
7e(b)(2)(A)) is amended by striking ``and TIN (as defined in section 
7701(a)(41) of the Internal Revenue Code of 1986)'' and inserting 
``social security account number and, if applicable, Federal employer 
identification number''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to information reported on or after such date (not later than 60 
days after the date of the enactment of this Act) as the Secretary of 
Health and Human Services shall specify.

SEC. 133. ACCESS TO INFORMATION IN ADVERSE ACTION DATA BANK BY ENTITIES 
              PROVIDED INFORMATION ON LICENSING SANCTIONS.

    Section 1128E(d)(1) (42 U.S.C. 1320a-7e(d)(1)) is amended by 
striking ``and health plans'' and inserting ``, health plans, private 
accreditation organizations, and other agencies, organizations, 
hospitals, and health care entities to which information may be 
disclosed under section 1921(b)''.

         TITLE II--IMPROVEMENTS IN PROTECTING PROGRAM INTEGRITY

                     Subtitle A--General Provisions

SEC. 201. LIMITING THE USE OF AUTOMATIC STAYS AND DISCHARGE IN 
              BANKRUPTCY PROCEEDINGS FOR PROVIDER LIABILITY FOR HEALTH 
              CARE FRAUD.

    (a) Nonapplicability of Automatic Stay Provisions.--
            (1) In exclusion proceedings.--Section 1128 (42 U.S.C. 
        1320a-7), as amended by section 4303(a) of the Balanced Budget 
        Act of 1997, is amended by adding at the end the following new 
        subsection:
    ``(k) Nonapplicability of Bankruptcy Stay.--An exclusion imposed 
under this section or a proceeding seeking an exclusion under this 
section is not subject to the automatic stay under section 362(a) of 
title 11, United States Code.''.
            (2) In civil money penalty proceedings.--Section 1128A(a) 
        (42 U.S.C. 1320a-7a(a)) is amended by adding at the end the 
        following: ``An exclusion, penalty, or assessment imposed under 
        this section or a proceeding that seeks an exclusion, penalty, 
        or assessment under this section, is not subject to the 
        automatic stay under section 362(a) of title 11, United States 
        Code. Notwithstanding any other provision of law, amounts made 
        payable under this section are not dischargeable under any 
        provision of such title.''.
            (3) In recoupment under part a of medicare.--Section 
        1815(d) (42 U.S.C. 1395g(d)) is amended--
                    (A) by inserting ``(1)'' after ``(d)'', and
                    (B) by adding at the end the following:
    ``(2) The recoupment of an overpayment under this section is not 
subject to the automatic stay under section 362(a) of title 11, United 
States Code. Notwithstanding any other provision of law, amounts due to 
the Secretary under this section are not dischargeable under any 
provision of such title.''.
            (4) In recoupment under part b of medicare.--Section 
        1833(j) (42 U.S.C. 1395l(j)) is amended--
                    (A) by inserting ``(1)'' after ``(j)'', and
                    (B) by adding at the end the following:
    ``(2) The recoupment of an overpayment under this section is not 
subject to the automatic stay under section 362(a) of title 11, United 
States Code. Notwithstanding any other provision of law, amounts due to 
the Secretary under this section are not dischargeable under any 
provision of such title.''.
            (5) In collection of overdue payments on scholarships and 
        loans.--Section 1892(a)(4) (42 U.S.C. 1395ccc(a)(4)) is amended 
        by adding at the end the following:
            ``(5) An exclusion imposed under paragraph (2)(C)(ii) or 
        (3)(B) is not subject to the automatic stay under section 
        362(a) of title 11, United States Code.''.
    (b) Nondischargability.--
            (1) In civil money penalty proceedings.--Section 1128A(a) 
        (42 U.S.C. 1320a-7a(a)), as amended by subsection (a)(2), is 
        further amended by adding at the end the following: 
        ``Notwithstanding any other provision of law, amounts made 
        payable under this section are not dischargeable under any 
        provision of such title.''.
            (2) In recoupment under part a of medicare.--Section 
        1815(d) (42 U.S.C. 1395g(d)(2)), as amended by subsection 
        (a)(3), is further amended by adding at the end the following:
    ``(3) Notwithstanding any other provision of law, amounts due to 
the Secretary under this section are not dischargeable under any 
provision of such title.''.
            (3) In recoupment under part b of medicare.--Section 
        1833(j) (42 U.S.C. 1395l(j)), as amended by subsection (a)(4), 
        is further amended by adding at the end the following: 
        ``Notwithstanding any other provision of law, amounts due to 
        the Secretary under this section are not dischargeable under 
        any provision of such title.''.
    (c) Effective Dates.--
            (1) The amendments made by subsection (a) shall apply to 
        bankruptcy petitions filed after the date of the enactment of 
        this Act.
            (2) The amendments made by subsection (b) shall apply on 
        and after the date of the enactment of this Act to any 
        proceeding which has not been completed as of such date.

SEC. 202. REQUIRING CERTAIN PROVIDERS TO FUND ANNUAL FINANCIAL AND 
              COMPLIANCE AUDITS AS A CONDITION OF PARTICIPATION UNDER 
              THE MEDICARE AND MEDICAID PROGRAMS.

    (a) Establishment of Annual Financial and Compliance Audit Fee 
Schedule.--Title XI, as amended by section 4321(c) of the Balanced 
Budget Act of 1997, is amended by inserting after section 1146 the 
following new section:

             ``compliance and financial audit fee schedule

    ``Sec. 1147. (a) Establishment.--
            ``(1) In general.--Subject to subsection (c), the Secretary 
        shall--
                    ``(A) establish a schedule of hourly rates for the 
                conduct of annual financial and compliance audits 
                during each fiscal year for all covered health care 
                entities (as defined in subsection (b)); and
                    ``(B) provide for the conduct, in a separate office 
                within the Department of Health and Human Services, of 
                such audits by specially trained and qualified 
                personnel of each entity's substantial compliance with 
                the requirements for payment to such entity under title 
                XVIII, title XIX, or both (whichever is applicable), 
                including requirements relating to medical necessity 
                and appropriate coding and documentation for services 
                and supplies provided.
            ``(2) Scope of audits.--An audit of an entity under 
        paragraph (1)(B) shall include, as appropriate, audits of 
        related entities (including businesses owned, in whole or in 
        part, by the provider).
    ``(b) Covered Health Care Entity.--
            ``(1) In general.--For purposes of this section, the term 
        `covered health care entity' means, with respect to a fiscal 
        year, an entity that--
                    ``(A) is a disclosing entity (as defined in section 
                1124(a)(2)), a health care provider, a practitioner (or 
                group of practitioners), an eligible organization (as 
                defined in section 1876(b)), or a Medicare+Choice 
                organization (as defined in section 1959(a)(1)), and
                    ``(B) provides (or arranges for the provision of) 
                services for which aggregate payment of at least 
                $500,000 is made under titles XVIII and XIX during the 
                fiscal year.
            ``(2) Application of control group rule.--In applying 
        paragraph (1), all persons treated as a single employer under 
        subsection (a) or (b) of section 52 of the Internal Revenue 
        Code of 1986 shall be treated as a single entity.
    ``(c) Requiring Maintenance of Appropriation Level.--No rates shall 
be collected under subsection (a) and no audits conducted under such 
subsection for a fiscal year if the amount appropriated and available 
for the conduct of audits of the type described in subsection (a)(1)(B) 
for the fiscal year is less than the amount so appropriated for fiscal 
year 1998 or for the fiscal year preceding the fiscal year involved, 
whichever is greater.
    ``(d) Use of Funds Exclusively for Financial and Compliance 
Audits.--Annual payments made to the Secretary under sections 
1866(a)(1)(T), 1862(a)(22), and 1903(i)(19) in the amounts specified 
under subsection (a) are hereby appropriated to the Secretary for the 
sole purpose of conducting audits described in subsection (a). Such 
amounts are available to the Secretary for such purpose without fiscal 
year limitation.''.
    (b) Application under Medicare Program.--
            (1) Payment requirement under medicare+choice program.--
        Section 1857(d) (42 U.S.C. 1395w-27(d)), as inserted by section 
        4001 of the Balanced Budget Act of 1997, is amended by adding 
        at the end the following new paragraph:
            ``(6) Payment for annual audit.--The contract shall require 
        the Medicare+Choice organization to provide for annual payment 
        to the Secretary of the appropriate amount specified under 
        section 1147(a) as necessary for the conduct of an annual 
        financial and compliance audit of the organization under such 
        section.''.
            (2) Payment requirement under current capitation.--Section 
        1876(k)(4) (42 U.S.C. 1395mm(k)(4)), as inserted by section of 
        the Balanced Budget Act of 1997, is amended by adding at the 
        end the following:
            ``(E) The requirement of providing for payment for annual 
        audits under section 1857(d)(6).''.
            (3) Payment requirement for providers of services.--Section 
        1866(a)(1) (42 U.S.C. 1395cc(a)(1)), as amended by section 
        4321(b) of the Balanced Budget Act of 1997, is amended--
                    (A) by adding a semicolon at the end of 
                subparagraph (R);
                    (B) by striking the period at the end of 
                subparagraph (S) and inserting ``; and''; and
                    (C) by inserting after subparagraph (S) the 
                following new subparagraph:
            ``(T) in the case of a provider that is a covered health 
        care entity (as defined in section 1147(b)), to provide for 
        annual payment to the Secretary of the appropriate amount 
        specified under section 1147(a) as necessary for the conduct of 
        an annual financial and compliance audit of the provider under 
        such section.''.
            (4) Requirement for other providers, suppliers, and 
        practitioners.--Section 1862(a) (42 U.S.C. 1395y(a)), as 
        amended by sections 4319(b), 4432(b), 4507(a)(2)(B), 4541(b), 
        and 4603(c)(2)(C) of the Balanced Budget Act of 1997, is 
        amended--
                    (A) by striking ``or'' at the end of paragraph 
                (20);
                    (B) by striking the period at the end of paragraph 
                (21) and inserting ``; or''; and
                    (C) by inserting after paragraph (21) the following 
                new paragraph:
            ``(22) where such expenses are for items and services 
        furnished by a covered health care entity (as defined in 
        section 1147(b)), unless the entity has an agreement in effect 
        under section 1857, 1866, or 1876(i) or has provided for annual 
        payment to the Secretary of the appropriate amount specified 
        under section 1147(a) as necessary for the conduct of an annual 
        financial and compliance audit of the audit under such 
        section.''.
    (c) Medicaid.--
            (1) Under managed care contract.--Section 1932(d) (42 
        U.S.C. 1396u-2(d)), as added by section 4707(a) of the Balanced 
        Budget Act of 1997, is amended by adding at the end the 
        following:
            ``(5) Payment for annual audit.--Each managed care entity, 
        in its contract under section 1903(m)(2)(A) or 1905(t)(3), 
        shall provide for annual payment to the Secretary of the 
        appropriate amount specified under section 1147(a) as necessary 
        for the conduct of an annual financial and compliance audit of 
        the entity under such section.''.
            (2) Other providers.--Section 1903(i) (42 U.S.C. 1396b(i)), 
        as amended by sections 4724(a) and 4724(b) of the Balanced 
        Budget Act of 1997, is amended--
                    (A) by striking ``or'' at the end of paragraph 
                (17);
                    (B) by striking the period at the end of paragraph 
                (18) and inserting ``; or''; and
                    (C) by inserting after paragraph (18) the following 
                new paragraph:
            ``(19) with respect to any amount expended for services 
        furnished by a covered health care entity (as defined in 
section 1147(b)), unless the entity has a contract under section 
1903(m)(2)(A) or 1905(t)(3) or has provided for annual payment to the 
Secretary of the appropriate amount specified under section 1147(a) as 
necessary for the conduct of an annual financial and compliance audit 
of the entity under such section.''.
    (d) Report on Auditing Agencies.--
            (1) Study.--The Secretary of Health and Human Services 
        shall conduct a study of the examining and accrediting agencies 
        that conduct audits and inspections of covered health care 
        entities (as defined in section 1147(b) of the Social Security 
        Act, as added by subsection (a)). Such study shall include an 
        examination of the audits and inspections conducted by such 
        agencies.
            (2) Report.--Based on the study conducted under paragraph 
        (1), the Secretary shall submit to Congress, by not later than 
        June 1, 1999, a report that includes recommendations on how 
        best to coordinate and consolidate these audits and inspections 
        to minimize unnecessary duplication.
    (e) Effective Date.--The amendments made by subsections (a) through 
(c) shall take effect on the date of the enactment of this Act and 
shall first apply to fiscal years beginning with fiscal year 1998.

SEC. 203. LIABILITY OF MEDICARE CARRIERS AND FISCAL INTERMEDIARIES AND 
              OF STATE MEDICAID AGENCIES FOR CLAIMS SUBMITTED BY 
              EXCLUDED PROVIDERS.

    (a) Reimbursement to the Secretary for Amounts Paid to Excluded 
Providers.--
            (1) Requirements for fiscal intermediaries.--
                    (A) In general.--Section 1816 (42 U.S.C. 1395h) is 
                amended by adding at the end the following new 
                subsection:
    ``(m) An agreement with an agency or organization under this 
section shall require that such agency or organization reimburse the 
Secretary for any amounts paid by the agency or organization for a 
service under this title which is furnished, directed, or prescribed by 
an individual or entity during any period for which the individual or 
entity is excluded pursuant to section 1128, 1128A, or 1156, from 
participation in the program under this title, if the amounts are paid 
after the Secretary notifies the agency or organization of the 
exclusion.''.
                    (B) Conforming amendment.--Subsection (i) of such 
                section is amended by adding at the end the following 
                new paragraph:
    ``(4) Nothing in this subsection shall be construed to prohibit 
reimbursement by an agency or organization under subsection (m).''.
            (2) Requirements for carriers.--Section 1842(b)(3) (42 
        U.S.C. 1395u(b)(3)) is amended--
                    (A) by striking ``and'' at the end of subparagraph 
                (I); and
                    (B) by inserting after subparagraph (I) the 
                following new subparagraph:
            ``(J) will reimburse the Secretary for any amounts paid by 
        the carrier for an item or service under this part which is 
        furnished, directed, or prescribed by an individual or entity 
        during any period for which the individual or entity is 
        excluded pursuant to section 1128, 1128A, or 1156, from 
        participation in the program under this title, if the amounts 
        are paid after the Secretary notifies the carrier of the 
        exclusion, and''.
            (3) Medicaid provision.--Section 1902(a)(39) (42 U.S.C. 
        1396a(a)(39)) is amended--
                    (A) by inserting ``(A)'' after ``provide'', and
                    (B) by inserting before the semicolon at the end 
                the following: ``, and (B) for reimbursement to the 
                Secretary of any payments made under the plan or any 
                item or service furnished, directed, or prescribed by 
                the excluded individual or entity during such period, 
                after the Secretary notifies the State of such 
                exclusion''.
    (b) Conforming Repeal of Mandatory Payment Rule.--Section 1862(e) 
(42 U.S.C. 1395y(e)) is amended--
            (1) in paragraph (1)(B), by striking ``and when the 
        person'' and all that follows through ``person)''; and
            (2) in paragraph (2), by striking the first sentence and 
        inserting the following: ``No individual or entity may bill (or 
        collect any amount from) any individual for any item or service 
        for which payment is denied under paragraph (1). No person is 
        liable for payment of any amounts billed for such an item or 
        service in violation of the previous sentence.''.
    (c) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to claims for payment submitted on or after the date of 
        the enactment of this Act.
            (2) Contract modification.--The Secretary of Health and 
        Human Services shall take such steps as may be necessary to 
        modify contracts and agreements entered into, renewed, or 
        extended before such date to conform such contracts or 
        agreements to the provisions of this subsection.

SEC. 204. MEDICARE HOSPITAL OUTPATIENT PAYMENT POLICIES.

    (a) Basing Medicare Payment for Hospital Outpatient Department 
Services on Payment Rates for Similar Services Provided Outside the 
Hospital Setting.--
            (1) In general.--Section 1833(t)(1) (42 U.S.C. 
        1395l(t)(1)), as added by section 4523(a) of the Balanced 
        Budget Act of 1997, is amended--
                    (A) in subparagraph (A), by inserting ``subject to 
                subparagraph (C),'' after ``1999,'', and
                    (B) by adding at the end the following new 
                subparagraph:
                    ``(C) Use of rates in non-hospital settings.--With 
                respect to covered OPD services furnished on or after 
                January 1, 2000, if payment may be made under this part 
                for similar services (such as physicians' services) 
                furnished outside the hospital setting, in accordance 
                with regulations of the Secretary, the total amount of 
                payment under this part for such covered OPD services 
                (including any facility-related component to such 
                services) shall be determined on the same basis on 
                which payment may be made for such similar services 
                furnished outside the hospital setting.''.
            (2) Conforming amendment.--The fifth sentence of section 
        1866(a)(2)(A) (42 U.S.C. 1395cc(a)(2)(A)), as added by section 
        4523(b) of the Balanced Budget Act of 1997, is amended by 
        inserting ``, or in the case described in section 
        1833(t)(1)(C), the coinsurance amount that would otherwise 
        apply with respect to the provision of the similar services 
        referred to in such section'' before the period at the end.
    (b) Medicare Payments for Inpatient Hospital Services Involving 
Emergency Care.--
            (1) MedPAC report on drg weighting factors.--The Medicare 
        Payment Advisory Commission (established under section 1805 of 
        the Social Security Act (42 U.S.C. 1395b-6), as inserted by 
        section 4022(a) of the Balanced Budget Act of 1997, shall 
        submit a report to Congress and the Secretary of Health and 
        Human Services, by January 1, 1999, on whether the DRG 
        weighting factors under section 1886(d)(4)(B) of the Social 
        Security Act for diagnosis-related groups associated with 
        emergency care are adequate to cover the costs of emergency 
        room use within discharges classified within such groups.
            (2) Adjustment of weighting factors.--Taking into account 
        the report submitted under paragraph (1), the Secretary of 
        Health and Human Services shall make appropriate adjustments in 
        the DRG weighting factors described in paragraph (1) for 
        discharges occurring on or after January 1, 2000, as may be 
        appropriate to ensure that hospital emergency room costs 
        attributable to medicare patients are appropriately covered.

SEC. 205. STANDARDIZATION OF FORMS USED FOR CERTIFICATIONS OF MEDICAL 
              NECESSITY AND CERTIFICATIONS OF TERMINAL ILLNESS.

    (a) Part A Services.--
            (1) Publication of standard.--Section 1814 (42 U.S.C. 
        1395f) is amended by adding at the end the following new 
        subsection:

                   ``Standard Form for Certifications

    ``(m)(1) For purposes of certifications and recertifications under 
paragraphs (2), (3), and (8) of subsection (a), the Secretary shall 
specify and publish a standard form and manner in which such 
certifications and recertifications are to be made.''.
            (2) Application to part a services.--Section 1814(a) (42 
        U.S.C. 1395f(a)) is amended--
                    (A) in paragraph (2), by striking ``certifies (and 
                recertifies,'' and inserting ``certifies in a form and 
                manner consistent with subsection (m)(1) (and 
                recertifies in such a form and manner,';
                    (B) in paragraph (3), by striking ``certifies'' and 
                inserting ``certifies in a form and manner consistent 
                with subsection (m)(1)''; and
                    (C) in paragraph (8), by striking ``certifies'' and 
                inserting ``certifies in a form and manner consistent 
                with subsection (m)(1)''.
    (b) Hospice Care.--
            (1) Publication of standard.--Section 1814(m) (42 U.S.C. 
        1395f(m)), as added by subsection (a), is amended by adding at 
        the end the following new paragraph:
    ``(2) For purposes of certifications and recertifications of 
terminal illness under subsection (a)(7), the Secretary shall specify 
and publish a standard form and manner in which such certifications and 
recertifications are to be made.''.
            (2) Application to hospice care.--Section 1814(a)(7) (42 
        U.S.C. 1395f(a)(7)) is amended--
                    (A) in subsection (A)(i), by inserting ``in a form 
                and manner consistent with subsection (m)(2)'' after 
                ``each certify in writing''; and
                    (B) in subsection (A)(ii), by inserting ``in such a 
                form and manner'' after ``recertifies''.
    (c) Part B Services.--
            (1) Publication of standard.--Section 1835 (42 U.S.C. 
        1395n) is amended by adding at the end the following:
    ``(f) For purposes of certifications and recertifications under 
subsection (a)(2), the Secretary shall specify and publish a standard 
form and manner in which such certifications and recertifications are 
to be made.''.
            (2) Application to part b services.--Section 1835(a)(2) (42 
        U.S.C. 1395n(a)(2)) is amended by striking ``certifies (and 
        recertifies,'' and inserting ``certifies in a form and manner 
        consistent with subsection (f) (and recertifies in such a form 
        and manner,'.
    (d) Effective Date.--The amendments made by subsections (a)(2), 
(b)(2), and (c)(2) shall apply to certifications and recertifications 
made on or after 6 months after the date the Secretary of Health and 
Human Services publishes a standard form and manner for such 
certifications and recertifications under the amendments made by 
subsections (a)(1), (b)(1), and (c)(1) respectively.

SEC. 206. NO MARK-UP FOR DRUGS, BIOLOGICALS, OR NUTRIENTS; USE OF 
              NATIONAL DRUG CODE NUMBERS IN MEDICARE CLAIMS.

    (a) No Mark-up for Drugs or Biologicals.--
            (1) In general.--Section 1842(o) (42 U.S.C. 1395u(o)), as 
        added by section 4556(a) of the Balanced Budget Act of 1997, is 
        amended to read as follows:
    ``(o)(1) For purposes of section 1833(a)(1)(S), the payment amount 
established in this subsection for a drug or biological shall be the 
lowest of the following:
            ``(A) The actual acquisition cost, as defined in paragraph 
        (2), to the person submitting the claim for payment for the 
        drug or biological.
            ``(B) The average wholesale price of such drug or 
        biological, as determined by the Secretary.
            ``(C) For payments for drugs or biologicals furnished on or 
        after January 1, 2000, the median actual acquisition cost of 
        all claims for payment for such drugs or biologicals for the 
        12-month period beginning July 1, 1998 (and adjusted, as the 
        Secretary determines appropriate, to reflect changes in the 
        cost of such drugs or biologicals due to inflation, and such 
        other factors as the Secretary determines appropriate).
            ``(D) The amount otherwise determined under this part.
    ``(2) For purposes of paragraph (1)(A), the term `actual 
acquisition cost' means, with respect to such drugs or biologicals the 
cost of the drugs or biologicals based on the most economical case size 
in inventory on the date of dispensing or, if less, the most economical 
case size purchased within six months of the date of dispensing whether 
or not that specific drug was furnished to an individual whether or not 
enrolled under this part. Such term includes appropriate adjustments, 
as determined by the Secretary, for all discounts, rebates, or any 
other benefit in cash or in kind (including travel, equipment, or free 
products). The Secretary shall include an additional payment for 
administrative, storage, and handling costs.
    ``(3)(A) No payment shall be made under this part for drugs or 
biologicals to a person whose bill or request for payment for such 
drugs or biologicals does not include a statement of the person's 
actual acquisition cost.
    ``(B) A person may not bill an individual enrolled under this 
part--
            ``(i) any amount other than the payment amount specified in 
        paragraph (1) or (4) (plus any applicable deductible and 
        coinsurance amounts), or
            ``(ii) any amount for such drugs or biologicals for which 
        payment may not be made pursuant to subparagraph (A).
    ``(C) If a person knowingly and willfully in repeated cases bills 
one or more individuals in violation of subparagraph (B), the Secretary 
may apply sanctions against that person in accordance with subsection 
(j)(2).
    ``(4) The Secretary may pay a reasonable dispensing fee (less the 
applicable deductible and coinsurance amounts) for drugs and 
biologicals to a licensed pharmacy approved to dispense drugs or 
biologicals under this part, if payment for such drugs or biologicals 
is made to the pharmacy.''.
            (2) Effective date.--The amendments made by paragraph (1) 
        apply to drugs and biologicals furnished on or after January 1, 
        1998.
            (3) Elimination of report on average wholesale price.--
        Section 4556 of the Balanced Budget Act of 1997 is amended--
                    (A) by striking subsection (c); and
                    (B) by redesignating subsection (d) as subsection 
                (c).
    (b) No Mark-up for Parenteral Nutrients.--
            (1) In general.--Section 1881(b) (42 U.S.C. 1395rr(b)) is 
        amended by adding at the end the following new paragraph:
    ``(12)(A) Intradialytic parenteral nutrients (including related 
supplies and equipment), when provided to a patient determined to have 
end stage renal disease, shall not be included as a dialysis service 
for purposes of payment under any prospective payment amount or 
comprehensive fee established under this section, and payment for such 
item shall be made separately in the amount specified in subparagraph 
(B).
    ``(B)(i) The amount specified in this subparagraph is 80 percent of 
the lowest of the following, less the applicable deductible amount:
            ``(I) The actual acquisition cost as defined in clause 
        (ii), to the person submitting the claim for payment for the 
        intradialytic parenteral nutrients.
            ``(II) The average wholesale price of such nutrients, as 
        determined by the Secretary.
            ``(III) For payments for nutrients furnished on or after 
        January 1, 2000, the median actual acquisition cost of all 
        claims for payment for such nutrients for the 12-month period 
        beginning July 1, 1998. The Secretary may adjust such median 
        actual acquisition cost to reflect changes in the cost of such 
        nutrients due to inflation, to costs associated with the proper 
        administration of such nutrients, and such other factors as the 
        Secretary determines appropriate.
    ``(ii) For purposes of clause (i), the term `actual acquisition 
cost' means, with respect to such nutrients, the cost of the nutrients 
at the time of purchase. Such term includes appropriate adjustments, as 
determined by the Secretary, for all discounts, rebates, or any other 
benefit in cash or in kind (including travel, equipment, or free 
products). The Secretary shall include an additional payment for 
administrative, storage, and handling costs.
    ``(iii) A physician, supplier, or other person may not bill an 
individual enrolled under part B any amount other than the payment 
amount specified in this subparagraph (plus any applicable deductible 
and coinsurance amounts).
    ``(C)(i) No payment shall be made under part B for intradialytic 
parenteral nutrients to a physician, supplier, or other person whose 
bill or request for payment for such nutrients does not include a 
statement of the physician's, supplier's, or other person's actual 
acquisition cost.
    ``(ii) A physician, supplier, or other person may not bill an 
individual enrolled under part B any amount for such nutrients for 
which payment may not be made pursuant to clause (i).
    ``(D) If a physician, supplier, or other person knowingly and 
willfully in repeated cases bills one or more individuals in violation 
of subparagraph (B)(iv) or (C)(ii), the Secretary may apply sanctions 
against that physician, supplier, or other person in accordance with 
section 1842(j)(2).''.
            (2) Effective date.--The amendment made by paragraph (1) 
        applies with respect to payments for intradialytic parenteral 
        nutrients provided on or after January 1, 1998.
    (c) Use of National Drug Code Numbers in Medicare Claims.--
            (1) In general.--The Secretary of Health and Human Services 
        shall modify the standard claim form used under part B of title 
        XVIII of the Social Security Act for physicians' services so 
        that the form provides for the reporting of the national drug 
        code (NDC) number for any prescription drug for which such a 
        number has been assigned.
            (2) Deadline; effective date.--The Secretary shall make the 
        modification under paragraph (1) in a manner so that the 
        modified form applies to claims submitted on or after such date 
        (not later than 6 months after the date of the enactment of 
        this Act) as the Secretary specifies.

SEC. 207. ADJUSTMENTS IN HOSPITAL PAYMENTS TO REFLECT EXCESS PAYMENT 
              RESULTING FROM A FINANCIAL INTEREST WITH DOWN-STREAM 
              FACILITIES.

    (a) In General.--Section 1886(d)(5) (42 U.S.C. 1395ww(d)(5)) is 
amended by adding at the end the following new subparagraph:
    ``(K) In the case of a hospital that has a financial relationship 
described in section 1866(a)(1)(S) with one or more home health 
agencies or other entities, the Secretary shall provide for such a 
payment adjustment as may be necessary to ensure that the total 
payments under this title to the hospital and such entities during a 
fiscal year does not exceed the total payments that the Secretary 
estimates would have been made under this title during the fiscal year 
if the services furnished by such entities had been furnished by 
entities with no such financial relationship to the hospital.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to payments during fiscal years beginning with fiscal year 1999.

                      Subtitle B--Other Provisions

SEC. 211. INCLUSION OF COST OF HOME HEALTH SERVICES IN EXPLANATION OF 
              MEDICARE BENEFITS.

    (a) In General.--Section 1895 (42 U.S.C. 1395fff), as added by 
section 4603(a) of the Balanced Budget Act of 1997, is amended by 
adding at the end the following new subsection:
    ``(e) Inclusion of Costs of Home Health Services in Explanation of 
Medicare Benefits.--The Secretary shall provide that each explanation 
of benefits provided under this title for home health services shall 
include the total amount that the home health agency or other provider 
of such services billed for such services.''.
    (b) Effective Date.--The amendments made by subsection (a) apply to 
explanation of benefits provided on and after the first day of the 
sixth month that begins after the date of the enactment of this Act.

SEC. 212. PROHIBITION OF ``COLD CALL'' MARKETING FOR MEDICARE+CHOICE 
              PLANS AND HOME HEALTH AGENCIES.

    (a) Medicare+Choice Plans.--Section 1851(h)(4) (42 U.S.C. 1395w-
21(h)(4)), as inserted by section 4001 of the Balanced Budget Act of 
1997, is amended--
            (1) by striking ``and'' at the end of subparagraph (A);
            (2) by striking the period at the end of subparagraph (B); 
        and
            (3) by adding at the end the following new subparagraph:
                    ``(C) shall prohibit a Medicare+Choice organization 
                from conducting, directly or indirectly, door-to-door, 
                telephonic, or other `cold-call' marketing of 
                enrollment under this part.''.
    (b) Home Health Agencies.--Section 1891(a) (42 U.S.C. 1395bbb(a)) 
is amended by adding at the end the following new paragraph:
            ``(7) The agency does not conduct, directly or indirectly, 
        door-to-door, telephonic, or other `cold-call' marketing of 
        home health services under this title.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act and shall apply to 
contracts entered into or renewed on or after such date.

              TITLE III--PROVIDER ENROLLMENT PROCESS; FEES

SEC. 301. FEES FOR AGREEMENTS WITH MEDICARE PROVIDERS AND SUPPLIERS.

    (a) Fees Related to Medicare Provider and Supplier Enrollment and 
Reenrollment.--Section 1866 (42 U.S.C. 1395cc) is amended by adding at 
the end the following:
    ``(j) Enrollment Procedures and Fees.--
            ``(1) Enrollment.--The Secretary may 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 may 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.''.
    (b) Clerical Amendment.--The heading of such section is amended to 
read as follows:

``agreements with providers of services and enrollment of other persons 
                         furnishing services''.

SEC. 302. REQUIREMENTS AND FEES FOR ISSUANCE OF STANDARD HEALTH CARE 
              IDENTIFIERS.

    Section 1173(b) (42 U.S.C. 1320d-2(b)) is amended by adding at the 
end the following:
            ``(3) Requirement to furnish social security numbers and 
        employer identification numbers.--The Secretary shall, as 
        appropriate, require each such individual, employer, health 
        plan, and health care provider to provide its employer 
        identification number (assigned pursuant to section 6109 of the 
        Internal Revenue Code of 1986) and social security account 
        number (assigned under section 205(c)(2)(B)) as a condition to 
receiving a unique health identifier.
            ``(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 under 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.''.

SEC. 303. ADMINISTRATIVE FEES FOR MEDICARE OVERPAYMENT COLLECTION.

    (a) Administrative Fees for Providers of Services Under Part A.--
Section 1815(d) (42 U.S.C. 1395g(d)) is amended by inserting ``(1)'' 
after ``(d)'' and by adding at the end the following:
    ``(2) If the payment of an excess described in paragraph (1) is not 
made (or effected by offset) within 30 days of the date of the 
determination, an administrative fee of 5 percent of the outstanding 
balance of the excess (after application of paragraph (1)), or such 
lower amount as an administrative law judge may determine upon an 
appeal of the initial determination of the excess, shall be imposed on 
the provider. The administrative fees so collected shall be deposited 
into the Federal Hospital Insurance Trust Fund.''.
    (b) Administrative Fees for Providers of Services or Other Persons 
Under Part B.--Section 1833(j) (42 U.S.C. 1395l(j)) is amended by 
inserting ``(1)'' after ``(j)'' and by adding at the end the following 
new paragraph:
    ``(2) If the payment of an excess described in paragraph (1) is not 
made (or effected by offset) within 30 days of the date of the 
determination, an administrative fee of 5 percent of the outstanding 
balance of the excess (after application of paragraph (1)), or such 
lower amount as an administrative law judge may determine upon an 
appeal of the initial determination of the excess, shall be imposed on 
the provider, or other person receiving the excess. The administrative 
fees so collected shall be deposited into the Federal Supplementary 
Medical Insurance Trust Fund.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to final determinations made on or after the date of the 
enactment of this Act.

                     TITLE IV--PAYMENT IMPROVEMENTS

       Subtitle A--Mental Health Partial Hospitalization Services

SEC. 401. LIMITATION ON LOCATION OF PROVISION OF SERVICES.

    (a) In General.--Section 1861(ff)(2) (42 U.S.C. 1395x(ff)(2)) is 
amended in the matter following subparagraph (I)--
            (1) by striking ``and furnished'' and inserting 
        ``furnished''; and
            (2) by inserting before the period the following: ``, and 
        furnished other than in a skilled nursing facility or in an 
        individual's Personal Residence''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to partial hospitalization services furnished on or after the 
first day of the third month beginning after the date of the enactment 
of this Act.

SEC. 402. QUALIFICATIONS FOR COMMUNITY MENTAL HEALTH CENTERS.

    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 mental health services described in 
        paragraph (1) of section 1913(c) of the Public Health Service 
        Act;
            ``(ii) meets applicable licensing or certification 
        requirements for community mental health centers in the State 
        in which it is located; and
            ``(iii) meets such additional conditions as the Secretary 
        may specify to ensure (I) the health and safety of individuals 
        being furnished such services, (II) the effective or efficient 
        furnishing of such services, and (III) the compliance of such 
        entity with the criteria described in such section.''.

SEC. 403. RE-ENROLLMENT OF PROVIDERS OF CMHC PARTIAL HOSPITALIZATION 
              SERVICES.

    (a) In General.--With respect to each community mental health 
center that furnishes partial hospitalization services for which 
payment is made under title XVIII of the Social Security Act, the 
Secretary of Health and Human Services shall provide for periodic 
recertification to ensure that the provision of such services complies 
with section 1913(c) of the Public Health Service Act.
    (b) Deadline for First Re-certification.--The first Re-
certification under subsection (a) shall be completed not later than 1 
year after the date of the enactment of this Act.

SEC. 404. PROSPECTIVE PAYMENT SYSTEM FOR PARTIAL HOSPITALIZATION 
              SERVICES.

    (a) Establishment of System.--Section 1833 (42 U.S.C. 1395l) is 
amended by inserting after subsection (o) the following:
    ``(p)(1) The Secretary may establish by regulation a prospective 
payment system for partial hospitalization services provided by a 
community mental health center or by a hospital to its outpatients. The 
system shall provide for appropriate payment levels for efficient 
centers and take into account payment levels for similar services 
furnished by other efficient entities.
    ``(2) A prospective payment system established pursuant to 
paragraph (1) shall provide for payment amounts for--
            ``(A) the first year in which such system applies, at a 
        level so that, as estimated by the Secretary, the total 
        aggregate payments under this part (including payments 
        attributable to deductibles and coinsurance) are equal to the 
        total aggregate payments that would have otherwise been made 
        under this part if such system had not been implemented; and
            ``(B) each subsequent year, in an amount equal to the 
        payment amount provided for under this paragraph for the 
        preceding year updated by the percentage increase in the 
        consumer price index for all urban consumers (all items; United 
        States city average) for the 12-month period ending with 
        September of that preceding year.''.
    (b) Coinsurance.--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.--(1) Section 1832(a)(2) (42 U.S.C. 
1395k(a)(2)) is amended--
            (A) in subparagraph (B), by striking ``or subparagraph 
        (I)'' and inserting ``, (I), or (J)''; and
            (B) in subparagraph (J), by striking ``provided by a 
        community mental health center (as described in section 
        1861(ff)(2)(B))''.
    (2) Section 1833(a) (42 U.S.C. 1395l(a)) is amended--
            (A) in paragraph (2) preceding subparagraph (A), by 
        striking ``(H), and (I)'' and inserting ``(H), (I), and (J)'';
            (B) by striking ``and'' at the end of paragraph (8);
            (C) by striking the period at the end of paragraph (9) and 
        inserting ``; and''; and
            (D) by adding at the end the following new paragraph:
            ``(10) in the case of partial hospitalization services, 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 on or after January 1 of the first year 
that begins at least 6 months after the date on which regulations are 
issued under section 1833(p) (42 U.S.C. 1395l(p)) as inserted by 
subsection (a).

SEC. 405. DEMONSTRATION FOR EXPANDED PARTIAL HOSPITALIZATION SERVICES.

    (a) Establishment.--
            (1) In general.--The Secretary of Health and Human Services 
        shall implement a demonstration project (in this section 
        referred to as the ``project'') under part B of title XVIII of 
        the Social Security Act under which community mental health 
        centers may offer expanded partial hospitalization services 
        (described in paragraph (2)) for purposes of providing for a 
        full continuum of ambulatory behavioral health care services.
            (2) Additional mental health services described.--For 
        purposes of paragraph (1), the expanded partial hospitalization 
        services are outpatient mental health services and such other 
        mental health services as the Secretary determines appropriate 
        which are not partial hospitalization services as defined in 
        section 1861(ff)(1) of such Act (42 U.S.C. 1395x(ff)(1)).
    (b) Selection of Centers.--For purposes of implementing such 
project, the Secretary shall select for participation in the project 
community mental health centers that serve populations in 3 different 
States, 1 of which predominantly serves rural populations.
    (c) Capitated Payment.--Under this project, payment for expanded 
partial hospitalization services shall be made on a capitated basis.
    (d) Waiver Authority.--The Secretary may waive such provisions of 
title XVIII of the Social Security Act as the Secretary deems necessary 
to conduct the project established under this section.
    (e) Evaluation and Report.--
            (1) Evaluation.--The Secretary shall evaluate the project. 
        Such evaluation shall include an examination of--
                    (A) the project's effect on the health and well-
                being of beneficiaries;
                    (B) any savings to the medicare program by reason 
                of capitated payments for partial hospitalization 
                services;
                    (C) the impact of basing payment for such services 
                on a capitated basis; and
                    (D) the project's effect on utilization of 
                inpatient services (including inpatient mental health 
                services), and associated costs.
            (2) Report.--Not later than 4 years after the date of the 
        enactment of this Act, the Secretary shall submit to Congress a 
        report containing a statement of the findings and conclusions 
        of the Secretary pursuant to the evaluation conducted under 
        paragraph (1), together with any recommendations for 
        legislation the Secretary considers appropriate with respect 
        to--
                    (A) the provision of additional mental health 
                services by community mental health centers under 
                partial hospitalization services; and
                    (B) payment for such services on a capitated basis.
    (f) Duration.--The project shall be conducted for a 3 year period.

                Subtitle B--Rural Health Clinic Services

SEC. 411. DECREASED BENEFICIARY COST SHARING FOR RURAL HEALTH CLINIC 
              SERVICES.

    (a) In General.--Section 1861(aa)(2) (42 U.S.C. 1395x(aa)(2)) is 
amended, in clause (ii) of the second sentence, 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 in no case may any coinsurance amount exceed 20 
percent of the limit described in section 1833(f), and in no case may 
any coinsurance be imposed for items and services described in 
subsection (s)(10)(A))''.
    (b) Conforming and Technical Amendment.--Paragraph (3) of section 
1833(a) (42 U.S.C. 1395l(a)) is amended to read as follows:
            ``(3)(A) in the case of services described in section 
        1832(a)(2)(D)(i) (relating to 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 services described in section 
        1832(a)(2)(D)(ii) (relating to Federally qualified health 
        center 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) 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 this section apply to 
services furnished on or after January 1, 1998.

SEC. 412. PROSPECTIVE PAYMENT SYSTEM FOR RURAL HEALTH CLINIC SERVICES.

    (a) Establishment of System.--Section 1833 (42 U.S.C. 1395l), as 
amended by section 4523(a) of the Balanced Budget Act of 1997, is 
amended by adding at the end the following:
    ``(u) Prospective Payment System for Rural Health Clinic 
Services.--
            ``(1) Establishment of system.--The Secretary shall 
        establish by 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, equal to the aggregate 
        payments that would have otherwise been made under this part 
        for the services covered under the system.''.
    (b) Application to Coinsurance.--Clause (ii) of the second sentence 
of section 1861(aa)(2) (42 U.S.C. 1395x(aa)(2)), as amended by section 
411(a), 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) Other Conforming Amendments.--Section 1833 (42 U.S.C. 1395l) is 
amended--
            (1) in subsection (a)(3)(A), as amended by section 411(b), 
        by striking ``rural health clinic services),'' and all that 
        follows and inserting ``rural health clinic services), 80 
        percent of the payment basis under the prospective payment 
        system established under section 1833(u) (or 100 percent of 
        such payment basis, for items and services described in section 
        1861(s)(10)(A)); and''; and
            (2) by striking subsection (f).
    (d) Effective Date.--The amendments made by subsections (b) and (c) 
apply to services furnished on or after January 1 of the first year 
that begins at least 6 months after the date on which regulations are 
issued under section 1833(u) of the Social Security Act (42 U.S.C. 
1395l(u)), as added by subsection (a).
                                 <all>