[Congressional Record Volume 142, Number 85 (Tuesday, June 11, 1996)]
[Senate]
[Pages S6085-S6096]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. GRAHAM (for himself, and Mr. Baucus):
  S. 1859. A bill to create a point of order against legislation which 
diverts savings achieved through medicare waste, fraud, and abuse 
enforcement activities for purposes other than improving the solvency 
of the Federal hospital insurance trust fund under title XVIII of the 
Social Security Act, to ensure the integrity of such trust fund, and 
for other purposes; to the Committee on Rules and Administration.


                 the medicare restore trust act of 1996

  Mr. GRAHAM. Mr. President, I rise today to introduce timely 
legislation with Senators Baucus and Pryor that addresses the problem 
of Medicare fraud and abuse. The two bills, entitled the ``Medicare 
Anti-Fraud Act of 1996'' and the ``Medicare Restore Trust Act of 
1996,'' would undertake serious and strong anti-fraud efforts by the 
Federal Government based in large part on the success of the 
administration's recent Medicare and antifraud effort called Operation 
Restore Trust and ensure that savings achieved from such efforts are 
returned to the Medicare trust fund.
  Mr. President, we have heard in the last few days some very troubling 
reports about the impending insolvency of the Medicare trust fund. This 
legislation would have two direct contributions to reversing that move 
toward insolvency.
  First, it would suture a hemorrhage of funds out of the Medicare 
trust fund which today are going for fraudulent bills, and not for 
service to American citizens; and, second, it would assure that any 
funds that were recovered as a result of these more effective 
investigations and prosecutions would go directly back into the 
Medicare trust fund in order to restore its financial base.
  Mr. President, unfortunately the phrase ``fraud, waste and abuse'' 
has become discredited. It has been used so often as an excuse for not 
dealing with the more difficult and fundamental problems. 
Unfortunately, the area of Medicare waste, fraud, and abuse is a part 
of the fundamental problem. It has been estimated that of the $180 
billion spent last year on Medicare and on approximately 36 million 
Americans' health care--$180 billion--10 percent, or $18 billion, was 
wasted in fraudulent activities.
  You might ask why is there such a high level of fraud in this program 
of Medicare? Some of the reasons include: The amount of money that is 
being expended is huge--$180 billion and growing; that it is being 
spent largely on populations which have groups within it that are 
vulnerable to these fraudulent schemes; that those people who wish to 
perpetrate those schemes are sophisticated shysters and there has been 
lax enforcement.
  First and foremost, the General Accounting Office estimates that the 
Medicare waste, fraud and abuse rip-off rate is about 10 percent. With 
fraud pilfering the health systems' resources, losses to Medicare and 
the federal share of Medicaid could be $30 billion annually. Using the 
most conservative of estimates, we could cover an additional 2 million 
seniors a year with funds lost just to Medicare waste, fraud, and 
abuse.
  Two million additional Americans could be covered if those funds 
could be properly directed.
  Although it is increasingly unlikely that a Medicare reform package 
will pass this year in Congress, it would be unconscionable to not pass 
a Medicare waste, fraud and abuse this year. Rather than putting 
Medicare beneficiaries at risk of losing coverage or access with the 
cuts envisioned in some legislative proposals during this Congress, we 
should act instead to combat Medicare fraud to protect the health care 
of beneficiaries and the Medicare trust fund.
  As the Citizens Against Government Waste wrote in their August 23, 
1995, report entitled ``Medicare Fraud: Tales From the Gypped,'' 
``Preserving, protecting, and strengthening Medicare must be the number 
one priority for Congress and the administration.'' The organization 
details 89 examples in its report and advises that waste, fraud,

[[Page S6086]]

and abuse is the first area of needed attack.
  How did this get to be such a problem? According to the General 
Accounting Office in its February 1995 report entitled ``Medicare 
Claims,'' ``Physicians, supply companies, or diagnostic laboratories 
have about 3 chances out of 1,000 of having Medicare audit their 
billing practices in any given year. Moreover, Medicare pays more 
claims with less scrutiny today than at any other time over the past 5 
years.'' The GAO continues, ``In fiscal year 1993, Medicare processed 
almost 700 million claims, about 250 million more than it processed 5 
years earlier. Despite the rising volume of claims, per-claim funding 
for antifraud and antiabuse activities declined between 1989 and 1993 
by over 20 percent.''
  As a result, FBI Director Louis Freeh says cocaine distributors in 
south Florida and southern California are switching from drug dealing 
to health care fraud. The reason: more money with less risk. Drug 
dealers committing health care fraud know that law enforcement is not 
yet equipped with the laws needed to effectively attack the problem. 
With a program estimated by the Congressional Budget Office to be 
spending over $1.6 billion during the next 6 years and with lax laws to 
combat abuse, con artists, thieves, and opportunists know Medicare is 
where the easy money is.
  As Republican Congressmen Steven Schiff and Chris Shays write, 
``currently there is no Federal crime of health care fraud. It is 
difficult to prosecute health care-related offenses because law 
enforcement must rely on wire and mail fraud statutes for their 
investigations and prosecutions.''
  Attacking fraud is crucial to the overall Medicare debate for the 
following reasons:
  Fraud ought to be the first place we look when considering reductions 
in Medicare expenditures.
  Fraud undermines public confidence in Medicare. We cannot ``fix'' 
Medicare while letting fraud erode the system.
  One dollar spent against fraud and abuse can reduce Medicare Program 
costs by as much as 11 dollars, according to the Health Care Financing 
Administration [HCFA] and demonstrated by the administration's effort 
in Operation Restore Trust.
  Solutions are available.
  What can be done to solve this problem? To engage in a comprehensive 
assault on fraud, particularly within the Medicare Program, multiple 
agencies within the Federal Government will need additional resources. 
The Inspector General testified at a hearing before the Senate Finance 
Committee that ``now is the time to implement new legal remedies and 
reverse the downward trend of funding for efforts to combat health care 
fraud and abuse.'' The legislation that I am introducing today will 
achieve both of these goals.
  Operation Restore Trust is an effort currently underway in five 
States which brings together the HHS Office of Inspector General, 
Health Care Financing Administration, the Department of Justice, State 
Medicaid agencies, and State Medicaid fraud control units to combat 
fraud and abuse. This legislation would institutionalize these efforts 
in all 50 States.
  The Department of Health and Human Services recently released results 
from the first year of Operation Restore Trust. The program had $4.09 
million to work with and has added $43.2 million to the Medicare trust 
fund and U.S. Treasury: an 11-to-1 return. This program has been a 
great success, but I agree with June Gibbs Brown that this is the ``tip 
of the iceberg.''
  To provide adequate resources to go after the fraud and abuse, we 
establish a Medicare anti-fraud account for the Inspector General (IG) 
and an anti-fraud control account for other government agency's use. 
Funds for the Medicare account would be provided by and returned to the 
Medicare trust fund. For every $1 spent on prevention, the IG uncovers 
at least $7 in fraud. By using trust fund dollars to augment IG 
operations, the legislation assures that the IG will continue to have 
the resources necessary to combat fraud and abuse without worrying 
about discretionary spending cuts.
  This legislation enacts a broad-based Federal statute aimed at 
suppressing Medicare fraud. This enhances the protection of fraud 
victims and prescribe stiff penalties against those convicted of fraud. 
It institutes a policy, ``one strike and you are out,'' one instance of 
Medicare fraud and you are out of the program for at least 5 years.
  The second bill would establish a point of order against any piece of 
legislation that would divert savings from anti-fraud, waste and abuse 
enforcement activities for any other purpose--such as new Federal 
spending or tax breaks--other than saving the Medicare trust fund. This 
legislation would also ensure that any savings from anti-fraud, waste 
and abuse activities reimburse the up-front investment on enforcement 
and further strengthen the Medicare trust fund.
  We have all promised to protect Medicare. We can do so by passing 
comprehensive Medicare waste, fraud, and abuse legislation and do it in 
1996, thus ensuring savings achieved are used to protect Medicare and 
improve its solvency. The two bills we are introducing today--the 
Medicare Anti-Fraud Act of 1996 and the Medicare Restore Trust Act--
would accomplish these goals.
  Mr. President, I suggest these two pieces of legislation should get 
the immediate attention of this Senate. I am pleased to see that we 
have with us today the chairman of the Senate Finance Committee, which 
I assume will be the primary committee of reference for consideration 
of this legislation.
  Every day that passes allows for further waste of Federal taxpayers 
money and further eroding of the solvency of the Medicare trust fund, 
further erosion of the confidence of the American people. We must take 
action now.
  At the signing of the Medicare bill in Missouri 30 years ago, 
President Johnson said Medicare had been planted with ``the seed of 
compassion and duty which have today flowered into care for the sick 
and serenity for the fearful.'' Medicare has lived up to the promise of 
President Johnson and President Truman. But fraud is rotting away at 
the Medicare system. We have the prescriptions to combat fraud. Now is 
the time to employ them if we want to save the integrity of Medicare 
for future generations.
  Mr. President, I ask unanimous consent that the text of the bills be 
printed in the Record.
  There being no objection, the bills were ordered to be printed in the 
Record, as follows:

                                S. 1858

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

     SECTION 1. SHORT TITLE; REFERENCES IN ACT; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Medicare 
     Antifraud Act of 1996''.
       (b) Amendments to Social Security Act.--Except as otherwise 
     specifically provided, whenever in this Act an amendment is 
     expressed in terms of an amendment to, or repeal of, a 
     section or other provision, the reference 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; references in act; table of contents.

                TITLE I--FRAUD AND ABUSE CONTROL PROGRAM

Sec. 101. Fraud and abuse control program.
Sec. 102. Medicare benefit integrity system.
Sec. 103. Application of certain health antifraud and abuse sanctions 
              to fraud and abuse against Federal health programs.
Sec. 104. Health care fraud and abuse provider guidance.
Sec. 105. Medicare/medicaid beneficiary protection program.
Sec. 106. Ensuring the integrity of the Federal Hospital Insurance 
              Trust Fund.

      TITLE II--REVISIONS TO CURRENT SANCTIONS FOR FRAUD AND ABUSE

Sec. 201. Mandatory exclusion from participation in medicare and State 
              health care programs.
Sec. 202. Establishment of minimum period of exclusion for certain 
              individuals and entities subject to permissive exclusion 
              from medicare and State health care programs.
Sec. 203. Permissive exclusion of individuals with ownership or control 
              interest in sanctioned entities.
Sec. 204. Sanctions against practitioners and persons for failure to 
              comply with statutory obligations.
Sec. 205. Sanctions against providers for excessive fees or prices.
Sec. 206. Applicability of the Bankruptcy Code to program sanctions.
Sec. 207. Intermediate sanctions for medicare health maintenance 
              organizations.
Sec. 208. Liability of medicare carriers and fiscal intermediaries and 
              States for claims submitted by excluded providers.
Sec. 209. Effective date.

[[Page S6087]]

         TITLE III--ADMINISTRATIVE AND MISCELLANEOUS PROVISIONS

Sec. 301. Establishment of the health care fraud and abuse data 
              collection program.
Sec. 302. Inspector General access to additional practitioner data 
              bank.
Sec. 303. Corporate whistleblower program.
Sec. 304. Home health billing, payment, and cost limit calculation to 
              be based on site where service is furnished.
Sec. 305. Application of inherent reasonableness.
Sec. 306. Clarification of time and filing limitations.
Sec. 307. Clarification of liability of third party administrators.
Sec. 308. Clarification of payment amounts to medicare.
Sec. 309. Increased flexibility in contracting for medicare claims 
              processing.

                   TITLE IV--CIVIL MONETARY PENALTIES

Sec. 401. Social Security Act civil monetary penalties.

                  TITLE V--AMENDMENTS TO CRIMINAL LAW

Sec. 501. Health care fraud.
Sec. 502. Forfeitures for Federal health care offenses.
Sec. 503. Injunctive relief relating to Federal health care offenses.
Sec. 504. Grand jury disclosure.
Sec. 505. False statements.
Sec. 506. Obstruction of criminal investigations, audits, or 
              inspections of Federal health care offenses.
Sec. 507. Theft or embezzlement.
Sec. 508. Laundering of monetary instruments.
Sec. 509. Authorized investigative demand procedures.

            TITLE VI--STATE HEALTH CARE FRAUD CONTROL UNITS

Sec. 601. State health care fraud control units.

         TITLE VII--MEDICARE/MEDICAID BILLING ABUSE PREVENTION

Sec. 701. Uniform medicare/medicaid application process.
Sec. 702. Standards for uniform claims.
Sec. 703. Unique provider identification code.
Sec. 704. Use of new procedures.
Sec. 705. Nondischargeability of certain medicare debts.
                TITLE I--FRAUD AND ABUSE CONTROL PROGRAM

     SEC. 101. FRAUD AND ABUSE CONTROL PROGRAM.

       (a) Establishment of Program.--Title XI (42 U.S.C. 1301 et 
     seq.) is amended by inserting after section 1128B the 
     following new section:


                   ``fraud and abuse control program

       ``Sec. 1128C. (a) Establishment of Program.--
       ``(1) In general.--Not later than January 1, 1997, the 
     Secretary, acting through the Office of the Inspector General 
     of the Department of Health and Human Services, and the 
     Attorney General shall establish a program--
       ``(A) to coordinate Federal, State, and local law 
     enforcement programs to control fraud and abuse with respect 
     to health plans,
       ``(B) to conduct investigations, audits, evaluations, and 
     inspections relating to the delivery of and payment for 
     health care in the United States,
       ``(C) to facilitate the enforcement of the provisions of 
     sections 1128, 1128A, and 1128B and other statutes applicable 
     to health care fraud and abuse,
       ``(D) to provide for the modification and establishment of 
     safe harbors and to issue advisory opinions and special fraud 
     alerts pursuant to section 104 of the Medicare Antifraud Act 
     of 1996, and
       ``(E) to provide for the reporting and disclosure of 
     certain final adverse actions against health care providers, 
     suppliers, or practitioners pursuant to the data collection 
     system established under section 301 of such Act.
       ``(2) Coordination with health plans.--In carrying out the 
     program established under paragraph (1), the Secretary and 
     the Attorney General shall consult with, and arrange for the 
     sharing of data with representatives of health plans.
       ``(3) Guidelines.--
       ``(A) In general.--The Secretary and the Attorney General 
     shall issue guidelines to carry out the program under 
     paragraph (1). The provisions of sections 553, 556, and 557 
     of title 5, United States Code, shall not apply in the 
     issuance of such guidelines.
       ``(B) Information guidelines.--
       ``(i) In general.--Guidelines issued under subparagraph (A) 
     shall include guidelines relating to the furnishing of 
     information by health plans, providers, and others to enable 
     the Secretary and the Attorney General to carry out the 
     program (including coordination with health plans under 
     paragraph (2)).
       ``(ii) Confidentiality.--Guidelines issued under 
     subparagraph (A) shall include procedures to assure that such 
     information is provided and utilized in a manner that 
     appropriately protects the confidentiality of the information 
     and the privacy of individuals receiving health care services 
     and items.
       ``(iii) Qualified immunity for providing information.--The 
     provisions of section 1157(a) (relating to limitation on 
     liability) shall apply to a person providing information to 
     the Secretary or the Attorney General in conjunction with 
     their performance of duties under this section.
       ``(4) Ensuring access to documentation.--The Inspector 
     General of the Department of Health and Human Services is 
     authorized to exercise such authority described in paragraphs 
     (3) through (9) of section 6 of the Inspector General Act of 
     1978 (5 U.S.C. App.) as necessary with respect to the 
     activities under the fraud and abuse control program 
     established under this subsection.
       ``(5) Authority of inspector general.--Nothing in this Act 
     shall be construed to diminish the authority of any Inspector 
     General, including such authority as is provided in the 
     Inspector General Act of 1978 (5 U.S.C. App.).
       ``(b) Additional Use of Funds by Inspector General.--
       ``(1) Reimbursements for investigations.--The Inspector 
     General of the Department of Health and Human Services is 
     authorized to receive and retain for current use 
     reimbursement for the costs of conducting investigations and 
     audits and for monitoring compliance plans when such costs 
     are ordered by a court, voluntarily agreed to by the payor, 
     or otherwise.
       ``(2) Crediting.--Funds received by the Inspector General 
     under paragraph (1) as reimbursement for costs of conducting 
     investigations shall be deposited to the credit of the 
     appropriation from which initially paid, or to appropriations 
     for similar purposes currently available at the time of 
     deposit, and shall remain available for obligation for 1 year 
     from the date of the deposit of such funds.
       ``(c) Health Plan Defined.--For purposes of this section, 
     the term `health plan' means a plan or program that provides 
     health benefits, whether directly, through insurance, or 
     otherwise, and includes--
       ``(1) a policy of health insurance;
       ``(2) a contract of a service benefit organization; and
       ``(3) a membership agreement with a health maintenance 
     organization or other prepaid health plan.''.
       (b) Establishment of Health Care Fraud and Abuse Control 
     Account in Federal Hospital Insurance Trust Fund.--Section 
     1817 (42 U.S.C. 1395i) is amended by adding at the end the 
     following new subsection:
       ``(k) Health Care Fraud and Abuse Control Account.--
       ``(1) Establishment.--There is hereby established in the 
     Trust Fund an expenditure account to be known as the `Health 
     Care Fraud and Abuse Control Account' (in this subsection 
     referred to as the `Account').
       ``(2) Appropriated amounts to trust fund.--
       ``(A) In general.--There are hereby appropriated to the 
     Trust Fund--
       ``(i) such gifts and bequests as may be made as provided in 
     subparagraph (B);
       ``(ii) such amounts as may be deposited in the Trust Fund 
     as provided in title XI; and
       ``(iii) such amounts as are transferred to the Trust Fund 
     under subparagraph (C).
       ``(B) Authorization to accept gifts.--The Trust Fund is 
     authorized to accept, on behalf of the United States, money 
     gifts and bequests made unconditionally to the Trust Fund, 
     for the benefit of the Account or any activity financed 
     through the Account.
       ``(C) Transfer of amounts.--The Managing Trustee shall 
     transfer to the Trust Fund, under rules similar to the rules 
     in section 9601 of the Internal Revenue Code of 1986, an 
     amount equal to the sum of the following:
       ``(i) Criminal fines recovered in cases involving a Federal 
     health care offense (as defined in section 982(a)(6)(B) of 
     title 18, United States Code).
       ``(ii) Civil monetary penalties and assessments imposed in 
     health care cases, including amounts recovered under titles 
     XI, XVIII, and XIX, and chapter 38 of title 31, United States 
     Code (except as otherwise provided by law).
       ``(iii) Amounts resulting from the forfeiture of property 
     by reason of a Federal health care offense.
       ``(iv) Penalties and damages obtained and otherwise 
     creditable to miscellaneous receipts of the general fund of 
     the Treasury obtained under sections 3729 through 3733 of 
     title 31, United States Code (known as the False Claims Act), 
     in cases involving claims related to the provision of health 
     care items and services (other than funds awarded to a 
     relator, for restitution or otherwise authorized by law).
       ``(3) Appropriated amounts to account for fraud and abuse 
     control program, etc.--
       ``(A) Departments of health and human services and 
     justice.--
       ``(i) In general.--There are hereby appropriated to the 
     Account from the Trust Fund such sums as the Secretary and 
     the Attorney General certify are necessary to carry out the 
     purposes described in subparagraph (C), to be available 
     without further appropriation, in an amount not to exceed--

       ``(I) for fiscal year 1997, $104,000,000;
       ``(II) for each of the fiscal years 1998 through 2003, the 
     limit for the preceding fiscal year, increased by 15 percent; 
     and
       ``(III) for each fiscal year after fiscal year 2003, the 
     limit for fiscal year 2003.

       ``(ii) Medicare and medicaid activities.--For each fiscal 
     year, of the amount appropriated in clause (i), the following 
     amounts shall be available only for the purposes of the 
     activities of the Office of the Inspector General of the 
     Department of Health and Human Services with respect to the 
     medicare and medicaid programs--

[[Page S6088]]

       ``(I) for fiscal year 1997, not less than $60,000,000 and 
     not more than $70,000,000;
       ``(II) for fiscal year 1998, not less than $80,000,000 and 
     not more than $90,000,000;
       ``(III) for fiscal year 1999, not less than $90,000,000 and 
     not more than $100,000,000;
       ``(IV) for fiscal year 2000, not less than $110,000,000 and 
     not more than $120,000,000;
       ``(V) for fiscal year 2001, not less than $120,000,000 and 
     not more than $130,000,000;
       ``(VI) for fiscal year 2002, not less than $140,000,000 and 
     not more than $150,000,000; and

       ``(VII) for each fiscal year after fiscal year 2002, not 
     less than $150,000,000 and not more than $160,000,000.

       ``(B) Federal bureau of investigation.--There are hereby 
     appropriated from the general fund of the United States 
     Treasury and hereby appropriated to the Account for transfer 
     to the Federal Bureau of Investigation to carry out the 
     purposes described in subparagraph (C), to be available 
     without further appropriation--
       ``(i) for fiscal year 1997, $47,000,000;
       ``(ii) for fiscal year 1998, $56,000,000;
       ``(iii) for fiscal year 1999, $66,000,000;
       ``(iv) for fiscal year 2000, $76,000,000;
       ``(v) for fiscal year 2001, $88,000,000;
       ``(vi) for fiscal year 2002, $101,000,000; and
       ``(vii) for each fiscal year after fiscal year 2002, 
     $114,000,000.
       ``(C) Use of funds.--The purposes described in this 
     subparagraph are to cover the costs (including equipment, 
     salaries, benefits, travel, and training) of the 
     administration and operation of the health care fraud and 
     abuse control program established under section 1128C(a), 
     including the costs of--
       ``(i) prosecuting health care matters (through criminal, 
     civil, and administrative proceedings);
       ``(ii) investigations;
       ``(iii) financial and performance audits of health care 
     programs and operations;
       ``(iv) inspections and other evaluations; and
       ``(v) provider and consumer education regarding compliance 
     with the provisions of title XI.
       ``(4) Appropriated amounts to account for medicare benefit 
     integrity system.--
       ``(A) In general.--There are hereby appropriated to the 
     Account from the Trust Fund for each fiscal year such amounts 
     as are necessary to carry out the Medicare Benefit Integrity 
     System under section 1889, subject to subparagraph (B), to be 
     available without further appropriation.
       ``(B) Amounts specified.--The amount appropriated under 
     subparagraph (A) for a fiscal year is as follows:
       ``(i) For fiscal year 1997, such amount shall be not less 
     than $430,000,000 and not more than $440,000,000.
       ``(ii) For fiscal year 1998, such amount shall be not less 
     than $490,000,000 and not more than $500,000,000.
       ``(iii) For fiscal year 1999, such amount shall be not less 
     than $550,000,000 and not more than $560,000,000.
       ``(iv) For fiscal year 2000, such amount shall be not less 
     than $620,000,000 and not more than $630,000,000.
       ``(v) For fiscal year 2001, such amount shall be not less 
     than $670,000,000 and not more than $680,000,000.
       ``(vi) For fiscal year 2002, such amount shall be not less 
     than $690,000,000 and not more than $700,000,000.
       ``(vii) For each fiscal year after fiscal year 2002, such 
     amount shall be not less than $710,000,000 and not more than 
     $720,000,000.
       ``(5) Annual report.--The Secretary and the Attorney 
     General shall submit jointly an annual report to Congress on 
     the amount of revenue which is generated and disbursed, and 
     the justification for such disbursements, by the Account in 
     each fiscal year.''.

     SEC. 102. MEDICARE BENEFIT INTEGRITY SYSTEM.

       Part C of title XVIII (42 U.S.C. 1395 et seq.) is amended 
     by inserting after section 1888 the following new section:


                 ``medicare benefit integrity contracts

       ``Sec. 1889. (a) Authority To Contract.--
       ``(1) In general.--In order to improve the effectiveness of 
     benefit quality assurance activities relating to programs 
     under this title, and to enhance the Secretary's capability 
     of carrying out program safeguard functions and related 
     education activities to avoid the improper expenditure of 
     assets of the Federal Hospital Insurance Trust Fund and the 
     Federal Supplementary Medical Insurance Trust Fund, the 
     Secretary shall enter into contracts with organizations or 
     other entities having demonstrated the capability to carry 
     out one or more benefit quality assurance activities. The 
     provisions of sections 1816 and 1842 shall be inapplicable to 
     contracts under this section.
       ``(2) Number of contracts.--The Secretary shall determine 
     the number of separate contracts which are necessary to 
     achieve, with the maximum degree of efficiency and cost-
     effectiveness, the objectives of this section. The Secretary 
     may enter into contracts under this section at such time or 
     times as are appropriate so long as not later than the fiscal 
     year beginning October 1, 1998, and for each fiscal year 
     thereafter, there are in effect contracts that, considered 
     collectively, provide for benefit quality assurance 
     activities with respect to all payments under this title.
       ``(b) Contract Requirements.--A benefit quality assurance 
     contract entered into under subsection (a) must provide for 
     one or more benefit quality assurance program activities. 
     Each such contract shall include an agreement by the 
     contractor to cooperate with the Inspector General of the 
     Department of Health and Human Services, and the Attorney 
     General, and other law enforcement agencies, as appropriate, 
     in the investigation and deterrence of fraud and abuse in 
     relation to this title and in other cases arising out of the 
     activities described in such section, and shall contain such 
     other provisions as the Secretary finds necessary or 
     appropriate to achieve the purposes of this part. The 
     provisions of section 1153(e)(1) shall apply to contracts and 
     contracting authority under this section, except that 
     competitive procedures must be used when entering into new 
     contracts under this section, or at any other time when it is 
     in the best interests of the United States. A contract under 
     this section may be renewed from term to term without regard 
     to any provision of law requiring competition if the 
     contractor has met or exceeded the performance requirements 
     established in the current contract.
       ``(c) Limitations.--
       ``(1) In general.--In carrying out this section, the 
     Secretary may not enter into a contract with an organization 
     or other entity if the Secretary determines that such 
     organization's or entity's financial holdings, interests, or 
     relationships would interfere with its ability to perform the 
     functions to be required by the contract in an effective and 
     impartial manner.
       ``(2) Limitation of liability.--The Secretary shall by 
     regulation provide for the limitation of a contractor's 
     liability for actions taken to carry out a contract under 
     this section, and such regulations shall, to the extent the 
     Secretary finds appropriate, employ the same or comparable 
     standards and other substantive and procedural provisions as 
     are contained in section 1157.''.

     SEC. 103. APPLICATION OF CERTAIN HEALTH ANTIFRAUD AND ABUSE 
                   SANCTIONS TO FRAUD AND ABUSE AGAINST FEDERAL 
                   HEALTH PROGRAMS.

       (a) Crimes.--
       (1) Social security act.--Section 1128B (42 U.S.C. 1320a-
     7b) is amended as follows:
       (A) In the heading, by striking ``medicare or state health 
     care programs'' and inserting ``federal health care 
     programs''.
       (B) In subsection (a)(1), by striking ``a program under 
     title XVIII or a State health care program (as defined in 
     section 1128(h))'' and inserting ``a Federal health care 
     program (as defined in subsection (f))''.
       (C) In subsection (a)(5), by striking ``a program under 
     title XVIII or a State health care program'' and inserting 
     ``a Federal health care program (as defined in subsection 
     (f))''.
       (D) In the second sentence of subsection (a)--
       (i) by striking ``a State plan approved under title XIX'' 
     and inserting ``a Federal health care program (as defined in 
     subsection (f))''; and
       (ii) by striking ``the State may at its option 
     (notwithstanding any other provision of that title or of such 
     plan)'' and inserting ``the administrator of such program may 
     at its option (notwithstanding any other provision of such 
     program)''.
       (E) In subsection (b)--
       (i) by striking ``and willfully'' each place it appears;
       (ii) by striking ``$25,000'' each place it appears and 
     inserting ``$50,000'';
       (iii) by striking ``title XVIII or a State health care 
     program'' each place it appears and inserting ``Federal 
     health care program (as defined in subsection (f))'';
       (iv) in paragraph (1) in the matter preceding subparagraph 
     (A), by striking ``kind--'' and inserting ``kind with intent 
     to be influenced--'';
       (v) in paragraph (1)(A), by striking ``in return for 
     referring'' and inserting ``to refer'';
       (vi) in paragraph (1)(B), by striking ``in return for 
     purchasing, leasing, ordering, or arranging for or 
     recommending'' and inserting ``to purchase, lease, order, or 
     arrange for or recommend'';
       (vii) in paragraph (2) in the matter preceding subparagraph 
     (A), by striking ``to induce such person'' and inserting 
     ``with intent to influence such person'';
       (viii) by adding at the end of paragraphs (1) and (2) the 
     following sentence: ``A violation exists under this paragraph 
     if one or more purposes of the remuneration is unlawful under 
     this paragraph.'';
       (ix) by redesignating paragraph (3) as paragraph (4);
       (x) in paragraph (4) (as redesignated) in the matter 
     preceding subparagraph (A), by striking ``Paragraphs (1) and 
     (2)'' and inserting ``Paragraphs (1), (2), and (3)''; and
       (xi) by inserting after paragraph (2) the following new 
     paragraph:
       ``(3)(A) The Attorney General may bring an action in the 
     district courts to impose upon any person who carries out any 
     activity in violation of this subsection a civil penalty of 
     not less than $25,000 and not more than $50,000 for each such 
     violation, plus three times the total remuneration offered, 
     paid, solicited, or received.
       ``(B) A violation exists under this paragraph if one or 
     more purposes of the remuneration is unlawful, and the 
     damages shall be the full amount of such remuneration.
       ``(C) Section 3731 of title 31, United States Code, and the 
     Federal Rules of Civil Procedure shall apply to actions 
     brought under this paragraph.
       ``(D) The provisions of this paragraph do not affect the 
     availability of other criminal and civil remedies for such 
     violations.''.

[[Page S6089]]

       (F) In subsection (c), by inserting ``(as defined in 
     section 1128(h))'' after ``a State health care program''.
       (G) By adding at the end the following new subsections:
       ``(f) For purposes of this section, the term `Federal 
     health care program' means--
       ``(1) any plan or program that provides health benefits, 
     whether directly, through insurance, or otherwise, which is 
     funded, in whole or in part, by the United States Government; 
     or
       ``(2) any State health care program, as defined in section 
     1128(h).
       ``(g)(1) The Inspector General of the departments and 
     agencies with a Federal health care program may conduct an 
     investigation or audit relating to violations of this section 
     and claims within the jurisdiction of other Federal 
     departments or agencies if the following conditions are 
     satisfied:
       ``(A) The investigation or audit involves primarily claims 
     submitted to the Federal health care programs of the 
     department or agency conducting the investigation or audit.
       ``(B) The Inspector General of the department or agency 
     conducting the investigation or audit gives notice and an 
     opportunity to participate in the investigation or audit to 
     the Inspector General of the department or agency with 
     primary jurisdiction over the Federal health care programs to 
     which the claims were submitted.
       ``(2) If the conditions specified in paragraph (1) are 
     fulfilled, the Inspector General of the department or agency 
     conducting the investigation or audit may exercise all powers 
     granted under the Inspector General Act of 1978 (5 U.S.C. 
     App.) with respect to the claims submitted to the other 
     departments or agencies to the same manner and extent as 
     provided in that Act with respect to claims submitted to such 
     departments or agencies.''.
       (2) Identification of community service opportunities.--
     Section 1128B (42 U.S.C. 1320a-7b), as amended by paragraph 
     (1), is amended by adding at the end the following new 
     subsection:
       ``(h) The Secretary may--
       ``(1) in consultation with State and local health care 
     officials, identify opportunities for the satisfaction of 
     community service obligations that a court may impose upon 
     the conviction of an offense under this section; and
       ``(2) make information concerning such opportunities 
     available to Federal and State law enforcement officers and 
     State and local health care officials.''.
       (b) Effective Date.--The amendments made by this section 
     shall take effect on January 1, 1997.

     SEC. 104. HEALTH CARE FRAUD AND ABUSE PROVIDER GUIDANCE.

       (a) Solicitation and Publication of Modifications to 
     Existing Safe Harbors and New Safe Harbors.--
       (1) In general.--
       (A) Solicitation of proposals for safe harbors.--Not later 
     than January 1, 1997, and not less than annually thereafter, 
     the Secretary shall publish a notice in the Federal Register 
     soliciting proposals, which will be accepted during a 60-day 
     period, for--
       (i) modifications to existing safe harbors issued pursuant 
     to section 14(a) of the Medicare Patient and Program 
     Protection Act of 1987 (42 U.S.C. 1320a-7b note);
       (ii) additional safe harbors specifying payment practices 
     that shall not be treated as a criminal offense under section 
     1128B(b) of the Social Security Act (42 U.S.C. 1320a-7b(b)) 
     and shall not serve as the basis for an exclusion under 
     section 1128(b)(7) of such Act (42 U.S.C. 1320a-7(b)(7));
       (iii) interpretive rulings to be issued pursuant to 
     subsection (b); and
       (iv) special fraud alerts to be issued pursuant to 
     subsection (c).
       (B) Publication of proposed modifications and proposed 
     additional safe harbors.--After considering the proposals 
     described in clauses (i) and (ii) of subparagraph (A), the 
     Secretary, in consultation with the Attorney General, shall 
     publish in the Federal Register proposed modifications to 
     existing safe harbors and proposed additional safe harbors, 
     if appropriate, with a 60-day comment period. After 
     considering any public comments received during this period, 
     the Secretary shall issue final rules modifying the existing 
     safe harbors and establishing new safe harbors, as 
     appropriate.
       (C) Report.--The Inspector General of the Department of 
     Health and Human Services (in this section referred to as the 
     ``Inspector General'') shall, in an annual report to Congress 
     or as part of the year-end semiannual report required by 
     section 5 of the Inspector General Act of 1978 (5 U.S.C. 
     App.), describe the proposals received under clauses (i) and 
     (ii) of subparagraph (A) and explain which proposals were 
     included in the publication described in subparagraph (B), 
     which proposals were not included in that publication, and 
     the reasons for the rejection of the proposals that were not 
     included.
       (2) Criteria for modifying and establishing safe harbors.--
     In modifying and establishing safe harbors under paragraph 
     (1)(B), the Secretary may consider the extent to which 
     providing a safe harbor for the specified payment practice 
     may result in any of the following:
       (A) An increase or decrease in access to health care 
     services.
       (B) An increase or decrease in the quality of health care 
     services.
       (C) An increase or decrease in patient freedom of choice 
     among health care providers.
       (D) An increase or decrease in competition among health 
     care providers.
       (E) An increase or decrease in the ability of health care 
     facilities to provide services in medically underserved areas 
     or to medically underserved populations.
       (F) An increase or decrease in the cost to Federal health 
     care programs (as defined in section 1128B(f) of the Social 
     Security Act (42 U.S.C. 1320a-7b(f)).
       (G) An increase or decrease in the potential 
     overutilization of health care services.
       (H) The existence or nonexistence of any potential 
     financial benefit to a health care professional or provider 
     which may vary based on their decisions of--
       (i) whether to order a health care item or service; or
       (ii) whether to arrange for a referral of health care items 
     or services to a particular practitioner or provider.
       (I) Any other factors the Secretary deems appropriate in 
     the interest of preventing fraud and abuse in Federal health 
     care programs (as so defined).
       (b) Interpretive Rulings.--
       (1) In general.--
       (A) Request for interpretive ruling.--Any person may 
     present, at any time, a request to the Inspector General for 
     a statement of the Inspector General's current interpretation 
     of the meaning of a specific aspect of the application of 
     sections 1128A and 1128B of the Social Security Act (42 
     U.S.C. 1320a-7a and 1320a-7b) (in this section referred to as 
     an ``interpretive ruling'').
       (B) Issuance and effect of interpretive ruling.--
       (i) In general.--If appropriate, the Inspector General 
     shall in consultation with the Attorney General, issue an 
     interpretive ruling not later than 120 days after receiving a 
     request described in subparagraph (A). Interpretive rulings 
     shall not have the force of law and shall be treated as an 
     interpretive rule within the meaning of section 553(b) of 
     title 5, United States Code. All interpretive rulings issued 
     pursuant to this clause shall be published in the Federal 
     Register or otherwise made available for public inspection.
       (ii) Reasons for denial.--If the Inspector General does not 
     issue an interpretive ruling in response to a request 
     described in subparagraph (A), the Inspector General shall 
     notify the requesting party of such decision not later than 
     120 days after receiving such a request and shall identify 
     the reasons for such decision.
       (2) Criteria for interpretive rulings.--
       (A) In general.--In determining whether to issue an 
     interpretive ruling under paragraph (1)(B), the Inspector 
     General may consider--
       (i) whether and to what extent the request identifies an 
     ambiguity within the language of the statute, the existing 
     safe harbors, or previous interpretive rulings; and
       (ii) whether the subject of the requested interpretive 
     ruling can be adequately addressed by interpretation of the 
     language of the statute, the existing safe harbor rules, or 
     previous interpretive rulings, or whether the request would 
     require a substantive ruling (as defined in section 552 of 
     title 5, United States Code) not authorized under this 
     subsection.
       (B) No rulings on factual issues.--The Inspector General 
     shall not give an interpretive ruling on any factual issue, 
     including the intent of the parties or the fair market value 
     of particular leased space or equipment.
       (c) Special Fraud Alerts.--
       (1) In general.--
       (A) Request for special fraud alerts.--Any person may 
     present, at any time, a request to the Inspector General for 
     a notice which informs the public of practices which the 
     Inspector General considers to be suspect or of particular 
     concern under section 1128B(b) of the Social Security Act (42 
     U.S.C. 1320a-7b(b)) (in this subsection referred to as a 
     ``special fraud alert'').
       (B) Issuance and publication of special fraud alerts.--Upon 
     receipt of a request described in subparagraph (A), the 
     Inspector General shall investigate the subject matter of the 
     request to determine whether a special fraud alert should be 
     issued. If appropriate, the Inspector General shall issue a 
     special fraud alert in response to the request. All special 
     fraud alerts issued pursuant to this subparagraph shall be 
     published in the Federal Register.
       (2) Criteria for special fraud alerts.--In determining 
     whether to issue a special fraud alert upon a request 
     described in paragraph (1), the Inspector General may 
     consider--
       (A) whether and to what extent the practices that would be 
     identified in the special fraud alert may result in any of 
     the consequences described in subsection (a)(2); and
       (B) the volume and frequency of the conduct that would be 
     identified in the special fraud alert.

     SEC. 105. MEDICARE/MEDICAID BENEFICIARY PROTECTION PROGRAM.

       (a) Establishment of Program.--Not later than January 1, 
     1997, the Secretary (through the Administrator of the Health 
     Care Financing Administration and the Inspector General of 
     the Department of Health and Human Services) shall establish 
     the Medicare/Medicaid Beneficiary Protection Program. Under 
     such program the Secretary shall--
       (1) educate medicare and medicaid beneficiaries regarding--
       (A) medicare and medicaid program coverage;
       (B) fraudulent and abusive practices;

[[Page S6090]]

       (C) medically unnecessary health care items and services; 
     and
       (D) substandard health care items and services;
       (2) identify and publicize fraudulent and abusive practices 
     with respect to the delivery of health care items and 
     services; and
       (3) establish a procedure for the reporting of fraudulent 
     and abusive health care providers, practitioners, claims, 
     items, and services to appropriate law enforcement and payer 
     agencies.
       (b) Recognition and Publication of Contributions.--The 
     program established by the Secretary under this section shall 
     recognize and publicize significant contributions made by 
     individual health care patients toward the combating of 
     health care fraud and abuse.
       (c) Dissemination of Information.--The Secretary shall 
     provide for the broad dissemination of information regarding 
     the Medicare/Medicaid Beneficiary Protection Program.

     SEC. 106. ENSURING THE INTEGRITY OF THE FEDERAL HOSPITAL 
                   INSURANCE TRUST FUND.

       (a) Determination.--Prior to the end of each fiscal year, 
     the Secretary of Health and Human Services (in this section 
     referred to as the ``Secretary'') and the Attorney General 
     shall jointly determine--
       (1) the portion of the costs charged during such fiscal 
     year to any account established within the Federal Hospital 
     Insurance Trust Fund under title XVIII of the Social Security 
     Act (42 U.S.C. 1395 et seq.) to combat health care waste, 
     fraud, and abuse, which do not relate to the administration 
     of the medicare program; and
       (2) the amount of funds deposited into such account of such 
     trust fund during such fiscal year that were attributable to 
     enforcement activities that were intended to combat health 
     care waste, fraud, and abuse, which do not relate to the 
     administration of the medicare program.
       (b) Certification.--If the portion determined under 
     paragraph (1) of subsection (a) exceeds the amount determined 
     under paragraph (2) of such subsection, the Secretary and the 
     Attorney General shall certify to the Secretary of the 
     Treasury the amount, which shall be equal to the amount of 
     such excess, which should be transferred from the General 
     Fund of the Treasury to such trust fund, in order to ensure 
     that such trust fund is fully reimbursed for any expenditures 
     made from the account described in subsection (a) that are 
     not related to the administration of the medicare program 
     under title XVIII of the Social Security Act.
       (c) Transfer of Funds.--The Secretary of the Treasury shall 
     transfer to such trust fund from the General Fund of the 
     Treasury, out of any funds in the General Fund that are not 
     otherwise appropriated, an amount equal to the amount 
     certified under subsection (b).
      TITLE II--REVISIONS TO CURRENT SANCTIONS FOR FRAUD AND ABUSE

     SEC. 201. MANDATORY EXCLUSION FROM PARTICIPATION IN MEDICARE 
                   AND STATE HEALTH CARE PROGRAMS.

       (a) Individual Convicted of Felony Relating to Health Care 
     Fraud.--
       (1) In general.--Section 1128(a) (42 U.S.C. 1320a-7(a)) is 
     amended by adding at the end the following new paragraph:
       ``(3) Felony conviction relating to health care fraud.--Any 
     individual or entity that has been convicted after the date 
     of the enactment of the Medicare Antifraud Act of 1996, under 
     Federal or State law, in connection with the delivery of a 
     health care item or service or with respect to any act or 
     omission in a health care program (other than those 
     specifically described in paragraph (1)) operated by or 
     financed in whole or in part by any Federal, State, or local 
     government agency, of a criminal offense consisting of a 
     felony relating to fraud, theft, embezzlement, breach of 
     fiduciary responsibility, or other financial misconduct.''.
       (2) Conforming amendment.--Paragraph (1) of section 1128(b) 
     (42 U.S.C. 1320a-7(b)) is amended to read as follows:
       ``(1) Conviction relating to fraud.--Any individual or 
     entity that has been convicted after the date of the 
     enactment of the Medicare Antifraud Act of 1996, under 
     Federal or State law--
       ``(A) of a criminal offense consisting of a misdemeanor 
     relating to fraud, theft, embezzlement, breach of fiduciary 
     responsibility, or other financial misconduct--
       ``(i) in connection with the delivery of a health care item 
     or service, or
       ``(ii) with respect to any act or omission in a health care 
     program (other than those specifically described in 
     subsection (a)(1)) operated by or financed in whole or in 
     part by any Federal, State, or local government agency; or
       ``(B) of a criminal offense relating to fraud, theft, 
     embezzlement, breach of fiduciary responsibility, or other 
     financial misconduct with respect to any act or omission in a 
     program (other than a health care program) operated by or 
     financed in whole or in part by any Federal, State, or local 
     government agency.''.
       (b) Individual Convicted of Felony Relating to Controlled 
     Substance.--
       (1) In general.--Section 1128(a) (42 U.S.C. 1320a-7(a)), as 
     amended by subsection (a), is amended by adding at the end 
     the following new paragraph:
       ``(4) Felony conviction relating to controlled substance.--
     Any individual or entity that has been convicted after the 
     date of the enactment of the Medicare Antifraud Act of 1996, 
     under Federal or State law, of a criminal offense consisting 
     of a felony relating to the unlawful manufacture, 
     distribution, prescription, or dispensing of a controlled 
     substance.''.
       (2) Conforming amendment.--Section 1128(b)(3) (42 U.S.C. 
     1320a-7(b)(3)) is amended--
       (A) in the heading, by striking ``Conviction'' and 
     inserting ``Misdemeanor conviction''; and
       (B) by striking ``criminal offense'' and inserting 
     ``criminal offense consisting of a misdemeanor''.

     SEC. 202. ESTABLISHMENT OF MINIMUM PERIOD OF EXCLUSION FOR 
                   CERTAIN INDIVIDUALS AND ENTITIES SUBJECT TO 
                   PERMISSIVE EXCLUSION FROM MEDICARE AND STATE 
                   HEALTH CARE PROGRAMS.

       Section 1128(c)(3) (42 U.S.C. 1320a-7(c)(3)) is amended by 
     adding at the end the following new subparagraphs:
       ``(D) In the case of an exclusion of an individual or 
     entity under paragraph (1), (2), or (3) of subsection (b), 
     the period of the exclusion shall be 3 years, unless the 
     Secretary determines in accordance with published regulations 
     that a shorter period is appropriate because of mitigating 
     circumstances or that a longer period is appropriate because 
     of aggravating circumstances.
       ``(E) In the case of an exclusion of an individual or 
     entity under paragraph (4) or (5) of subsection (b), the 
     period of the exclusion shall not be less than the period 
     during which the individual's or entity's license to provide 
     health care is revoked, suspended, or surrendered, or the 
     individual or the entity is excluded or suspended from a 
     Federal or State health care program.
       ``(F) In the case of an exclusion of an individual or 
     entity under subsection (b)(6)(B), the period of the 
     exclusion shall be not less than 1 year.''.

     SEC. 203. PERMISSIVE EXCLUSION OF INDIVIDUALS WITH OWNERSHIP 
                   OR CONTROL INTEREST IN SANCTIONED ENTITIES.

       Section 1128(b) (42 U.S.C. 1320a-7(b)) is amended by adding 
     at the end the following new paragraph:
       ``(15) Individuals controlling a sanctioned entity.--Any 
     individual who has a direct or indirect ownership or control 
     interest of 5 percent or more, or an ownership or control 
     interest (as defined in section 1124(a)(3)) in, or who is an 
     officer or managing employee (as defined in section 1126(b)) 
     of, an entity--
       ``(A) that has been convicted of any offense described in 
     subsection (a) or in paragraph (1), (2), or (3) of this 
     subsection; or
       ``(B) that has been excluded from participation under a 
     program under title XVIII or under a State health care 
     program (as defined in subsection (h)).''.

     SEC. 204. SANCTIONS AGAINST PRACTITIONERS AND PERSONS FOR 
                   FAILURE TO COMPLY WITH STATUTORY OBLIGATIONS.

       (a) Minimum Period of Exclusion for Practitioners and 
     Persons Failing To Meet Statutory Obligations.--
       (1) In general.--The second sentence of section 1156(b)(1) 
     (42 U.S.C. 1320c-5(b)(1)) is amended by striking ``may 
     prescribe)'' and inserting ``may prescribe, except that such 
     period may not be less than 1 year)''.
       (2) Conforming amendment.--Section 1156(b)(2) (42 U.S.C. 
     1320c-5(b)(2)) is amended by striking ``shall remain'' and 
     inserting ``shall (subject to the minimum period specified in 
     the second sentence of paragraph (1)) remain''.
       (b) Repeal of ``Unwilling or Unable'' Condition for 
     Imposition of Sanction.--Section 1156(b)(1) (42 U.S.C. 1320c-
     5(b)(1)) is amended--
       (1) in the second sentence, by striking ``and determines'' 
     and all that follows through ``such obligations,''; and
       (2) by striking the third sentence.

     SEC. 205. SANCTIONS AGAINST PROVIDERS FOR EXCESSIVE FEES OR 
                   PRICES.

       Section 1128(b)(6)(A) (42 U.S.C. 1320a-7(b)(6)(A)) is 
     amended--
       (1) by inserting ``(as specified by the Secretary in 
     regulations)'' after ``substantially in excess of such 
     individual's or entity's usual charges''; and
       (2) by striking ``(or, in applicable cases, substantially 
     in excess of such individual's or entity's costs)'' and 
     inserting ``, costs or fees''.

     SEC. 206. APPLICABILITY OF THE BANKRUPTCY CODE TO PROGRAM 
                   SANCTIONS.

       (a) Exclusion of Individuals and Entities From 
     Participation in Federal Health Care Programs.--Section 1128 
     (42 U.S.C. 1320a-7) is amended by adding at the end the 
     following new subsection:
       ``(j) Applicability of Bankruptcy Provisions.--An exclusion 
     imposed under this section is not subject to the automatic 
     stay imposed under section 362 of title 11, United States 
     Code.''.
       (b) Civil Monetary Penalties.--Section 1128A(a) (42 U.S.C. 
     1320a-7a(a)) is amended by adding at the end the following 
     sentence: ``An exclusion imposed under this subsection is not 
     subject to the automatic stay imposed under section 362 of 
     title 11, United States Code, and any penalties and 
     assessments imposed under this section shall be 
     nondischargeable under the provisions of such title.''.
       (c) Offset of Payments to Individuals.--Section 1892(a)(4) 
     (42 U.S.C. 1395ccc(a)(4)) is amended by adding at the end the 
     following

[[Page S6091]]

     sentence: ``An exclusion imposed under paragraph (2)(C)(ii) 
     or paragraph (3)(B) is not subject to the automatic stay 
     imposed under section 362 of title 11, United States Code.''.

     SEC. 207. INTERMEDIATE SANCTIONS FOR MEDICARE HEALTH 
                   MAINTENANCE ORGANIZATIONS.

       (a) Application of Intermediate Sanctions for Program 
     Violations.--
       (1) In general.--Section 1876(i)(1) (42 U.S.C. 
     1395mm(i)(1)) is amended by striking ``the Secretary may 
     terminate'' and all that follows and inserting ``in 
     accordance with procedures established under paragraph (9), 
     the Secretary may at any time terminate any such contract or 
     may impose the intermediate sanctions described in paragraph 
     (6)(B) or (6)(C) (whichever is applicable) on the eligible 
     organization if the Secretary determines that the 
     organization--
       ``(A) has failed substantially to carry out the contract;
       ``(B) is carrying out the contract in a manner 
     substantially inconsistent with the efficient and effective 
     administration of this section; or
       ``(C) no longer substantially meets the applicable 
     conditions of subsections (b), (c), (e), and (f).''.
       (2) Other intermediate sanctions for miscellaneous program 
     violations.--Section 1876(i)(6) (42 U.S.C. 1395mm(i)(6)) is 
     amended by adding at the end the following new subparagraph:
       ``(C) In the case of an eligible organization for which the 
     Secretary makes a determination under paragraph (1), the 
     basis of which is not described in subparagraph (A), the 
     Secretary may apply the following intermediate sanctions:
       ``(i) Civil money penalties of not more than $25,000 for 
     each determination under paragraph (1) if the deficiency that 
     is the basis of the determination has directly adversely 
     affected (or has the substantial likelihood of adversely 
     affecting) an individual covered under the organization's 
     contract.
       ``(ii) Civil money penalties of not more than $10,000 for 
     each week beginning after the initiation of procedures by the 
     Secretary under paragraph (9) during which the deficiency 
     that is the basis of a determination under paragraph (1) 
     exists.
       ``(iii) Suspension of enrollment of individuals under this 
     section after the date the Secretary notifies the 
     organization of a determination under paragraph (1) and until 
     the Secretary is satisfied that the deficiency that is the 
     basis for the determination has been corrected and is not 
     likely to recur.''.
       (3) Procedures for imposing sanctions.--Section 1876(i) (42 
     U.S.C. 1395mm(i)) is amended by adding at the end the 
     following new paragraph:
       ``(9) The Secretary may terminate a contract with an 
     eligible organization under this section or may impose the 
     intermediate sanctions described in paragraph (6) on the 
     organization in accordance with formal investigation and 
     compliance procedures established by the Secretary under 
     which--
       ``(A) the Secretary first provides the organization with 
     the reasonable opportunity to develop and implement a 
     corrective action plan to correct the deficiencies that were 
     the basis of the Secretary's determination under paragraph 
     (1) and the organization fails to develop or implement such a 
     plan;
       ``(B) in deciding whether to impose sanctions, the 
     Secretary considers aggravating factors such as whether an 
     entity has a history of deficiencies or has not taken action 
     to correct deficiencies the Secretary has brought to their 
     attention;
       ``(C) there are no unreasonable or unnecessary delays 
     between the finding of a deficiency and the imposition of 
     sanctions; and
       ``(D) the Secretary provides the organization with 
     reasonable notice and opportunity for hearing (including the 
     right to appeal an initial decision) before imposing any 
     sanction or terminating the contract.''.
       (4) Conforming amendments.--Section 1876(i)(6)(B) (42 
     U.S.C. 1395mm(i)(6)(B)) is amended by striking the second 
     sentence.
       (b) Agreements With Peer Review Organizations.--
       (1) Requirement for written agreement.--Section 
     1876(i)(7)(A) (42 U.S.C. 1395mm(i)(7)(A)) is amended by 
     striking ``an agreement'' and inserting ``a written 
     agreement''.
       (2) Development of model agreement.--Not later than July 1, 
     1997, the Secretary shall develop a model of the agreement 
     that an eligible organization with a risk-sharing contract 
     under section 1876 of the Social Security Act (42 U.S.C. 
     1395mm) must enter into with an entity providing peer review 
     services with respect to services provided by the 
     organization under section 1876(i)(7)(A) of such Act (42 
     U.S.C. 1395mm(i)(7)(A)).
       (3) Report by gao.--
       (A) Study.--The Comptroller General of the United States 
     shall conduct a study of the costs incurred by eligible 
     organizations with risk-sharing contracts under section 1876 
     of such Act (42 U.S.C. 1395mm(b)) of complying with the 
     requirement of entering into a written agreement with an 
     entity providing peer review services with respect to 
     services provided by the organization, together with an 
     analysis of how information generated by such entities is 
     used by the Secretary to assess the quality of services 
     provided by such eligible organizations.
       (B) Report to congress.--Not later than July 1, 1998, the 
     Comptroller General shall submit a report to the Committee on 
     Ways and Means and the Committee on Commerce of the House of 
     Representatives and the Committee on Finance and the Special 
     Committee on Aging of the Senate on the study conducted under 
     subparagraph (A).

     SEC. 208. LIABILITY OF MEDICARE CARRIERS AND FISCAL 
                   INTERMEDIARIES AND STATES 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:
       ``(l) An agreement with an agency or organization under 
     this section shall require that such agency or organization 
     reimburse the Secretary for any amounts paid 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.--Section 1816(i) (42 U.S.C. 
     1395h(i)) 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 (l).''.
       (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 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) Requirements for states.--Section 1902(a)(39) (42 
     U.S.C. 1396a(a)(39)) is amended by striking the semicolon at 
     the end and inserting ``, and provide further for 
     reimbursement to the Secretary of any payments made under the 
     plan for 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)(2) (42 U.S.C. 1395y(e)(2)) is amended to read as 
     follows:
       ``(2) 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.''.

     SEC. 209. EFFECTIVE DATE.

       The amendments made by this title shall take effect January 
     1, 1997.
         TITLE III--ADMINISTRATIVE AND MISCELLANEOUS PROVISIONS

     SEC. 301. ESTABLISHMENT OF THE HEALTH CARE FRAUD AND ABUSE 
                   DATA COLLECTION PROGRAM.

       (a) General Purpose.--Not later than January 1, 1997, the 
     Secretary shall establish a national health care fraud and 
     abuse data collection program for the reporting of final 
     adverse actions (not including settlements in which no 
     findings of liability have been made) against health care 
     providers, suppliers, or practitioners as required by 
     subsection (b), with access as set forth in subsection (c), 
     and shall maintain a database of the information collected 
     under this section.
       (b) Reporting of Information.--
       (1) In general.--Each Government agency and health plan 
     shall report any final adverse action (not including 
     settlements in which no findings of liability have been made) 
     taken against a health care provider, supplier, or 
     practitioner.
       (2) Information to be reported.--The information to be 
     reported under paragraph (1) includes the following:
       (A) The name and TIN (as defined in section 7701(a)(41) of 
     the Internal Revenue Code of 1986) of any health care 
     provider, supplier, or practitioner who is the subject of a 
     final adverse action.
       (B) The name (if known) of any health care entity with 
     which a health care provider, supplier, or practitioner, who 
     is the subject of a final adverse action, is affiliated or 
     associated.
       (C) The nature of the final adverse action and whether such 
     action is on appeal.
       (D) A description of the acts or omissions and injuries 
     upon which the final adverse action was based, and such other 
     information as the Secretary determines by regulation is 
     required for appropriate interpretation of information 
     reported under this section.
       (3) Confidentiality.--In determining what information is 
     required, the Secretary shall include procedures to assure 
     that the privacy of individuals receiving health care 
     services is appropriately protected.
       (4) Timing and form of reporting.--The information required 
     to be reported under this subsection shall be reported 
     regularly (but not less often than monthly) and in such form 
     and manner as the Secretary of Health and Human Services (in 
     this section referred to as the ``Secretary'') prescribes. 
     Such information shall first be required to be reported on a 
     date specified by the Secretary.

[[Page S6092]]

       (5) To whom reported.--The information required to be 
     reported under this subsection shall be reported to the 
     Secretary.
       (c) Disclosure and Correction of Information.--
       (1) Disclosure.--With respect to the information about 
     final adverse actions (not including settlements in which no 
     findings of liability have been made) reported to the 
     Secretary under this section with respect to a health care 
     provider, supplier, or practitioner, the Secretary shall, by 
     regulation, provide for--
       (A) disclosure of the information, upon request, to the 
     health care provider, supplier, or licensed practitioner, and
       (B) procedures in the case of disputed accuracy of the 
     information.
       (2) Corrections.--Each Government agency and health plan 
     shall report corrections of information already reported 
     about any final adverse action taken against a health care 
     provider, supplier, or practitioner, in such form and manner 
     that the Secretary prescribes by regulation.
       (d) Access to Reported Information.--
       (1) Availability.--The information in the database 
     maintained under this section shall be available to Federal 
     and State government agencies, health plans, and the public 
     pursuant to procedures that the Secretary shall provide by 
     regulation.
       (2) Fees for disclosure.--The Secretary may establish or 
     approve reasonable fees for the disclosure of information in 
     such database (other than with respect to requests by Federal 
     agencies). The amount of such a fee may be sufficient to 
     recover the full costs of carrying out the provisions of this 
     section, including reporting, disclosure, and administration. 
     Such fees shall be available to the Secretary or, in the 
     Secretary's discretion to the agency designated under this 
     section to cover such costs.
       (e) Protection From Liability for Reporting.--No person or 
     entity shall be held liable in any civil action with respect 
     to any report made as required by this section, without 
     knowledge of the falsity of the information contained in the 
     report.
       (f) Definitions and Special Rules.--For purposes of this 
     section:
       (1) Final adverse action.--
       (A) In general.--The term ``final adverse action'' includes 
     the following:
       (i) Civil judgments against a health care provider or 
     practitioner in Federal or State court related to the 
     delivery of a health care item or service.
       (ii) Federal or State criminal convictions related to the 
     delivery of a health care item or service.
       (iii) Actions by Federal or State agencies responsible for 
     the licensing and certification of health care providers, 
     suppliers, and licensed health care practitioners, 
     including--

       (I) formal or official actions, such as revocation or 
     suspension of a license (and the length of any such 
     suspension), reprimand, censure, or probation,
       (II) any other loss of license, or the right to apply for 
     or renew a license of the provider, supplier, or 
     practitioner, whether by operation of law, voluntary 
     surrender, nonrenewability, or otherwise, or
       (III) any other negative action or finding by such Federal 
     or State agency that is publicly available information.

       (iv) Exclusion from participation in Federal or State 
     health care programs (as defined in section 1128B(f) and 
     1128(h), respectively).
       (v) Any other adjudicated actions or decisions that the 
     Secretary shall establish by regulation.
       (B) Exclusion.--The term does not include any action with 
     respect to a malpractice claim.
       (C) Special rule.--For purposes of this paragraph, the 
     existence of a conviction shall be determined under section 
     1128(i) of the Social Security Act (42 U.S.C. 1320a-7(i)).
       (2) Licensed health care practitioner.--The terms 
     ``licensed health care practitioner'', ``licensed 
     practitioner'', and ``practitioner'' mean, with respect to a 
     State, an individual who is licensed or otherwise authorized 
     by the State to provide health care services (or any 
     individual who, without authority holds himself or herself 
     out to be so licensed or authorized).
       (3) Health care provider.--The term ``health care 
     provider'' means a provider of services as defined in section 
     1861(u) of the Social Security Act (42 U.S.C. 1395x(u)), and 
     any person or entity, including a health maintenance 
     organization, group medical practice, or any other entity 
     listed by the Secretary in regulation, that provides health 
     care services.
       (4) Supplier.--The term ``supplier'' means a supplier of 
     health care items and services described in subsections (a) 
     and (b) of section 1819, and section 1861 of the Social 
     Security Act (42 U.S.C. 1395i-3 (a) and (b), and 1395x).
       (5) Government agency.--The term ``Government agency'' 
     shall include the following:
       (A) The Department of Justice.
       (B) The Department of Health and Human Services.
       (C) Any other Federal agency that either administers or 
     provides payment for the delivery of health care services, 
     including, but not limited to the Department of Defense and 
     the Veterans' Administration.
       (D) State law enforcement agencies.
       (E) State medicaid fraud and abuse units.
       (F) Federal or State agencies responsible for the licensing 
     and certification of health care providers and licensed 
     health care practitioners.
       (6) Health plan.--The term ``health plan'' has the meaning 
     given such term by section 1128C(c) of the Social Security 
     Act, as added by section 101(a) of this Act.
       (g) Conforming Amendment.--Section 1921(d) (42 U.S.C. 
     1396r-2(d)) is amended by inserting ``and section 301 of the 
     Medicare Antifraud Act of 1996'' after ``section 422 of the 
     Health Care Quality Improvement Act of 1986''.

     SEC. 302. INSPECTOR GENERAL ACCESS TO NATIONAL PRACTITIONER 
                   DATA BANK.

       Section 427 of the Health Care Quality Improvement Act of 
     1986 (42 U.S.C. 11137) is amended--
       (1) in subsection (a), by adding at the end the following 
     sentence: ``Information reported under this part shall also 
     be made available, upon request, to the Inspector General of 
     the Departments of Health and Human Services, Defense, and 
     Labor, the Office of Personnel Management, and the Railroad 
     Retirement Board.''; and
       (2) by amending subsection (b)(4) to read as follows:
       ``(4) Fees.--The Secretary may impose fees for the 
     disclosure of information under this part sufficient to 
     recover the full costs of carrying out the provisions of this 
     part, including reporting, disclosure, and administration, 
     except that a fee may not be imposed for requests made by the 
     Inspector General of the Department of Health and Human 
     Services. Such fees shall remain available to the Secretary 
     (or, in the Secretary's discretion, to the agency designated 
     in section 424(b)) until expended.''.

     SEC. 303. CORPORATE WHISTLEBLOWER PROGRAM.

       Title XI (42 U.S.C. 1301 et seq.), as amended by section 
     101(a), is amended by inserting after section 1128C the 
     following new section:


                   ``CORPORATE WHISTLEBLOWER PROGRAM

       ``Sec. 1128D. (a) Establishment of Program.--The Secretary, 
     through the Inspector General of the Department of Health and 
     Human Services, shall establish a procedure whereby 
     corporations, partnerships, and other legal entities 
     specified by the Secretary, may voluntarily disclose 
     instances of unlawful conduct and seek to resolve liability 
     for such conduct through means specified by the Secretary.
       ``(b) Limitation.--No person may bring an action under 
     section 3730(b) of title 31, United States Code, if, on the 
     date of filing--
       ``(1) the matter set forth in the complaint has been 
     voluntarily disclosed to the United States by the proposed 
     defendant and the defendant has been accepted into the 
     voluntary disclosure program established pursuant to 
     subsection (a); and
       ``(2) any new information provided in the complaint under 
     such section does not add substantial grounds for additional 
     recovery beyond those encompassed within the scope of the 
     voluntary disclosure.''.

     SEC. 304. HOME HEALTH BILLING, PAYMENT, AND COST LIMIT 
                   CALCULATION TO BE BASED ON SITE WHERE SERVICE 
                   IS FURNISHED.

       (a) Conditions of Participation.--Section 1891 (42 U.S.C. 
     1395bbb) is amended by adding at the end the following new 
     subsection:
       ``(g) A home health agency shall submit claims for payment 
     of home health services under this title only on the basis of 
     the geographic location at which the service is furnished, as 
     determined by the Secretary.''.
       (b) Wage Adjustment.--Section 1861(v)(1)(L)(iii) (42 U.S.C. 
     1395x(v)(1)(L)(iii)) is amended by striking ``agency is 
     located'' and inserting ``service is furnished''.

     SEC. 305. APPLICATION OF INHERENT REASONABLENESS.

       (a) In General.--Section 1834(a)(10)(B) (42 U.S.C. 
     1395m(a)(10)(B)) is amended--
       (1) in the first sentence, by striking ``apply the 
     provisions'' and all that follows through the period and 
     inserting ``describe by regulation the factors to be used in 
     determining the cases (or particular items) in which the 
     application of this subsection results in the determination 
     of an amount that, by reason of its being grossly excessive 
     or grossly deficient, is not inherently reasonable, and to 
     provide in such cases for the factors that will be considered 
     in establishing an amount that is realistic and equitable.''; 
     and
       (2) in the second sentence, by striking ``applying such 
     provisions'' and inserting ``applying the previous provisions 
     of this subsection''.
       (b) Conforming Amendment.--Section 1834(i) (42 U.S.C. 
     1395m(i)) is amended by adding at the end the following new 
     paragraph:
       ``(3) Adjustment for inherent reasonableness.--The 
     provisions of subsection (a)(10)(B) shall apply to payment 
     for surgical dressings under this subsection.''.

     SEC. 306. CLARIFICATION OF TIME AND FILING LIMITATIONS.

       (a) In General.--Section 1862(b)(2)(B) (42 U.S.C. 
     1395y(b)(2)(B)) is amended by adding at the end the following 
     new clause:
       ``(v) Time, filing, and related provisions under primary 
     plan.--Requirements under a primary plan as to the filing of 
     a claim, time limitations for the filing of a claim, 
     information not maintained by the Secretary, or notification 
     or pre-admission review, shall not apply to a claim by the 
     United States under clause (ii) or (iii).''.
       (b) Effective Date.--The amendment made by subsection (a) 
     applies to items and services furnished after 1990.

[[Page S6093]]

     SEC. 307. CLARIFICATION OF LIABILITY OF THIRD PARTY 
                   ADMINISTRATORS.

       (a) In General.--Section 1862(b)(2)(B)(ii) (42 U.S.C. 
     1395y(b)(2)(B)(ii)) is amended by inserting ``, or which 
     determines claims under the primary plan'' after ``primary 
     plan''.
       (b) Claims Between Parties Other Than the United States.--
     Section 1862(b)(2)(B) (42 U.S.C. 1395y(b)(2)(B)), as amended 
     by section 306(a) of this Act, is amended by adding at the 
     end the following new clause:
       ``(vi) Claims between parties other than the united 
     states.--A claim by the United States under clause (ii) or 
     (iii) shall not preclude claims between other parties.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to items and services furnished after 1990.

     SEC. 308. CLARIFICATION OF PAYMENT AMOUNTS TO MEDICARE.

       (a) In General.--Section 1862(b)(2)(B)(i) (42 U.S.C. 
     1395y(b)(2)(B)(i)) is amended to read as follows:
       ``(i) Repayment required.--

       ``(I) In general.--Any payment under this title, with 
     respect to any item or service for which payment by a primary 
     plan is required under the preceding provisions of this 
     subsection, shall be conditioned on reimbursement to the 
     appropriate Trust Fund established by this title when notice 
     or other information is received that payment for that item 
     or service has been or should have been made under those 
     provisions. If reimbursement is not made to the appropriate 
     Trust Fund before the expiration of the 60-day period that 
     begins on the date such notice or other information is 
     received, the Secretary may charge interest (beginning with 
     the date on which the notice or other information is 
     received) on the amount of the reimbursement until 
     reimbursement is made (at a rate determined by the Secretary 
     in accordance with regulations of the Secretary of the 
     Treasury applicable to charges for late payments).
       ``(II) Determination of amount owed.--The amount owed by a 
     primary plan under the first sentence of subclause (I) is the 
     lesser of the full primary payment required (if that amount 
     is readily determinable) and the amount paid under this title 
     for that item or service.''.

       (b) Conforming and Technical Amendments.--
       (1) Subparagraphs (A)(i)(I) and (B)(i) of section 
     1862(b)(1) (42 U.S.C. 1395y(b)(1)) are each amended by 
     inserting ``(or eligible to be covered)'' after ``covered''.
       (2) Section 1862(b)(1)(C)(ii) (42 U.S.C. 
     1395y(b)(1)(C)(ii)) is amended by striking ``covered by such 
     plan''.
       (3) The matter in section 1862(b)(2)(A) (42 U.S.C. 
     1395y(b)(2)(A)) preceding clause (i) is amended by striking 
     ``, except as provided in subparagraph (B),''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to items and services furnished after 1990.

     SEC. 309. INCREASED FLEXIBILITY IN CONTRACTING FOR MEDICARE 
                   CLAIMS PROCESSING.

       (a) Carriers To Include Entities That Are Not Insurance 
     Companies.--The matter in section 1842(a) (42 U.S.C. 
     1395u(a)) preceding paragraph (1) is amended by striking 
     ``with carriers'' and inserting ``with agencies and 
     organizations (referred to as carriers)''.
       (b) Repeal.--Section 1842(f) (42 U.S.C. 1395u(f)) is 
     repealed.
                   TITLE IV--CIVIL MONETARY PENALTIES

     SEC. 401. SOCIAL SECURITY ACT CIVIL MONETARY PENALTIES.

       (a) General Civil Monetary Penalties.--Section 1128A (42 
     U.S.C. 1320a-7a) is amended as follows:
       (1) In the third sentence of subsection (a), by striking 
     ``programs under title XVIII'' and inserting ``Federal health 
     care programs (as defined in section 1128B(f))''.
       (2) In subsection (f)--
       (A) by redesignating paragraph (3) as paragraph (4); and
       (B) by inserting after paragraph (2) the following new 
     paragraph:
       ``(3) With respect to amounts recovered arising out of a 
     claim under a Federal health care program (as defined in 
     section 1128B(f)), the portion of such amounts as is 
     determined to have been paid by the program shall be repaid 
     to the program, and the portion of such amounts attributable 
     to the amounts recovered under this section by reason of the 
     amendments made by the Medicare Antifraud Act of 1996 (as 
     estimated by the Secretary) shall be deposited into the 
     Health Care Fraud and Abuse Control Account established under 
     section 101(b) of such Act.''.
       (3) In subsection (i)--
       (A) in paragraph (2), by striking ``title V, XVIII, XIX, or 
     XX of this Act'' and inserting ``a Federal health care 
     program (as defined in section 1128B(f))'';
       (B) in paragraph (4), by striking ``a health insurance or 
     medical services program under title XVIII or XIX of this 
     Act'' and inserting ``a Federal health care program (as so 
     defined)''; and
       (C) in paragraph (5), by striking ``title V, XVIII, XIX, or 
     XX'' and inserting ``a Federal health care program (as so 
     defined)''.
       (4) By adding at the end the following new subsection:
       ``(m)(1) For purposes of this section, with respect to a 
     Federal health care program not contained in this Act, 
     references to the Secretary in this section shall be deemed 
     to be references to the Secretary or Administrator of the 
     department or agency with jurisdiction over such program and 
     references to the Inspector General of the Department of 
     Health and Human Services in this section shall be deemed to 
     be references to the Inspector General of the applicable 
     department or agency.
       ``(2)(A) The Secretary and Administrator of the departments 
     and agencies referred to in paragraph (1) may include in any 
     action pursuant to this section, claims within the 
     jurisdiction of other Federal departments or agencies as long 
     as the following conditions are satisfied:
       ``(i) The case primarily involves claims submitted to the 
     Federal health care programs of the department or agency 
     initiating the action.
       ``(ii) The Secretary or Administrator of the department or 
     agency initiating the action gives notice and an opportunity 
     to participate in the investigation to the Inspector General 
     of the department or agency with primary jurisdiction over 
     the Federal health care programs to which the claims were 
     submitted.
       ``(B) If the conditions specified in subparagraph (A) are 
     fulfilled, the Inspector General of the department or agency 
     initiating the action is authorized to exercise all powers 
     granted under the Inspector General Act of 1978 (5 U.S.C. 
     App.) with respect to the claims submitted to the other 
     departments or agencies to the same manner and extent as 
     provided in that Act with respect to claims submitted to such 
     departments or agencies.''.
       (b) Excluded Individual Retaining Ownership or Control 
     Interest in Participating Entity.--Section 1128A(a) (42 
     U.S.C. 1320a-7a(a)) is amended--
       (1) by striking ``or'' at the end of paragraph (1)(D);
       (2) by striking ``, or'' at the end of paragraph (2) and 
     inserting a semicolon;
       (3) by striking the semicolon at the end of paragraph (3) 
     and inserting ``; or''; and
       (4) by inserting after paragraph (3) the following new 
     paragraph:
       ``(4) in the case of a person who is not an organization, 
     agency, or other entity, is excluded from participating in a 
     program under title XVIII or a State health care program in 
     accordance with this subsection or under section 1128 and 
     who, at the time of a violation of this subsection, retains a 
     direct or indirect ownership or control interest of 5 percent 
     or more, or an ownership or control interest (as defined in 
     section 1124(a)(3)) in, or who is an officer or managing 
     employee (as defined in section 1126(b)) of, an entity that 
     is participating in a program under title XVIII or a State 
     health care program;''.
       (c) Employer Billing for Services Furnished, Directed, or 
     Prescribed by an Excluded Employee.--Section 1128A(a)(1) (42 
     U.S.C. 1320a-7a(a)(1)), as amended by subsection (b), is 
     amended--
       (1) by striking ``or'' at the end of subparagraph (C);
       (2) by striking the semicolon at the end of subparagraph 
     (D) and inserting ``, or''; and
       (3) by adding at the end the following new subparagraph:
       ``(E) is for a medical or other item or service furnished, 
     directed, or prescribed by an individual who is an employee 
     or agent of the person during a period in which such employee 
     or agent was excluded from the program under which the claim 
     was made on any of the grounds for exclusion described in 
     subparagraph (D);''.
       (d) Civil Money Penalties for Items or Services Furnished, 
     Directed, or Prescribed by an Excluded Individual.--Section 
     1128A(a)(1)(D) (42 U.S.C. 1320a-7a(a)(1)(D)) is amended by 
     inserting ``, directed, or prescribed'' after ``furnished''.
       (e) Modifications of Amounts of Penalties and 
     Assessments.--Section 1128A(a) (42 U.S.C. 1320a-7a(a)), as 
     amended by subsection (b), is amended in the matter following 
     paragraph (4)--
       (1) by striking ``$2,000'' and inserting ``$10,000'';
       (2) by inserting ``; in cases under paragraph (4), $10,000 
     for each day the prohibited relationship occurs'' after 
     ``false or misleading information was given''; and
       (3) by striking ``twice the amount'' and inserting ``3 
     times the amount''.
       (f) Claim for Item or Service Based on Incorrect Coding or 
     Medically Unnecessary Services.--Section 1128A(a)(1) (42 
     U.S.C. 1320a-7a(a)(1)), as amended by subsection (c), is 
     amended--
       (1) in subparagraph (A) by striking ``claimed,'' and 
     inserting ``claimed, including any person who engages in a 
     pattern or practice of presenting or causing to be presented 
     a claim for an item or service that is based on a code that 
     the person knows or has reason to know will result in a 
     greater payment to the person than the code the person knows 
     or has reason to know is applicable to the item or service 
     actually provided,'';
       (2) in subparagraph (D), by striking ``or'' at the end; and
       (3) in subparagraph (E), by striking the semicolon and 
     inserting``, or''; and
       (4) by inserting after subparagraph (E) the following new 
     subparagraph:
       ``(F) is for a medical or other item or service that a 
     person knows or has reason to know is not medically 
     necessary;''.
       (g) Permitting Secretary To Impose Civil Monetary Penalty 
     for Kickback Violations.--Section 1128A(b) (42 U.S.C. 1320a-
     7a(a)) is amended by adding the following new paragraph:
       ``(3) Any person (including any organization, agency, or 
     other entity, but excluding a beneficiary as defined in 
     subsection (i)(5)) who the Secretary determines has violated 
     section 1128B(b) of this title shall be subject to a civil 
     monetary penalty of not more than $10,000 for each such 
     violation. In addition,

[[Page S6094]]

     such person shall be subject to an assessment of not more 
     than twice the total amount of the remuneration offered, 
     paid, solicited, or received in violation of section 
     1128B(b). The total amount of remuneration subject to an 
     assessment shall be calculated without regard to whether some 
     portion thereof also may have been intended to serve a 
     purpose other than one proscribed by section 1128B(b).''.
       (h) Sanctions Against Practitioners and Persons for Failure 
     To Comply With Statutory Obligations.--Section 1156(b)(3) (42 
     U.S.C. 1320c-5(b)(3)) is amended by striking ``the actual or 
     estimated cost'' and inserting ``up to $10,000 for each 
     instance''.
       (i) Procedural Provisions.--Section 1876(i)(6) (42 U.S.C. 
     1395mm(i)(6)), as amended by section 207(a)(2), is amended by 
     adding at the end the following new subparagraph:
       ``(D) The provisions of section 1128A (other than 
     subsections (a) and (b)) shall apply to a civil money penalty 
     under subparagraph (A) or (B) in the same manner as they 
     apply to a civil money penalty or proceeding under section 
     1128A(a).''.
       (j) Prohibition Against Offering Inducements to Individuals 
     Enrolled Under Programs or Plans.--
       (1) Offer of remuneration.--Section 1128A(a) (42 U.S.C. 
     1320a-7a(a)), as amended by subsection (b), is amended--
       (A) by striking ``, or'' at the end of paragraph (3) and 
     inserting a semicolon;
       (B) by striking the semicolon at the end of paragraph (4) 
     and inserting ``; or''; and
       (C) by inserting after paragraph (4) the following new 
     paragraph:
       ``(5) offers to or transfers remuneration to any individual 
     eligible for benefits under title XVIII of this Act, or under 
     a State health care program (as defined in section 1128(h)) 
     that such person knows or should know is likely to influence 
     such individual to order or receive from a particular 
     provider, practitioner, or supplier any item or service for 
     which payment may be made, in whole or in part, under title 
     XVIII, or a State health care program (as so defined);''.
       (2) Remuneration defined.--Section 1128A(i) (42 U.S.C. 
     1320a-7a(i)) is amended by adding the following new 
     paragraph:
       ``(6) The term `remuneration' includes the waiver of 
     coinsurance and deductible amounts (or any part thereof), and 
     transfers of items or services for free or for other than 
     fair market value. The term `remuneration' does not include--
       ``(A) the waiver of coinsurance and deductible amounts by a 
     person, if--
       ``(i) the waiver is not offered as part of any 
     advertisement or solicitation;
       ``(ii) the person does not routinely waive coinsurance or 
     deductible amounts; and
       ``(iii) the person--

       ``(I) waives the coinsurance and deductible amounts after 
     determining in good faith that the individual is in financial 
     need;
       ``(II) fails to collect coinsurance or deductible amounts 
     after making reasonable collection efforts; or
       ``(III) provides for any permissible waiver as specified in 
     section 1128B(b)(3) or in regulations issued by the 
     Secretary;

       ``(B) differentials in coinsurance and deductible amounts 
     as part of a benefit plan design as long as the differentials 
     have been disclosed in writing to all beneficiaries, third 
     party payors, and providers, to whom claims are presented and 
     as long as the differentials meet the standards as defined in 
     regulations promulgated by the Secretary not later than 180 
     days after the date of the enactment of the Medicare 
     Antifraud Act of 1996; or
       ``(C) incentives given to individuals to promote the 
     delivery of preventive care as determined by the Secretary in 
     regulations so promulgated.''.
       (k) Effective Date.--The amendments made by this section 
     shall take effect January 1, 1997.
                  TITLE V--AMENDMENTS TO CRIMINAL LAW

     SEC. 501. HEALTH CARE FRAUD.

       (a) In General.--
       (1)  Fines and imprisonment for health care fraud 
     violations.--Chapter 63 of title 18, United States Code, is 
     amended by adding at the end the following new section:

     ``Sec. 1347. Health care fraud

       ``(a) Whoever knowingly and willfully executes, or attempts 
     to execute, a scheme or artifice--
       ``(1) to defraud any health plan or other person, in 
     connection with the delivery of or payment for health care 
     benefits, items, or services; or
       ``(2) to obtain, by means of false or fraudulent pretenses, 
     representations, or promises, any of the money or property 
     owned by, or under the custody or control of, any health 
     plan, or person in connection with the delivery of or payment 
     for health care benefits, items, or services;

     shall be fined under this title or imprisoned not more than 
     10 years, or both. If the violation results in serious bodily 
     injury (as defined in section 1365(g)(3) of this title), such 
     person may be imprisoned for any term of years.
       ``(b) For purposes of this section, the term `health plan' 
     has the same meaning given such term in section 1128C(c) of 
     the Social Security Act.''.
       (2) Clerical amendment.--The table of sections at the 
     beginning of chapter 63 of title 18, United States Code, is 
     amended by adding at the end the following:

``1347. Health care fraud.''.
       (b) Criminal Fines Deposited in the Health Care Fraud and 
     Abuse Control Account.--The Secretary of the Treasury shall 
     deposit into the Health Care Fraud and Abuse Control Account 
     established under section 101(b) an amount equal to the 
     criminal fines imposed under section 1347 of title 18, United 
     States Code (relating to health care fraud).

     SEC. 502. FORFEITURES FOR FEDERAL HEALTH CARE OFFENSES.

       (a) In General.--Section 982(a) of title 18, United States 
     Code, is amended by adding after paragraph (5) the following 
     new paragraph:
       ``(6)(A) The court, in imposing sentence on a person 
     convicted of a Federal health care offense, shall order the 
     person to forfeit property, real or personal, that 
     constitutes or is derived, directly or indirectly, from 
     proceeds traceable to the commission of the offense.
       ``(B) For purposes of this paragraph, the term `Federal 
     health care offense' means a violation of, or a criminal 
     conspiracy to violate--
       ``(i) section 1347 of this title;
       ``(ii) section 1128B of the Social Security Act;
       ``(iii) section 287, 371, 664, 666, 1001, 1027, 1341, 1343, 
     1920, or 1954 of this title if the violation or conspiracy 
     relates to health care fraud; and
       ``(iv) section 501 or 511 of the Employee Retirement Income 
     Security Act of 1974, if the violation or conspiracy relates 
     to health care fraud.''.
       (b)  Property Forfeited Deposited in Health Care Fraud and 
     Abuse Control Account.--The Secretary of the Treasury shall 
     deposit into the Health Care Fraud and Abuse Control Account 
     established under section 101(b) an amount equal to amounts 
     resulting from forfeiture of property by reason of a Federal 
     health care offense pursuant to section 982(a)(6) of title 
     18, United States Code.

     SEC. 503. INJUNCTIVE RELIEF RELATING TO FEDERAL HEALTH CARE 
                   OFFENSES.

       (a) In General.--Section 1345(a)(1) of title 18, United 
     States Code, is amended--
       (1) by striking ``or'' at the end of subparagraph (A);
       (2) by inserting ``or'' at the end of subparagraph (B); and
       (3) by adding at the end the following new subparagraph:
       ``(C) committing or about to commit a Federal health care 
     offense (as defined in section 982(a)(6)(B) of this 
     title);''.
       (b) Freezing of Assets.--Section 1345(a)(2) of title 18, 
     United States Code, is amended by inserting ``or a Federal 
     health care offense (as defined in section 982(a)(6)(B))'' 
     after ``title)''.

     SEC. 504. GRAND JURY DISCLOSURE.

       Section 3322 of title 18, United States Code, is amended--
       (1) by redesignating subsections (c) and (d) as subsections 
     (d) and (e), respectively; and
       (2) by inserting after subsection (b) the following new 
     subsection:
       ``(c) A person who is privy to grand jury information 
     concerning a Federal health care offense (as defined in 
     section 982(a)(6)(B))--
       ``(1) received in the course of duty as an attorney for the 
     Government; or
       ``(2) disclosed under rule 6(e)(3)(A)(ii) of the Federal 
     Rules of Criminal Procedure;
     may disclose that information to an attorney for the 
     Government to use in any investigation or civil proceeding 
     relating to health care fraud.''.

     SEC. 505. FALSE STATEMENTS.

       (a) In General.--Chapter 47, of title 18, United States 
     Code, is amended by adding at the end the following new 
     section:

     ``Sec. 1035. False statements relating to health care matters

       ``(a) Whoever, in any matter involving a health plan, 
     knowingly and willfully falsifies, conceals, or covers up by 
     any trick, scheme, or device a material fact, or makes any 
     false, fictitious, or fraudulent statements or 
     representations, or makes or uses any false writing or 
     document knowing the same to contain any false, fictitious, 
     or fraudulent statement or entry, shall be fined under this 
     title or imprisoned not more than 5 years, or both.
       ``(b) For purposes of this section, the term `health plan' 
     has the same meaning given such term in section 1128C(c) of 
     the Social Security Act.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of chapter 47 of title 18, United States Code, in 
     amended by adding at the end the following:

``1035. False statements relating to health care matters.''.

     SEC. 506. OBSTRUCTION OF CRIMINAL INVESTIGATIONS, AUDITS, OR 
                   INSPECTIONS OF FEDERAL HEALTH CARE OFFENSES.

       (a) In General.--Chapter 73 of title 18, United States 
     Code, is amended by adding at the end the following new 
     section:

     ``Sec. 1518. Obstruction of criminal investigations, audits, 
       or inspections of Federal health care offenses

       ``(a) In General.--Whoever willfully prevents, obstructs, 
     misleads, delays or attempts to prevent, obstruct, mislead, 
     or delay the communication of information or records relating 
     to a Federal health care offense to a Federal agent or 
     employee involved in an investigation, audit, inspection, or 
     other activity related to such an offense, shall be fined 
     under this title or imprisoned not more than 5 years, or 
     both.
       ``(b) Federal Health Care Offense.--As used in this section 
     the term `Federal health

[[Page S6095]]

     care offense' has the same meaning given such term in section 
     982(a)(6)(B) of this title.
       ``(c) Criminal Investigator.--As used in this section the 
     term `criminal investigator' means any individual duly 
     authorized by a department, agency, or armed force of the 
     United States to conduct or engage in investigations for 
     prosecutions for violations of health care offenses.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of chapter 73 of title 18, United States Code, is 
     amended by adding at the end the following:

``1518. Obstruction of criminal investigations, audits, or inspections 
              of Federal health care offenses.''.

     SEC. 507. THEFT OR EMBEZZLEMENT.

       (a) In General.--Chapter 31 of title 18, United States 
     Code, is amended by adding at the end the following new 
     section:

     ``Sec. 669. Theft or embezzlement in connection with health 
       care

       ``(a) In General.--Whoever willfully embezzles, steals, or 
     otherwise without authority willfully and unlawfully converts 
     to the use of any person other than the rightful owner, or 
     intentionally misapplies any of the moneys, funds, 
     securities, premiums, credits, property, or other assets of a 
     health plan, shall be fined under this title or imprisoned 
     not more than 10 years, or both.
       ``(b) Health Plan.--As used in this section the term 
     `health plan' has the same meaning given such term in section 
     1128C(c) of the Social Security Act.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of chapter 31 of title 18, United States Code, is 
     amended by adding at the end the following:

``669. Theft or embezzlement in connection with health care.''.

     SEC. 508. LAUNDERING OF MONETARY INSTRUMENTS.

       Section 1956(c)(7) of title 18, United States Code, is 
     amended by adding at the end the following new subparagraph:
       ``(F) Any act or activity constituting an offense involving 
     a Federal health care offense as that term is defined in 
     section 982(a)(6)(B) of this title.''.

     SEC. 509. AUTHORIZED INVESTIGATIVE DEMAND PROCEDURES.

       (a) In General.--Chapter 233 of title 18, United States 
     Code, is amended by adding after section 3485 the following 
     new section:

     ``Sec. 3486. Authorized investigative demand procedures

       ``(a) Authorization.--
       ``(1) In any investigation relating to functions set forth 
     in paragraph (2), the Attorney General or designee may issue 
     in writing and cause to be served a subpoena compelling 
     production of any records (including any books, papers, 
     documents, electronic media, or other objects or tangible 
     things), which may be relevant to an authorized law 
     enforcement inquiry, that a person or legal entity may 
     possess or have care, custody, or control. A custodian of 
     records may be required to give testimony concerning the 
     production and authentication of such records. The production 
     of records may be required from any place in any State or in 
     any territory or other place subject to the jurisdiction of 
     the United States at any designated place, except that such 
     production shall not be required more than 500 miles distant 
     from the place where the subpoena is served. Witnesses 
     summoned under this section shall be paid the same fees and 
     mileage that are paid witnesses in the courts of the United 
     States. A subpoena requiring the production of records shall 
     describe the objects required to be produced and prescribe a 
     return date within a reasonable period of time within which 
     the objects can be assembled and made available.
       ``(2) Investigative demands utilizing an administrative 
     subpoena are authorized for any investigation with respect to 
     any act or activity constituting or involving health care 
     fraud, including a scheme or artifice--
       ``(A) to defraud any health plan or other person, in 
     connection with the delivery of or payment for health care 
     benefits, items, or services; or
       ``(B) to obtain, by means of false or fraudulent pretenses, 
     representations, or promises, any of the money or property 
     owned by, or under the custody or control or, any health 
     plan, or person in connection with the delivery of or payment 
     for health care benefits, items, or services.
       ``(b) Service.--A subpoena issued under this section may be 
     served by any person designated in the subpoena to serve it. 
     Service upon a natural person may be made by personal 
     delivery of the subpoena to such person. Service may be made 
     upon a domestic or foreign association which is subject to 
     suit under a common name, by delivering the subpoena to an 
     officer, to a managing or general agent, or to any other 
     agent authorized by appointment or by law to receive service 
     of process. The affidavit of the person serving the subpoena 
     entered on a true copy thereof by the person serving it shall 
     be proof of service.
       ``(c) Enforcement.--In the case of contumacy by or refusal 
     to obey a subpoena issued to any person, the Attorney General 
     may invoke the aid of any court of the United States within 
     the jurisdiction of which the investigation is carried on or 
     of which the subpoenaed person is an inhabitant, or in which 
     such person carries on business or may be found, to compel 
     compliance with the subpoena. The court may issue an order 
     requiring the subpoenaed person to appear before the Attorney 
     General to produce records, if so ordered, or to give 
     testimony touching the matter under investigation. Any 
     failure to obey the order of the court may be punished by the 
     court as a contempt thereof. All process in any such case may 
     be served in any judicial district in which such person may 
     be found.
       ``(d) Immunity From Civil Liability.--Notwithstanding any 
     Federal, State, or local law, any person, including officers, 
     agents, and employees, receiving a subpoena under this 
     section, who complies in good faith with the subpoena and 
     thus produces the materials sought, shall not be liable in 
     any court of any State or the United States to any customer 
     or other person for such production or for nondisclosure of 
     that production to the customer.
       ``(e) Use in Action Against Individuals.--
       ``(1) Health information about an individual that is 
     disclosed under this section may not be used in, or disclosed 
     to any person for use in, any administrative, civil, or 
     criminal action or investigation directed against the 
     individual who is the subject of the information unless the 
     action or investigation arises out of and is directly related 
     to receipt of health care or payment for health care or 
     action involving a fraudulent claim related to health, or if 
     authorized by an appropriate order of a court of competent 
     jurisdiction, granted after application showing good cause 
     therefore.
       ``(2) In assessing good cause, the court shall weigh the 
     public interest and the need for disclosure against the 
     injury to the patient, to the physician-patient relationship, 
     and to the treatment services.
       ``(3) Upon the granting of such order, the court, in 
     determining the extent to which any disclosure of all or any 
     part of any record is necessary, shall impose appropriate 
     safeguards against unauthorized disclosure.
       ``(f) Health Plan.--As used in this section, the term 
     `health plan' has the same meaning given such term in section 
     1128C(c) of the Social Security Act.''.
       (b) Clerical Amendment.--The table of sections for chapter 
     223 of title 18, United States Code, is amended by inserting 
     after the item relating to section 3485 the following new 
     item:

``3486. Authorized investigative demand procedures.''.

       (c) Conforming Amendment.--Section 1510(b)(3)(B) of title 
     18, United States Code, is amended by inserting ``or a 
     Department of Justice subpoena (issued under section 3486),'' 
     after ``subpoena''.
            TITLE VI--STATE HEALTH CARE FRAUD CONTROL UNITS

     SEC. 601. STATE HEALTH CARE FRAUD CONTROL UNITS.

       (a) Extension of Concurrent Authority To Investigate and 
     Prosecute Fraud in Other Federal Programs.--Section 
     1903(q)(3) (42 U.S.C. 1396b(q)(3)) is amended--
       (1) by inserting ``(A)'' after ``in connection with''; and
       (2) by striking ``title.'' and inserting ``title; and (B) 
     in cases where the entity's function is also described by 
     subparagraph (A), and upon the approval of the relevant 
     Federal agency, any aspect of the provision of health care 
     services and activities of providers of such services under 
     any Federal health care program (as defined in section 
     1128B(b)(1)).''.
       (b) Extension of Authority To Investigate and Prosecute 
     Patient Abuse in Non-Medicaid Board and Care Facilities.--
     Section 1903(q)(4) (42 U.S.C. 1396b(q)(4)) is amended to read 
     as follows:
       ``(4)(A) The entity has--
       ``(i) procedures for reviewing complaints of abuse or 
     neglect of patients in health care facilities which receive 
     payments under the State plan under this title;
       ``(ii) at the option of the entity, procedures for 
     reviewing complaints of abuse or neglect of patients residing 
     in board and care facilities; and
       ``(iii) procedures for acting upon such complaints under 
     the criminal laws of the State or for referring such 
     complaints to other State agencies for action.
       ``(B) For purposes of this paragraph, the term `board and 
     care facility' means a residential setting which receives 
     payment from or on behalf of two or more unrelated adults who 
     reside in such facility, and for whom one or both of the 
     following is provided:
       ``(i) Nursing care services provided by, or under the 
     supervision of, a registered nurse, licensed practical nurse, 
     or licensed nursing assistant.
       ``(ii) Personal care services that assist residents with 
     the activities of daily living, including personal hygiene, 
     dressing, bathing, eating, toileting, ambulation, transfer, 
     positioning, self-medication, body care, travel to medical 
     services, essential shopping, meal preparation, laundry, and 
     housework.''.
         TITLE VII--MEDICARE/MEDICAID BILLING ABUSE PREVENTION

     SEC. 701. UNIFORM MEDICARE/MEDICAID APPLICATION PROCESS.

       Not later than 1 year after the date of the enactment of 
     this Act, the Secretary of Health and Human Services (in this 
     title referred to as the ``Secretary'') shall establish 
     procedures and a uniform application form for use by any 
     individual or entity that seeks to participate in the 
     programs under titles XVIII and XIX of the Social Security 
     Act (42 U.S.C. 1395 et seq.; 42 U.S.C. 1396 et seq.). The 
     procedures established shall include the following:
       (1) Execution of a standard authorization form by all 
     individuals and entities prior to submission of claims for 
     payment which shall include the social security number of

[[Page S6096]]

     the beneficiary and the TIN (as defined in section 
     7701(a)(41) of the Internal Revenue Code of 1986) of any 
     health care provider, supplier, or practitioner providing 
     items or services under the claim.
       (2) Assumption of responsibility and liability for all 
     claims submitted.
       (3) A right of access by the Secretary to provider records 
     relating to items and services rendered to beneficiaries of 
     such programs.
       (4) Retention of source documentation.
       (5) Provision of complete and accurate documentation to 
     support all claims for payment.
       (6) A statement of the legal consequences for the 
     submission of false or fraudulent claims for payment.

     SEC. 702. STANDARDS FOR UNIFORM CLAIMS.

       (a) Establishment of Standards.--Not later than 1 year 
     after the date of the enactment of this Act, the Secretary 
     shall establish standards for the form and submission of 
     claims for payment under the medicare program under title 
     XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) and 
     the medicaid program under title XIX of such Act (42 U.S.C. 
     1396 et seq.).
       (b) Ensuring Provider Responsibility.--In establishing 
     standards under subsection (a), the Secretary, in 
     consultation with appropriate agencies including the 
     Department of Justice, shall include such methods of ensuring 
     provider responsibility and accountability for claims 
     submitted as necessary to control fraud and abuse.
       (c) Use of Electronic Media.--The Secretary shall develop 
     specific standards which govern the submission of claims 
     through electronic media in order to control fraud and abuse 
     in the submission of such claims.

     SEC. 703. UNIQUE PROVIDER IDENTIFICATION CODE.

       (a) Establishment of System.--Not later than 1 year after 
     the date of the enactment of this Act, the Secretary shall 
     establish a system which provides for the issuance of a 
     unique identifier code for each individual or entity 
     furnishing items or services for which payment may be made 
     under title XVIII or XIX of the Social Security (42 U.S.C. 
     1395 et seq.; 1396 et seq.), and the notation of such unique 
     identifier codes on all claims for payment.
       (b) Application Fee.--The Secretary shall require an 
     individual applying for a unique identifier code under 
     subsection (a) to submit a fee in an amount determined by the 
     Secretary to be sufficient to cover the cost of investigating 
     the information on the application and the individual's 
     suitability for receiving such a code.

     SEC. 704. USE OF NEW PROCEDURES.

       No payment may be made under either title XVIII or XIX of 
     the Social Security Act (42 U.S.C. 1395 et seq.; 42 U.S.C. 
     1396 et seq.) for any item or service furnished by an 
     individual or entity unless the requirements of sections 702 
     and 703 are satisfied.

     SEC. 705. NONDISCHARGEABILITY OF CERTAIN MEDICARE DEBTS.

       (a) Payment to Providers.--Section 1815(d) (42 U.S.C. 
     1395g(d)) is amended by adding at the end thereof the 
     following new sentence: ``Notwithstanding any other provision 
     of law, amounts due to the program under this subsection are 
     not dischargeable under any provision of title 11, United 
     States Code.''.
       (b) Payment of Benefits.--Section 1833(j) (42 U.S.C. 
     1395l(j)) is amended by adding at the end thereof the 
     following new sentence: ``Notwithstanding any other provision 
     of law, amounts due to the program under this subsection are 
     not dischargeable under any provision of title 11, United 
     States Code.''.
                                                                    ____


                                S. 1859

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Medicare Restore Trust Act 
     of 1996''.

     SEC. 2. PROHIBITION ON CONSIDERATION OF LEGISLATION THAT 
                   DIVERTS SAVINGS ACHIEVED THROUGH MEDICARE 
                   WASTE, FRAUD, AND ABUSE ENFORCEMENT ACTIVITIES 
                   FOR PURPOSES OTHER THAN IMPROVING THE SOLVENCY 
                   OF THE FEDERAL HOSPITAL INSURANCE TRUST FUND.

       (a) Point of Order.--It shall not be in order in the Senate 
     to consider any bill, conference report, or any other 
     legislation that would use savings achieved through 
     enforcement activities that are intended to combat waste, 
     fraud, and abuse under the medicare program under title XVIII 
     of the Social Security Act as offsets for purposes other than 
     to improve the solvency of the Federal Hospital Insurance 
     Trust Fund established under section 1817 of such Act (42 
     U.S.C. 1395i) (in this Act referred to as the ``trust 
     fund'').
       (b) Waiver.--The point of order described in subsection (a) 
     may be waived or suspended in the Senate by a \3/5\ majority 
     vote of the Senators duly chosen and sworn, or by the 
     unanimous consent of the Senate.
       (c) Appeals.--
       (1) In general.--Appeals in the Senate from decisions of 
     the Chair relating to this section shall be limited to 1 
     hour, to be equally divided between and controlled by, the 
     appellant and the manager of the bill, conference report, or 
     other legislation, as the case may be.
       (2) Waiver.--An affirmative \3/5\ majority vote of the 
     Senators duly chosen and sworn, or a unanimous consent 
     agreement of the Senate shall be required to sustain an 
     appeal of the ruling of the Chair on a point of order raised 
     under this section.

     SEC. 3. ENSURING THE INTEGRITY OF THE FEDERAL HOSPITAL 
                   INSURANCE TRUST FUND.

       (a) Determination.--Prior to the end of each fiscal year, 
     the Secretary of Health and Human Services (in this section 
     referred to as the ``Secretary'') and the Attorney General 
     shall jointly determine--
       (1) the portion of the costs charged during such fiscal 
     year to any account established within the Federal Hospital 
     Insurance Trust Fund under title XVIII of the Social Security 
     Act (42 U.S.C. 1395 et seq.) to combat health care waste, 
     fraud, and abuse, which do not relate to the administration 
     of the medicare program; and
       (2) the amount of funds deposited into such account of such 
     trust fund during such fiscal year that were attributable to 
     enforcement activities that were intended to combat health 
     care waste, fraud, and abuse, which do not relate to the 
     administration of the medicare program.
       (b) Certification.--If the portion determined under 
     paragraph (1) of subsection (a) exceeds the amount determined 
     under paragraph (2) of such subsection, the Secretary and the 
     Attorney General shall certify to the Secretary of the 
     Treasury the amount, which shall be equal to the amount of 
     such excess, which should be transferred from the General 
     Fund of the Treasury to such trust fund, in order to ensure 
     that such trust fund is fully reimbursed for any expenditures 
     made from the account described in subsection (a) that are 
     not related to the administration of the medicare program 
     under title XVIII of the Social Security Act.
       (c) Transfer of Funds.--The Secretary of the Treasury shall 
     transfer to such trust fund from the General Fund of the 
     Treasury, out of any funds in the General Fund that are not 
     otherwise appropriated, an amount equal to the amount 
     certified under subsection (b).
                                 ______