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115th Congress   }                                   {  Rept. 115-448
                        HOUSE OF REPRESENTATIVES
 1st Session     }                                   {         Part 1

======================================================================



 
            MEDICARE CIVIL AND CRIMINAL PENALTIES UPDATE ACT

                                _______
                                

 December  6, 2017.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

 Mr. Walden, from the Committee on Energy and Commerce, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 3245]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Energy and Commerce, to whom was referred 
the bill (H.R. 3245) to amend title XI of the Social Security 
Act to increase civil money penalties and criminal fines for 
Federal health care program fraud and abuse, and for other 
purposes, having considered the same, report favorably thereon 
without amendment and recommend that the bill do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     2
Background and Need for Legislation..............................     2
Committee Action.................................................     2
Committee Votes..................................................     3
Oversight Findings and Recommendations...........................     3
New Budget Authority, Entitlement Authority, and Tax Expenditures     3
Congressional Budget Office Estimate.............................     3
Federal Mandates Statement.......................................     5
Statement of General Performance Goals and Objectives............     5
Duplication of Federal Programs..................................     5
Committee Cost Estimate..........................................     5
Earmark, Limited Tax Benefits, and Limited Tariff Benefits.......     5
Disclosure of Directed Rule Makings..............................     5
Advisory Committee Statement.....................................     5
Applicability to Legislative Branch..............................     5
Section-by-Section Analysis of the Legislation...................     5
Changes in Existing Law Made by the Bill, as Reported............     6
Exchange of Letters with Additional Committees of Referral.......    22

                          Purpose and Summary

    H.R. 3245 was introduced on July 14, 2017, by Rep. Gus 
Bilirakis (R-FL). H.R. 3245 would update both civil and 
criminal penalties in the Medicare program. Many of these 
penalties were last updated 20 years ago.

                  Background and Need for Legislation

    The U.S. Government Accountability Office has for decades 
rated the Medicare program as a high-risk program for fraud due 
to its size, complexity, and susceptibility to improper 
payments. The Medicare Civil and Criminal Penalties Update Act 
addresses the ability of the Office of the Inspector General 
and the U.S. Department of Justice to address fraud and abuse 
by increasing civil and criminal fines. Some of these penalties 
have not been updated in over twenty years. These penalties 
include bribing or providing kickbacks, submitting false 
information, and making false statements in applications or 
claims for payments.
    The Chief Counsel of HHS' Inspector General testified in 
2011 stating:

          The perpetrators of these [health care fraud] schemes 
        range from street criminals, who believe it is safer 
        and more profitable to steal from Medicare than to 
        traffic in illegal drugs, to Fortune 500 companies that 
        pay kickbacks to physicians in return for referrals. . 
        . . We are concerned that providers that engage in 
        health care fraud may consider civil penalties and 
        criminal fines a cost of doing business.

    Increasing penalties creates a deterrent to criminals 
trying to defraud federal health care programs. These policies 
will also allow the government to recover more funds from those 
who target the system and return it to the Medicare trust 
funds, which strengthens the solvency of the Medicare program.

                            Committee Action

    On July 20, 2017, the Subcommittee on Health held a hearing 
on H.R. 3263. The hearing was entitled ``Examining Bipartisan 
Legislation to Improve the Medicare Program.'' The Subcommittee 
received testimony from:
           Christel Aprigliano, CEO, Diabetes Patient 
        Advocacy Coalition;
           Lisa Bardach, Speech-Language Pathologist, 
        ALS of Michigan;
           K. Eric De Jonge, President-Elect, American 
        Academy of Home Care Medicine (AAHCM);
           Cletis Earle, Chairman-Elect, CHIME Board of 
        Trustees;
           Mary Grealy, President, Healthcare 
        Leadership Council;
           Deepak A. Kapoor, Chairman and CEO, 
        Integrated Medical Professionals;
           Brett Kissela, Chair, Department of 
        Neurology and Rehabilitation Medicine, University of 
        Cincinnati Gardner Neuroscience Institute, on behalf of 
        American Academy of Neurology;
           Justin Moore, CEO, American Physical Therapy 
        Association;
           Alan E. Morrison Chair, Diagnostic Services 
        Committee, National Association for the Support of Long 
        Term Care (NASL);
           Varner Richards, Board Chair, National Home 
        Infusion Association; and
           Stacy Sanders, Federal Policy Director, 
        Medicare Rights Center.
    On September 13, 2017, the Subcommittee on Health met in 
open markup session and forwarded H.R. 3245, without amendment, 
to the full Committee by a voice vote. On October 4, 2017, the 
full Committee on Energy and Commerce met in open markup 
session and ordered H.R. 3245, without amendment, favorably 
reported to the House by a voice vote.

                            Committee Votes

    Clause 3(b) of rule XIII requires the Committee to list the 
record votes on the motion to report legislation and amendments 
thereto. There were no record votes taken in connection with 
ordering H.R. 3245 reported.

                 Oversight Findings and Recommendations

    Pursuant to clause 2(b)(1) of rule X and clause 3(c)(1) of 
rule XIII, the Committee held a hearing and made findings that 
are reflected in this report.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    Pursuant to clause 3(c)(2) of rule XIII, the Committee 
finds that H.R. 3245 would result in no new or increased budget 
authority, entitlement authority, or tax expenditures or 
revenues.

                  Congressional Budget Office Estimate

    Pursuant to clause 3(c)(3) of rule XIII, the following is 
the cost estimate provided by the Congressional Budget Office 
pursuant to section 402 of the Congressional Budget Act of 
1974:

H.R. 3245--Medicare Civil and Criminal Penalties Update Act

    Summary: H.R. 3245 would modify certain monetary penalties 
(both civil and criminal) for violations of federal law related 
to health care programs. CBO estimates that H.R. 3245 would not 
have a significant budgetary impact. Enacting H.R. 3245 could 
affect direct spending and revenues; therefore, pay-as-you-go 
procedures apply.
    CBO estimates that enacting H.R. 3245 would not have a 
significant effect on net direct spending or on-budget deficits 
in any of the four consecutive 10-year periods beginning in 
2028.
    H.R. 3245 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
    Basis of estimate: Under current law, the government may 
impose financial sanctions for violations of federal health 
care statutes.\1\ For example, it is illegal to bill federal 
health care programs for services that were not provided or 
that were provided by unlicensed professionals.
---------------------------------------------------------------------------
    \1\All penalties collected, both civil and criminal, are revenues 
and some result in new direct spending. Some penalties collected for 
violations that occurred in a state Medicaid program or in programs 
funded by the Maternal and Child Health Block Grant are returned to the 
states Amounts paid to states or to other federal programs with the 
authority to spend them without further appropriations action would be 
direct spending.
---------------------------------------------------------------------------
    Those financial sanctions generally involve restitution--
often between 150 percent and 300 percent of the amount that 
the federal government paid for illegally billed health care 
goods and services--and may involve an additional monetary 
penalty that may be assessed on a per-violation basis. The 
government may also exclude the perpetrator from participating 
in federal health care programs. Under current law, sections 
1128A and 1128B of the Social Security Act establish penalties 
for each violation of ``not more than'' a specified amount--for 
example, not more than $10,000 for violations related to false 
claims or claims provided by providers not eligible for 
payment. H.R. 3245 would increase that specified amount, either 
doubling or quadrupling it.
    Based on discussions with staff of the Office of the 
Inspector General for the Department of Health and Human 
Services, CBO has concluded that the existing caps on the 
amount of the civil or criminal penalties for each violation 
almost never impose a constraint on the amount that may be 
collected through the combination of restitution and monetary 
penalties.
    That conclusion is based on two considerations. First, 
restitution is the prosecutors' main tool; they set the 
amount--for example, 200 percent of the amount of illegal 
billings--based on the egregiousness of the violation and the 
ability of the perpetrator to pay. Second, nearly all cases 
involve numerous illegal claims, so imposing the current 
maximum penalty on each claim would risk violating the 
prohibition on excessive fines under the Eighth Amendment to 
the U.S. Constitution.
    Based on those considerations, CBO estimates that enacting 
H.R. 3245 would not have a significant effect on direct 
spending or revenues over the 2018-2027 period.
    Pay-As-You-Go considerations: The bill would increase the 
cap on the amount of monetary penalties that may be assessed 
for each violation of federal health care statutes. Such a 
change in limits on penalties could affect direct spending and 
revenues; therefore pay-as-you-go applies to the bill. However, 
based on the small number of cases that would be affected, CBO 
estimates that any such effects would be insignificant.
    Increase in long-term direct spending and deficits: CBO 
estimates that enacting the legislation would not increase 
budget deficits in any of the four consecutive 10-year periods 
beginning in 2028.
    Mandates: H.R. 3245 contains no intergovernmental or 
private-sector mandates as defined in UMRA.
    Estimate prepared by: Federal Costs: Lara Robillard; 
Mandates: Amy Petz.
    Estimate approved by: Theresa Gullo, Assistant Director for 
Budget Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

         Statement of General Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII, the general 
performance goal or objective of this legislation is to update 
both civil and criminal penalties in the Medicare program.

                    Duplication of Federal Programs

    Pursuant to clause 3(c)(5) of rule XIII, no provision of 
H.R. 3245 is known to be duplicative of another Federal 
program, including any program that was included in a report to 
Congress pursuant to section 21 of Public Law 111-139 or the 
most recent Catalog of Federal Domestic Assistance.

                        Committee Cost Estimate

    Pursuant to clause 3(d)(1) of rule XIII, the Committee 
adopts as its own the cost estimate prepared by the Director of 
the Congressional Budget Office pursuant to section 402 of the 
Congressional Budget Act of 1974.

       Earmark, Limited Tax Benefits, and Limited Tariff Benefits

    Pursuant to clause 9(e), 9(f), and 9(g) of rule XXI, the 
Committee finds that H.R. 3245 contains no earmarks, limited 
tax benefits, or limited tariff benefits.

                  Disclosure of Directed Rule Makings

    Pursuant to section 3(i) of H. Res. 5, the Committee finds 
that H.R. 3245 contains no directed rule makings.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

             Section-by-Section Analysis of the Legislation


Section 1. Short title

    Section 1 provides that the Act may be cited as the 
``Medicare Civil and Criminal Penalties Update Act.''

Section 2. Increased civil and criminal penalties and increased 
        sentences for federal health care program fraud and abuse

    Section 2 would increase the maximum amounts of criminal 
and civil penalties for violations under the Medicare program.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, and existing law in which no 
change is proposed is shown in roman):

                          SOCIAL SECURITY ACT




           *       *       *       *       *       *       *
     TITLE XI--GENERAL PROVISIONS, PEER REVIEW, AND ADMINISTRATIVE 
                             SIMPLIFICATION


Part A--General Provisions

           *       *       *       *       *       *       *



                        civil monetary penalties

  Sec. 1128A. (a) Any person (including an organization, 
agency, or other entity, but excluding a beneficiary, as 
defined in subsection (i)(5)) that--
          (1) knowingly presents or causes to be presented to 
        an officer, employee, or agent of the United States, or 
        of any department or agency thereof, or of any State 
        agency (as defined in subsection (i)(1)), a claim (as 
        defined in subsection (i)(2)) that the Secretary 
        determines--
                  (A) is for a medical or other item or service 
                that the person knows or should know was not 
                provided as 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,
                  (B) is for a medical or other item or service 
                and the person knows or should know the claim 
                is false or fraudulent,
                  (C) is presented for a physician's service 
                (or an item or service incident to a 
                physician's service) by a person who knows or 
                should know that the individual who furnished 
                (or supervised the furnishing of) the service--
                          (i) was not licensed as a physician,
                          (ii) was licensed as a physician, but 
                        such license had been obtained through 
                        a misrepresentation of material fact 
                        (including cheating on an examination 
                        required for licensing), or
                          (iii) represented to the patient at 
                        the time the service was furnished that 
                        the physician was certified in a 
                        medical specialty by a medical 
                        specialty board when the individual was 
                        not so certified,
                  (D) is for a medical or other item or service 
                furnished during a period in which the person 
                was excluded from the program under which the 
                claim was made pursuant to a determination by 
                the Secretary under this section or under 
                section 1128, 1156, 1160(b) (as in effect on 
                September 2, 1982), 1862(d) (as in effect on 
                the date of the enactment of the Medicare and 
                Medicaid Patient and Program Protection Act of 
                1987), or 1866(b) or as a result of the 
                application of the provisions of section 
                1842(j)(2), or
                  (E) is for a pattern of medical or other 
                items or services that a person knows or should 
                know are not medically necessary;
          (2) knowingly presents or causes to be presented to 
        any person a request for payment which is in violation 
        of the terms of (A) an assignment under section 
        1842(b)(3)(B)(ii), or (B) an agreement with a State 
        agency (or other requirement of a State plan under 
        title XIX) not to charge a person for an item or 
        service in excess of the amount permitted to be 
        charged, or (C) an agreement to be a participating 
        physician or supplier under section 1842(h)(1), or (D) 
        an agreement pursuant to section 1866(a)(1)(G);
          (3) knowingly gives or causes to be given to any 
        person, with respect to coverage under title XVIII of 
        inpatient hospital services subject to the provisions 
        of section 1886, information that he knows or should 
        know is false or misleading, and that could reasonably 
        be expected to influence the decision when to discharge 
        such person or another individual from the hospital;
          (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;
          (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);
          (6) arranges or contracts (by employment or 
        otherwise) with an individual or entity that the person 
        knows or should know is excluded from participation in 
        a Federal health care program (as defined in section 
        1128B(f)), for the provision of items or services for 
        which payment may be made under such a program;
          (7) commits an act described in paragraph (1) or (2) 
        of section 1128B(b);
          (8) knowingly makes, uses, or causes to be made or 
        used, a false record or statement material to a false 
        or fraudulent claim for payment for items and services 
        furnished under a Federal health care program; or
          (9) fails to grant timely access, upon reasonable 
        request (as defined by the Secretary in regulations), 
        to the Inspector General of the Department of Health 
        and Human Services, for the purpose of audits, 
        investigations, evaluations, or other statutory 
        functions of the Inspector General of the Department of 
        Health and Human Services;
          (8) orders or prescribes a medical or other item or 
        service during a period in which the person was 
        excluded from a Federal health care program (as so 
        defined), in the case where the person knows or should 
        know that a claim for such medical or other item or 
        service will be made under such a program;
          (9) knowingly makes or causes to be made any false 
        statement, omission, or misrepresentation of a material 
        fact in any application, bid, or contract to 
        participate or enroll as a provider of services or a 
        supplier under a Federal health care program (as so 
        defined), including Medicare Advantage organizations 
        under part C of title XVIII, prescription drug plan 
        sponsors under part D of title XVIII, medicaid managed 
        care organizations under title XIX, and entities that 
        apply to participate as providers of services or 
        suppliers in such managed care organizations and such 
        plans;
          (10) knows of an overpayment (as defined in paragraph 
        (4) of section 1128J(d)) and does not report and return 
        the overpayment in accordance with such section;
shall be subject, in addition to any other penalties that may 
be prescribed by law, to a civil money penalty of not more than 
[$10,000] $20,000 for each item or service (or, in cases under 
paragraph (3), [$15,000] $30,000 for each individual with 
respect to whom false or misleading information was given; in 
cases under paragraph (4), [$10,000] $20,000 for each day the 
prohibited relationship occurs; in cases under paragraph (7), 
[$50,000] $100,000 for each such act; or in cases under 
paragraph (9), [$50,000] $100,000 for each false statement or 
misrepresentation of a material fact). In addition, such a 
person shall be subject to an assessment of not more than 3 
times the amount claimed for each such item or service in lieu 
of damages sustained by the United States or a State agency 
because of such claim (or, in cases under paragraph (7), 
damages of not more than 3 times the total amount of 
remuneration offered, paid, solicited, or received, without 
regard to whether a portion of such remuneration was offered, 
paid, solicited, or received for a lawful purpose; or in cases 
under paragraph (9), an assessment of not more than 3 times the 
total amount claimed for each item or service for which payment 
was made based upon the application containing the false 
statement or misrepresentation of a material fact). In addition 
the Secretary may make a determination in the same proceeding 
to exclude the person from participation in the Federal health 
care programs (as defined in section 1128B(f)(1)) and to direct 
the appropriate State agency to exclude the person from 
participation in any State health care program.
  (b)(1) If a hospital or a critical access hospital knowingly 
makes a payment, directly or indirectly, to a physician as an 
inducement to reduce or limit medically necessary services 
provided with respect to individuals who--
          (A) are entitled to benefits under part A or part B 
        of title XVIII or to medical assistance under a State 
        plan approved under title XIX, and
          (B) are under the direct care of the physician,
the hospital or a critical access hospital shall be subject, in 
addition to any other penalties that may be prescribed by law, 
to a civil money penalty of not more than [$2,000] $5,000 for 
each such individual with respect to whom the payment is made.
  (2) Any physician who knowingly accepts receipt of a payment 
described in paragraph (1) shall be subject, in addition to any 
other penalties that may be prescribed by law, to a civil money 
penalty of not more than [$2,000] $5,000 for each individual 
described in such paragraph with respect to whom the payment is 
made.
  (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] $10,000, 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.
  (c)(1) The Secretary may initiate a proceeding to determine 
whether to impose a civil money penalty, assessment, or 
exclusion under subsection (a) or (b) only as authorized by the 
Attorney General pursuant to procedures agreed upon by them. 
The Secretary may not initiate an action under this section 
with respect to any claim, request for payment, or other 
occurrence described in this section later than six years after 
the date the claim was presented, the request for payment was 
made, or the occurrence took place. The Secretary may initiate 
an action under this section by serving notice of the action in 
any manner authorized by Rule 4 of the Federal Rules of Civil 
Procedure.
  (2) The Secretary shall not make a determination adverse to 
any person under subsection (a) or (b) until the person has 
been given written notice and an opportunity for the 
determination to be made on the record after a hearing at which 
the person is entitled to be represented by counsel, to present 
witnesses, and to cross-examine witnesses against the person.
  (3) In a proceeding under subsection (a) or (b) which--
          (A) is against a person who has been convicted 
        (whether upon a verdict after trial or upon a plea of 
        guilty or nolo contendere) of a Federal crime charging 
        fraud or false statements, and
          (B) involves the same transaction as in the criminal 
        action, the person is estopped from denying the 
        essential elements of the criminal offense.
  (4) The official conducting a hearing under this section may 
sanction a person, including any party or attorney, for failing 
to comply with an order or procedure, failing to defend an 
action, or other misconduct as would interfere with the speedy, 
orderly, or fair conduct of the hearing. Such sanction shall 
reasonably relate to the severity and nature of the failure or 
misconduct. Such sanction may include--
          (A) in the case of refusal to provide or permit 
        discovery, drawing negative factual inferences or 
        treating such refusal as an admission by deeming the 
        matter, or certain facts, to be established,
          (B) prohibiting a party from introducing certain 
        evidence or otherwise supporting a particular claim or 
        defense,
          (C) striking pleadings, in whole or in part,
          (D) staying the proceedings,
          (E) dismissal of the action,
          (F) entering a default judgment,
          (G) ordering the party or attorney to pay attorneys' 
        fees and other costs caused by the failure or 
        misconduct, and
          (H) refusing to consider any motion or other action 
        which is not filed in a timely manner.
  (d) In determining the amount or scope of any penalty, 
assessment, or exclusion imposed pursuant to subsection (a) or 
(b), the Secretary shall take into account--
          (1) the nature of claims and the circumstances under 
        which they were presented,
          (2) the degree of culpability, history of prior 
        offenses, and financial condition of the person 
        presenting the claims, and
          (3) such other matters as justice may require.
  (e) Any person adversely affected by a determination of the 
Secretary under this section may obtain a review of such 
determination in the United States Court of Appeals for the 
circuit in which the person resides, or in which the claim or 
specified claim was presented, by filing in such court (within 
sixty days following the date the person is notified of the 
Secretary's determination) a written petition requesting that 
the determination be modified or set aside. A copy of the 
petition shall be forthwith transmitted by the clerk of the 
court to the Secretary, and thereupon the Secretary shall file 
in the Court the record in the proceeding as provided in 
section 2112 of title 28, United States Code. Upon such filing, 
the court shall have jurisdiction of the proceeding and of the 
question determined therein, and shall have the power to make 
and enter upon the pleadings, testimony, and proceedings set 
forth in such record a decree affirming, modifying, remanding 
for further consideration, or setting aside, in whole or in 
part, the determination of the Secretary and enforcing the same 
to the extent that such order is affirmed or modified. No 
objection that has not been urged before the Secretary shall be 
considered by the court, unless the failure or neglect to urge 
such objection shall be excused because of extraordinary 
circumstances. The findings of the Secretary with respect to 
questions of fact, if supported by substantial evidence on the 
record considered as a whole, shall be conclusive. If any party 
shall apply to the court for leave to adduce additional 
evidence and shall show to the satisfaction of the court that 
such additional evidence is material and that there were 
reasonable grounds for the failure to adduce such evidence in 
the hearing before the Secretary, the court may order such 
additional evidence to be taken before the Secretary and to be 
made a part of the record. The Secretary may modify his 
findings as to the facts, or make new findings, by reason of 
additional evidence so taken and filed, and he shall file with 
the court such modified or new findings, which findings with 
respect to questions of fact, if supported by substantial 
evidence on the record considered as a whole, shall be 
conclusive, and his recommendations, if any, for the 
modification or setting aside of his original order. Upon the 
filing of the record with it, the jurisdiction of the court 
shall be exclusive and its judgment and decree shall be final, 
except that the same shall be subject to review by the Supreme 
Court of the United States, as provided in section 1254 of 
title 28, United States Code.
  (f) Civil money penalties and assessments imposed under this 
section may be compromised by the Secretary and may be 
recovered in a civil action in the name of the United States 
brought in United States district court for the district where 
the claim or specified claim (as defined in subsection (r)) was 
presented, or where the claimant (or, with respect to a person 
described in subsection (o), the person) resides, as determined 
by the Secretary. Amounts recovered under this section shall be 
paid to the Secretary and disposed of as follows:
          (1)(A) In the case of amounts recovered arising out 
        of a claim under title XIX, there shall be paid to the 
        State agency an amount bearing the same proportion to 
        the total amount recovered as the State's share of the 
        amount paid by the State agency for such claim bears to 
        the total amount paid for such claim.
          (B) In the case of amounts recovered arising out of a 
        claim under an allotment to a State under title V, 
        there shall be paid to the State agency an amount equal 
        to three-sevenths of the amount recovered.
          (2) Such portion of the amounts recovered as is 
        determined to have been paid out of the trust funds 
        under sections 1817 and 1841 shall be repaid to such 
        trust funds.
          (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).
          (4) The remainder of the amounts recovered shall be 
        deposited as miscellaneous receipts of the Treasury of 
        the United States.
The amount of such penalty or assessment, when finally 
determined, or the amount agreed upon in compromise, may be 
deducted from any sum then or later owing by the United States 
or a State agency (or, in the case of a penalty or assessment 
under subsection (o), by a specified State agency (as defined 
in subsection (q)(6)), to the person against whom the penalty 
or assessment has been assessed.
  (g) A determination by the Secretary to impose a penalty, 
assessment, or exclusion under subsection (a) or (b) shall be 
final upon the expiration of the sixty-day period referred to 
in subsection (e). Matters that were raised or that could have 
been raised in a hearing before the Secretary or in an appeal 
pursuant to subsection (e) may not be raised as a defense to a 
civil action by the United States to collect a penalty, 
assessment, or exclusion assessed under this section.
  (h) Whenever the Secretary's determination to impose a 
penalty, assessment, or exclusion under subsection (a) or (b) 
becomes final, he shall notify the appropriate State or local 
medical or professional organization, the appropriate State 
agency or agencies administering or supervising the 
administration of State health care programs (as defined in 
section 1128(h)), and the appropriate utilization and quality 
control peer review organization, and the appropriate State or 
local licensing agency or organization (including the agency 
specified in section 1864(a) and 1902(a)(33)) that such a 
penalty, assessment, or exclusion has become final and the 
reasons therefor.
  (i) For the purposes of this section:
          (1) The term ``State agency'' means the agency 
        established or designated to administer or supervise 
        the administration of the State plan under title XIX of 
        this Act or designated to administer the State's 
        program under title V or subtitle 1 of title XX of this 
        Act.
          (2) The term ``claim'' means an application for 
        payments for items and services under a Federal health 
        care program (as defined in section 1128B(f)).
          (3) The term ``item or service'' includes (A) any 
        particular item, device, medical supply, or service 
        claimed to have been provided to a patient and listed 
        in an itemized claim for payment, and (B) in the case 
        of a claim based on costs, any entry in the cost 
        report, books of account or other documents sup- 
        porting such claim.
          (4) The term ``agency of the United States'' includes 
        any contractor acting as a fiscal intermediary, 
        carrier, or fiscal agent or any other claims processing 
        agent for a Federal health care program (as so 
        defined).
          (5) The term ``beneficiary'' means an individual who 
        is eligible to receive items or services for which 
        payment may be made under a Federal health care program 
        (as so defined) but does not include a provider, 
        supplier, or practitioner.
          (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; or
                                  (II) fails to collect 
                                coinsurance or deductible 
                                amounts after making reasonable 
                                collection efforts;
                  (B) subject to subsection (n), any 
                permissible practice described in any 
                subparagraph of section 1128B(b)(3) or in 
                regulations issued by the Secretary;
                  (C) 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;
                  (D) incentives given to individuals to 
                promote the delivery of preventive care as 
                determined by the Secretary in regulations so 
                promulgated;
                  (E) a reduction in the copayment amount for 
                covered OPD services under section 
                1833(t)(5)(B);
                  (F) any other remuneration which promotes 
                access to care and poses a low risk of harm to 
                patients and Federal health care programs (as 
                defined in section 1128B(f) and designated by 
                the Secretary under regulations);
                  (G) the offer or transfer of items or 
                services for free or less than fair market 
                value by a person, if--
                          (i) the items or services consist of 
                        coupons, rebates, or other rewards from 
                        a retailer;
                          (ii) the items or services are 
                        offered or transferred on equal terms 
                        available to the general public, 
                        regardless of health insurance status; 
                        and
                          (iii) the offer or transfer of the 
                        items or services is not tied to the 
                        provision of other items or services 
                        reimbursed in whole or in part by the 
                        program under title XVIII or a State 
                        health care program (as defined in 
                        section 1128(h));
                  (H) the offer or transfer of items or 
                services for free or less than fair market 
                value by a person, if--
                          (i) the items or services are not 
                        offered as part of any advertisement or 
                        solicitation;
                          (ii) the items or services are not 
                        tied to the provision of other services 
                        reimbursed in whole or in part by the 
                        program under title XVIII or a State 
                        health care program (as so defined);
                          (iii) there is a reasonable 
                        connection between the items or 
                        services and the medical care of the 
                        individual; and
                          (iv) the person provides the items or 
                        services after determining in good 
                        faith that the individual is in 
                        financial need; or
                  (I) effective on a date specified by the 
                Secretary (but not earlier than January 1, 
                2011), the waiver by a PDP sponsor of a 
                prescription drug plan under part D of title 
                XVIII or an MA organization offering an MA-PD 
                plan under part C of such title of any 
                copayment for the first fill of a covered part 
                D drug (as defined in section 1860D-2(e)) that 
                is a generic drug for individuals enrolled in 
                the prescription drug plan or MA-PD plan, 
                respectively.
          (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.
  (j)(1) The provisions of subsections (d) and (e) of section 
205 shall apply with respect to this section to the same extent 
as they are applicable with respect to title II. The Secretary 
may delegate the authority granted by section 205(d) (as made 
applicable to this section) to the Inspector General of the 
Department of Health and Human Services for purposes of any 
investigation under this section.
  (2) The Secretary may delegate authority granted under this 
section and under section 1128 to the Inspector General of the 
Department of Health and Human Services.
  (k) Whenever the Secretary has reason to believe that any 
person has engaged, is engaging, or is about to engage in any 
activity which makes the person subject to a civil monetary 
penalty under this section, the Secretary may bring an action 
in an appropriate district court of the United States (or, if 
applicable, a United States court of any territory) to enjoin 
such activity, or to enjoin the person from concealing, 
removing, encumbering, or disposing of assets which may be 
required in order to pay a civil monetary penalty if any such 
penalty were to be imposed or to seek other appropriate relief.
  (l) A principal is liable for penalties, assessments, and an 
exclusion under this section for the actions of the principal's 
agent acting within the scope of the agency.
  (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.
  (n)(1) Subparagraph (B) of subsection (i)(6) shall not apply 
to a practice described in paragraph (2) unless--
          (A) the Secretary, through the Inspector General of 
        the Department of Health and Human Services, 
        promulgates a rule authorizing such a practice as an 
        exception to remuneration; and
          (B) the remuneration is offered or transferred by a 
        person under such rule during the 2-year period 
        beginning on the date the rule is first promulgated.
  (2) A practice described in this paragraph is a practice 
under which a health care provider or facility pays, in whole 
or in part, premiums for medicare supplemental policies for 
individuals entitled to benefits under part A of title XVIII 
pursuant to section 226A.
  (o) Any person (including an organization, agency, or other 
entity, but excluding a program beneficiary, as defined in 
subsection (q)(4)) that, with respect to a grant, contract, or 
other agreement for which the Secretary provides funding--
          (1) knowingly presents or causes to be presented a 
        specified claim (as defined in subsection (r)) under 
        such grant, contract, or other agreement that the 
        person knows or should know is false or fraudulent;
          (2) knowingly makes, uses, or causes to be made or 
        used any false statement, omission, or 
        misrepresentation of a material fact in any 
        application, proposal, bid, progress report, or other 
        document that is required to be submitted in order to 
        directly or indirectly receive or retain funds provided 
        in whole or in part by such Secretary pursuant to such 
        grant, contract, or other agreement;
          (3) knowingly makes, uses, or causes to be made or 
        used, a false record or statement material to a false 
        or fraudulent specified claim under such grant, 
        contract, or other agreement;
          (4) knowingly makes, uses, or causes to be made or 
        used, a false record or statement material to an 
        obligation (as defined in subsection (s)) to pay or 
        transmit funds or property to such Secretary with 
        respect to such grant, contract, or other agreement, or 
        knowingly conceals or knowingly and improperly avoids 
        or decreases an obligation to pay or transmit funds or 
        property to such Secretary with respect to such grant, 
        contract, or other agreement; or
          (5) fails to grant timely access, upon reasonable 
        request (as defined by such Secretary in regulations), 
        to the Inspector General of the Department, for the 
        purpose of audits, investigations, evaluations, or 
        other statutory functions of such Inspector General in 
        matters involving such grants, contracts, or other 
        agreements;
shall be subject, in addition to any other penalties that may 
be prescribed by law, to a civil money penalty in cases under 
paragraph (1), of not more than $10,000 for each specified 
claim; in cases under paragraph (2), not more than $50,000 for 
each false statement, omission, or misrepresentation of a 
material fact; in cases under paragraph (3), not more than 
$50,000 for each false record or statement; in cases under 
paragraph (4), not more than $50,000 for each false record or 
statement or $10,000 for each day that the person knowingly 
conceals or knowingly and improperly avoids or decreases an 
obligation to pay; or in cases under paragraph (5), not more 
than $15,000 for each day of the failure described in such 
paragraph. In addition, in cases under paragraphs (1) and (3), 
such a person shall be subject to an assessment of not more 
than 3 times the amount claimed in the specified claim 
described in such paragraph in lieu of damages sustained by the 
United States or a specified State agency because of such 
specified claim, and in cases under paragraphs (2) and (4), 
such a person shall be subject to an assessment of not more 
than 3 times the total amount of the funds described in 
paragraph (2) or (4), respectively (or, in the case of an 
obligation to transmit property to the Secretary described in 
paragraph (4), of the value of the property described in such 
paragraph) in lieu of damages sustained by the United States or 
a specified State agency because of such case. In addition, the 
Secretary may make a determination in the same proceeding to 
exclude the person from participation in the Federal health 
care programs (as defined in section 1128B(f)(1)) and to direct 
the appropriate State agency to exclude the person from 
participation in any State health care program.
  (p) The provisions of subsections (c), (d), (g), and (h) 
shall apply to a civil money penalty or assessment under 
subsection (o) in the same manner as such provisions apply to a 
penalty, assessment, or proceeding under subsection (a). In 
applying subsection (d), each reference to a claim under such 
subsection shall be treated as including a reference to a 
specified claim (as defined in subsection (r)).
  (q) For purposes of this subsection and subsections (o) and 
(p):
          (1) The term ``Department'' means the Department of 
        Health and Human Services.
          (2) The term ``material'' means having a natural 
        tendency to influence, or be capable of influencing, 
        the payment or receipt of money or property.
          (3) The term ``other agreement'' includes a 
        cooperative agreement, scholarship, fellowship, loan, 
        subsidy, payment for a specified use, donation 
        agreement, award, or subaward (regardless of whether 
        one or more of the persons entering into the agreement 
        is a contractor or subcontractor).
          (4) The term ``program beneficiary'' means, in the 
        case of a grant, contract, or other agreement designed 
        to accomplish the objective of awarding or otherwise 
        furnishing benefits or assistance to individuals and 
        for which the Secretary provides funding, an individual 
        who applies for, or who receives, such benefits or 
        assistance from such grant, contract, or other 
        agreement. Such term does not include, with respect to 
        such grant, contract, or other agreement, an officer, 
        employee, or agent of a person or entity that receives 
        such grant or that enters into such contract or other 
        agreement.
          (5) The term ``recipient'' includes a subrecipient or 
        subcontractor.
          (6) The term ``specified State agency'' means an 
        agency of a State government established or designated 
        to administer or supervise the administration of a 
        grant, contract, or other agreement funded in whole or 
        in part by the Secretary.
  (r) For purposes of this section, the term ``specified 
claim'' means any application, request, or demand under a 
grant, contract, or other agreement for money or property, 
whether or not the United States or a specified State agency 
has title to the money or property, that is not a claim (as 
defined in subsection (i)(2)) and that--
          (1) is presented or caused to be presented to an 
        officer, employee, or agent of the Department or agency 
        thereof, or of any specified State agency; or
          (2) is made to a contractor, grantee, or any other 
        recipient if the money or property is to be spent or 
        used on the Department's behalf or to advance a 
        Department program or interest, and if the Department--
                  (A) provides or has provided any portion of 
                the money or property requested or demanded; or
                  (B) will reimburse such contractor, grantee, 
                or other recipient for any portion of the money 
                or property which is requested or demanded.
  (s) For purposes of subsection (o), the term ``obligation'' 
means an established duty, whether or not fixed, arising from 
an express or implied contractual, grantor-grantee, or 
licensor-licensee relationship, for a fee-based or similar 
relationship, from statute or regulation, or from the retention 
of any overpayment.

   criminal penalties for acts involving federal health care programs

  Sec. 1128B. (a) Whoever--
          (1) knowingly and willfully makes or causes to be 
        made any false statement or representation of a 
        material fact in any application for any benefit or 
        payment under a Federal health care program (as defined 
        in subsection (f)),
          (2) at any time knowingly and willfully makes or 
        causes to be made any false statement or representation 
        of a material fact for use in determining rights to 
        such benefit or payment,
          (3) having knowledge of the occurrence of any event 
        affecting (A) his initial or continued right to any 
        such benefit or payment, or (B) the initial or 
        continued right to any such benefit or payment of any 
        other individual in whose behalf he has applied for or 
        is receiving such benefit or payment, conceals or fails 
        to disclose such event with an intent fraudulently to 
        secure such benefit or payment either in a greater 
        amount or quantity than is due or when no such benefit 
        or payment is authorized,
          (4) having made application to receive any such 
        benefit or payment for the use and benefit of another 
        and having received it, knowingly and willfully 
        converts such benefit or payment or any part thereof to 
        a use other than for the use and benefit of such other 
        person,
          (5) presents or causes to be presented a claim for a 
        physician's service for which payment may be made under 
        a Federal health care program and knows that the 
        individual who furnished the service was not licensed 
        as a physician, or
          (6) for a fee knowingly and willfully counsels or 
        assists an individual to dispose of assets (including 
        by any transfer in trust) in order for the 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),
shall (i) in the case of such a statement, representation, 
concealment, failure, conversion, or provision of counsel or 
assistance by any other person in connection with the 
furnishing (by that person) of items or services for which 
payment is or may be made under the program, be guilty of a 
felony and upon conviction thereof fined not more than 
[$25,000] $100,000 or imprisoned for [not more than five years 
or both, or (ii)] not more than 10 years or both, or (ii) in 
the case of such a statement, representation, concealment, 
failure, conversion, or provision of counsel or assistance by 
any other person, be guilty of a misdemeanor and upon 
conviction thereof fined not more than [$10,000] $20,000 or 
imprisoned for not more than one year, or both. In addition, in 
any case where an individual who is otherwise eligible for 
assistance under a Federal health care program is convicted of 
an offense under the preceding provisions of this subsection, 
the administrator of such program may at its option 
(notwithstanding any other provision of such program) limit, 
restrict, or suspend the eligibility of that individual for 
such period (not exceeding one year) as it deems appropriate; 
but the imposition of a limitation, restriction, or suspension 
with respect to the eligibility of any individual under this 
sentence shall not affect the eligibility of any other person 
for assistance under the plan, regardless of the relationship 
between that individual and such other person.
  (b)(1) Whoever knowingly and willfully solicits or receives 
any remuneration (including any kickback, bribe, or rebate) 
directly or indirectly, overtly or covertly, in cash or in 
kind--
          (A) in return for referring an individual to a person 
        for the furnishing or arranging for the furnishing of 
        any item or service for which payment may be made in 
        whole or in part under a Federal health care program, 
        or
          (B) in return for purchasing, leasing, ordering, or 
        arranging for or recommending purchasing, leasing, or 
        ordering any good, facility, service, or item for which 
        payment may be made in whole or in part under a Federal 
        health care program,
shall be guilty of a felony and upon conviction thereof, shall 
be fined not more than [$25,000] $100,000 or imprisoned for 
[not more than five years] not more than 10 years, or both.
  (2) Whoever knowingly and willfully offers or pays any 
remuneration (including any kickback, bribe, or rebate) 
directly or indirectly, overtly or covertly, in cash or in kind 
to any person to induce such person--
          (A) to refer an individual to a person for the 
        furnishing or arranging for the furnishing of any item 
        or service for which payment may be made in whole or in 
        part under a Federal health care program, or
          (B) to purchase, lease, order, or arrange for or 
        recommend purchasing, leasing, or ordering any good, 
        facility, service, or item for which payment may be 
        made in whole or in part under a Federal health care 
        program,
shall be guilty of a felony and upon conviction thereof, shall 
be fined not more than [$25,000] $100,000 or imprisoned for 
[not more than five years] not more than 10 years, or both.
  (3) Paragraphs (1) and (2) shall not apply to--
          (A) a discount or other reduction in price obtained 
        by a provider of services or other entity under a 
        Federal health care program if the reduction in price 
        is properly disclosed and appropriately reflected in 
        the costs claimed or charges made by the provider or 
        entity under a Federal health care program;
          (B) any amount paid by an employer to an employee 
        (who has a bona fide employment relationship with such 
        employer) for employment in the provision of covered 
        items or services;
          (C) any amount paid by a vendor of goods or services 
        to a person authorized to act as a purchasing agent for 
        a group of individuals or entities who are furnishing 
        services reimbursed under a Federal health care program 
        if--
                  (i) the person has a written contract, with 
                each such individual or entity, which specifies 
                the amount to be paid the person, which amount 
                may be a fixed amount or a fixed percentage of 
                the value of the purchases made by each such 
                individual or entity under the contract, and
                  (ii) in the case of an entity that is a 
                provider of services (as defined in section 
                1861(u)), the person discloses (in such form 
                and manner as the Secretary requires) to the 
                entity and, upon request, to the Secretary the 
                amount received from each such vendor with 
                respect to purchases made by or on behalf of 
                the entity;
          (D) a waiver of any coinsurance under part B of title 
        XVIII by a Federally qualified health care center with 
        respect to an individual who qualifies for subsidized 
        services under a provision of the Public Health Service 
        Act;
          (E) any payment practice specified by the Secretary 
        in regulations promulgated pursuant to section 14(a) of 
        the Medicare and Medicaid Patient and Program 
        Protection Act of 1987 or in regulations under section 
        1860D-3(e)(6);
          (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;
          (G) the waiver or reduction by pharmacies (including 
        pharmacies of the Indian Health Service, Indian tribes, 
        tribal organizations, and urban Indian organizations) 
        of any cost-sharing imposed under part D of title 
        XVIII, if the conditions described in clauses (i) 
        through (iii) of section 1128A(i)(6)(A) are met with 
        respect to the waiver or reduction (except that, in the 
        case of such a waiver or reduction on behalf of a 
        subsidy eligible individual (as defined in section 
        1860D-14(a)(3)), section 1128A(i)(6)(A) shall be 
        applied without regard to clauses (ii) and (iii) of 
        that section);
          (H) any remuneration between a federally qualified 
        health center (or an entity controlled by such a health 
        center) and an MA organization pursuant to a written 
        agreement described in section 1853(a)(4);
          (I) any remuneration between a health center entity 
        described under clause (i) or (ii) of section 
        1905(l)(2)(B) and any individual or entity providing 
        goods, items, services, donations, loans, or a 
        combination thereof, to such health center entity 
        pursuant to a contract, lease, grant, loan, or other 
        agreement, if such agreement contributes to the ability 
        of the health center entity to maintain or increase the 
        availability, or enhance the quality, of services 
        provided to a medically underserved population served 
        by the health center entity; and
          (J) a discount in the price of an applicable drug (as 
        defined in paragraph (2) of section 1860D-14A(g)) of a 
        manufacturer that is furnished to an applicable 
        beneficiary (as defined in paragraph (1) of such 
        section) under the Medicare coverage gap discount 
        program under section 1860D-14A.
          (4) Whoever without lawful authority knowingly and 
        willfully purchases, sells or distributes, or arranges 
        for the purchase, sale, or distribution of a 
        beneficiary identification number or unique health 
        identifier for a health care provider under title 
        XVIII, title XIX, or title XXI shall be imprisoned for 
        not more than 10 years or fined not more than $500,000 
        ($1,000,000 in the case of a corporation), or both.
  (c) Whoever knowingly and willfully makes or causes to be 
made, or induces or seeks to induce the making of, any false 
statement or representation of a material fact with respect to 
the conditions or operation of any institution, facility, or 
entity in order that such institution, facility, or entity may 
qualify (either upon initial certification or upon 
recertification) as a hospital, critical access hospital, 
skilled nursing facility, nursing facility, intermediate care 
facility for the mentally retarded, or other entity (including 
an eligible organization under section 1876(b)) for which 
certification is required under title XVIII or a State health 
care program (as defined in section 1128(h)), or with respect 
to information required to be provided under section 1124A, 
shall be guilty of a felony and upon conviction thereof shall 
be fined not more than [$25,000] $100,000 or imprisoned for 
[not more than five years] not more than 10 years, or both.
  (d) Whoever knowingly and willfully--
          (1) charges, for any service provided to a patient 
        under a State plan approved under title XIX, money or 
        other consideration at a rate in excess of the rates 
        established by the State (or, in the case of services 
        provided to an individual enrolled with a medicaid 
        managed care organization under title XIX under a 
        contract under section 1903(m) or under a contractual, 
        referral, or other arrangement under such contract, at 
        a rate in excess of the rate permitted under such 
        contract), or
          (2) charges, solicits, accepts, or receives, in 
        addition to any amount otherwise required to be paid 
        under a State plan approved under title XIX, any gift, 
        money, donation, or other consideration (other than a 
        charitable, religious, or philanthropic contribution 
        from an organization or from a person unrelated to the 
        patient)--
                  (A) as a precondition of admitting a patient 
                to a hospital, nursing facility, or 
                intermediate care facility for the mentally 
                retarded, or
                  (B) as a requirement for the patient's 
                continued stay in such a facility,
        when the cost of the services provided therein to the 
        patient is paid for (in whole or in part) under the 
        State plan,
shall be guilty of a felony and upon conviction thereof shall 
be fined not more than [$25,000] $100,000 or imprisoned for 
[not more than five years] not more than 10 years, or both.
  (e) Whoever accepts assignments described in section 
1842(b)(3)(B)(ii) or agrees to be a participating physician or 
supplier under section 1842(h)(1) and knowingly, willfully, and 
repeatedly violates the term of such assignments or agreement, 
shall be guilty of a misdemeanor and upon conviction thereof 
shall be fined not more than [$2,000] $4,000 or imprisoned for 
not more than six months, or both.
  (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).
  (g) In addition to the penalties provided for in this section 
or section 1128A, a claim that includes items or services 
resulting from a violation of this section constitutes a false 
or fraudulent claim for purposes of subchapter III of chapter 
37 of title 31, United States Code.
  (h) With respect to violations of this section, a person need 
not have actual knowledge of this section or specific intent to 
commit a violation of this section.

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