Health Hippo
HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT OF 1996
(Public Law 104-191 104th Congress)
TITLE II–PREVENTING HEALTH CARE FRAUD AND ABUSE; ADMINISTRATIVE SIMPLIFICATION
- Sec. 200. References in title.
- Subtitle A–Fraud and Abuse Control Program
- Sec. 201. Fraud and abuse
control program. - Sec. 202. Medicare integrity
program. - Sec. 203. Beneficiary incentive
programs. - Sec. 204. Application of certain
health antifraud and abuse sanctions to fraud and abuse against
Federal health care programs. - Sec. 205. Guidance regarding
application of health care fraud and abuse sanctions.
- Sec. 201. Fraud and abuse
- Subtitle B–Revisions to Current Sanctions for Fraud and Abuse
- Sec. 211. Mandatory exclusion
from participation in Medicare and State health care programs. - Sec. 212. Establishment of
minimum period of exclusion for certain individuals and
entities subject to permissive exclusion from Medicare and
State health care programs. - Sec. 213. Permissive exclusion
of individuals with ownership or control interest in sanctioned
entities. - Sec. 214. Sanctions against
practitioners and persons for failure to comply with statutory
obligations. - Sec. 215. Intermediate sanctions
for Medicare health maintenance organizations. - Sec. 216. Additional exception
to anti-kickback penalties for risk- sharing arrangements. - Sec. 217. Criminal penalty for
fraudulent disposition of assets in order to obtain medicaid
benefits. - Sec. 218. Effective date.
- Sec. 211. Mandatory exclusion
- Subtitle C–Data Collection
- Subtitle E–Revisions to Criminal Law
- Sec. 241. Definitions relating
to Federal health care offense. - Sec. 242. Health care fraud.
- Sec. 243. Theft or embezzlement.
- Sec. 244. False statements.
- Sec. 245. Obstruction of
criminal investigations of health care offenses. - Sec. 246. Laundering of monetary
instruments. - Sec. 247. Injunctive relief
relating to health care offenses. - Sec. 248. Authorized
investigative demand procedures. - Sec. 249. Forfeitures for
Federal health care offenses. - Sec. 250. Relation to ERISA
authority.
- Sec. 241. Definitions relating
- Subtitle F–Administrative Simplification
- Part C–Administrative Simplification
- Sec. 1171. Definitions.
- Sec. 1172. General requirements for
adoption of standards. - Sec. 1173. Standards for
information transactions and data elements. - Sec. 1174. Timetables for adoption
of standards. - Sec. 1175. Requirements.
- Sec. 1176. General penalty for
failure to comply with requirements and standards. - Sec. 1177. Wrongful disclosure of
individually identifiable health information. - Sec. 1178. Effect on State law.
- Sec. 1179. Processing payment
transactions.”. - Sec. 263. Changes in membership and
duties of National Committee on Vital and Health Statistics. - Sec. 264. Recommendations with
respect to privacy of certain health information. - Subtitle G–Duplication and Coordination of Medicare-Related
Plans - Sec. 271. Duplication and
coordination of Medicare-related plans.
SEC. 200. REFERENCES IN TITLE.
Except as otherwise specifically provided, whenever in this title
an amendment is expressed in terms of an amendment to or repeal of a
section or other provision, the reference shall be considered to be
made to that section or other provision of the Social Security Act.
Subtitle A–Fraud and Abuse Control Program
SEC. 201. 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:
Sec. 1128C. (a) <<NOTE: 42 USC 1320a-7c.>>
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 1128D, 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 1128E.
(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.–Such guidelines
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.–Such guidelines 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 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 sections
242(b) and 249(c) of the Health Insurance Portability and
Accountability Act of 1996, and 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).
(D) Application.–Nothing in subparagraph (C)(iii) shall be
construed to limit the availability of recoveries and forfeitures
obtained under title I of the Employee Retirement Income Security Act
of 1974 for the purpose of providing equitable or remedial relief for
employee welfare benefit plans, and for participants and
beneficiaries under such plans, as authorized under such title.
(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– (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 and benefits, and
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 integrity
program.– (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 Integrity Program under section
1893, subject to subparagraph (B) and 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.–Not later than January 1, the Secretary and
the Attorney General shall submit jointly a report to Congress which
identifies– (A) the amounts appropriated to the Trust Fund for the
previous fiscal year under paragraph (2)(A) and the source of such
amounts; and (B) the amounts appropriated from the Trust Fund for
such year under paragraph (3) and the justification for the
expenditure of such amounts.
(6) GAO report.–Not later than January 1 of 2000, 2002, and 2004,
the Comptroller General of the United States shall submit a report to
Congress which– (A) identifies– (i) the amounts appropriated to the
Trust Fund for the previous two fiscal years under paragraph (2)(A)
and the source of such amounts; and (ii) the amounts appropriated
from the Trust Fund for such fiscal years under paragraph (3) and the
justification for the expenditure of such amounts; (B) identifies any
expenditures from the Trust Fund with respect to activities not
involving the Medicare program under title XVIII; (C) identifies any
savings to the Trust Fund, and any other savings, resulting from
expenditures from the Trust Fund; and (D) analyzes such other aspects
of the operation of the Trust Fund as the Comptroller General of the
United States considers appropriate.”.
SEC. 202. MEDICARE INTEGRITY PROGRAM.
(a) Establishment of Medicare Integrity Program.–Title XVIII is
amended by adding at the end the following new section:
Sec. 1893. (a) Establishment <<NOTE: 42 USC 1395ddd.>>
of Program.–There is hereby established the Medicare Integrity
Program (in this section referred to as the `Program’) under which
the Secretary shall promote the integrity of the Medicare program by
entering into contracts in accordance with this section with eligible
entities to carry out the activities described in subsection (b).
(b) Activities Described.–The activities described in this
subsection are as follows: (1) Review of activities of providers of
services or other individuals and entities furnishing items and
services for which payment may be made under this title (including
skilled nursing facilities and home health agencies), including
medical and utilization review and fraud review (employing similar
standards, processes, and technologies used by private health plans,
including equipment and software technologies which surpass the
capability of the equipment and technologies used in the review of
claims under this title as of the date of the enactment of this
section).
(2) Audit of cost reports.
(3) Determinations as to whether payment should not be, or should
not have been, made under this title by reason of section 1862(b),
and recovery of payments that should not have been made.
(4) Education of providers of services, beneficiaries, and other
persons with respect to payment integrity and benefit quality
assurance issues.
(5) Developing (and periodically updating) a list of items of
durable medical equipment in accordance with section 1834(a)(15)
which are subject to prior authorization under such section.
(c) Eligibility of Entities.–An entity is eligible to enter into
a contract under the Program to carry out any of the activities
described in subsection (b) if– (1) the entity has demonstrated
capability to carry out such activities; (2) in carrying out such
activities, the entity agrees to cooperate with the Inspector General
of the Department of Health and Human Services, 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 such activities; (3) the
entity complies with such conflict of interest standards as are
generally applicable to Federal acquisition and procurement; and (4)
the entity meets such other requirements as the Secretary may impose.
In the case of the activity described in subsection (b)(5), an
entity shall be deemed to be eligible to enter into a contract under
the Program to carry out the activity if the entity is a carrier with
a contract in effect under section 1842.
(d) Process <<NOTE: Regulations.>> for Entering Into
Contracts.– The Secretary shall enter into contracts under the
Program in accordance with such procedures as the Secretary shall by
regulation establish, except that such procedures shall include the
following: (1) Procedures for identifying, evaluating, and resolving
organizational conflicts of interest that are generally applicable to
Federal acquisition and procurement.
(2) Competitive procedures to be used– (A) when entering into new
contracts under this section; (B) when entering into contracts that
may result in the elimination of responsibilities of an individual
fiscal intermediary or carrier under section 202(b) of the Health
Insurance Portability and Accountability Act of 1996; and (C) at any
other time considered appropriate by the Secretary, except that the
Secretary may continue to contract with entities that are carrying
out the activities described in this section pursuant to agreements
under section 1816 or contracts under section 1842 in effect on the
date of the enactment of this section.
(3) Procedures under which a contract under this section may be
renewed without regard to any provision of law requiring competition
if the contractor has met or exceeded the performance requirements
established in the current contract.
The Secretary may enter into such contracts without regard to
final rules having been promulgated.
(e) Limitation <<NOTE: Regulations.>> on Contractor
Liability.– The Secretary shall by regulation provide for the
limitation of a contractor’s liability for actions taken to carry out
a contract under the Program, and such regulation 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.”.
(b) Elimination of FI and Carrier Responsibility for Carrying Out
Activities Subject to Program.– (1) Responsibilities of fiscal
intermediaries under part a.–Section 1816 (42 U.S.C. 1395h) is
amended by adding at the end the following new subsection:
(l) No agency or organization may carry out (or receive payment
for carrying out) any activity pursuant to an agreement under this
section to the extent that the activity is carried out pursuant to a
contract under the Medicare Integrity Program under section 1893.”.
(2) Responsibilities of carriers under part b.–Section 1842(c)
(42 U.S.C. 1395u(c)) is amended by adding at the end the following
new paragraph:
(6) No carrier may carry out (or receive payment for carrying out)
any activity pursuant to a contract under this subsection to the
extent that the activity is carried out pursuant to a contract under
the Medicare Integrity Program under section 1893. The previous
sentence shall not apply with respect to the activity described in
section 1893(b)(5) (relating to prior authorization of certain items
of durable medical equipment under section 1834(a)(15)).”.
SEC. 203. BENEFICIARY <<NOTE: 42
USC 1395b-5.>> INCENTIVE PROGRAMS.
(a) Clarification of Requirement to Provide Explanation of
Medicare Benefits.–The Secretary of Health and Human Services (in
this section referred to as the Secretary”) shall provide an
explanation of benefits under the Medicare program under title XVIII
of the Social Security Act with respect to each item or service for
which payment may be made under the program which is furnished to an
individual, without regard to whether or not a deductible or
coinsurance may be imposed against the individual with respect to the
item or service.
(b) Program To Collect Information on Fraud and Abuse.– (1)
Establishment of program.–Not later than 3 months after the date of
the enactment of this Act, the Secretary shall establish a program
under which the Secretary shall encourage individuals to report to
the Secretary information on individuals and entities who are
engaging in or who have engaged in acts or omissions which constitute
grounds for the imposition of a sanction under section 1128, 1128A,
or 1128B of the Social Security Act, or who have otherwise engaged in
fraud and abuse against the Medicare program under title XVIII of
such act for which there is a sanction provided under law. The
program shall discourage provision of, and not consider, information
which is frivolous or otherwise not relevant or material to the
imposition of such a sanction.
(2) Payment of portion of amounts collected.–If an individual
reports information to the Secretary under the program established
under paragraph (1) which serves as the basis for the collection by
the Secretary or the Attorney General of any amount of at least $100
(other than any amount paid as a penalty under section 1128B of the
Social Security Act), the Secretary may pay a portion of the amount
collected to the individual (under procedures similar to those
applicable under section 7623 of the Internal Revenue Code of 1986 to
payments to individuals providing information on violations of such
Code).
(c) Program To Collect Information on Program Efficiency.– (1)
Establishment of program.–Not later than 3 months after the date of
the enactment of this Act, the Secretary shall establish a program
under which the Secretary shall encourage individuals to submit to
the Secretary suggestions on methods to improve the efficiency of the
Medicare program.
(2) Payment of portion of program savings.–If an individual
submits a suggestion to the Secretary under the program established
under paragraph (1) which is adopted by the Secretary and which
results in savings to the program, the Secretary may make a payment
to the individual of such amount as the Secretary considers
appropriate.
SEC. 204. APPLICATION OF CERTAIN HEALTH
ANTIFRAUD AND ABUSE SANCTIONS TO FRAUD AND ABUSE AGAINST FEDERAL
HEALTH CARE PROGRAMS.
(a) In General.–Section 1128B (42 U.S.C. 1320a-7b) is amended as
follows: (1) In the heading, by striking Medicare or state health
care programs” and inserting federal health care programs”.
(2) 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))”.
(3) In subsection (a)(5), by striking a program under title XVIII
or a State health care program” and inserting a Federal health care
program”.
(4) In the second sentence of subsection (a)– (A) by striking a
State plan approved under title XIX” and inserting a Federal health
care program”, and (B) 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)”.
(5) In subsection (b), by striking title XVIII or a State health
care program” each place it appears and inserting a Federal health
care program”.
(6) In subsection (c), by inserting (as defined in section
1128(h))” after a State health care program”.
(7) By adding at the end the following new subsection:
(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 directly, in whole or in part, by the United States Government
(other than the health insurance program under chapter 89 of title 5,
United States Code); or (2) any State health care program, as defined
in section 1128(h).”.
(b) Effective <<NOTE: 42 USC 1320a-7b note.>>
Date.–The amendments made by this section shall take effect on
January 1, 1997.
SEC. 205. GUIDANCE REGARDING APPLICATION
OF HEALTH CARE FRAUD AND ABUSE SANCTIONS.
Title XI (42 U.S.C. 1301 et seq.), as amended by section 201, is
amended by inserting after section 1128C the following new section:
Sec. 1128D. (a) Solicitation <<NOTE: 42 USC
1320a-7d.>> and Publication of Modifications to Existing Safe
Harbors and New Safe Harbors.– (1) In general.– (A) Solicitation
<<NOTE: Federal Register, publication.>> 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 and Medicaid 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) and shall not
serve as the basis for an exclusion under section 1128(b)(7); (iii)
advisory opinions 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 <<NOTE: Federal Register, publication.>>
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)).
(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) Advisory Opinions.– (1) Issuance of advisory opinions.–The
Secretary, in consultation with the Attorney General, shall issue
written advisory opinions as provided in this subsection.
(2) Matters subject to advisory opinions.–The Secretary shall
issue advisory opinions as to the following matters: (A) What
constitutes prohibited remuneration within the meaning of section
1128B(b).
(B) Whether an arrangement or proposed arrangement satisfies the
criteria set forth in section 1128B(b)(3) for activities which do not
result in prohibited remuneration.
(C) Whether an arrangement or proposed arrangement satisfies the
criteria which the Secretary has established, or shall establish by
regulation for activities which do not result in prohibited
remuneration.
(D) What constitutes an inducement to reduce or limit services to
individuals entitled to benefits under title XVIII or title XIX
within the meaning of section 1128B(b).
(E) Whether any activity or proposed activity constitutes grounds
for the imposition of a sanction under section 1128, 1128A, or 1128B.
(3) Matters not subject to advisory opinions.–Such advisory
opinions shall not address the following matters: (A) Whether the
fair market value shall be, or was paid or received for any goods,
services or property.
(B) Whether an individual is a bona fide employee within the
requirements of section 3121(d)(2) of the Internal Revenue Code of
1986.
(4) Effect of advisory opinions.– (A) Binding as to secretary and
parties involved.–Each advisory opinion issued by the Secretary
shall be binding as to the Secretary and the party or parties
requesting the opinion.
(B) Failure to seek opinion.–The failure of a party to seek an
advisory opinion may not be introduced into evidence to prove that
the party intended to violate the provisions of sections 1128, 1128A,
or 1128B.
(5) Regulations.– (A) In general.–Not later than 180 days after
the date of the enactment of this section, the Secretary shall issue
regulations to carry out this section. Such regulations shall provide
for– (i) the procedure to be followed by a party applying for an
advisory opinion; (ii) the procedure to be followed by the Secretary
in responding to a request for an advisory opinion; (iii) the
interval in which the Secretary shall respond; (iv) the reasonable
fee to be charged to the party requesting an advisory opinion; and
(v) the manner in which advisory opinions will be made available to
the public.
(B) Specific contents.–Under the regulations promulgated pursuant
to subparagraph (A)– (i) the Secretary shall be required to issue to
a party requesting an advisory opinion by not later than 60 days
after the request is received; and (ii) the fee charged to the party
requesting an advisory opinion shall be equal to the costs incurred
by the Secretary in responding to the request.
(6) Application of subsection.–This subsection shall apply to
requests for advisory opinions made on or after the date which is 6
months after the date of enactment of this section and before the
date which is 4 years after such date of enactment.
(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 the Medicare program under title XVIII or a
State health care program, as defined in section 1128(h) (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.”.
Subtitle B–Revisions to Current Sanctions for Fraud and Abuse
SEC. 211. 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 for an offense which occurred after the date
of the enactment of the Health Insurance Portability and
Accountability 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
for an offense which occurred after the date of the enactment of the
Health Insurance Portability and Accountability 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 for an
offense which occurred after the date of the enactment of the Health
Insurance Portability and Accountability 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. 212. 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
subsection (b)(4) or (b)(5), 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. 213. 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.–(A) Any individual– (i) who has a direct or
indirect ownership or control interest in a sanctioned entity and who
knows or should know (as defined in section 1128A(i)(6)) of the
action constituting the basis for the conviction or exclusion
described in subparagraph (B); or (ii) who is an officer or managing
employee (as defined in section 1126(b)) of such an entity.
(B) For purposes of subparagraph (A), 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.”.
SEC. 214. 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. 215. INTERMEDIATE SANCTIONS FOR
MEDICARE HEALTH MAINTENANCE ORGANIZATIONS.
(a) Application of Intermediate Sanctions for any 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 organization has a history of
deficiencies or has not taken action to correct deficiencies the
Secretary has brought to the organization’s 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.–Section
1876(i)(7)(A) (42 U.S.C. 1395mm(i)(7)(A)) is amended by striking an
agreement” and inserting a written agreement”.
(c) Effective <<NOTE: 42 USC 1395mm note.>> Date.–The
amendments made by this section shall apply with respect to contract
years beginning on or after January 1, 1997.
SEC. 216. ADDITIONAL EXCEPTION TO
ANTI-KICKBACK PENALTIES FOR RISK-SHARING ARRANGEMENTS.
(a) In General.–Section 1128B(b)(3) (42 U.S.C. 1320a-7b(b)(3)) is
amended– (1) by striking and” at the end of subparagraph (D); (2)
by striking the period at the end of subparagraph (E) and inserting ;
and”; and (3) by adding at the end the following new subparagraph:
(F) any remuneration between an organization and an individual or
entity providing items or services, or a combination thereof,
pursuant to a written agreement between the organization and the
individual or entity if the organization is an eligible organization
under section 1876 or if the written agreement, through a
risk-sharing arrangement, places the individual or entity at
substantial financial risk for the cost or utilization of the items
or services, or a combination thereof, which the individual or entity
is obligated to provide.”.
(b) Negotiated <<NOTE: 42 USC 1320a-7b note.>>
Rulemaking for Risk- Sharing Exception.– (1) Establishment.– (A) In
general.–The Secretary of Health and Human Services (in this
subsection referred to as the Secretary”) shall establish, on an
expedited basis and using a negotiated rulemaking process under
subchapter 3 of chapter 5 of title 5, United States Code, standards
relating to the exception for risk- sharing arrangements to the
anti-kickback penalties described in section 1128B(b)(3)(F) of the
Social Security Act, as added by subsection (a).
(B) Factors to consider.–In establishing standards relating to
the exception for risk-sharing arrangements to the anti-kickback
penalties under subparagraph (A), the Secretary– (i) shall consult
with the Attorney General and representatives of the hospital,
physician, other health practitioner, and health plan communities,
and other interested parties; and (ii) shall take into account– (I)
the level of risk appropriate to the size and type of arrangement;
(II) the frequency of assessment and distribution of incentives;
(III) the level of capital contribution; and (IV) the extent to which
the risk- sharing arrangement provides incentives to control the cost
and quality of health care services.
(2) Publication of notice.–In carrying out the rulemaking process
under this subsection, the Secretary shall publish the notice
provided for under section 564(a) of title 5, United States Code, by
not later than 45 days after the date of the enactment of this Act.
(3) Target date for publication of rule.–As part of the notice
under paragraph (2), and for purposes of this subsection, the target
date for publication” (referred to in section 564(a)(5) of such
title) shall be January 1, 1997.
(4) Abbreviated period for submission of comments.–In applying
section 564(c) of such title under this subsection, 15 days” shall
be substituted for 30 days”.
(5) Appointment of negotiated rulemaking committee and
facilitator.–The Secretary shall provide for– (A) the appointment
of a negotiated rulemaking committee under section 565(a) of such
title by not later than 30 days after the end of the comment period
provided for under section 564(c) of such title (as shortened under
paragraph (4)), and (B) the nomination of a facilitator under section
566(c) of such title by not later than 10 days after the date of
appointment of the committee.
(6) Preliminary committee report.–The negotiated rulemaking
committee appointed under paragraph (5) shall report to the
Secretary, by not later than October 1, 1996, regarding the
committee’s progress on achieving a consensus with regard to the
rulemaking proceeding and whether such consensus is likely to occur
before one month before the target date for publication of the rule.
If the committee reports that the committee has failed to make
significant progress toward such consensus or is unlikely to reach
such consensus by the target date, the Secretary may terminate such
process and provide for the publication of a rule under this
subsection through such other methods as the Secretary may provide.
(7) Final committee report.–If the committee is not terminated
under paragraph (6), the rulemaking committee shall submit a report
containing a proposed rule by not later than one month before the
target publication date.
(8) Interim, final <<NOTE: Federal Register,
publication.>> effect.–The Secretary shall publish a rule
under this subsection in the Federal Register by not later than the
target publication date. Such rule shall be effective and final
immediately on an interim basis, but is subject to change and
revision after public notice and opportunity for a period (of not
less than 60 days) for public comment. In connection with such rule,
the Secretary shall specify the process for the timely review and
approval of applications of entities to be certified as
provider-sponsored organizations pursuant to such rules and
consistent with this subsection.
(9) Publication of rule after public comment.–The Secretary shall
provide for consideration of such comments and republication of such
rule by not later than 1 year after the target publication date.
(c) Effective <<NOTE: 42 USC 1320a-7b note.>>
Date.–The amendments made by subsection (a) shall apply to written
agreements entered into on or after January 1, 1997, without regard
to whether regulations have been issued to implement such amendments.
SEC. 217. CRIMINAL PENALTY FOR
FRAUDULENT DISPOSITION OF ASSETS IN ORDER TO OBTAIN MEDICAID
BENEFITS.
Section 1128B(a) (42 U.S.C. 1320a-7b(a)) is amended– (1) by
striking or” at the end of paragraph (4); (2) by adding or” at the
end of paragraph (5); and (3) by inserting after paragraph (5) the
following new paragraph: (6) knowingly and willfully disposes of
assets (including by any transfer in trust) in order for an
individual to become eligible for medical assistance under a State
plan under title XIX, if disposing of the assets results in the
imposition of a period of ineligibility for such assistance under
section 1917(c),”.
SEC. 218. EFFECTIVE <<NOTE: 42 USC
1320a-7 note.>> DATE.
Except as otherwise provided, the amendments made by this subtitle
shall take effect January 1, 1997.
Subtitle C–Data Collection
SEC. 221. ESTABLISHMENT OF THE HEALTH
CARE FRAUD AND ABUSE DATA COLLECTION PROGRAM.
(a) In General.–Title XI (42 U.S.C. 1301 et seq.), as amended by
sections 201 and 205, is amended by inserting after section 1128D the
following new section:
Sec. 1128E. (a) General <<NOTE: 42 USC 1320a-7e.>>
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: (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
prescribes. Such information shall first be required to be reported
on a date specified by the Secretary.
(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 and health plans
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 shall be sufficient to recover the full costs of
operating the database. 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,
including the agency designated by the Secretary in subsection (b)(5)
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) Coordination With National Practitioner Data Bank.–The
Secretary shall implement this section in such a manner as to avoid
duplication with the reporting requirements established for the
National Practitioner Data Bank under the Health Care Quality
Improvement Act of 1986 (42 U.S.C. 11101 et seq.).
(g) Definitions and Special Rules.–For purposes of this section:
(1) Final adverse action.– (A) In general.–The term `final adverse
action’ includes: (i) Civil judgments against a health care provider,
supplier, 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, non- renewability, 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 sections 1128B(f) and 1128(h), respectively).
(v) Any other adjudicated actions or decisions that the Secretary
shall establish by regulation.
(B) Exception.–The term does not include any action with respect
to a malpractice claim.
(2) 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) Government agency.–The term `Government agency’ shall
include: (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 control units.
(F) Federal or State agencies responsible for the licensing and
certification of health care providers and licensed health care
practitioners.
(4) Health plan.–The term `health plan’ has the meaning given
such term by section 1128C(c).
(5) Determination of conviction.–For purposes of paragraph (1),
the existence of a conviction shall be determined under paragraph (4)
of section 1128(i).”.
(b) Improved Prevention in Issuance of Medicare Provider
Numbers.– Section 1842(r) (42 U.S.C. 1395u(r)) is amended by adding
at the end the following new sentence: Under such system, the
Secretary may impose appropriate fees on such physicians to cover the
costs of investigation and recertification activities with respect to
the issuance of the identifiers.”.
Subtitle D–Civil Monetary Penalties
SEC. 231. 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)(1))”.
(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 Health Insurance
Portability and Accountability Act of 1996 (as estimated by the
Secretary) shall be deposited into the Federal Hospital Insurance
Trust Fund pursuant to section 1817(k)(2)(C).”.
(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 involves primarily 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– (A) retains a direct or
indirect ownership or control interest in an entity that is
participating in a program under title XVIII or a State health care
program, and who knows or should know of the action constituting the
basis for the exclusion; or (B) is an officer or managing employee
(as defined in section 1126(b)) of such an entity;”.
(c) 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”.
(d) Clarification of Level of Knowledge Required for Imposition of
Civil Monetary Penalties.– (1) In general.–Section 1128A(a) (42
U.S.C. 1320a-7a(a)) is amended– (A) in paragraphs (1) and (2), by
inserting knowingly” before presents” each place it appears; and
(B) in paragraph (3), by striking gives” and inserting knowingly
gives or causes to be given”.
(2) Definition of standard.–Section 1128A(i) (42 U.S.C.
1320a-7a(i)), as amended by subsection (h)(2), is amended by
adding at the end the following new paragraph: (7) The term `should
know’ means that a person, with respect to information– (A) acts in
deliberate ignorance of the truth or falsity of the information; or
(B) acts in reckless disregard of the truth or falsity of the
information, and no proof of specific intent to defraud is
required.”.
(e) 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 (b), 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 should know will
result in a greater payment to the person than the code the person
knows or should know is applicable to the item or service actually
provided,”; (2) in subparagraph (C), by striking or” at the end;
(3) in subparagraph (D), by striking the semicolon and inserting ,
or”; and (4) by inserting after subparagraph (D) the following new
subparagraph: (E) is for a pattern of medical or other items or
services that a person knows or should know are not medically
necessary;”.
(f) 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”.
(g) Procedural Provisions.–Section 1876(i)(6) (42 U.S.C.
1395mm(i)(6)), as amended by section 215(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 (B)(i) or (C)(i) in the same
manner as such provisions apply to a civil money penalty or
proceeding under section 1128A(a).”.
(h) 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); (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 at the end 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 payers, 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 Health Insurance
Portability and Accountability 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.”.
(i) Effective <<NOTE: 42 USC 1320a-7a note.>>
Date.–The amendments made by this section shall apply to acts or
omissions occurring on or after January 1, 1997.
SEC. 232. PENALTY FOR FALSE
CERTIFICATION FOR HOME HEALTH SERVICES.
(a) In General.–Section 1128A(b) (42 U.S.C. 1320a-7a(b)) is
amended by adding at the end the following new paragraph: (3)(A) Any
physician who executes a document described in subparagraph (B) with
respect to an individual knowing that all of the requirements
referred to in such subparagraph are not met with respect to the
individual shall be subject to a civil monetary penalty of not more
than the greater of– (i) $5,000, or (ii) three times the amount of
the payments under title XVIII for home health services which are
made pursuant to such certification.
(B) A document described in this subparagraph is any document that
certifies, for purposes of title XVIII, that an individual meets the
requirements of section 1814(a)(2)(C) or 1835(a)(2)(A) in the case of
home health services furnished to the individual.”.
(b) Effective <<NOTE: 42 USC 1320a-7a note.>>
Date.–The amendment made by subsection (a) shall apply to
certifications made on or after the date of the enactment of this
Act.
Subtitle E–Revisions to Criminal Law
SEC. 241. DEFINITIONS RELATING TO
FEDERAL HEALTH CARE OFFENSE.
(a) In General.–Chapter 1 of title 18, United States Code, is
amended by adding at the end the following:
Sec. 24. Definitions relating to Federal health care offense
(a) As used in this title, the term `Federal health care offense’
means a violation of, or a criminal conspiracy to violate– (1)
section 669, 1035, 1347, or 1518 of this title; (2) section 287, 371,
664, 666, 1001, 1027, 1341, 1343, or 1954 of this title, if the
violation or conspiracy relates to a health care benefit program.
(b) As used in this title, the term `health care benefit program’
means any public or private plan or contract, affecting commerce,
under which any medical benefit, item, or service is provided to any
individual, and includes any individual or entity who is providing a
medical benefit, item, or service for which payment may be made under
the plan or contract.”.
(b) Clerical Amendment.–The table of sections at the beginning of
chapter 2 of title 18, United States Code, is amended by inserting
after the item relating to section 23 the following new item:
24. Definitions relating to Federal health care offense.”.
(a) Offense.– (1) In general.–Chapter 63 of title 18, United
States Code, is amended by adding at the end the following:
Sec. 1347. Health care fraud
Whoever knowingly and willfully executes, or attempts to execute,
a scheme or artifice– (1) to defraud any health care benefit
program; 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 care benefit program,
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 of this title),
such person shall be fined under this title or imprisoned not more
than 20 years, or both; and if the violation results in death, such
person shall be fined under this title, or imprisoned for any term of
years or for life, or both.”.
(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 <<NOTE: 42 USC 1395i note.>> Fines
Deposited in Federal Hospital Insurance Trust Fund.–The Secretary of
the Treasury shall deposit into the Federal Hospital Insurance Trust
Fund pursuant to section 1817(k)(2)(C) of the Social Security Act (42
U.S.C. 1395i) an amount equal to the criminal fines imposed under
section 1347 of title 18, United States Code (relating to health care
fraud).
SEC. 243. THEFT OR EMBEZZLEMENT.
(a) In General.–Chapter 31 of title 18, United States Code, is
amended by adding at the end the following:
Sec. 669. Theft or embezzlement in connection with health care
(a) Whoever knowingly and willfully embezzles, steals, or
otherwise without authority 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 care benefit program, shall be fined under this
title or imprisoned not more than 10 years, or both; but if the value
of such property does not exceed the sum of $100 the defendant shall
be fined under this title or imprisoned not more than one year, or
both.
(b) As used in this section, the term `health care benefit
program’ has the meaning given such term in section 24(b) of this
title.”.
(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.”.
(a) In General.–Chapter 47 of title 18, United States Code, is
amended by adding at the end the following:
Sec. 1035. False statements relating to health care matters
(a) Whoever, in any matter involving a health care benefit
program, knowingly and willfully– (1) falsifies, conceals, or covers
up by any trick, scheme, or device a material fact; or (2) makes any
materially false, fictitious, or fraudulent statements or
representations, or makes or uses any materially false writing or
document knowing the same to contain any materially false,
fictitious, or fraudulent statement or entry, 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 5 years,
or both.
(b) As used in this section, the term `health care benefit
program’ has the meaning given such term in section 24(b) of this
title.”.
(b) Clerical Amendment.–The table of sections at the beginning of
chapter 47 of title 18, United States Code, is amended by adding at
the end the following new item:
1035. False statements relating to health care matters.”.
SEC. 245. OBSTRUCTION OF CRIMINAL
INVESTIGATIONS OF HEALTH CARE OFFENSES.
(a) In General.–Chapter 73 of title 18, United States Code, is
amended by adding at the end the following: Sec. 1518. Obstruction of
criminal investigations of health care offenses
(a) Whoever willfully prevents, obstructs, misleads, delays or
attempts to prevent, obstruct, mislead, or delay the communication of
information or records relating to a violation of a Federal health
care offense to a criminal investigator shall be fined under this
title or imprisoned not more than 5 years, or both.
(b) 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 new item:
1518. Obstruction of criminal investigations of health care
offenses.”.
SEC. 246. LAUNDERING OF MONETARY
INSTRUMENTS.
Section 1956(c)(7) of title 18, United States Code, is amended by
adding at the end the following: (F) Any act or activity constituting
an offense involving a Federal health care offense.”.
SEC. 247. INJUNCTIVE RELIEF RELATING TO
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: (C) committing or about to commit a
Federal health care offense.”.
(b) Freezing of Assets.–Section 1345(a)(2) of title 18, United
States Code, is amended by inserting or a Federal health care
offense” after title)”.
SEC. 248. AUTHORIZED INVESTIGATIVE
DEMAND PROCEDURES.
(a) In General.–Chapter 223 of title 18, United States Code, is
amended by adding after section 3485 the following:
Sec. 3486. Authorized investigative demand procedures
(a) Authorization.–(1) In any investigation relating to any act
or activity involving a Federal health care offense, the Attorney
General or the Attorney General’s designee may issue in writing and
cause to be served a subpoena– (A) requiring the 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; or (B) requiring a
custodian of records to give testimony concerning the production and
authentication of such records.
(2) A subpoena under this subsection 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.
(3) The production of records shall not be required under this
section at any place more than 500 miles distant from the place where
the subpoena for the production of such records is served.
(4) Witnesses summoned under this section shall be paid the same
fees and mileage that are paid witnesses in the courts of the United
States.
(b) Service.–A subpoena issued under this section may be served
by any person who is at least 18 years of age and is designated in
the subpoena to serve it. Service upon a natural person may be made
by personal delivery of the subpoena to him. Service may be made upon
a domestic or foreign corporation or upon a partnership or other
unincorporated 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 he 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
concerning the production and authentication of such records. 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 summons under this section, who complies in
good faith with the summons 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) Limitation on Use.–(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
therefor.
(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.”.
(b) Clerical Amendment.–The table of sections at the beginning of
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 of title 18),” after
subpoena”.
SEC. 249. 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) 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 gross proceeds traceable to the commission of the
offense.”.
(b) Conforming Amendment.–Section 982(b)(1)(A) of title 18,
United States Code, is amended by inserting or (a)(6)” after
(a)(1)”.
(c) Property Forfeited <<NOTE: 42 USC 1395i note.>>
Deposited in Federal Hospital Insurance Trust Fund.– (1) In
general.–After the payment of the costs of asset forfeiture has been
made and after all restoration payments (if any) have been made, and
notwithstanding any other provision of law, the Secretary of the
Treasury shall deposit into the Federal Hospital Insurance Trust Fund
pursuant to section 1817(k)(2)(C) of the Social Security Act, as
added by section 301(b), an amount equal to the net amount realized
from the forfeiture of property by reason of a Federal health care
offense pursuant to section 982(a)(6) of title 18, United States
Code.
(2) Costs of asset forfeiture.–For purposes of paragraph (1), the
term payment of the costs of asset forfeiture” means– (A) the
payment, at the discretion of the Attorney General, of any expenses
necessary to seize, detain, inventory, safeguard, maintain,
advertise, sell, or dispose of property under seizure, detention, or
forfeited, or of any other necessary expenses incident to the
seizure, detention, forfeiture, or disposal of such property,
including payment for– (i) contract services; (ii) the employment of
outside contractors to operate and manage properties or provide other
specialized services necessary to dispose of such properties in an
effort to maximize the return from such properties; and (iii)
reimbursement of any Federal, State, or local agency for any
expenditures made to perform the functions described in this
subparagraph; (B) at the discretion of the Attorney General, the
payment of awards for information or assistance leading to a civil or
criminal forfeiture involving any Federal agency participating in the
Health Care Fraud and Abuse Control Account; (C) the compromise and
payment of valid liens and mortgages against property that has been
forfeited, subject to the discretion of the Attorney General to
determine the validity of any such lien or mortgage and the amount of
payment to be made, and the employment of attorneys and other
personnel skilled in State real estate law as necessary; (D) payment
authorized in connection with remission or mitigation procedures
relating to property forfeited; and (E) the payment of State and
local property taxes on forfeited real property that accrued between
the date of the violation giving rise to the forfeiture and the date
of the forfeiture order.
(3) Restoration payment.–Notwithstanding any other provision of
law, if the Federal health care offense referred to in paragraph (1)
resulted in a loss to an employee welfare benefit plan within the
meaning of section 3(1) of the Employee Retirement Income Security
Act of 1974, the Secretary of the Treasury shall transfer to such
employee welfare benefit plan, from the amount realized from the
forfeiture of property referred to in paragraph (1), an amount equal
to such loss. For purposes of paragraph (1), the term restoration
payment” means the amount transferred to an employee welfare benefit
plan pursuant to this paragraph.
SEC. 250. RELATION <<NOTE: 29 USC
1136 note.>> TO ERISA AUTHORITY.
Nothing in this subtitle shall be construed as affecting the
authority of the Secretary of Labor under section 506(b) of the
Employee Retirement Income Security Act of 1974, including the
Secretary’s authority with respect to violations of title 18, United
States Code (as amended by this subtitle).
Subtitle F–Administrative Simplification
SEC. 261. <<NOTE: 42 USC 1320d
note.>> PURPOSE.
It is the purpose of this subtitle to improve the Medicare program
under title XVIII of the Social Security Act, the medicaid program
under title XIX of such Act, and the efficiency and effectiveness of
the health care system, by encouraging the development of a health
information system through the establishment of standards and
requirements for the electronic transmission of certain health
information.
SEC. 262. ADMINISTRATIVE SIMPLIFICATION.
(a) In General.–Title XI (42 U.S.C. 1301 et seq.) is amended by
adding at the end the following:
Part C–Administrative Simplification
Sec. 1171. For <<NOTE: 42 USC
1320d.>> purposes of this part: (1) Code set.–The term `code
set’ means any set of codes used for encoding data elements, such as
tables of terms, medical concepts, medical diagnostic codes, or
medical procedure codes.
(2) Health care clearinghouse.–The term `health care
clearinghouse’ means a public or private entity that processes or
facilitates the processing of nonstandard data elements of health
information into standard data elements.
(3) Health care provider.–The term `health care provider’
includes a provider of services (as defined in section 1861(u)), a
provider of medical or other health services (as defined in section
1861(s)), and any other person furnishing health care services or
supplies.
(4) Health information.–The term `health information’ means any
information, whether oral or recorded in any form or medium, that–
(A) is created or received by a health care provider, health plan,
public health authority, employer, life insurer, school or
university, or health care clearinghouse; and (B) relates to the
past, present, or future physical or mental health or condition of an
individual, the provision of health care to an individual, or the
past, present, or future payment for the provision of health care to
an individual.
(5) Health plan.–The term `health plan’ means an individual or
group plan that provides, or pays the cost of, medical care (as such
term is defined in section 2791 of the Public Health Service Act).
Such term includes the following, and any combination thereof: (A) A
group health plan (as defined in section 2791(a) of the Public Health
Service Act), but only if the plan– (i) has 50 or more participants
(as defined in section 3(7) of the Employee Retirement Income
Security Act of 1974); or (ii) is administered by an entity other
than the employer who established and maintains the plan.
(B) A health insurance issuer (as defined in section 2791(b) of
the Public Health Service Act).
(C) A health maintenance organization (as defined in section
2791(b) of the Public Health Service Act).
(D) Part A or part B of the Medicare program under title XVIII.
(E) The medicaid program under title XIX.
(F) A Medicare supplemental policy (as defined in section
1882(g)(1)).
(G) A long-term care policy, including a nursing home fixed
indemnity policy (unless the Secretary determines that such a policy
does not provide sufficiently comprehensive coverage of a benefit so
that the policy should be treated as a health plan).
(H) An employee welfare benefit plan or any other arrangement
which is established or maintained for the purpose of offering or
providing health benefits to the employees of 2 or more employers.
(I) The health care program for active military personnel under
title 10, United States Code.
(J) The veterans health care program under chapter 17 of title 38,
United States Code.
(K) The Civilian Health and Medical Program of the Uniformed
Services (CHAMPUS), as defined in section 1072(4) of title 10, United
States Code.
(L) The Indian health service program under the Indian Health Care
Improvement Act (25 U.S.C. 1601 et seq.).
(M) The Federal Employees Health Benefit Plan under chapter 89 of
title 5, United States Code.
(6) Individually identifiable health information.–The term
`individually identifiable health information’ means any information,
including demographic information collected from an individual,
that– (A) is created or received by a health care provider, health
plan, employer, or health care clearinghouse; and (B) relates to the
past, present, or future physical or mental health or condition of an
individual, the provision of health care to an individual, or the
past, present, or future payment for the provision of health care to
an individual, and– (i) identifies the individual; or (ii) with
respect to which there is a reasonable basis to believe that the
information can be used to identify the individual.
(7) Standard.–The term `standard’, when used with reference to a
data element of health information or a transaction referred to in
section 1173(a)(1), means any such data element or transaction that
meets each of the standards and implementation specifications adopted
or established by the Secretary with respect to the data element or
transaction under sections 1172 through 1174.
(8) Standard setting organization.–The term `standard setting
organization’ means a standard setting organization accredited by the
American National Standards Institute, including the National Council
for Prescription Drug Programs, that develops standards for
information transactions, data elements, or any other standard that
is necessary to, or will facilitate, the implementation of this part.
Sec. 1172. (a) Applicability.–Any
<<NOTE: 42 USC 1320d-1.>> standard adopted under this
part shall apply, in whole or in part, to the following persons: (1)
A health plan.
(2) A health care clearinghouse.
(3) A health care provider who transmits any health information in
electronic form in connection with a transaction referred to in
section 1173(a)(1).
(b) Reduction of Costs.–Any standard adopted under this part
shall be consistent with the objective of reducing the administrative
costs of providing and paying for health care.
(c) Role of Standard Setting Organizations.– (1) In
general.–Except as provided in paragraph (2), any standard adopted
under this part shall be a standard that has been developed, adopted,
or modified by a standard setting organization.
(2) Special rules.– (A) Different standards.–The Secretary may
adopt a standard that is different from any standard developed,
adopted, or modified by a standard setting organization, if– (i) the
different standard will substantially reduce administrative costs to
health care providers and health plans compared to the alternatives;
and (ii) the standard is promulgated in accordance with the
rulemaking procedures of subchapter III of chapter 5 of title 5,
United States Code.
(B) No standard by standard setting organization.–If no standard
setting organization has developed, adopted, or modified any standard
relating to a standard that the Secretary is authorized or required
to adopt under this part– (i) paragraph (1) shall not apply; and
(ii) subsection (f) shall apply.
(3) Consultation requirement.– (A) In general.–A standard may
not be adopted under this part unless– (i) in the case of a standard
that has been developed, adopted, or modified by a standard setting
organization, the organization consulted with each of the
organizations described in subparagraph (B) in the course of such
development, adoption, or modification; and (ii) in the case of any
other standard, the Secretary, in complying with the requirements of
subsection (f), consulted with each of the organizations described in
subparagraph (B) before adopting the standard.
(B) Organizations described.–The organizations referred to in
subparagraph (A) are the following: (i) The National Uniform Billing
Committee.
(ii) The National Uniform Claim Committee.
(iii) The Workgroup for Electronic Data Interchange.
(iv) The American Dental Association.
(d) Implementation Specifications.–The Secretary shall establish
specifications for implementing each of the standards adopted under
this part.
(e) Protection of Trade Secrets.–Except as otherwise required by
law, a standard adopted under this part shall not require disclosure
of trade secrets or confidential commercial information by a person
required to comply with this part.
(f) Assistance to the Secretary.–In complying with the
requirements of this part, the Secretary shall rely on the
recommendations of the National Committee on Vital and Health
Statistics established under section 306(k) of the Public Health
Service Act (42 U.S.C. 242k(k)), and shall consult with appropriate
Federal and State agencies <<NOTE: Federal Register,
publication.>> and private organizations. The Secretary shall
publish in the Federal Register any recommendation of the National
Committee on Vital and Health Statistics regarding the adoption of a
standard under this part.
(g) Application to Modifications of Standards.–This section shall
apply to a modification to a standard (including an addition to a
standard) adopted under section 1174(b) in the same manner as it
applies to an initial standard adopted under section 1174(a).
Sec. 1173. (a) Standards <<NOTE:
42 USC 1320d-2.>> To Enable Electronic Exchange.– (1) In
general.–The Secretary shall adopt standards for transactions, and
data elements for such transactions, to enable health information to
be exchanged electronically, that are appropriate for– (A) the
financial and administrative transactions described in paragraph (2);
and (B) other financial and administrative transactions determined
appropriate by the Secretary, consistent with the goals of improving
the operation of the health care system and reducing administrative
costs.
(2) Transactions.–The transactions referred to in paragraph
(1)(A) are transactions with respect to the following: (A) Health
claims or equivalent encounter information.
(B) Health claims attachments.
(C) Enrollment and disenrollment in a health plan.
(D) Eligibility for a health plan.
(E) Health care payment and remittance advice.
(F) Health plan premium payments.
(G) First report of injury.
(H) Health claim status.
(I) Referral certification and authorization.
(3) Accommodation of specific providers.–The standards adopted by
the Secretary under paragraph (1) shall accommodate the needs of
different types of health care providers.
(b) Unique Health Identifiers.– (1) In general.–The Secretary
shall adopt standards providing for a standard unique health
identifier for each individual, employer, health plan, and health
care provider for use in the health care system. In carrying out the
preceding sentence for each health plan and health care provider, the
Secretary shall take into account multiple uses for identifiers and
multiple locations and specialty classifications for health care
providers.
(2) Use of identifiers.–The standards adopted under paragraph (1)
shall specify the purposes for which a unique health identifier may
be used.
(c) Code Sets.– (1) In general.–The Secretary shall adopt
standards that– (A) select code sets for appropriate data elements
for the transactions referred to in subsection (a)(1) from among the
code sets that have been developed by private and public entities; or
(B) establish code sets for such data elements if no code sets for
the data elements have been developed.
(2) Distribution.–The Secretary shall establish efficient and
low-cost procedures for distribution (including electronic
distribution) of code sets and modifications made to such code sets
under section 1174(b).
(d) Security Standards for Health Information.– (1) Security
standards.–The Secretary shall adopt security standards that– (A)
take into account– (i) the technical capabilities of record systems
used to maintain health information; (ii) the costs of security
measures; (iii) the need for training persons who have access to
health information; (iv) the value of audit trails in computerized
record systems; and (v) the needs and capabilities of small health
care providers and rural health care providers (as such providers are
defined by the Secretary); and (B) ensure that a health care
clearinghouse, if it is part of a larger organization, has policies
and security procedures which isolate the activities of the health
care clearinghouse with respect to processing information in a manner
that prevents unauthorized access to such information by such larger
organization.
(2) Safeguards.–Each person described in section 1172(a) who
maintains or transmits health information shall maintain reasonable
and appropriate administrative, technical, and physical safeguards–
(A) to ensure the integrity and confidentiality of the information;
(B) to protect against any reasonably anticipated– (i) threats or
hazards to the security or integrity of the information; and (ii)
unauthorized uses or disclosures of the information; and (C)
otherwise to ensure compliance with this part by the officers and
employees of such person.
(e) Electronic Signature.– (1) Standards.–The Secretary, in
coordination with the Secretary of Commerce, shall adopt standards
specifying procedures for the electronic transmission and
authentication of signatures with respect to the transactions
referred to in subsection (a)(1).
(2) Effect of compliance.–Compliance with the standards adopted
under paragraph (1) shall be deemed to satisfy Federal and State
statutory requirements for written signatures with respect to the
transactions referred to in subsection (a)(1).
(f) Transfer of Information Among Health Plans.–The Secretary
shall adopt standards for transferring among health plans appropriate
standard data elements needed for the coordination of benefits, the
sequential processing of claims, and other data elements for
individuals who have more than one health plan.
Sec. 1174. (a) Initial <<NOTE: 42
USC 1320d-3.>> Standards.–The Secretary shall carry out
section 1173 not later than 18 months after the date of the enactment
of the Health Insurance Portability and Accountability Act of 1996,
except that standards relating to claims attachments shall be adopted
not later than 30 months after such date.
(b) Additions and Modifications to Standards.– (1) In
general.–Except as provided in paragraph (2), the Secretary shall
review the standards adopted under section 1173, and shall adopt
modifications to the standards (including additions to the
standards), as determined appropriate, but not more frequently than
once every 12 months. Any addition or modification to a standard
shall be completed in a manner which minimizes the disruption and
cost of compliance.
(2) Special rules.– (A) First 12-month period.–Except with
respect to additions and modifications to code sets under
subparagraph (B), the Secretary may not adopt any modification to a
standard adopted under this part during the 12-month period beginning
on the date the standard is initially adopted, unless the Secretary
determines that the modification is necessary in order to permit
compliance with the standard.
(B) Additions and modifications to code sets.– (i) In
general.–The Secretary shall ensure that procedures exist for the
routine maintenance, testing, enhancement, and expansion of code
sets.
(ii) Additional rules.–If a code set is modified under this
subsection, the modified code set shall include instructions on how
data elements of health information that were encoded prior to the
modification may be converted or translated so as to preserve the
informational value of the data elements that existed before the
modification. Any modification to a code set under this subsection
shall be implemented in a manner that minimizes the disruption and
cost of complying with such modification.
Sec. 1175. (a) Conduct <<NOTE: 42
USC 1320d-4.>> of Transactions by Plans.– (1) In general.–If
a person desires to conduct a transaction referred to in section
1173(a)(1) with a health plan as a standard transaction– (A) the
health plan may not refuse to conduct such transaction as a standard
transaction; (B) the insurance plan may not delay such transaction,
or otherwise adversely affect, or attempt to adversely affect, the
person or the transaction on the ground that the transaction is a
standard transaction; and (C) the information transmitted and
received in connection with the transaction shall be in the form of
standard data elements of health information.
(2) Satisfaction of requirements.–A health plan may satisfy the
requirements under paragraph (1) by– (A) directly transmitting and
receiving standard data elements of health information; or (B)
submitting nonstandard data elements to a health care clearinghouse
for processing into standard data elements and transmission by the
health care clearinghouse, and receiving standard data elements
through the health care clearinghouse.
(3) Timetable for compliance.–Paragraph (1) shall not be
construed to require a health plan to comply with any standard,
implementation specification, or modification to a standard or
specification adopted or established by the Secretary under sections
1172 through 1174 at any time prior to the date on which the plan is
required to comply with the standard or specification under
subsection (b).
(b) Compliance With Standards.– (1) Initial compliance.– (A) In
general.–Not later than 24 months after the date on which an initial
standard or implementation specification is adopted or established
under sections 1172 and 1173, each person to whom the standard or
implementation specification applies shall comply with the standard
or specification.
(B) Special rule for small health plans.–In the case of a small
health plan, paragraph (1) shall be applied by substituting `36
months’ for `24 months’. For purposes of this subsection, the
Secretary shall determine the plans that qualify as small health
plans.
(2) Compliance with modified standards.–If the Secretary adopts a
modification to a standard or implementation specification under this
part, each person to whom the standard or implementation
specification applies shall comply with the modified standard or
implementation specification at such time as the Secretary determines
appropriate, taking into account the time needed to comply due to the
nature and extent of the modification. The time determined
appropriate under the preceding sentence may not be earlier than the
last day of the 180-day period beginning on the date such
modification is adopted. The Secretary may extend the time for
compliance for small health plans, if the Secretary determines that
such extension is appropriate.
(3) Construction.–Nothing in this subsection shall be construed
to prohibit any person from complying with a standard or
specification by– (A) submitting nonstandard data elements to a
health care clearinghouse for processing into standard data elements
and transmission by the health care clearing- house; or (B) receiving
standard data elements through a health care clearinghouse.
Sec. 1176. (a) General <<NOTE: 42
USC 1320d-5.>> Penalty.– (1) In general.–Except as provided
in subsection (b), the Secretary shall impose on any person who
violates a provision of this part a penalty of not more than $100 for
each such violation, except that the total amount imposed on the
person for all violations of an identical requirement or prohibition
during a calendar year may not exceed $25,000.
(2) Procedures.–The provisions of section 1128A (other than
subsections (a) and (b) and the second sentence of subsection (f))
shall apply to the imposition of a civil money penalty under this
subsection in the same manner as such provisions apply to the
imposition of a penalty under such section 1128A.
(b) Limitations.– (1) Offenses otherwise punishable.–A penalty
may not be imposed under subsection (a) with respect to an act if the
act constitutes an offense punishable under section 1177.
(2) Noncompliance not discovered.–A penalty may not be imposed
under subsection (a) with respect to a provision of this part if it
is established to the satisfaction of the Secretary that the person
liable for the penalty did not know, and by exercising reasonable
diligence would not have known, that such person violated the
provision.
(3) Failures due to reasonable cause.– (A) In general.–Except as
provided in subparagraph (B), a penalty may not be imposed under
subsection (a) if– (i) the failure to comply was due to reasonable
cause and not to willful neglect; and (ii) the failure to comply is
corrected during the 30-day period beginning on the first date the
person liable for the penalty knew, or by exercising reasonable
diligence would have known, that the failure to comply occurred.
(B) Extension of period.– (i) No penalty.–The period referred to
in subparagraph (A)(ii) may be extended as determined appropriate by
the Secretary based on the nature and extent of the failure to
comply.
(ii) Assistance.–If the Secretary determines that a person failed
to comply because the person was unable to comply, the Secretary may
provide technical assistance to the person during the period
described in subparagraph (A)(ii). Such assistance shall be provided
in any manner determined appropriate by the Secretary.
(4) Reduction.–In the case of a failure to comply which is due to
reasonable cause and not to willful neglect, any penalty under
subsection (a) that is not entirely waived under paragraph (3) may be
waived to the extent that the payment of such penalty would be
excessive relative to the compliance failure involved.
Sec. 1177. (a) Offense.–A <<NOTE:
42 USC 1320d-6.>> person who knowingly and in violation of this
part– (1) uses or causes to be used a unique health identifier; (2)
obtains individually identifiable health information relating to an
individual; or (3) discloses individually identifiable health
information to another person, shall be punished as provided in
subsection (b).
(b) Penalties.–A person described in subsection (a) shall– (1)
be fined not more than $50,000, imprisoned not more than 1 year, or
both; (2) if the offense is committed under false pretenses, be fined
not more than $100,000, imprisoned not more than 5 years, or both;
and (3) if the offense is committed with intent to sell, transfer, or
use individually identifiable health information for commercial
advantage, personal gain, or malicious harm, be fined not more than
$250,000, imprisoned not more than 10 years, or both.
Sec. 1178. (a) General <<NOTE: 42
USC 1320d-7.>> Effect.– (1) General rule.–Except as provided
in paragraph (2), a provision or requirement under this part, or a
standard or implementation specification adopted or established under
sections 1172 through 1174, shall supersede any contrary provision of
State law, including a provision of State law that requires medical
or health plan records (including billing information) to be
maintained or transmitted in written rather than electronic form.
(2) Exceptions.–A provision or requirement under this part, or a
standard or implementation specification adopted or established under
sections 1172 through 1174, shall not supersede a contrary provision
of State law, if the provision of State law– (A) is a provision the
Secretary determines– (i) is necessary– (I) to prevent fraud and
abuse; (II) to ensure appropriate State regulation of insurance and
health plans; (III) for State reporting on health care delivery or
costs; or (IV) for other purposes; or (ii) addresses controlled
substances; or (B) subject to section 264(c)(2) of the Health
Insurance Portability and Accountability Act of 1996, relates to the
privacy of individually identifiable health information.
(b) Public Health.–Nothing in this part shall be construed to
invalidate or limit the authority, power, or procedures established
under any law providing for the reporting of disease or injury, child
abuse, birth, or death, public health surveillance, or public health
investigation or intervention.
(c) State Regulatory Reporting.–Nothing in this part shall limit
the ability of a State to require a health plan to report, or to
provide access to, information for management audits, financial
audits, program monitoring and evaluation, facility licensure or
certification, or individual licensure or certification.
Sec. 1179. To <<NOTE: 42 USC
1320d-8.>> the extent that an entity is engaged in activities
of a financial institution (as defined in section 1101 of the Right
to Financial Privacy Act of 1978), or is engaged in authorizing,
processing, clearing, settling, billing, transferring, reconciling,
or collecting payments, for a financial institution, this part, and
any standard adopted under this part, shall not apply to the entity
with respect to such activities, including the following: (1) The use
or disclosure of information by the entity for authorizing,
processing, clearing, settling, billing, transferring, reconciling or
collecting, a payment for, or related to, health plan premiums or
health care, where such payment is made by any means, including a
credit, debit, or other payment card, an account, check, or
electronic funds transfer.
(2) The request for, or the use or disclosure of, information by
the entity with respect to a payment described in para- graph (1)–
(A) for transferring receivables; (B) for auditing; (C) in connection
with– (i) a customer dispute; or (ii) an inquiry from, or to, a
customer; (D) in a communication to a customer of the entity
regarding the customer’s transactions, payment card, account, check,
or electronic funds transfer; (E) for reporting to consumer reporting
agencies; or (F) for complying with– (i) a civil or criminal
subpoena; or (ii) a Federal or State law regulating the entity.”.
(b) Conforming Amendments.– (1) Requirement for medicare
providers.–Section 1866(a)(1) (42 U.S.C. 1395cc(a)(1)) is amended–
(A) by striking and” at the end of subparagraph (P); (B) by striking
the period at the end of subparagraph (Q) and inserting ; and”; and
(C) by inserting immediately after subparagraph (Q) the following new
subparagraph: (R) to contract only with a health care clearinghouse
(as defined in section 1171) that meets each standard and
implementation specification adopted or established under part C of
title XI on or after the date on which the health care clearinghouse
is required to comply with the standard or specification.”.
(2) Title heading.–Title XI (42 U.S.C. 1301 et seq.) is amended
by striking the title heading and inserting the following:
TITLE XI–GENERAL PROVISIONS, PEER REVIEW, AND ADMINISTRATIVE
SIMPLIFICATION”.
SEC. 263. CHANGES IN MEMBERSHIP AND
DUTIES OF NATIONAL COMMITTEE ON VITAL AND HEALTH STATISTICS.
Section 306(k) of the Public Health Service Act (42 U.S.C.
242k(k)) is amended– (1) in paragraph (1), by striking 16” and
inserting 18”; (2) by amending paragraph (2) to read as follows:
(2) The members of the Committee shall be appointed from among
persons who have distinguished themselves in the fields of health
statistics, electronic interchange of health care information,
privacy and security of electronic information, population-based
public health, purchasing or financing health care services,
integrated computerized health information systems, health services
research, consumer interests in health information, health data
standards, epidemiology, and the provision of health services.
Members of the Committee shall be appointed for terms of 4 years.”;
(3) by redesignating paragraphs (3) through (5) as paragraphs (4)
through (6), respectively, and inserting after paragraph (2) the
following:
(3) Of the members of the Committee– (A) 1 shall be appointed,
not later than 60 days after the date of the enactment of the Health
Insurance Portability and Accountability Act of 1996, by the Speaker
of the House of Representatives after consultation with the Minority
Leader of the House of Representatives; (B) 1 shall be appointed, not
later than 60 days after the date of the enactment of the Health
Insurance Portability and Accountability Act of 1996, by the
President pro tempore of the Senate after consultation with the
Minority Leader of the Senate; and (C) 16 shall be appointed by the
Secretary.”; (4) by amending paragraph (5) (as so redesignated) to
read as follows:
(5) The Committee– (A) shall assist and advise the Secretary–
(i) to delineate statistical problems bearing on health and health
services which are of national or international interest; (ii) to
stimulate studies of such problems by other organizations and
agencies whenever possible or to make investigations of such problems
through subcommittees; (iii) to determine, approve, and revise the
terms, definitions, classifications, and guidelines for assessing
health status and health services, their distribution and costs, for
use (I) within the Department of Health and Human Services, (II) by
all programs administered or funded by the Secretary, including the
Federal-State-local cooperative health statistics system referred to
in subsection (e), and (III) to the extent possible as determined by
the head of the agency involved, by the Department of Veterans
Affairs, the Department of Defense, and other Federal agencies
concerned with health and health services; (iv) with respect to the
design of and approval of health statistical and health information
systems concerned with the collection, processing, and tabulation of
health statistics within the Department of Health and Human Services,
with respect to the Cooperative Health Statistics System established
under subsection (e), and with respect to the standardized means for
the collection of health information and statistics to be established
by the Secretary under subsection (j)(1); (v) to review and comment
on findings and proposals developed by other organizations and
agencies and to make recommendations for their adoption or
implementation by local, State, national, or international agencies;
(vi) to cooperate with national committees of other countries and
with the World Health Organization and other national agencies in the
studies of problems of mutual interest; (vii) to issue <<NOTE:
Reports.>> an annual report on the state of the Nation’s
health, its health services, their costs and distributions, and to
make proposals for improvement of the Nation’s health statistics and
health information systems; and (viii) in complying with the
requirements imposed on the Secretary under part C of title XI of the
Social Security Act; (B) shall study the issues related to the
adoption of uniform data standards for patient medical record
information and the electronic exchange of such information; (C)
shall <<NOTE: Reports.>> report to the Secretary not
later than 4 years after the date of the enactment of the Health
Insurance Portability and Accountability Act of 1996 recommendations
and legislative proposals for such standards and electronic exchange;
and (D) shall be responsible generally for advising the Secretary and
the Congress on the status of the implementation of part C of title
XI of the Social Security Act.”; and (5) by adding at the end the
following:
(7) <<NOTE: Reports.>> Not later than 1 year after the
date of the enactment of the Health Insurance Portability and
Accountability Act of 1996, and annually thereafter, the Committee
shall submit to the Congress, and make public, a report regarding the
implementation of part C of title XI of the Social Security Act. Such
report shall address the following subjects, to the extent that the
Committee determines appropriate: (A) The extent to which persons
required to comply with part C of title XI of the Social Security Act
are cooperating in implementing the standards adopted under such
part.
(B) The extent to which such entities are meeting the security
standards adopted under such part and the types of penalties assessed
for noncompliance with such standards.
(C) Whether the Federal and State Governments are receiving
information of sufficient quality to meet their responsibilities
under such part.
(D) Any problems that exist with respect to implementation of such
part.
(E) The extent to which timetables under such part are being
met.”.
SEC. 264. RECOMMENDATIONS WITH
<<NOTE: 42 USC 1320d-2 note.>> RESPECT TO PRIVACY OF
CERTAIN HEALTH INFORMATION.
(a) In General.–Not later than the date that is 12 months after
the date of the enactment of this Act, the Secretary of Health and
Human Services shall submit to the Committee on Labor and Human
Resources and the Committee on Finance of the Senate and the
Committee on Commerce and the Committee on Ways and Means of the
House of Representatives detailed recommendations on standards with
respect to the privacy of individually identifiable health
information.
(b) Subjects for Recommendations.–The recommendations under
subsection (a) shall address at least the following: (1) The rights
that an individual who is a subject of individually identifiable
health information should have.
(2) The procedures that should be established for the exercise of
such rights.
(3) The uses and disclosures of such information that should be
authorized or required.
(c) Regulations.– (1) In <<NOTE: Regulations.>>
general.–If legislation governing standards with respect to the
privacy of individually identifiable health information transmitted
in connection with the transactions described in section 1173(a) of
the Social Security Act (as added by section 262) is not enacted by
the date that is 36 months after the date of the enactment of this
Act, the Secretary of Health and Human Services shall promulgate
final regulations containing such standards not later than the date
that is 42 months after the date of the enactment of this Act. Such
regulations shall address at least the subjects described in
subsection (b).
(2) Preemption.–A regulation promulgated under paragraph (1)
shall not supercede a contrary provision of State law, if the
provision of State law imposes requirements, standards, or
implementation specifications that are more stringent than the
requirements, standards, or implementation specifications imposed
under the regulation.
(d) Consultation.–In carrying out this section, the Secretary of
Health and Human Services shall consult with– (1) the National
Committee on Vital and Health Statistics established under section
306(k) of the Public Health Service Act (42 U.S.C. 242k(k)); and (2)
the Attorney General.
Subtitle G–Duplication and Coordination of Medicare-Related Plans
SEC. 271. DUPLICATION AND COORDINATION
OF MEDICARE-RELATED PLANS.
(a) Treatment of Certain Health Insurance Policies as
Nonduplicative.–Section 1882(d)(3)(A) (42 U.S.C. 1395ss(d)(3)(A)) is
amended– (1) in clause (iii), by striking clause (i)” and inserting
clause (i)(II)”; and (2) by adding at the end the following:
(iv) For purposes of this subparagraph, a health insurance policy
(other than a Medicare supplemental policy) providing for benefits
which are payable to or on behalf of an individual without regard to
other health benefit coverage of such individual is not considered to
`duplicate’ any health benefits under this title, under title XIX, or
under a health insurance policy, and subclauses (I) and (III) of
clause (i) do not apply to such a policy.
(v) For purposes of this subparagraph, a health insurance policy
(or a rider to an insurance contract which is not a health insurance
policy) is not considered to `duplicate’ health benefits under this
title or under another health insurance policy if it– (I) provides
health care benefits only for long-term care, nursing home care, home
health care, or community-based care, or any combination thereof,
(II) coordinates against or excludes items and services available or
paid for under this title or under another health insurance policy,
and (III) for policies sold or issued on or after the end of the
90-day period beginning on the date of enactment of the Health
Insurance Portability and Accountability Act of 1996 discloses such
coordination or exclusion in the policy’s outline of coverage.
For purposes of this clause, the terms `coordinates’ and
`coordination’ mean, with respect to a policy in relation to health
benefits under this title or under another health insurance policy,
that the policy under its terms is secondary to, or excludes from
payment, items and services to the extent available or paid for under
this title or under another health insurance policy.
(vi)(I) An individual entitled to benefits under part A or
enrolled under part B of this title who is applying for a health
insurance policy (other than a policy described in subclause (III))
shall be furnished a disclosure statement described in clause (vii)
for the type of policy being applied for. Such statement shall be
furnished as a part of (or together with) the application for such
policy.
(II) Whoever issues or sells a health insurance policy (other than
a policy described in subclause (III)) to an individual described in
subclause (I) and fails to furnish the appropriate disclosure
statement as required under such subclause shall be fined under title
18, United States Code, or imprisoned not more than 5 years, or both,
and, in addition to or in lieu of such a criminal penalty, is subject
to a civil money penalty of not to exceed $25,000 (or $15,000 in the
case of a person other than the issuer of the policy) for each such
violation.
(III) A policy described in this subclause (to which subclauses
(I) and (II) do not apply) is a Medicare supplemental policy or a
health insurance policy identified under 60 Federal Register 30880
(June 12, 1995) as a policy not required to have a disclosure
statement.
(IV) Any reference in this section to the revised NAIC model
regulation (referred to in subsection (m)(1)(A)) is deemed a
reference to such regulation as revised by section 171(m)(2) of the
Social Security Act Amendments of 1994 (Public Law 103-432) and as
modified by substituting, for the disclosure required under section
16D(2), disclosure under subclause (I) of an appropriate disclosure
statement under clause (vii).
(vii) The disclosure statement described in this clause for a type
of policy is the statement specified under subparagraph (D) of this
paragraph (as in effect before the date of the enactment of the
Health Insurance Portability and Accountability Act of 1996) for that
type of policy, as revised as follows: (I) In each statement, amend
the second line to read as follows:
`THIS IS NOT MEDICARE SUPPLEMENT INSURANCE’.
(II) In each statement, strike the third line and insert the
following: `Some health care services paid for by Medicare may also
trigger the payment of benefits under this policy.’.
(III) In each statement not described in subclause (V), strike the
boldface matter that begins `This insurance’ and all that follows up
to the next paragraph that begins `Medicare’.
(IV) In each statement not described in subclause (V), insert
before the boxed matter (that states `Before You Buy This Insurance’)
the following: `This policy must pay benefits without regard to other
health benefit coverage to which you may be entitled under Medicare
or other insurance.’.
(V) In a statement relating to policies providing both nursing
home and non-institutional coverage, to policies providing nursing
home benefits only, or policies providing home care benefits only,
amend the sentence that begins `Federal law’ to read as follows:
`Federal law requires us to inform you that in certain situations
this insurance may pay for some care also covered by Medicare.’.
(viii)(I) Subject to subclause (II), nothing in this subparagraph
shall restrict or preclude a State’s ability to regulate health
insurance policies, including any health insurance policy that is
described in clause (iv), (v), or (vi)(III).
(II) A State may not declare or specify, in statute, regulation,
or otherwise, that a health insurance policy (other than a Medicare
supplemental policy) or rider to an insurance contract which is not a
health insurance policy, that is described in clause (iv), (v), or
(vi)(III) and that is sold, issued, or renewed to an individual
entitled to benefits under part A or enrolled under part B
`duplicates’ health benefits under this title or under a Medicare
supplemental policy.”.
(b) Conforming Amendments.–Section 1882(d)(3) (42 U.S.C.
1395ss(d)(3)) is amended– (1) in subparagraph (C)– (A) by
striking with respect to (i)” and inserting with respect to”, and
(B) by striking , (ii) the sale” and all that follows up to the
period at the end; and (2) by striking subparagraph (D).
(c) Transitional <<NOTE: 42 USC 1395ss note.>>
Provision.– (1) No penalties.–Subject to paragraph (3), no criminal
or civil money penalty may be imposed under section 1882(d)(3)(A) of
the Social Security Act for any act or omission that occurred during
the transition period (as defined in paragraph (4)) and that relates
to any health insurance policy that is described in clause (iv) or
(v) of such section (as amended by subsection (a)).
(2) Limitation on legal action.–Subject to paragraph (3), no
legal action shall be brought or continued in any Federal or State
court insofar as such action– (A) includes a cause of action which
arose, or which is based on or evidenced by any act or omission which
occurred, during the transition period; and (B) relates to the
application of section 1882(d)(3)(A) of the Social Security Act to
any act or omission with respect to the sale, issuance, or renewal of
any health insurance policy that is described in clause (iv) or (v)
of such section (as amended by subsection (a)).
(3) Disclosure condition.–In the case of a policy described in
clause (iv) of section 1882(d)(3)(A) of the Social Security Act that
is sold or issued on or after the effective date of statements under
section 171(d)(3)(C) of the Social Security Act Amendments of 1994
and before the end of the 30-day period beginning on the date of the
enactment of this Act, paragraphs (1) and (2) shall only apply if
disclosure was made in accordance with section 1882(d)(3)(C)(ii) of
the Social Security Act (as in effect before the date of the
enactment of this Act).
(4) Transition period.–In this subsection, the term transition
period” means the period beginning on November 5, 1991, and ending
on the date of the enactment of this Act.
(d) Effective <<NOTE: 42 USC 1395ss note.>> Date.–(1)
Except as provided in this subsection, the amendment made by
subsection (a) shall be effective as if included in the enactment of
section 4354 of the Omnibus Budget Reconciliation Act of 1990.
(2)(A) Clause (vi) of section 1882(d)(3)(A) of the Social Security
Act, as added by subsection (a), shall only apply to individuals
applying for– (i) a health insurance policy described in section
1882(d)(3)(A)(iv) of such Act (as added by subsection (a)), after the
date of the enactment of this Act, or (ii) another health insurance
policy after the end of the 30-day period beginning on the date of
the enactment of this Act.
(B) A seller or issuer of a health insurance policy may
substitute, for the disclosure statement described in clause (vii) of
such section, the statement specified under section 1882(d)(3)(D) of
the Social Security Act (as in effect before the date of the
enactment of this Act), without the revision specified in such
clause.
- Health Hippo ©1996-2015