Petition for Writ of Certiorari — Shapour Motamedi, Shayan Motamedi, and Heriberto Moises Lopez, Petitioners v. United States

App. 1

NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STATES

OF AMERICA,

Plaintiff-Appellee,

v.

SHAPOUR MOTAMEDI,

Defendant-Appellant,

No. 20-10364

D.C. Nos.

3:18-cr-00554-WHA-1

3:18-cr-00554-WHA

MEMORANDUM*

(Filed Jan. 11, 2022)

and

SHAYAN MOTAMEDI,

Defendant,

HERIBERTO MOISES LOPEZ,

Defendant.

UNITED STATES

OF AMERICA,

Plaintiff-Appellee,

v.

No. 20-10366

D.C. Nos.

3:18-cr-00554-WHA-2

3:18-cr-00554-WHA

SHAYAN MOTAMEDI,

Defendant-Appellant,

and

* This disposition is not appropriate for publication and is

not precedent except as provided by Ninth Circuit Rule 36-3.

App. 2

SHAPOUR MOTAMEDI;

HERIBERTO MOISES LOPEZ,

Defendants.

UNITED STATES

OF AMERICA,

Plaintiff-Appellee,

v.

No. 20-10367

D.C. Nos.

3:18-cr-00554-WHA-3

3:18-cr-00554-WHA

HERIBERTO MOISES LOPEZ,

Defendant-Appellant,

and

SHAPOUR MOTAMEDI;

SHAYAN MOTAMEDI,

Defendants.

Appeal from the United States District Court

for the Northern District of California

William Alsup, District Judge, Presiding

Argued and Submitted December 10, 2021

San Francisco, California

Before: WARDLAW, BRESS, and BUMATAY, Circuit

Judges.

Concurrence by Judge BUMATAY

Shapour Motamedi, Shayan Motamedi, and

Heriberto Moises Lopez (collectively “Defendants”)

pleaded guilty to conspiracy to violate 42 U.S.C.

§ 1320a-7b(b), the “Anti-Kickback Statute.” On appeal,

they argue that their convictions should be vacated

App. 3

because a subsection of the Anti-Kickback Statute

known as the “Safe Harbor Provision,” 42 U.S.C.

§ 1320a-7b(b)(3)(E), violates the non-delegation doctrine. We have jurisdiction under 28 U.S.C. § 1291, and

we affirm their convictions.

1. The Safe Harbor Provision provides that the

Secretary of Health and Human Services (HHS) may

specify by regulation payment practices to which the

“illegal remunerations” prohibitions shall not apply. 42

U.S.C. § 1320a7b(b)(3)(E). Thus, the Safe Harbor Provision delegates to the Secretary the ability to remove

certain types of conduct from the scope of the offense

defined by statute. Given the combined operation of

the Anti-Kickback Statute and the Safe Harbor Provision, we conclude that Defendants are challenging

their statute of conviction and thus have standing to

assert their non-delegation argument.

2. The delegation in the Safe Harbor Provision is

constitutional, however, because Congress has supplied HHS with an “intelligible principle” to guide the

Secretary’s discretion in setting those bounds.1 United

1

Defendants argue that that we should dispense with the

traditional “intelligible principle test” for determining whether a

statute violates the non-delegation doctrine, and adopt the

stricter test proposed by Justice Gorsuch in his dissent in United

State v. Gundy, 139 S. Ct. 2116, 2129, reh’g denied, 140 S. Ct. 579

(2019). However, as the Defendants acknowledge, “[w]e are bound

to follow a controlling Supreme Court precedent until it is explicitly overruled by that Court,” and the intelligible principle test

remains the standard for determining whether the delegation of

legislative power is constitutional. Nunez-Reyes v. Holder, 646

App. 4

States v. Gundy, 139 S. Ct. 2116, 2123 (plurality op.),

reh’g denied, 140 S. Ct. 579 (2019). Under modern

precedent, the intelligible principle test imposes “an

exceedingly modest limitation.” United States v.

Melgar-Diaz, 2 F.4th 1263, 1266 (9th Cir. 2021); see also

Gundy, 139 S. Ct. at 2129 (plurality op.) (explaining

that the intelligible principle test is “not demanding”).

For example, the Supreme Court has upheld the delegation of broad conferrals of authority to regulate “in

the public interest,” National Broadcasting Co. v.

United States, 319 U.S. 190, 216 (1943), to set “fair and

equitable prices,” Yakus v. United States, 321 U.S. at

422, 427 (1944), to set “just and reasonable rates,” FPC

v. Hope Natural Gas Co., 320 U.S. 591 (1944), and to

issue air quality standards that are “requisite to protect the public health.” Whitman v. American Trucking

Association, 531 U.S. 457 (2001).

In this case, the instructions Congress provided to

HHS are much more specific than the instructions the

Supreme Court has upheld against non-delegation

challenges. Congress gave the Secretary a list of nine

factors to consider when promulgating exceptions to

the criminal prohibition under the Safe Harbor Provision. See 42 U.S.C. § 1320a-7d(a)(2). Those nine factors

direct the Secretary to consider whether adding a safe

harbor would improve the quality of healthcare in the

United States in general by doing things like improving “access to healthcare services,” improving the

“quality of health care services,” and reducing

F.3d 684, 692 (9th Cir. 2011); see also Miller v. Gammie, 335 F.3d

889, 893 (9th Cir. 2003) (en banc).

App. 5

incentives for doctors to “overutiliz[e]” healthcare services. Id. The delegation in the Safe Harbor Provision

is, therefore, constitutional.

Defendants make two arguments in response, neither of which has merit. First, they argue that whatever guidance Congress provided in 42 U.S.C.

§ 1320a7d(a)(2) is vitiated by the catchall section,

§ 1320a-7d(a)(2)(I), which permits the Secretary to

consider “[a]ny other factors the Secretary deems appropriate in the interest of preventing fraud and abuse

in Federal health care programs (as so defined).” They

contend that this “catchall clause” allows the Secretary

to consider anything she wants, so her discretion isn’t

cabined at all.

We disagree. For one, even considered in isolation,

§ 1320a-7d(a)(2)(I) provides an intelligible principle to

guide the Secretary’s discretion. The Secretary is directed to consider “other factors” to the extent that

they serve the interest of preventing “fraud and

abuse in Federal health care programs.” 42 U.S.C.

§ 1320a7d(a)(2)(I). That instruction reflects an intelligible principle: it is possible to evaluate whether a particular safe harbor promulgated by the Secretary is

likely to prevent fraud and abuse or not. And again,

that direction, even standing alone, is more stringent

a guardrail than guidelines the Court has upheld in

the past, such as regulating “in the public interest,”

National Broadcasting Co., 319 U.S. at 216, or setting

“just and reasonable” rates, Hope Natural Gas Co., 320

U.S. at 591.

App. 6

Defendants also argue that even if 42 U.S.C.

§ 1320a-7d(a)(2) provides sufficient guidance in the

context of a civil statute, Congress should be required

to provide more guidance in the context of a criminal

statute, relying on Touby v. United States, 500 U.S. 160

(1991). However, there, the Supreme Court said only

that its case law was “not entirely clear as to whether

more specific guidance is in fact required” in the context of a criminal statute, declining to resolve that

question because the statute at issue “passe[d] muster

even if greater congressional specificity is required in

the criminal context.” Id. at 166. Similarly here, we

need not decide that question because, as discussed

above, Section 7d(a)(2) clearly provides an intelligible

principle which passes muster “even if greater congressional specificity is required in the criminal context.” Id.

AFFIRMED.

United States v. Motamedi, et al., Nos. 20-10364, 2010366, 20-10367

BUMATAY, Circuit Judge, concurring:

I agree we should affirm the Appellants’ convictions here, but I would do so without reaching the merits of their non-delegation claim. I thus concur in the

judgment of the court only.

The Appellants were convicted of conspiracy to

violate 42 U.S.C. § 1320a7b(b)—the Anti-Kickback

Statute. See 18 U.S.C. § 371. The Anti-Kickback

App. 7

Statute makes it a felony to receive or pay kickbacks,

bribes, or rebates in return for purchasing “any item or

service for which payment may be made in whole or in

part under a Federal health care program.” 42 U.S.C.

§ 1320a-7b(b)(1), (b)(2). The Statute, however, establishes various safe harbors to criminal liability. See 42

U.S.C. § 1320a-7b(b)(3). One of those safe harbors invites the Secretary of Health and Human Services to

promulgate regulations exempting certain “payment

practice[s]” from criminal liability under the Statute.

42 U.S.C. § 1320a-7b(b)(3)(E).

In yet another law, Congress provided criteria to

HHS for establishing and modifying these safe harbors. 42 U.S.C. § 1320a-7d(a)(2). This law set out eight

relatively specific factors for HHS to consider in adopting or amending a safe harbor regulation. See 42 U.S.C.

§ 1320a-7d(a)(2)(A)–(H). But the law ends with what’s

been called a “catchall provision”—permitting HHS to

consider “[a]ny other factors the Secretary deems appropriate in the interest of preventing fraud and abuse

in Federal health care programs.” 42 U.S.C. § 1320a7d(a)(2)(I). It is here that the Appellants complain.

Appellants contend that this catchall provision

grants HHS almost unfettered authority to decide

which actions are criminal under the Anti-Kickback

Statute with no meaningful congressional guidance.

They claim that such a provision violates the nondelegation doctrine as traditionally understood, see

Mistretta v. United States, 488 U.S. 361, 372 (1989), and

especially under the robust non-delegation view articulated by Justice Gorsuch, see Gundy v. United States,

App. 8

139 S. Ct. 2116, 2131 (2019) (Gorsuch, J., dissenting).

They then ask us to reverse their convictions based on

the violation of the non-delegation doctrine.

There’s one problem with that: Assuming they are

right—that the catchall provision provides no “intelligible principle” and thus Congress has unconstitutionally delegated its authority to HHS—the catchall

provision is easily severable from the Anti-Kickback

Statute. “Unless it is evident that the legislature would

not have enacted those provisions which are within its

power, independently of that which is not, the invalid

part may be dropped if what is left is fully operative as

law.” United States v. Taylor, 693 F.2d 919, 921–22 (9th

Cir. 1982) (quoting United States v. Jackson, 390 U.S.

570, 585 (1968)). Given the text, structure, and chronological development of the Anti-Kickback Statute and

the safe harbor regulations, I find it unlikely that Congress would have chosen to discard the entire law prohibiting kickbacks if it could not also include the

catchall provision for establishing safe harbors. See id.

at 922.

So even if we were to strike the catchall provision

as a violation of the non-delegation doctrine, the rest

of the Anti-Kickback Statute would remain fully operative and Appellants’ convictions under § 1320a-7b(b)

and 18 U.S.C. § 371 would be untouched. Id. I thus join

the majority in affirming their convictions.

App. 9

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STATES

OF AMERICA,

No. 20-10364

and

ORDER

SHAYAN MOTAMEDI,

(Filed Feb. 23, 2022)

D.C. Nos.

Plaintiff-Appellee,

3:18-cr-00554-WHA-1

3:18-cr-00554-WHA

v.

Northern District

SHAPOUR MOTAMEDI,

of California,

Defendant-Appellant, San Francisco

Defendant,

HERIBERTO MOISES LOPEZ,

Defendant.

UNITED STATES

OF AMERICA,

No. 20-10366

D.C. Nos.

Plaintiff-Appellee,

3:18-cr-00554-WHA-2

3:18-cr-00554-WHA

v.

Northern District

SHAYAN MOTAMEDI,

of California,

Defendant-Appellant, San Francisco

and

SHAPOUR MOTAMEDI;

HERIBERTO MOISES LOPEZ,

Defendants.

App. 10

UNITED STATES

OF AMERICA,

Plaintiff-Appellee,

v.

No. 20-10367

D.C. Nos.

3:18-cr-00554-WHA-3

3:18-cr-00554-WHA

HERIBERTO MOISES LOPEZ,

Defendant-Appellant,

and

SHAPOUR MOTAMEDI;

SHAYAN MOTAMEDI,

Defendants.

Before: WARDLAW, BRESS, and BUMATAY, Circuit

Judges.

The panel has unanimously voted to deny the petition for rehearing en banc. The full court has been

advised of the petition and no judge has requested a

vote on whether to rehear the matter en banc. Fed. R.

App. P. 35.

The petition for rehearing en banc is DENIED.

App. 11

RELEVANT CONSTITUTIONAL

AND STATUTORY PROVISIONS

United States Constitution, Article I, Section 1

All legislative Powers herein granted shall be vested in

a Congress of the United States, which shall consist of

a Senate and House of Representatives.

42 U.S.C. § 1320a-7b

(a) Making or causing to be made false statements or

representations. 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

App. 12

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 [42 USCS §§ 1396 et seq.], if disposing of

the assets results in the imposition of a period

of ineligibility for such assistance under section 1917(c) [42 USCS § 1396p(c)],

shall (i) in the case of such a statement, representation,

concealment, failure, or conversion 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 $100,000 or imprisoned for not more than 10 years or both, or (ii) in the

App. 13

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

$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)

Illegal remunerations.

(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

App. 14

(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 $100,000

or imprisoned for 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 $100,000

or imprisoned for not more than 10 years, or

both.

App. 15

(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

App. 16

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)

[42 USCS § 1395x(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 [42 USCS

§§ 1395j et seq.] 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

[note to this section] or in regulations

under section 1860D-3(e)(6) [1860D4(e)(6)] [42 USCS § 1395w-104(e)(6)];

(F) any remuneration between an

organization and an individual or entity providing items or services, or a

App. 17

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 [42

USCS § 1395mm] 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 [42 USCS §§ 1395w101 et seq.], if the conditions described in clauses (i) through (iii)

of section 1128A(i)(6)(A) [42 USCS

§ 1320a7a(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) [42

USCS § 1395w-114(a)(3)]), section

1128A(i)(6)(A) [42 USCS § 1320a7a(i)(6)(A)] shall be applied without

regard to clauses (ii) and (iii) of that

section);

App. 18

(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) [42

USCS § 1395w-23(a)(4)];

(I) any remuneration between a

health center entity described under

clause (i) or (ii) of section 1905(1)(2)(B)

[42 USCS § 1396d(1)(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;

(J) a discount in the price of an applicable drug (as defined in paragraph (2) of section 1860D-14A(g) [42

USCS § 1395w-114a(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

[42 USCS § 1395w-114a]; and

App. 19

(K) an incentive payment made to a

Medicare fee-for-service beneficiary

by an ACO under an ACO Beneficiary Incentive Program established

under subsection (m) of section 1899

[42 USCS § 1395jjj(m)], if the payment is made in accordance with the

requirements of such subsection and

meets such other conditions as the

Secretary may establish.

(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 [42 USCS §§ 1395 et seq.,

1396 et seq., 1397aa et seq.] 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) False statements or representations with respect

to condition or operation of institutions. 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, home

health agency, or other entity (including an eligible

App. 20

organization under section 1876(b) [42 USCS

§ 1395mm(b)]) for which certification is required under

title XVIII [42 USCS §§ 1395 et seq.] or a State health

care program (as defined in section 1128(h) [42 USCS

§ 1320a-7(h)]), or with respect to information required

to be provided under section 1124A [42 USCS § 1320a3a], shall be guilty of a felony and upon conviction

thereof shall be fined not more than $100,000 or imprisoned for not more than 10 years, or both.

(d) Illegal patient admittance and retention practices. Whoever knowingly and willfully—

(1) charges, for any service provided to a patient under a State plan approved under title

XIX [42 USCS §§ 1396 et seq.], 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) [42 USCS § 1396b(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 [42 USCS §§ 1396 et seq.], 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)—

App. 21

(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 $100,000

or imprisoned for not more than 10 years, or

both.

(e) Violation of assignment terms. Whoever accepts

assignments described in section 1842(b)(3)(B)(ii) [42

USCS § 1395u(b)(3)(B)(ii)] or agrees to be a participating physician or supplier under section 1842(h)(1) [42

USCS § 1395a(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 $4,000

or imprisoned for not more than six months, or both.

(f ) “Federal health care program” defined. 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

App. 22

Government (other than the health insurance

program under chapter 89 of title 5, United

States Code [5 USCS §§ 8901 et seq.]); or

(2) any State health care program, as defined in section 1128(h) [42 USCS § 1320a7(h)].

(g) Liability under subchapter III of chapter 37 of title 31. In addition to the penalties provided for in this

section or section 1128A [42 USCS § 1320a-7a], 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 [31 USCS §§ 3721 et seq.].

(h) Actual knowledge or specific intent not required.

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.

42 U.S.C. § 1320a-7d

(a) Solicitation and publication of modifications to

existing safe harbors and new safe harbors.

(1)

In general.

(A) Solicitation 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—

App. 23

(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) [42

USCS § 1320a-7b(b)] and

shall not serve as the basis

for an exclusion under section 1128(b)(7) [42 USCS

§ 1320a-7(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 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

App. 24

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.

App. 25

(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 ) [42

USCS § 1320a-7b(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

App. 26

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) [42 USCS § 1320a7b(b)] or section 1128A(i)(6) [42

USCS § 1320a-7a(i)(6)].

(B) Whether an arrangement or

proposed arrangement satisfies the

criteria set forth in section 1128B(b)(3)

[42 USCS § 1320a-7b(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

App. 27

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 [42 USCS

§§ 1395 et seq. or 1396 et seq.] within

the meaning of section 1128A(b) [42

USCS § 1320a-7a(b)].

(E) Whether any activity or proposed activity constitutes grounds

for the imposition of a sanction under

section 1128, 1128A, or 1128B [42

USCS § 1320a-7, 1320a-7a, or 1320a7b].

(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 [26

USCS § 3121(d)(2)].

(4)

Effect of advisory opinions.

(A) Binding as to secretary and parties involved. Each advisory opinion

issued by the Secretary shall be

App. 28

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 [section] 1128, 1128A, or

1128B [42 USCS § 1320a-7, 1320a7a, or 1320a-7b].

(5)

Regulations.

(A) In general. Not later than 180

days after the date of the enactment

of this section [enacted Aug. 21,

1996], 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

App. 29

(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 [enacted Aug. 21, 1996].

(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

App. 30

particular concern under the Medicare program under title XVIII [42

USCS §§ 1395 et seq.] or a State

health care program, as defined in

section 1128(h) [42 USCS § 1320a7(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.