Health Coverage Availability and Affordability Act of 1996

TABLE OF CONTENTS:

Title I: Improved Availability and Portability of Health

Insurance Coverage

Subtitle A: Coverage Under Group Health Plans

Subtitle B: Definitions; General Provisions

Title II: Preventing Health Care Fraud and Abuse;

Administrative Simplification

Subtitle A: Fraud and Abuse Control Program

Subtitle B: Revisions to Current Sanctions for Fraud

and Abuse

Subtitle C: Data Collection

Subtitle D: Civil Monetary Penalties

Subtitle E: Revisions to Criminal Law

Subtitle F: Administrative Simplification

Title III: Tax-Related Health Provisions

Subtitle A: Medical Savings Accounts

Subtitle B: Increase in Deduction for Health Insurance

Costs of Self-Employed Individuals

Health Coverage Availability and Affordability Act of 1996 - Title I: Improved Availability and Portability of Health Insurance Coverage - Subtitle A: Coverage Under Group Health Plans - Requires a group health plan and an insurer or health maintenance organization (HMO) offering health insurance in connection with a group health plan to: (1) reduce any preexisting condition period by the aggregate period of prior coverage; and (2) limit any preexisting condition period to not more than 12 months. Prohibits: (1) preexisting condition periods for newborns and regarding certain adoptions; and (2) treating pregnancy as a preexisting condition. Allows an HMO that does not use preexisting condition limitations to impose an eligibility period.

(Sec. 103) Prohibits coverage exclusion on the basis of health status. Requires a plan to allow an otherwise-eligible employee to enroll if the employee previously declined enrollment because of other coverage and subsequently lost the other coverage. Prohibits, if a plan offers family coverage, a waiting period for a newborn, certain adopted children, or a spouse.

(Sec. 104) Amends the Internal Revenue Code to impose a tax on any failure of a group health plan to meet certain requirements of this Act. Deems sections 101 through 103 of this Act to be provisions of the Employee Retirement Income Security Act of 1974. Provides for civil money penalties for failure to meet a requirement of this subtitle.

Subtitle B: Definitions; General Provisions - Sets forth definitions and general provisions, including: (1) excluding church plans from the requirements of this title; and (2) requiring (unless a State elects otherwise) that a State plan under title XIX (Medicaid) of the Social Security Act be treated as a group health plan.

Title II: Preventing Health Care Fraud and Abuse; Administrative Simplification - Subtitle A: Fraud and Abuse Control Program - Amends title XI of the Social Security Act (SSA) to direct the Secretary of Health and Human Services (HHS), acting through the HHS Office of Inspector General (IG), and the Attorney General to establish a program to: (1) coordinate Federal, State, and local law enforcement programs to control health care fraud and abuse; (2) conduct investigations, audits, and inspections relating to the delivery of and payment for health care; (3) facilitate enforcement of certain provisions of SSA and other Acts applicable to health care fraud and abuse; (4) provide for the modification and establishment of safe harbors; (5) issue advisory opinions and special fraud alerts; and (6) 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 below.

(Sec. 201) Establishes the Health Care Fraud and Abuse Control Account (Account) in Medicare's Federal Hospital Insurance Trust Fund (Trust Fund) to hold the criminal fines and civil monetary penalties and assessments obtained from Federal health care cases, as well as property forfeiture proceeds resulting from such cases, and other specified amounts for financing the program above and the Medicare Integrity Program established below. Makes certain appropriations to the Trust Fund and Account, earmarking specified amounts for activities of HHS' IG with respect to the Medicare and Medicaid programs under, respectively, SSA titles XVIII and XIX.

(Sec. 202) Establishes the Medicare Integrity Program under which the HHS Secretary shall promote the integrity of the Medicare program by entering into contracts with certain eligible private entities to: (1) review the activities of Medicare service providers and audit cost reports to determine whether payment should not have been made; (2) educate service providers, beneficiaries, and other persons with respect to payment and benefit issues; and (3) develop and periodically update a list of items of durable medical equipment subject to prior authorization.

Eliminates the responsibilities of fiscal intermediaries under Medicare part A (Hospital Insurance) and carriers under Medicare part B (Supplementary Medical Insurance) for carrying out certain activities to the extent such activities are carried out pursuant to a contract under the Medicare Integrity Program.

(Sec. 203) Directs the HHS Secretary to provide an explanation of benefits under the Medicare program with respect to each furnished item or service for which payment may be made, whether or not a deductible or coinsurance payment may be imposed against the individual with respect to the item or service.

Directs the HHS Secretary to establish a program to encourage individuals to: (1) report information on fraud and abuse under Medicare; and (2) submit suggestions on methods to improve the efficiency of the Medicare program. Provides for the payment to such individuals of a portion of: (1) any amounts collected due to any reports of fraud or abuse; or (2) any savings resulting from any suggestions that are adopted.

(Sec. 204) Amends SSA title XI to extend the application of criminal penalties for acts involving the Medicare program to similar violations of 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 Federal Government, except the Federal Employees' Health Benefits Program.

(Sec. 205) Directs the HHS Secretary periodically to publish a notice in the Federal Register soliciting proposals for: (1) modifications to existing safe harbors issued under the Medicare and Medicaid Patient and Program Protection Act of 1987; (2) additional safe harbors specifying payment practices that shall not be treated as a criminal offense or exclusion; (3) advisory opinions by the Secretary with regard to SSA title XI civil monetary and criminal penalty provisions; and (4) special fraud alerts by the HHS IG, upon request, with regard to suspect practices under the Medicare program or a State health care program. Requires subsequent issuance of any appropriate implementing regulations.

Subtitle B: Revisions to Current Sanctions for Fraud and Abuse - Excludes from participation in Medicare and State health care programs any individual or entity convicted after the enactment of this Act of a felony related to: (1) fraud in connection with the delivery of a health care item or service; or (2) a controlled substance.

(Sec. 212) Revises specified current sanctions involving exclusion for fraud and abuse under Medicare and State health care programs.

Repeals the prerequisite that a health care practitioner or person be determined "unwilling or unable" to comply substantially with a corrective action plan before sanctions may be imposed (thus permitting the Secretary to exclude such practitioner or person from eligibility to provide services for failure to comply with a corrective action plan, regardless of circumstances).

(Sec. 215) Permits the imposition of intermediate sanctions on Medicare health maintenance organizations (HMOs), in addition to the current option of termination.

(Sec. 216) Excepts from anti-kickback penalties for discounting and managed care arrangements any remuneration between an organization and an item or service provider under a written agreement if: (1) the organization is a Medicare-eligible HMO or competitive medical plan; or (2) the written agreement places the item or service provider at substantial financial risk for the cost or utilization of such items or services which it is obligated to provide, whether through a withhold, capitation, or other similar risk arrangement.

(Sec. 217) Establishes a criminal penalty for fraudulent disposition of assets in order to obtain Medicaid benefits.

Subtitle C: Data Collection - Directs the HHS Secretary to establish a national health care fraud and abuse data collection program for the reporting of final adverse actions against health care providers, suppliers, or practitioners. Requires each Government agency and health care plan to report to the Secretary any final adverse action taken against a health care provider, supplier, or practitioner.

(Sec. 221) Allows the HHS Secretary, under the system for unique identifiers for Medicare physicians, to 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 - Revises civil monetary penalty and other related SSA title XI provisions, among other things: (1) subjecting to civil penalties certain program-excluded individuals who retain an ownership or control interest in a participating entity if they know or should know of the action constituting the basis for the exclusion at the time they violated such provisions; (2) increasing the amounts of various specified penalties and assessments, including those against health care practitioners who fail to comply with their statutory obligations; (3) prohibiting the offering of inducements to individuals enrolled under Medicare or a State health care program, including waiver of coinsurance and deductible amounts and transfers of items or services for free or for other than fair market value; and (4) establishing a penalty for false certification for home health services.

(Sec. 232) Requires a knowing level of intent in a violation to justify the imposition of civil money penalties.

Subtitle E: Revisions to Criminal Law - Amends the Federal criminal code to define a Federal health care offense and to cover health care fraud, theft or embezzlement in connection with health care, obstruction of criminal investigations of health care offenses, and other specified matters related to health care fraud, such as the laundering of monetary instruments.

(Sec. 247) Provides for injunctive relief relating to covered health care offenses, as well as for property forfeitures.

Subtitle F: Administrative Simplification - Amends SSA title XI to add a new part C (Administrative Simplification) to provide for development of an electronic system for: (1) processing health care information consistent with the goal of improving the operation of the overall health care system; and (2) reducing related administrative costs through the HHS Secretary's adoption of certain standards for information transactions (including enrollment, disenrollment, claims attachments, and coordination of benefits) and data elements as well as security and privacy standards, and performance of tasks pursuant to specified requirements, assisted by a new Health Information Advisory Committee established by this Act.

Establishes penalties for the wrongful disclosure of individually identifiable health information, among other violations of this subtitle.

Title III: Tax-Related Health Provisions - Subtitle A: Medical Savings Accounts - Amends the Internal Revenue Code to allow a deduction for limited amounts paid to a medical savings account (MSA). Defines "medical savings account" as a trust for paying the account holder's medical expenses. Exempts an MSA from taxation unless it has ceased being an MSA. Provides for the treatment of distributions. Allows the MSA deduction to be taken whether or not the individual itemizes deductions. Excludes limited employer MSA contributions from employee gross income. Excludes employer MSA contributions from provisions relating to social security, railroad retirement, unemployment, and withholding taxes. Makes MSA contributions unavailable under cafeteria plans. Excludes MSAs from the value of taxable estates. Imposes a tax on excess MSA contributions. Exempts an MSA holder from prohibited transactions taxes if the MSA ceases to be an MSA. Imposes a penalty on MSA reporting failure. Exempts MSAs from the definition of "specified insurance contract" for provisions relating to capitalization of certain policy acquisition expenses.

Subtitle B: Increase in Deduction for Health Insurance Costs of Self-Employed Individuals - Allows self-employed individuals to deduct a portion of their expenditures for medical insurance for the individual, spouse, and dependents.