SEC. 205. GUIDANCE REGARDING APPLICATION OF HEALTH CARE FRAUD AND ABUSE
SANCTIONS.
Title[ Title II\Subtitle A Contents
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:
``guidance regarding application of health care fraud and abuse
sanctions
``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.''.
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