Title IV, SEC. 4043. CIVIL MONETARY PENALTIES. (a) Prohibition Against Offering Inducements to Individuals Enrolled Under Plans. (1) Offer of remuneration. Section 1128A(a) (42 U.S.C. 1320a 7a(a)) (as amended by section 4041(a)(1)) is amended (A) by striking ``; or'' at the end of paragraph (3) and inserting a semicolon; (B) by striking the semicolon at the end of paragraph (4) and inserting ``; or''; and (C) by inserting after paragraph (4) the following new paragraph: ``(5) offers, pays, 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;''. (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, except that such term does not include the waiver of coinsurance or deductible amounts by a person or entity, if ``(A) the waiver is not offered as part of any advertisement or solicitation; ``(B) the person does not routinely waive coinsurance or deductible amounts; and ``(C) the person ``(i) waives the coinsurance and deductible amounts after determining in good faith that the individual is indigent; ``(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) 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)) is amended (1) in subparagraph (A), by striking ``claimed,'' and inserting the following: ``claimed, including any person who presents or causes to be presented a claim for an item or service which includes a procedure or diagnosis code that the person knows or should know will result in a greater payment to the person than the code applicable to the item or service actually provided or actual patient medical condition,''; (2) in subparagraph (C), by striking ``or'' at the end; (3) in subparagraph (D), by striking ``; or'' and inserting ``, or''; and (4) by inserting after subparagraph (D) the following new subparagraph: ``(E) is for a medical or other item or service that a person knows or should know is not medically necessary; or''. (c) Excluded Individual Retaining Ownership or Control Interest in Participating Entity. Section 1128A(a) of such Act, as amended by section 4041(a)(1) and subsection (a)(1), is further amended (1) by striking ``or'' at the end of paragraph (4); (2) by striking the semicolon at the end of paragraph (5) and inserting ``; or''; and (3) by inserting after paragraph (5) the following new paragraph: ``(6) in the case of a person who is not an organization, agency, or other entity, who is excluded from participating in a program under title XVIII or a State health care program in accordance with this section, section 1128, or section 1156 and who, during the period of exclusion, retains either a direct or indirect ownership or control interest of 5 percent or more in, or an ownership or control interest (as defined in section 1124(a)(3)) in, or who is an officer, director, agent, or managing employee (as defined in section 1126(b)) of, an entity that is participating in a program under title XVIII or a State health care program;''. (d) Additional Offenses Relating to Alliance System. Section 1128A(a) of such Act, as amended by section 4041(a)(1) and subsections (a)(1) and (c), is further amended (1) by striking ``or'' at the end of paragraph (5); (2) by striking the semicolon at the end of paragraph (6) and inserting ``; or''; and (3) by inserting after paragraph (6) the following new paragraphs: ``(7) engages in a practice that circumvents a payment methodology intended to reimburse for two or more discreet medical items or services at a single or fixed amount, including but not limited to, multiple admissions or readmission to hospitals and other institutions reimbursed on a diagnosis reimbursement grouping basis; ``(8) engages in a practice which has the effect of limiting or discouraging (as compared to other plan enrollees) the utilization of health care services covered by law or under the service contract by title XIX or other publicly subsidized patients, including but not limited to differential standards for the location and hours of service offered by providers participating in the plan; ``(9) substantially fails to cooperate with a quality assurance program or a utilization review activity; ``(10) fails substantially to provide or authorize medically necessary items and services that are required to be provided to an individual covered under a health plan or public program for the delivery of or payment for health care items or services, if the failure has adversely affected (or had a substantial likelihood of adversely affecting) the individual; ``(11) employs or contracts with any individual or entity who is excluded from participating in a program under title XVIII or a State health care program in accordance with this section, section 1128, or section 1156, for the provision of any services (including but not limited to health care, utilization review, medical social work, or administrative), or employs or contracts with any entity for the direct or indirect provision of such services, through such an excluded individual or entity; or ``(12) submits false or fraudulent statements, data or information or claims to the National Health Board established under part 1 of subtitle F of title I of the Health Security Act, any other federal agency, a state health care agency, a health alliance, or any other Federal, state or local agency charged with implementation or oversight of the plan that the person knows or should know is fraudulent;''. (e) Modifications of Amounts of Penalties and Assessments. Section 1128A(a) (42 U.S.C. 1320a-7a(a)), as amended by section 4041(a), subsection (a)(1), subsection (c), and subsection (d), is amended in the matter following paragraph (6) (1) by striking ``$2,000'' and inserting ``$10,000''; (2) by inserting after ``under paragraph (4), $50,000 for each such violation'' the following: ``; in cases under paragraph (5), $10,000 for each such offer of transfer; in cases under paragraph (6), $10,000 for each day the prohibited relationship occurs; in cases under paragraphs (7) through (12), an amount not to exceed $50,000 for each such determination by the Secretary''; and (3) by striking ``twice the amount'' and inserting ``three times the amount''. (f) Interest on Penalties. Section 1128A(f) (42 U.S.C. 1320a-7a(f)) is amended by adding after the first sentence the following: ``Interest shall accrue on the penalties and assessments (as defined in subsection (g)) imposed by a final determination of the Secretary in accordance with an annual rate established by the Secretary under the Federal Claims Collection Act. The rate of interest charged shall be the rate in effect on the date the determination becomes final and shall remain fixed at that rate until the entire amount due is paid. In addition, the Secretary is authorized to recover the costs of collection in any case where the penalties and assessments are not paid within 30 days after the determination becomes final, or in the case of a compromised amount, where payments are more than 90 days past due. In lieu of actual costs, the Secretary is authorized to impose a charge of up to 10 percent of the amount of penalties and assessments owed to cover the costs of collection.''. (g) Authorization To Act. (1) In general. The first sentence of section 1128A(c)(1) (42 U.S.C. 1320a-7a(c)(1)) is amended by striking all that follows ``(b)'' and inserting the following: ``unless, within one year after the date the Secretary presents a case to the Attorney General for consideration, the Attorney General brings an action in a district court of the United States.''. (2) Effective date. The amendment made by this paragraph (1) shall apply to cases presented by the Secretary of Health and Human Services for consideration on or after the date of the enactment of this Act. (h) Deposit of Penalties Collected into All-Payer Trust Fund. Section 1128A(f)(3) (42 U.S.C. 1320a 7a(f)(3)) is amended by striking ``as miscellaneous receipts of the Treasury of the United States'' and inserting ``in the All-Payer Health Care Fraud and Abuse Control Trust Fund established under section 5402 of the Health Security Act''. (i) Clarification of Penalty Imposed on Excluded Provider Furnishing Services. Section 1128A(a)(1)(D) (42 U.S.C. 1320a 7a(a)(1)(D)) is amended by inserting ``who furnished the service'' after ``in which the person was''.