[Congressional Record (Bound Edition), Volume 156 (2010), Part 11]
[House]
[Pages 16207-16210]
[From the U.S. Government Publishing Office, www.gpo.gov]




         STRENGTHENING MEDICARE ANTI-FRAUD MEASURES ACT OF 2010

  Mr. PALLONE. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 6130) to amend title XI of the Social Security Act to expand 
the permissive exclusion from participation in Federal health care 
programs to individuals and entities affiliated with sanctioned 
entities, as amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 6130

       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 ``Strengthening Medicare Anti-
     Fraud Measures Act of 2010''.

[[Page 16208]]



     SEC. 2. PERMISSIVE EXCLUSION FROM FEDERAL HEALTH CARE 
                   PROGRAMS EXPANDED TO INDIVIDUALS AND ENTITIES 
                   AFFILIATED WITH SANCTIONED ENTITIES.

       Section 1128(b)(15) of the Social Security Act (42 U.S.C. 
     1320a-7(b)(15)) is amended to read as follows:
       ``(15) Individuals or entities affiliated with a sanctioned 
     entity.--(A) Any of the following:
       ``(i) Any individual who--
       ``(I) is a person with an ownership or control interest (as 
     defined in section 1124(a)(3)) in a sanctioned entity or an 
     affiliated entity of such sanctioned entity (or was a person 
     with such an interest at the time of any of the conduct that 
     formed a basis for the conviction or exclusion described in 
     subparagraph (B)); and
       ``(II) knows or should know (as defined in section 
     1128A(i)(7)) (or knew or should have known) of such conduct.
       ``(ii) Any individual who is an officer or managing 
     employee (as defined in section 1126(b)) of a sanctioned 
     entity or affiliated entity of such sanctioned entity (or was 
     such an officer or managing employee at the time of any of 
     the conduct that formed a basis for the conviction or 
     exclusion described in subparagraph (B)).
       ``(iii) Any affiliated entity of a sanctioned entity.
       ``(B) For purposes of this paragraph, the term `sanctioned 
     entity' means an entity--
       ``(i) that has been convicted of any offense described in 
     subsection (a) or in paragraph (1), (2), or (3) of this 
     subsection; or
       ``(ii) that has been excluded from participation under a 
     program under title XVIII or under a State health care 
     program.
       ``(C)(i) For purposes of this paragraph, the term 
     `affiliated entity' means, with respect to a sanctioned 
     entity--
       ``(I) an entity affiliated with such sanctioned entity; and
       ``(II) an entity that was so affiliated at the time of any 
     of the conduct that formed the basis for the conviction or 
     exclusion described in subparagraph (B).
       ``(ii) For purposes of clause (i), an entity shall be 
     treated as affiliated with another entity if--
       ``(I) one of the entities is a person with an ownership or 
     control interest (as defined in section 1124(a)(3)) in the 
     other entity (or had such an interest at the time of any of 
     the conduct that formed a basis for the conviction or 
     exclusion described in subparagraph (B));
       ``(II) there is a person with an ownership or control 
     interest (as defined in section 1124(a)(3)) in both entities 
     (or had such an interest at the time of any of the conduct 
     that formed a basis for the conviction or exclusion described 
     in subparagraph (B)); or
       ``(III) there is a person who is an officer or managing 
     employee (as defined in section 1126(b)) of both entities (or 
     was such an officer or managing employee at the time of any 
     of the conduct that formed a basis for the conviction or 
     exclusion described in subparagraph (B)).''.

     SEC. 3. BUDGETARY EFFECTS OF PAYGO LEGISLATION.

       The budgetary effects of this Act, for the purpose of 
     complying with the Statutory Pay-As-You-Go Act of 2010, shall 
     be determined by reference to the latest statement titled 
     ``Budgetary Effects of PAYGO Legislation'' for this Act, 
     submitted for printing in the Congressional Record by the 
     Chairman of the House Budget Committee, provided that such 
     statement has been submitted prior to the vote on passage.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from New 
Jersey (Mr. Pallone) and the gentleman from Kentucky (Mr. Whitfield) 
each will control 20 minutes.
  The Chair recognizes the gentleman from New Jersey.


                             General Leave

  Mr. PALLONE. Mr. Speaker, I ask unanimous consent that all Members 
may have 5 legislative days in which to revise and extend their remarks 
and include extraneous material in the Record.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from New Jersey?
  There was no objection.
  Mr. PALLONE. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise today in strong support of H.R. 6130. The 
legislation expands the authority of the Health and Human Services 
Office of Inspector General to allow it to ban corporate executives 
from doing business with Medicare if their companies were convicted of 
fraud. It also gives the inspector general the ability to exclude 
parent companies that may be committing fraud through shell companies.
  This important bill will close two loopholes in current law so that 
criminal offenders who defraud our Nation's seniors will have to pay 
for their crimes. Mr. Speaker, for every dollar put into the pockets of 
criminals, a dollar is taken out of the system to provide much-needed 
care to millions of Medicare patients, including two of our Nation's 
most vulnerable populations--seniors and the disabled.
  This morning, my subcommittee held a hearing on Medicare fraud in 
which we talked about the many important provisions of the new health 
care law that will assist CMS, the OIG, and the Justice Department in 
identifying abusive suppliers and fraudulent billing practices. In that 
hearing, we heard from the inspector general about how this bill will 
help fight fraud by closing two remaining gaps.
  The first gap allows an executive who has left the company being 
charged with fraud by the time of conviction to continue to participate 
in Federal health programs. This shortfall willingly permits these 
criminals to move from one company to another and continue to steal 
from Medicare seniors and taxpayers. H.R. 6130 would give the OIG the 
authority to ban these executives from doing business with Medicare.
  The second gap allows companies that engage in fraud who have set up 
shell companies to insulate themselves from liability and get off scot-
free. Once these shell organizations dissolve, there is no real penalty 
to the parent company. So H.R. 6130 would give the OIG the authority to 
ban these parent companies from doing business with Medicare.
  Mr. Speaker, all forms of fraud undermine the integrity of our public 
health system, and I applaud my colleagues from the Ways and Means 
Committee--particularly Mr. Stark--for working on this important 
legislation.
  I urge my colleagues to support this bill.
  Mr. Speaker, I reserve the balance of my time.
  Mr. WHITFIELD. Mr. Speaker, I rise today to support H.R. 6130, a 
commonsense solution to combating fraud in Medicare. This legislation 
will provide the Health and Human Services Office of the Inspector 
General with tools to properly combat Medicare fraud.
  First, it will close an important loophole in current law and give 
the Office of the Inspector General additional authority to fight 
fraud. Under current law, for example, if an executive leaves a company 
before the company is convicted of Medicare fraud, that executive 
cannot be barred from participating in Federal health programs. Under 
current law, an executive intent on defrauding Medicare could simply 
move from one company to another and continue to inequitably use 
American taxpayers' money.
  Second, this law will prevent companies from hiding behind corporate 
shells. Some companies use shell companies to protect the parent 
company from any liability. If the company is caught participating in 
fraud, the shell could be dissolved, leaving the parent company fully 
intact. Under this bill, the Office of Inspector General can exclude 
parent companies when such punishment is merited.
  I am glad that we are continuing to find ways to combat fraud in 
Medicare because we know that health care costs are out of control. And 
I might say, I am sure every Member had the same experiences that I did 
when we were home over this recent 3-week work period in which people 
were coming up asking all sorts of questions about the health care 
reform bill, and we really do not know the answers to it because HHS is 
basically going to be writing these regulations. And we are not going 
to fully know the outcome of this legislation for many years to come, 
which I think merits, once again, the importance of starting to have 
oversight hearings to have some questions answered that the American 
people are asking for.

                              {time}  1610

  I would ask unanimous consent at this time to yield the balance of my 
time to the gentleman from California (Mr. Herger).
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Kentucky?
  There was no objection.
  Mr. HERGER. I reserve the balance of my time.
  Mr. PALLONE. Mr. Speaker, I ask unanimous consent that the gentleman

[[Page 16209]]

from California (Mr. Stark), the Health Subcommittee chair on the Ways 
and Means Committee, control the remainder of the time on the majority 
side.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from New Jersey?
  There was no objection.
  Mr. STARK. Mr. Speaker, I yield myself such time as I may consume and 
rise in support of H.R. 6130, which strengthens the Medicare Anti-Fraud 
Measures Act, as you have heard described here.
  This bipartisan fraud and abuse-fighting legislation was co-authored 
by our ranking member, Mr. Herger, and was cosponsored on our side of 
the aisle by Mr. Lewis, who chairs the Oversight Subcommittee on Ways 
and Means.
  It was developed in a way that I think Congress should do more 
legislation. It was a problem that was called to the attention of Mr. 
Herger and myself, and we worked together with the Office of the 
Inspector General and the Centers for Medicare and Medicaid and 
expanded the authority to ban executives from companies who have been 
convicted of fraud from the program.
  As you have heard, many of those executives can come back and 
repeatedly take money from the Medicare or Medicaid program to which 
they're not entitled, and this would put an end to that. It expands the 
permissive authority to exclude affiliates, and it sees that the funds 
thereby go to the services that beneficiaries need. The bill has been 
endorsed by AARP, which states that the bill would expand the authority 
of the United States Health and Human Services to accomplish just that.
  I want to thank my ranking member, Mr. Herger, and Mr. Lewis, for 
cooperating on this. I think we have unanimous agreement that it's a 
bill that's necessary, a bill that will reduce fraud and abuse, and a 
bill that will aid the Medicare and Medicaid programs.
  I reserve the balance of my time.
  Mr. HERGER. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, there is broad agreement that more needs to be done to 
combat waste, fraud, and abuse in Medicare. In fact, fraud is such an 
issue in Medicare, that the chief counsel to the HHS Inspector General, 
Lewis Morris, who testified before the Ways and Means Health 
Subcommittee this summer, said, ``A lot of career criminals and 
organized criminals have decided that building a Medicare fraud scam is 
far safer than dealing in crack or dealing in stolen cars, and it's far 
more lucrative. Right now, it's a good bet that you can take millions 
from us, and chances are you're not going to get caught.''
  Mr. Speaker, it's clear more must be done to ensure that taxpayer 
dollars and seniors' premiums are being used wisely and efficiently. 
That is why Chairman Stark and I authored the legislation before us 
today, H.R. 6130, the Strengthening Medicare Anti-Fraud Measures Act.
  When Mr. Morris testified at our subcommittee, he identified ways in 
which the current law could be improved. This legislation seeks to 
address those areas.
  The bill makes two improvements to current law. First, it provides 
authority to exclude from Federal health programs executives whose 
companies have been convicted of fraud. The HHS Office of Inspector 
General would be allowed to exclude executives who were in positions of 
authority at the time the fraud was committed but subsequently left 
those positions.
  Because the current statute is written in the present tense, it only 
punishes officers, managing employees, and owners at the exact time OIG 
levels punishment. Therefore, the individual who was the CEO of a 
company that engaged in criminal fraud can evade Medicare penalties if 
he or she resigns before the company is convicted. The ex-CEO is then 
free to take on jobs with other health care entities and commit fraud 
all over again.
  Under H.R. 6130, OIG could exclude the individuals who are 
responsible corporate officials at the time fraud was being committed, 
regardless of where they are employed later.
  The second change this bill makes prevents companies that are 
convicted of fraud from hiding behind corporate shells and evading 
punishment. The bill does this by strengthening OIG's ability to impose 
penalties on corporations affiliated with convicted entities, or to use 
``permissive exclusion'' authority to exclude them from program 
participation.
  Currently, corporations that engage in health care fraud can resolve 
the criminal case through a guilty plea of a non-operating subsidiary. 
OIG's only remedy in such a case doesn't allow for any meaningful 
punishment against the company that's actually behind the Medicare 
fraud.
  This legislation gives OIG the authority to exclude corporate parents 
or other affiliates from the Medicare program so that OIG will be 
better positioned to require significant changes at these companies 
beyond the remedies that are generally required in civil cases. This 
would provide a significant incentive to corporate parents to promote 
compliance and police the activities within their corporate families.
  With these additional tools, OIG will be better able to stop those 
individuals who commit fraud but who have been able to stay one step 
ahead of law enforcement, saving taxpayer dollars and protecting 
seniors.
  Medicare fraud is a crime that hurts senior citizens, law-abiding 
health care providers, and every American who pays taxes.
  I thank Chairman Stark for working with me on this legislation and 
urge the support of my colleagues.
  I reserve the balance of my time.
  Mr. STARK. Mr. Speaker, at this time I would like to yield 2 minutes 
to the gentleman from Georgia (Mr. Lewis), the distinguished chair of 
our Oversight Subcommittee on Ways and Means, who, like Mr. Herger, 
recognizes the seriousness of this problem and was helpful in our 
hearings in calling attention to many of the problems.
  Mr. LEWIS of Georgia. Mr. Speaker, I want to thank my friend, my 
colleague, Chairman Stark, for yielding time.
  Mr. Speaker, we as a Nation have a duty to provide the very best 
health care to our seniors and our disabled brothers and sisters. For 
them, Medicare is a blessing, a lifeline.
  Each time someone steals money from Medicare, it weakens the public 
trust, it hurts our seniors, and threatens the future of Medicare. We 
must not, and we will not allow, criminals to rob Medicare. If you 
defraud Medicare once, you will never, ever do it again.
  CEOs who defraud Medicare should not be able to simply move to a 
different company and continue to bill Medicare. Their companies should 
not be able to hide behind corporate shells that rob Medicare. This 
legislation will strengthen the anti-fraud laws and stop these bad 
practices.

                              {time}  1620

  I want to thank Mr. Herger and again the chairman of our Subcommittee 
on Health, Chairman Stark, for working side by side with the Oversight 
Subcommittee to end these abuses.
  I ask all my colleagues on both sides of the aisle to support this 
necessary bipartisan bill.
  Mr. HERGER. In closing, I urge all Members to vote ``yes'' on H.R. 
6130, and I yield back the balance of my time.
  Mr. STARK. Mr. Speaker, I yield myself the balance of my time.
  I want to thank my distinguished ranking member for his support and 
work in bringing this bill to the floor, and thank the staff who have 
worked on this bill; John Barket, who was a fellow in our subcommittee, 
got it started. He has now moved to Health and Human Services, but I 
wanted to recognize his leadership. I would like to thank Erik 
Rasmussen and Dan Elling on Mr. Herger's staff for their work and help 
in this area. And as always, Debbie Curtis and Hannah Neprash on my 
subcommittee as well for their good work. And again to thank Mr. Herger 
for joining with us to see that we bring an end to these bad practices.
  I yield back the balance of my time.

[[Page 16210]]

  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from New Jersey (Mr. Pallone) that the House suspend the 
rules and pass the bill, H.R. 6130, as amended.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

                          ____________________