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AO United States
General Accounting Office
Washington, D.C. 20548
Health, Education and Human Services Division
B-270093
October 7, 1995
The Honorable Fortney H. (Pete) Stark
Ranking Minority Member
Subcommittee on Health
Committee on Ways and Means
House of Representatives
Dear Mr. Stark:
Your letter of October 4, 1995, asked us to review the
fraud and abuse provisions of H.R. 2425, especially two
provisions changing requirements of the anti-kickback and
civil monetary penalty sections of the Social Security Act.
You also forwarded comments you had received from the
Department of Health and Human Services' (HHS) Office of
the Inspector General (OIG) and the Department of Justice
on H.R. 2389.' These agencies expressed serious concerns
about the two provisions. Because of the limited time
available, we concentrated on these two provisions and have
not fully analyzed the other provisions in H.R. 2425.
PROPOSED CHANGE TO MEDICARE ANTI-KICKBACK LAW
Section 1128B(b) (2) of the Social Security Act2 establishes
criminal liability for [w]hoever 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 to refer persons to them for medical services
covered by Medicare or certain other health programs. In
our experience, such arrangements are often disguised to
appear to provide compensation for professional services or
as returns on investments. Even when a physician performs
a service for the money received, the inducements for
referrals can result in unnecessary payments from Medicare.
1H.R. 2389 was incorporated, with some changes, into H.R.
2425.
242 U.S.C. 1320a-7b(2).
GAO/HEHS-96-37R Fraud and Abuse Provisions in H.R. 2425
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