[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 2335 Introduced in Senate (IS)]







105th CONGRESS
  2d Session
                                S. 2335

 To amend title XVIII of the Social Security Act to improve efforts to 
                combat medicare fraud, waste, and abuse.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 21, 1998

  Mr. Harkin (for himself and Mr. Hollings) introduced the following 
  bill; which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To amend title XVIII of the Social Security Act to improve efforts to 
                combat medicare fraud, waste, 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; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Medicare Waste Tax 
Reduction Act of 1998''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Increased antifraud audits and medical reviews.
Sec. 3. Expansion of medicare senior waste patrol nationwide.
Sec. 4. Application of inherent reasonableness to all part B services 
                            other than physicians' services.
Sec. 5. Oversight of home health agencies.
Sec. 6. No mark-up for drugs or biologicals.
Sec. 7. Ensuring that the medicare program does not reimburse claims 
                            owed by other payers.
Sec. 8. Repeal of expanded exception for risk-sharing contract to anti-
                            kickback provisions.
Sec. 9. Expansion of criminal penalties for kickbacks.
Sec. 10. Extension of subpoena and injunction authority.
Sec. 11. Civil monetary penalties for services ordered or prescribed by 
                            an excluded individual or entity.
Sec. 12. Civil monetary penalties for false certification of 
                            eligibility to receive partial 
                            hospitalization and hospice services.
Sec. 13. Application of certain provisions of the bankruptcy code.
Sec. 14. Improving private sector coordination in combatting health 
                            care fraud.
Sec. 15. Fees for agreements with medicare providers and suppliers.
Sec. 16. Increased medicare compliance, education, and assistance for 
                            health care providers.
Sec. 17. Paperwork and administrative hassle reduction.
Sec. 18. Clarification of application of sanctions to Federal health 
                            care programs.
Sec. 19. Payments for durable medical equipment.
Sec. 20. Implementation of commercial claims auditing systems.
Sec. 21. Partial hospitalization payment reforms.

SEC. 2. INCREASED ANTIFRAUD AUDITS AND MEDICAL REVIEWS.

    (a) In General.--Section 1893(d) of the Social Security Act (42 
U.S.C. 1395ddd(d)) is amended by inserting after paragraph (3) the 
following:
            ``(4) In the case of fiscal year 1999 and thereafter, 
        procedures to ensure that--
                    ``(A) the number of medical reviews, utilization 
                reviews, and fraud reviews in a fiscal year of 
                providers of services and other individuals and 
                entities furnishing items and services for which 
                payment may be made under this title is equal to at 
                least twice the number of such reviews that were 
                conducted in fiscal year 1998;
                    ``(B) the number of provider cost reports audited 
                in a fiscal year is equal to at least--
                            ``(i) 15 percent of those submitted by a 
                        home health agency, a skilled nursing facility, 
                        or a supplier of durable medical equipment; and
                            ``(ii) twice the number of such reports 
                        that were audited in fiscal year 1998 for those 
                        submitted by any other provider of services or 
                        any other individual or entity furnishing items 
                        and services for which payment may be made 
                        under this title; and
                    ``(C) in determining which providers of services, 
                individuals, or cost reports to review or audit, 
                priority is placed on providers, individuals, and areas 
                that the Secretary determines are subject to abuse and 
                most likely to result in mispayment or overpayment 
                recoveries.''.
    (b) Increase in Appropriated Amounts To Account for Medicare 
Integrity Program.--Section 1817(k)(4) of the Social Security Act (42 
U.S.C. 1395i(k)(4)) is amended--
            (1) in subparagraph (A), by striking ``subparagraph (B)'' 
        and inserting ``subparagraphs (B) and (C)'';
            (2) in subparagraph (B)--
                    (A) in clause (iii), by striking ``$550,000,000 and 
                not more than $560,000,000'' and inserting 
                ``$650,000,000 and not more than $660,000,000'';
                    (B) in clause (iv), by striking ``$620,000,000 and 
                not more than $630,000,000'' and inserting 
                ``$720,000,000 and not more than $730,000,000'';
                    (C) in clause (v), by striking ``$670,000,000 and 
                not more than $680,000,000'' and inserting 
                ``$770,000,000 and not more than $780,000,000'';
                    (D) in clause (vi), by striking ``$690,000,000 and 
                not more than $700,000,000'' and inserting 
                ``$790,000,000 and not more than $800,000,000''; and
                    (E) in clause (vii), by striking ``$710,000,000 and 
                not more than $720,000,000'' and inserting 
                ``$810,000,000 and not more than $820,000,000''; and
            (3) by adding at the end the following:
                    ``(C) Additional amount.--
                            ``(i) In general.--For fiscal years 1999 
                        and thereafter, the amount appropriated each 
                        fiscal year in accordance with subparagraph (B) 
                        shall be increased by an amount equal to the 
                        sum of--
                                    ``(I) 5 percent of the overpayment 
                                and mispayment recoveries made through 
                                activities associated with the Medicare 
                                Integrity Program under section 1893 
                                during the previous fiscal year; and
                                    ``(II) 100 percent of the payments 
                                received by the Secretary during the 
                                previous fiscal year from providers of 
                                services and other individuals and 
                                entities furnishing items and services 
                                for which payment may be made under 
                                this title for the costs of overpayment 
                                recovery activities that were required 
                                to be paid because egregious levels of 
                                payment errors were identified by the 
                                Secretary.
                            ``(ii) Use of additional amount.--The 
                        additional amount described in clause (i) shall 
                        be used by the Secretary for the costs 
                        associated with carrying out the procedures 
                        described in section 1893(d)(4).''.

SEC. 3. EXPANSION OF MEDICARE SENIOR WASTE PATROL NATIONWIDE.

    There are authorized to be appropriated $25,000,000 in fiscal year 
1999, and such sums as are necessary for fiscal years 2000 through 
2002, for the purpose of carrying out, and expanding nationwide, the 
Health Care Anti-Fraud, Waste and Abuse Community Volunteer 
Demonstration Projects conducted by the Administration on Aging 
pursuant to the Omnibus Consolidated Appropriations Act, 1997 (Public 
Law 104-208).

SEC. 4. APPLICATION OF INHERENT REASONABLENESS TO ALL PART B SERVICES 
              OTHER THAN PHYSICIANS' SERVICES.

    (a) Repeal of Certain Provisions of the Balanced Budget Act of 
1997.--
            (1) Repeal.--Section 4316 the Balanced Budget Act of 1997 
        (Public Law 105-33; 111 Stat. 390), and the amendments made by 
        such section, is repealed effective August 5, 1997.
            (2) Applicability.--Effective August 5, 1997, the Social 
        Security Act shall be applied and administered as if section 
        4316 of the Balanced Budget Act of 1997 (Public Law 105-33; 111 
        Stat. 390), and the amendments made by such section, had not 
        been enacted.
    (b) Application of Inherent Reasonableness to All Part B Services 
Other Than Physicians' Services.--
            (1) In general.--Section 1842(b)(8) of the Social Security 
        Act (42 U.S.C. 1395u(b)(8)) is amended to read as follows:
    ``(8) The Secretary shall describe by regulation the factors to be 
used in determining the cases (of particular items or services) in 
which the application of this part (other than to physicians' services 
paid under section 1848) results in the determination of an amount 
that, because of its being grossly excessive or grossly deficient, is 
not inherently reasonable, and provide in those cases for the factors 
to be considered in establishing an amount that is realistic and 
equitable.''.
            (2) Effective date.--The amendments made by this subsection 
        shall take effect August 5, 1997.

SEC. 5. OVERSIGHT OF HOME HEALTH AGENCIES.

    (a) Validation Surveys of Home Health Agencies.--Section 1891(c) of 
the Social Security Act (42 U.S.C. 1395bbb(c)) is amended by adding at 
the end the following:
    ``(3)(A) The Secretary shall conduct onsite surveys of a 
representative sample of home health agencies in each State, within 2 
months of the date of surveys conducted under this subsection by the 
State, in a sufficient number to allow inferences about the adequacies 
of each State's surveys conducted under this subsection. In conducting 
such surveys, the Secretary shall use the same survey protocols as the 
State is required to use under this subsection. If the State has 
determined that a home health agency is in compliance with the 
requirements specified in or pursuant to section 1861(o), this section, 
or this title, but the Secretary determines that the facility does not 
meet such requirements, the Secretary's determination as to the 
facility's noncompliance with such requirements is binding and 
supersedes that of the State survey.
    ``(B) Scope.--With respect to each State, the Secretary shall 
conduct surveys under subparagraph (A) each year with respect to at 
least 5 percent of the number of home health agencies surveyed by the 
State in the year, but in no case less than 5 home health agencies in 
the State.
    ``(C) Remedies for substandard performance.--If the Secretary 
finds, on the basis of such surveys, that a State has failed to perform 
surveys as required under this subsection or that a State's survey and 
certification performance otherwise is not adequate, the Secretary 
shall provide for an appropriate remedy, which may include the training 
of survey teams in the State.
    ``(D) Special surveys of compliance.--Where the Secretary has 
reason to question the compliance of a home health agency with any of 
the requirements specified in or pursuant to section 1861(o), this 
section, or this title, the Secretary may conduct a survey of the 
agency and, on the basis of that survey, make independent and binding 
determinations concerning the extent to which the home health agency 
meets such requirements.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on the date of enactment of this Act.

SEC. 6. NO MARKUP FOR DRUGS OR BIOLOGICALS.

    (a) 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) If a physician's, supplier's, or any other person's bill 
or request for payment for services includes a charge for a drug or 
biological for which payment may be made under this part and the drug 
or biological is not paid on a cost or prospective payment basis as 
otherwise provided in this part, the payment amount established in this 
subsection for the 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) 95 percent of 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 6 months of the date of dispensing whether 
or not that specific drug or biological 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), (4), or (5) (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 1 
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 or 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.''.
    (b) Effective Date.--The amendments made by subsection (a) apply to 
drugs or biologicals furnished on or after January 1, 1999.
    (c) Elimination of Report on Average Wholesale Price.--Section 4556 
of the Balanced Budget Act of 1997 is amended--
            (1) by striking subsection (c); and
            (2) by redesignating subsection (d) as subsection (c).

SEC. 7. ENSURING THAT THE MEDICARE PROGRAM DOES NOT REIMBURSE CLAIMS 
              OWED BY OTHER PAYERS.

    (a) Information From Group Health Plans.--Section 1862(b) of the 
Social Security Act (42 U.S.C. 1395y(b)) is amended by adding at the 
end the following:
            ``(7) Information from group health plans.--
                    ``(A) Provision of information by group health 
                plans.--The administrator of a group health plan 
                subject to the requirements of paragraph (1) shall 
                provide the Secretary with the information described in 
                subsection (C) for each individual covered under the 
                plan who is entitled to any benefits under this title. 
                Such information shall be provided in such manner and 
                at such times as the Secretary may specify (but in no 
                case more frequently than 4 times per year).
                    ``(B) Provision of information by employers and 
                employee organizations.--An employer (or employee 
                organization) that maintains or participates in a group 
                health plan subject to the requirements of paragraph 
                (1) shall provide to the administrator of the plan the 
                information described in subsection (C) for each 
                individual covered under the plan who is entitled to 
                any benefits under this title. Such information shall 
                be provided in such manner and at such times as the 
                Secretary may specify (but in no case more frequently 
                than 4 times per year).
                    ``(C) Information.--The information described in 
                this subparagraph is as follows:
                            ``(i) Elements concerning the individual.--
                                    ``(I) The individual's name.
                                    ``(II) The individual's date of 
                                birth.
                                    ``(III) The individual's sex.
                                    ``(IV) The individual's social 
                                security insurance number.
                                    ``(V) The number assigned by the 
                                Secretary to the individual for claims 
                                under this title.
                                    ``(VI) The family relationship of 
                                the individual to the person who has 
                                current or prior employment status with 
                                the employer.
                            ``(ii) Elements concerning the family 
                        member with current or prior employment 
                        status.--
                                    ``(I) The name of the person in the 
                                individual's family who has current or 
                                prior employment status with the 
                                employer.
                                    ``(II) That person's social 
                                security insurance number.
                                    ``(III) The number or other 
                                identifier assigned by the plan to that 
                                person.
                                    ``(IV) The periods of coverage for 
                                that person under the plan.
                                    ``(V) The employment status of that 
                                person (current or former employee) 
                                during those periods of coverage.
                                    ``(VI) The classes (of that 
                                person's family members) covered under 
                                the plan.
                            ``(iii) Plan elements.--
                                    ``(I) The items and services 
                                covered under the plan.
                                    ``(II) The name and address to 
                                which claims under the plan are to be 
                                sent.
                            ``(iv) Elements concerning the employer.--
                                    ``(I) The employer's name.
                                    ``(II) The employer's address.
                                    ``(III) The employer identification 
                                number of the employer.
                    ``(D) Use of identifiers.--The administrator of a 
                group health plan shall utilize a unique identifier for 
                the plan in providing information under subparagraph 
                (A) and in other transactions, as may be specified by 
the Secretary, related to the provisions of this subsection. The 
Secretary may provide to the administrator the unique identifier 
described in the preceding sentence.
                    ``(E) Penalty for noncompliance.--Any entity that 
                knowingly and willfully fails to comply with a 
                requirement imposed by this paragraph shall be subject 
                to a civil money penalty not to exceed $1,000 for each 
                incident of such failure. The provisions of section 
                1128A (other than subsections (a) and (b)) shall apply 
                to a civil money penalty under the previous sentence in 
                the same manner as those provisions apply to a penalty 
                or proceeding under section 1128A(a).
                    ``(F) Group health plan defined.--In this 
                paragraph, the term `group health plan' has the meaning 
                given such term in paragraph (1)(A)(v).''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on January 1, 1999.

SEC. 8. REPEAL OF EXPANDED EXCEPTION FOR RISK-SHARING CONTRACT TO ANTI-
              KICKBACK PROVISIONS.

    (a) In General.--Section 1128B(b)(3) of the Social Security Act (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 Rulemaking and Report.--Subsection (b) of 
section 216 of the Health Insurance Portability and Accountability Act 
of 1996 (42 U.S.C. 1320a-7b note) is repealed.
    (c) Effective Dates.--
            (1) Repeal of exception.--The amendments made by subsection 
        (a) shall apply to remuneration provided on or after the date 
        of enactment of this Act, regardless of whether it is pursuant 
        to an agreement or arrangement entered into before such date.
            (2) Elimination of rulemaking and report.--Subsection (b) 
        shall take effect on the date of enactment of this Act.

SEC. 9. EXPANSION OF CRIMINAL PENALTIES FOR KICKBACKS.

    (a) Application of Criminal Penalty Authority to All Health Care 
Benefit Programs.--
            (1) In general.--Section 1128B(b) of the Social Security 
        Act (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) of the Social Security Act (42 U.S.C. 1320a-7b(f)) is 
        amended--
                    (A) by redesignating paragraphs (1) and (2) as 
                subparagraphs (A) and (B) respectively;
                    (B) by striking ``(f)'' and inserting ``(f)(1)''; 
                and
                    (C) by adding at the end the following:
    ``(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.--
                    (A) In general.--Section 1128A(a) of the Social 
                Security Act (42 U.S.C. 1320a-7a(a)) is amended in the 
                final sentence by striking ``1128B(f)(1)'' and 
                inserting ``1128B(f)(1)(A)''.
                    (B) Heading.--The heading of section 1128B of the 
                Social Security Act (42 U.S.C. 1320a-7b) is amended by 
                striking ``federal health care'' and inserting 
                ``federal health care and health care benefit''.
    (b) Effective Date.--The amendments made by subsection (a) apply to 
offenses occurring on and after the date of enactment of this Act.

SEC. 10. EXTENSION OF SUBPOENA AND INJUNCTION AUTHORITY.

    (a) Subpoena Authority.--Section 1128A(j)(1) of the Social Security 
Act (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) of the Social Security 
Act (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) In general.--Section 1128A(j)(1) of the Social Security 
        Act (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) Authority.--Section 1128A(j)(2) of the Social Security 
        Act (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 of the Social Security Act 
(42 U.S.C. 1320a-7) (as amended by section 4303(a)(2) of the Balanced 
Budget Act of 1997 (Public Law 105-33; 111 Stat. 383)) is amended by 
adding at the end the following:
    ``(k) For provisions of law concerning the Secretary's subpoena and 
injunction authority with respect to activities under this section, see 
subsections (j) and (k) of section 1128A.''.

SEC. 11. CIVIL MONETARY PENALTIES FOR SERVICES ORDERED OR PRESCRIBED BY 
              AN EXCLUDED INDIVIDUAL OR ENTITY.

    Section 1128A(a)(1) of the Social Security Act (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 adding 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''.

SEC. 12. CIVIL MONETARY PENALTIES FOR FALSE CERTIFICATION OF 
              ELIGIBILITY TO RECEIVE PARTIAL HOSPITALIZATION AND 
              HOSPICE SERVICES.

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

SEC. 13. APPLICATION OF CERTAIN PROVISIONS OF THE BANKRUPTCY CODE.

    (a) Restricted Applicability of Bankruptcy Stay, Discharge, and 
Preferential Transfer Provisions to Medicare and Medicaid Debts.--Title 
XI of the Social Security Act (42 U.S.C. 1301 et seq.) is amended by 
inserting after section 1143 the following:

       ``application of certain provisions of the bankruptcy code

    ``Sec. 1144. (a) Medicare- and Medicaid-Related Actions Not Stayed 
by Bankruptcy Proceedings.--The commencement or continuation of any 
action against a debtor under this title or title XVIII or XIX (other 
than an action with respect to health care services for the debtor 
under title XVIII), including any action or proceeding to exclude or 
suspend the debtor from program participation, assess civil money 
penalties, recoup or set off overpayments, or deny or suspend payment 
of claims shall not be subject to the provisions of section 362(a) of 
title 11, United States Code.
    ``(b) Medicare- and Medicaid-Related Debt Not Dischargeable in 
Bankruptcy.--A debt owed to the United States or to a State for an 
overpayment under title XVIII or XIX (other than an overpayment for 
health care services for the debtor under title XVIII), or for a 
penalty, fine, or assessment under this title or title XVIII or XIX, 
shall not be dischargeable under any provision of title 11, United 
States Code.
    ``(c) Repayment of Certain Debts Considered Final.--Payments made 
to repay a debt to the United States or to a State with respect to 
items or services provided, or claims for payment made, under title 
XVIII or XIX (including repayment of an overpayment (other than an 
overpayment for health care services for the debtor under such title 
XVIII)), or to pay a penalty, fine, or assessment under this title or 
title XVIII or XIX, shall be considered final and not preferential 
transfers under section 547 of title 11, United States Code.''.
    (b) Medicare Rules Applicable to Bankruptcy Proceedings.--Title 
XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) (as amended 
by section 4015 of the Balanced Budget Act of 1997 (Public Law 105-33; 
111 Stat. 337)) is amended by adding at the end the following:

           ``application of provisions of the bankruptcy code

    ``Sec. 1897. (a) Use of Medicare Standards and Procedures.--
Notwithstanding any provision of title 11, United States Code, or any 
other provision of law, in the case of claims by a debtor in bankruptcy 
for payment under this title, the determination of whether the claim is 
allowable, and of the amount payable, shall be made in accordance with 
the provisions of this title and title XI and implementing regulations.
    ``(b) Notice to Creditor of Bankruptcy Petitioner.--In the case of 
a debt owed to the United States with respect to items or services 
provided, or claims for payment made, under this title (including a 
debt arising from an overpayment or a penalty, fine, or assessment 
under title XI or this title), the notices to the creditor of 
bankruptcy petitions, proceedings, and relief required under title 11, 
United States Code (including under section 342 of that title and 
section 2002(j) of the Federal Rules of Bankruptcy Procedure), shall be 
given to the Secretary. Provision of such notice to a fiscal agent of 
the Secretary shall not be considered to satisfy this requirement.
    ``(c) Turnover of Property to the Bankruptcy Estate.--For purposes 
of section 542(b) of title 11, United States Code, a claim for payment 
under this title shall not be considered to be a matured debt payable 
to the estate of a debtor until such claim has been allowed by the 
Secretary in accordance with procedures under this title.''.

SEC. 14. IMPROVING PRIVATE SECTOR COORDINATION IN COMBATTING HEALTH 
              CARE FRAUD.

    (a) In General.--Title XI of the Social Security Act (42 U.S.C. 
1301 et seq.) is amended by inserting after section 1157 the following:

``improving private sector coordination in combatting health care fraud

    ``Sec. 1157A. (a) In General.--Notwithstanding any other provision 
of law, no health plan (as defined in section 1128C(c), issuer of a 
health plan, or employee of a health plan shall be held liable in any 
civil action with respect to the provision of information regarding 
suspected health care fraud, including but not limited to health care 
offenses (as defined in (18 U.S.C. 24)) to an applicable individual 
unless such information is false and the person providing it knew, or 
had reason to believe, that such information was false.
    ``(b) Applicable Individual.--In subsection (a), the term 
`applicable individual' means--
            ``(1) a Federal, State, or local law enforcement official 
        responsible for the investigation or prosecution of suspected 
        health care fraud offenses; or
            ``(2) an employee of a health plan or issuer of a health 
        plan.
    ``(c) Attorney's Fees.--Any health plan, issuer of a health plan, 
or employee of a health plan against whom a civil action is brought, 
and who is found to be entitled to immunity from liability by reason of 
this section, shall be entitled to recover reasonable attorney's fees 
and costs from the person who brought the civil action.''.
    (b) Effective Date.--The amendment made by subsection (a) takes 
effect on the date of enactment of this Act.

SEC. 15. FEES FOR AGREEMENTS WITH MEDICARE PROVIDERS AND SUPPLIERS.

    (a) Fees Related to Medicare Provider and Supplier Enrollment and 
Reenrollment.--Section 1866 of the Social Security Act (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 section 1866 of the Social 
Security Act (42 U.S.C. 1395cc) is amended to read as follows:

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

SEC. 16. INCREASED MEDICARE COMPLIANCE, EDUCATION, AND ASSISTANCE FOR 
              HEALTH CARE PROVIDERS.

    (a) Development of Plan.--Not later than 6 months after the date of 
enactment of this Act, the Secretary of Health and Human Services 
shall, in consultation with health care provider representatives, 
develop and implement a comprehensive plan of activities to--
            (1) maximize health care provider knowledge of medicare 
        program integrity requirements, including anti-fraud and abuse 
        laws and administrative actions;
            (2) assist health care providers with medicare program 
        integrity compliance, including educating such providers 
        regarding compliance activities and procedures of the Health 
        Care Financing Administration and the Inspector General of the 
        Department of Health and Human Services;
            (3) develop improved computer technology for health care 
        providers to both reduce their administrative hassles and 
        facilitate their compliance with medicare program requirements, 
        including physician evaluation and management guidelines; and
            (4) otherwise improve compliance among health care 
        providers with rules and regulations under the medicare 
        program.
    (b) Funding.--Notwithstanding any other provision of law, of the 
amounts appropriated under section 1817(k)(4) of the Social Security 
Act (42 U.S.C. 1395i(k)(4) for a fiscal year, there shall be made 
available $10,000,000 in fiscal year 1999 and such sums as are 
necessary in fiscal years 2000 through 2003 to carry out the purposes 
of this section.

SEC. 17. PAPERWORK AND ADMINISTRATIVE HASSLE REDUCTION.

    (a) Study by Committee.--
            (1) Establishment.--Not later than 90 days after the date 
        of enactment of this Act, the Secretary of Health and Human 
        Services shall contract with the Institute of Medicine of the 
        National Academy of Sciences to establish a committee to study 
        medicare program administrative requirements that are 
        applicable to health care providers under such program.
            (2) Committee.--The committee described in paragraph (1) 
        shall be composed of--
                    (A) at least 9 health care providers who 
                participate in, and have significant experience working 
                with, the medicare program;
                    (B) experts in paperwork reduction; and
                    (C) beneficiaries under the medicare program or 
                their representatives.
    (b) Recommendations.--The committee described in subsection (a) 
shall develop recommendations regarding how paperwork and 
administrative requirements under the medicare program can be minimized 
in a manner that--
            (1) increases the time health care providers that are 
        subject to such requirements have to spend in direct patient 
        care; and
            (2) maintains medicare program integrity and compliance 
        with anti-fraud and abuse requirements.
In developing such recommendations, the committee shall seek to 
streamline variations in administrative and paperwork requirements 
between the medicare programs and other government health programs and 
private health plans.
    (c) Report.--Not later than June 1, 1999, the committee described 
in subsection (a) shall submit a report to the Secretary of Health and 
Human Services, the Committees on Finance and Appropriations of the 
Senate and the Committees on Ways and Means, Commerce, and 
Appropriations of the House of Representatives. Such report shall 
contain a detailed description of the matters studied pursuant to 
subsection (a) and the recommendations developed pursuant to subsection 
(b), including such legislation and administrative actions as the 
committee considers appropriate.
    (d) Authorization of Appropriations.--
            (1) In general.--There are authorized to be appropriated 
        $1,000,000 for fiscal year 1999 to carry out the purposes of 
        this section.
            (2) Availability.--Any sums appropriated under the 
        authorization contained in this subsection shall remain 
        available, without fiscal year limitation, until expended.

SEC. 18. CLARIFICATION OF APPLICATION OF SANCTIONS TO FEDERAL HEALTH 
              CARE PROGRAMS.

    (a) Coverage of Employment.--Section 1128 of the Social Security 
Act (42 U.S.C. 1320a-7) is amended--
            (1) in subsection (a), in the matter preceding paragraph 
        (1), by inserting ``(including employment under)'' after 
        ``participation in''; and
            (2) in subsection (b), in the matter preceding paragraph 
        (1), by inserting ``(including employment)'' after 
        ``participation in''.
    (b) Application Under Civil Money Penalty Authority.--Section 1128A 
of the Social Security Act (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 ``Federal or 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 of the Social Security Act (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 
                ``Federal or State 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 of the Social Security Act (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) of the Social Security Act (42 U.S.C. 
1320a-7b(f)(1)), as amended by section 9(a)(2)(B), is amended--
            (1) in the matter preceding subparagraph (A), 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 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, to convictions that occur on or 
after the date of enactment of this Act.

SEC. 19. PAYMENTS FOR DURABLE MEDICAL EQUIPMENT.

    (a) In General.--Section 1834(a)(1) of the Social Security Act (42 
U.S.C. 1395m(a)(1)) is amended--
            (1) in subparagraph (B)--
                    (A) in clause (i), by striking ``, or'' at the end 
                and inserting a semicolon; and
                    (B) by inserting after clause (ii) the following:
                            ``(iii) the least expensive amount that the 
                        supplier of the item is paid by a 
                        Medicare+Choice organization for such item; or
                            ``(iv) the least expensive amount that the 
                        supplier of the item is paid by any Federal 
                        health care program for such item;''; and
            (2) by adding the following at the end:
                    ``(E) Administrative costs.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), if--
                                    ``(I) the payment amount for an 
                                item is covered under clauses (iii) or 
                                (iv) of subparagraph (B); and
                                    ``(II) the Secretary determines 
                                that the administrative costs 
                                associated with billing and receiving 
                                reimbursement from the Secretary for 
                                the item exceeds the administrative 
                                costs associated with providing such 
                                item to a Medicare+Choice organization 
                                or another Federal health care program;
                        then the Secretary shall adjust the payment 
                        rate for such item to reflect such excess.
                            ``(ii) Limitation.--In no case may the 
                        payment rate for an item that is adjusted under 
                        clause (i) exceed the payment rate for such 
                        item determined in clauses (i) and (ii) of 
                        subparagraph (B).
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to items provided on or after January 1, 1999.

SEC. 20. IMPLEMENTATION OF COMMERCIAL CLAIMS AUDITING SYSTEMS.

    (a) Commercial Claims Auditing Systems.--
            (1) In general.--Not later than 90 days after the date of 
        enactment of this Act, the Secretary shall require medicare 
        carriers to use commercial claims auditing systems in the 
        processing of claims under part B of the medicare program under 
        title XVIII of the Social Security Act (42 U.S.C. 1395j et 
        seq.) for the purpose of identifying billing errors and abuses.
            (2) Supplement to other technology.--Commercial claims 
        auditing systems required under paragraph (1) shall be used as 
        a supplement to any other information technology used by 
        medicare carriers in processing claims under the medicare 
        program.
            (3) Uniformity.--In order to ensure uniformity in 
        processing claims under the medicare program, the Secretary may 
        require that medicare carriers utilize 1 or more common 
        commercial claims auditing systems, provided that the selection 
        of such system or systems by the Secretary shall be--
                    (A) after due consideration of competing 
                alternative systems; but
                    (B) without regard to any provision of law that 
                requires the use of competitive procedures (as defined 
                in section 4 of the Office of Federal Procurement 
                Policy Act (41 U.S.C. 403)) or the publication of 
                notice of proposed procurements.
            (4) Implementation.--Commercial claims auditing systems 
        required under paragraph (1) shall be implemented by all 
        medicare carriers by not later than 180 days after the date of 
        enactment of this Act.
    (b) Minimum Software Requirements.--Any commercial claims auditing 
system required to be implemented pursuant to subsection (a) shall, at 
a minimum--
            (1) be a commercial item;
            (2) surpass the capability of systems currently used in the 
        processing of claims under part B of the medicare program; and
            (3) be modifiable to--
                    (A) satisfy pertinent statutory requirements of the 
                medicare program; and
                    (B) conform to policies of the Secretary regarding 
                claims processing under such program.
    (c) Disclosure.--
            (1) In general.--Except as provided in paragraph (2), 
        notwithstanding any other provision of law, any information 
        technology (or data related thereto) utilized by medicare 
        carriers in establishing a commercial claims auditing system 
        pursuant to subsection (a) shall not be subject to public 
        disclosure.
            (2) Authorized disclosure.--The Secretary may authorize the 
        public disclosure of the information described in paragraph (1) 
        if the Secretary determines that--
                    (A) release of such information is in the public 
                interest; and
                    (B) the information to be released is not protected 
                from disclosure under section 552(b) of title 5, United 
                States Code.
    (d) Definitions.--In this section--
            (1) Commercial claims auditing system.--The term 
        ``commercial claims auditing system'' means a commercial 
        specialized auditing system that includes edits which identify 
        inappropriately coded health care claims.
            (2) Commercial item.--The term ``commercial item'' has the 
        meaning given such term in section 4 of the Office of Federal 
        Procurement Policy Act (41 U.S.C. 403).
            (3) Information technology.--The term ``information 
        technology'' has the meaning given such term in subparagraphs 
        (A) and (B) of section 5002(3) of the Information Technology 
        Management Reform Act of 1996 (40 U.S.C. 1401(3)), were such 
        information technology to be acquired by an executive agency.
            (4) Medicare carrier.--The term ``medicare carrier'' means 
        an entity that has a contract with the Secretary pursuant to 
        section 1842(a) of the Social Security Act (42 U.S.C. 
        1395u(a)).
            (5) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.

SEC. 21. PARTIAL HOSPITALIZATION PAYMENT REFORMS.

    (a) Limitation on Location of Provision of Services.--
            (1) In general.--Section 1861(ff)(2) of the Social Security 
        Act (42 U.S.C. 1395x(ff)(2)) is amended in the matter following 
        subparagraph (I)--
                    (A) by striking ``and furnished'' and inserting 
                ``furnished''; and
                    (B) by inserting before the period the following: 
                ``, and furnished other than in a skilled nursing 
                facility or in an individual's personal residence''.
            (2) Effective Date.--The amendments made by paragraph (1) 
        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.
    (b) Qualifications for Community Mental Health Centers.--Section 
1861(ff)(3)(B) of the Social Security Act (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 (including protecting against 
        fraud, waste, and abuse), and (III) the compliance of such 
        entity with the criteria described in such section.''.
    (c) Reenrollment of Providers of CMHC Partial Hospitalization 
Services.--
            (1) 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 re-certification to ensure that the 
        provision of such services complies with section 1913(c) of the 
        Public Health Service Act.
            (2) Deadline for first re-certification.--The first re-
        certification under paragraph (1) shall be completed not later 
        than 1 year after the date of the enactment of this Act.
    (d) Prospective Payment System for Partial Hospitalization 
Services.--
            (1) Establishment of System.--Section 1833 of the Social 
        Security Act (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 hospitals 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) for such year are 
        not greater than the total aggregate payments that would have 
        otherwise been made under this part if such system had not been 
        implemented (assuming full implementation of the provisions 
        contained in subsections (a) through (c) of section 21 of the 
        Medicare Waste Tax Reduction Act of 1998); 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.''.
            (2) Coinsurance.--Section 1866(a)(2)(A) of such Act (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.''.
            (3) Conforming Amendments.--(A) Section 1832(a)(2) of such 
        Act (42 U.S.C. 1395k(a)(2)) is amended--
                    (i) in subparagraph (B), by striking ``or 
                subparagraph (I)'' and inserting ``, (I), or (J)''; and
                    (ii) in subparagraph (J), by striking ``provided by 
                a community mental health center (as described in 
                section 1861(ff)(2)(B))''.
            (B) Section 1833(a) of such Act (42 U.S.C. 1395l(a)) is 
        amended--
                    (i) in paragraph (2) in the matter preceding 
                subparagraph (A), by striking ``(H), and (I)'' and 
                inserting ``(H), (I), and (J)'';
                    (ii) by striking ``and'' at the end of paragraph 
                (8);
                    (iii) by striking the period at the end of 
                paragraph (9) and inserting ``; and''; and
                    (iv) by adding at the end the following:
            ``(10) in the case of partial hospitalization services, 80 
        percent of the payment basis under the prospective payment 
        system established under section 1833(p).''.
            (4) Effective Date.--The amendments made by paragraphs (2) 
        and (3) 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) of such Act 
        (42 U.S.C. 1395l(p)) as inserted by paragraph (1).
                                 <all>