
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 23, 2000]
[Document not affected by Public Laws enacted between
  January 23, 2000 and December 4, 2001]
[CITE: 42USC1320a-8]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
                       CHAPTER 7--SOCIAL SECURITY
 
   SUBCHAPTER XI--GENERAL PROVISIONS, PEER REVIEW, AND ADMINISTRATIVE 
                             SIMPLIFICATION
 
                       Part A--General Provisions
 
Sec. 1320a-8. Civil monetary penalties and assessments for 
        subchapters II, VIII and XVI
        

(a) False statements or representations of material fact; proceedings to 
        exclude

    (1) Any person (including an organization, agency, or other entity) 
who makes, or causes to be made, a statement or representation of a 
material fact for use in determining any initial or continuing right to 
or the amount of--
        (A) monthly insurance benefits under subchapter II of this 
    chapter,
        (B) benefits or payments under subchapter VIII of this chapter, 
    or
        (C) benefits or payments under subchapter XVI of this chapter,

that the person knows or should know is false or misleading or knows or 
should know omits a material fact or makes such a statement with knowing 
disregard for the truth shall be subject to, in addition to any other 
penalties that may be prescribed by law, a civil money penalty of not 
more than $5,000 for each such statement or representation. Such person 
also shall be subject to an assessment, in lieu of damages sustained by 
the United States because of such statement or representation, of not 
more than twice the amount of benefits or payments paid as a result of 
such a statement or representation. In addition, the Commissioner of 
Social Security may make a determination in the same proceeding to 
recommend that the Secretary exclude, as provided in section 1320a-7 of 
this title, such a person who is a medical provider or physician from 
participation in the programs under subchapter XVIII of this chapter.
    (2) For purposes of this section, a material fact is one which the 
Commissioner of Social Security may consider in evaluating whether an 
applicant is entitled to benefits under subchapter II of this chapter or 
subchapter VIII of this chapter, or eligible for benefits or payments 
under subchapter XVI of this chapter.

(b) Initiation of proceedings; hearing; sanctions

    (1) The Commissioner of Social Security may initiate a proceeding to 
determine whether to impose a civil money penalty or assessment, or 
whether to recommend exclusion under subsection (a) of this section only 
as authorized by the Attorney General pursuant to procedures agreed upon 
by the Commissioner of Social Security and the Attorney General. The 
Commissioner of Social Security may not initiate an action under this 
section with respect to any violation described in subsection (a) of 
this section later than 6 years after the date the violation was 
committed. The Commissioner of Social Security may initiate an action 
under this section by serving notice of the action in any manner 
authorized by Rule 4 of the Federal Rules of Civil Procedure.
    (2) The Commissioner of Social Security shall not make a 
determination adverse to any person under this section until the person 
has been given written notice and an opportunity for the determination 
to be made on the record after a hearing at which the person is entitled 
to be represented by counsel, to present witnesses, and to cross-examine 
witnesses against the person.
    (3) In a proceeding under this section which--
        (A) is against a person who has been convicted (whether upon a 
    verdict after trial or upon a plea of guilty or nolo contendere) of 
    a Federal or State crime charging fraud or false statements; and
        (B) involves the same transaction as in the criminal action;

the person is estopped from denying the essential elements of the 
criminal offense.
    (4) The official conducting a hearing under this section may 
sanction a person, including any party or attorney, for failing to 
comply with an order or procedure, for failing to defend an action, or 
for such other misconduct as would interfere with the speedy, orderly, 
or fair conduct of the hearing. Such sanction shall reasonably relate to 
the severity and nature of the failure or misconduct. Such sanction may 
include--
        (A) in the case of refusal to provide or permit discovery, 
    drawing negative factual inference or treating such refusal as an 
    admission by deeming the matter, or certain facts, to be 
    established;
        (B) prohibiting a party from introducing certain evidence or 
    otherwise supporting a particular claim or defense;
        (C) striking pleadings, in whole or in part;
        (D) staying the proceedings;
        (E) dismissal of the action;
        (F) entering a default judgment;
        (G) ordering the party or attorney to pay attorneys' fees and 
    other costs caused by the failure or misconduct; and
        (H) refusing to consider any motion or other action which is not 
    filed in a timely manner.

(c) Amount or scope of penalties, assessments, or exclusions

    In determining pursuant to subsection (a) of this section the amount 
or scope of any penalty or assessment, or whether to recommend an 
exclusion, the Commissioner of Social Security shall take into account--
        (1) the nature of the statements and representations referred to 
    in subsection (a) of this section and the circumstances under which 
    they occurred;
        (2) the degree of culpability, history of prior offenses, and 
    financial condition of the person committing the offense; and
        (3) such other matters as justice may require.

(d) Judicial review

    (1) Any person adversely affected by a determination of the 
Commissioner of Social Security under this section may obtain a review 
of such determination in the United States Court of Appeals for the 
circuit in which the person resides, or in which the statement or 
representation referred to in subsection (a) of this section was made, 
by filing in such court (within 60 days following the date the person is 
notified of the Commissioner's determination) a written petition 
requesting that the determination be modified or set aside. A copy of 
the petition shall be forthwith transmitted by the clerk of the court to 
the Commissioner of Social Security, and thereupon the Commissioner of 
Social Security shall file in the court the record in the proceeding as 
provided in section 2112 of title 28. Upon such filing, the court shall 
have jurisdiction of the proceeding and of the question determined 
therein, and shall have the power to make and enter upon the pleadings, 
testimony, and proceedings set forth in such record a decree affirming, 
modifying, remanding for further consideration, or setting aside, in 
whole or in part, the determination of the Commissioner of Social 
Security and enforcing the same to the extent that such order is 
affirmed or modified. No objection that has not been urged before the 
Commissioner of Social Security shall be considered by the court, unless 
the failure or neglect to urge such objection shall be excused because 
of extraordinary circumstances.
    (2) The findings of the Commissioner of Social Security with respect 
to questions of fact, if supported by substantial evidence on the record 
considered as a whole, shall be conclusive in the review described in 
paragraph (1). If any party shall apply to the court for leave to adduce 
additional evidence and shall show to the satisfaction of the court that 
such additional evidence is material and that there were reasonable 
grounds for the failure to adduce such evidence in the hearing before 
the Commissioner of Social Security, the court may order such additional 
evidence to be taken before the Commissioner of Social Security and to 
be made a part of the record. The Commissioner of Social Security may 
modify such findings as to the facts, or make new findings, by reason of 
additional evidence so taken and filed, and the Commissioner of Social 
Security shall file with the court such modified or new findings, which 
findings with respect to questions of fact, if supported by substantial 
evidence on the record considered as a whole shall be conclusive, and 
the Commissioner's recommendations, if any, for the modification or 
setting aside of the Commissioner's original order.
    (3) Upon the filing of the record and the Commissioner's original or 
modified order with the court, the jurisdiction of the court shall be 
exclusive and its judgment and decree shall be final, except that the 
same shall be subject to review by the Supreme Court of the United 
States, as provided in section 1254 of title 28.

(e) Compromise of money penalties and assessments; recovery; use of 
        funds recovered

    (1) Civil money penalties and assessments imposed under this section 
may be compromised by the Commissioner of Social Security and may be 
recovered--
        (A) in a civil action in the name of the United States brought 
    in United States district court for the district where the statement 
    or representation referred to in subsection (a) of this section was 
    made, or where the person resides, as determined by the Commissioner 
    of Social Security;
        (B) by means of reduction in tax refunds to which the person is 
    entitled, based on notice to the Secretary of the Treasury as 
    permitted under section 3720A of title 31;
        (C)(i) by decrease of any payment of monthly insurance benefits 
    under subchapter II of this chapter, notwithstanding section 407 of 
    this title,
        (ii) by decrease of any payment under subchapter VIII of this 
    chapter to which the person is entitled, or
        (iii) by decrease of any payment under subchapter XVI of this 
    chapter for which the person is eligible, notwithstanding section 
    407 of this title, as made applicable to subchapter XVI of this 
    chapter by reason of section 1383(d)(1) of this title;
        (D) by authorities provided under the Debt Collection Act of 
    1982, as amended, to the extent applicable to debts arising under 
    this chapter;
        (E) by deduction of the amount of such penalty or assessment, 
    when finally determined, or the amount agreed upon in compromise, 
    from any sum then or later owing by the United States to the person 
    against whom the penalty or assessment has been assessed; or
        (F) by any combination of the foregoing.

    (2) Amounts recovered under this section shall be recovered by the 
Commissioner of Social Security and shall be disposed of as follows:
        (A) In the case of amounts recovered arising out of a 
    determination relating to subchapter II of this chapter, the amounts 
    shall be transferred to the Managing Trustee of the Federal Old-Age 
    and Survivors Insurance Trust Fund or the Federal Disability 
    Insurance Trust Fund, as determined appropriate by the Commissioner 
    of Social Security, and such amounts shall be deposited by the 
    Managing Trustee into such Trust Fund.
        (B) In the case of amounts recovered arising out of a 
    determination relating to subchapter VIII or XVI of this chapter, 
    the amounts shall be deposited by the Commissioner of Social 
    Security into the general fund of the Treasury as miscellaneous 
    receipts.

(f) Finality of determination respecting penalty, assessment, or 
        exclusion

    A determination pursuant to subsection (a) of this section by the 
Commissioner of Social Security to impose a penalty or assessment, or to 
recommend an exclusion shall be final upon the expiration of the 60-day 
period referred to in subsection (d) of this section. Matters that were 
raised or that could have been raised in a hearing before the 
Commissioner of Social Security or in an appeal pursuant to subsection 
(d) of this section may not be raised as a defense to a civil action by 
the United States to collect a penalty or assessment imposed under this 
section.

(g) Notification of appropriate entities of finality of determination

    Whenever the Commissioner's determination to impose a penalty or 
assessment under this section with respect to a medical provider or 
physician becomes final, the Commissioner shall notify the Secretary of 
the final determination and the reasons therefor, and the Secretary 
shall then notify the entities described in section 1320a-7a(h) of this 
title of such final determination.

(h) Injunction

    Whenever the Commissioner of Social Security has reason to believe 
that any person has engaged, is engaging, or is about to engage in any 
activity which makes the person subject to a civil monetary penalty 
under this section, the Commissioner of Social Security may bring an 
action in an appropriate district court of the United States (or, if 
applicable, a United States court of any territory) to enjoin such 
activity, or to enjoin the person from concealing, removing, 
encumbering, or disposing of assets which may be required in order to 
pay a civil monetary penalty and assessment if any such penalty were to 
be imposed or to seek other appropriate relief.

(i) Delegation of authority

    (1) The provisions of subsections (d) and (e) of section 405 of this 
title shall apply with respect to this section to the same extent as 
they are applicable with respect to subchapter II of this chapter. The 
Commissioner of Social Security may delegate the authority granted by 
section 405(d) of this title (as made applicable to this section) to the 
Inspector General for purposes of any investigation under this section.
    (2) The Commissioner of Social Security may delegate authority 
granted under this section to the Inspector General.

(j) ``State agency'' defined

    For purposes of this section, the term ``State agency'' shall have 
the same meaning as in section 1320a-7a(i)(1) of this title.

(k) Liability of principal for acts of agents

    A principal is liable for penalties and assessments under subsection 
(a) of this section, and for an exclusion under section 1320a-7 of this 
title based on a recommendation under subsection (a) of this section, 
for the actions of the principal's agent acting within the scope of the 
agency.

(l) Protection of ongoing criminal investigations

    As soon as the Inspector General, Social Security Administration, 
has reason to believe that fraud was involved in the application of an 
individual for monthly insurance benefits under subchapter II of this 
chapter or for benefits under subchapter VIII or XVI of this chapter, 
the Inspector General shall make available to the Commissioner of Social 
Security information identifying the individual, unless a United States 
attorney, or equivalent State prosecutor, with jurisdiction over 
potential or actual related criminal cases, certifies, in writing, that 
there is a substantial risk that making the information so available in 
a particular investigation or redetermining the eligibility of the 
individual for such benefits would jeopardize the criminal prosecution 
of any person who is a subject of the investigation from which the 
information is derived.

(Aug. 14, 1935, ch. 531, title XI, Sec. 1129, as added and amended Pub. 
L. 103-296, title I, Sec. 108(b)(10)(A), title II, Sec. 206(b)(1), 
(e)(1), Aug. 15, 1994, 108 Stat. 1483, 1509, 1515; Pub. L. 106-169, 
title II, Sec. 251(b)(6), Dec. 14, 1999, 113 Stat. 1855.)

                       References in Text

    Rule 4 of the Federal Rules of Civil Procedure, referred to in 
subsec. (b)(1), is set out in the Appendix to Title 28, Judiciary and 
Judicial Procedure.
    The Debt Collection Act of 1982, referred to in subsec. (e)(1)(D), 
is Pub. L. 97-365, Oct. 25, 1982, 96 Stat. 1749. For complete 
classification of this Act to the Code, see Short Title of 1982 
Amendment note set out under section 5514 of Title 5, Government 
Employees and Organization, and Tables.


                            Prior Provisions

    A prior section 1320a-8, act Aug. 14, 1935, ch. 531, title XI, 
Sec. 1129, as added Dec. 5, 1980, Pub. L. 96-499, title IX, Sec. 914(a), 
94 Stat. 2621; amended Aug. 13, 1981, Pub. L. 97-35, title XXI, 
Sec. 2193(c)(4), 95 Stat. 827; July 18, 1984, Pub. L. 98-369, div. B, 
title III, Sec. 2354(a)(4), 98 Stat. 1100, related to coordinated 
audits, prior to repeal by Pub. L. 100-203, title IV, 
Sec. 4118(m)(1)(A), (2), Dec. 22, 1987, 101 Stat. 1330-157, applicable 
to audits conducted after Dec. 22, 1987.


                               Amendments

    1999--Pub. L. 106-169, Sec. 251(b)(6)(A), substituted ``II, VIII'' 
for ``II'' in section catchline.
    Subsec. (a)(1)(B), (C). Pub. L. 106-169, Sec. 251(b)(6)(B), added 
subpar. (B) and redesignated former subpar. (B) as (C).
    Subsec. (a)(2). Pub. L. 106-169, Sec. 251(b)(6)(C), inserted ``or 
subchapter VIII of this chapter,'' after ``subchapter II of this 
chapter''.
    Subsec. (e)(1)(C)(ii), (iii). Pub. L. 106-169, Sec. 251(b)(6)(D), 
added cl. (ii) and redesignated former cl. (ii) as (iii).
    Subsec. (e)(2)(B). Pub. L. 106-169, Sec. 251(b)(6)(E), substituted 
``subchapter VIII or XVI'' for ``subchapter XVI''.
    Subsec. (l). Pub. L. 106-169, Sec. 251(b)(6)(F), substituted 
``subchapter VIII or XVI'' for ``subchapter XVI''.
    1994--Subsec. (a)(1). Pub. L. 103-296, Sec. 108(b)(10)(A)(i), (ii), 
in closing provisions substituted ``Commissioner of Social Security'' 
for ``Secretary'', inserted ``recommend that the Secretary'' before 
``exclude, as provided'', and struck out before period at end ``and to 
direct the appropriate State agency to exclude the person from 
participation in any State health care program permanently or for such 
period as the Secretary determines''.
    Subsecs. (a)(2), (b)(1), (2), (c). Pub. L. 103-296, 
Sec. 108(b)(10)(A)(i), substituted ``Commissioner of Social Security'' 
for ``Secretary'' wherever appearing.
    Subsec. (d). Pub. L. 103-296, Sec. 108(b)(10)(A)(i), substituted 
``Commissioner of Social Security'' for ``Secretary'' wherever 
appearing.
    Pub. L. 103-296, Sec. 108(b)(10)(A)(i), which directed that this 
section be amended by substituting ``Commissioner of Social Security'' 
for ``Secretary'' wherever appearing, was also executed by substituting 
``Commissioner's'' for ``Secretary's'' wherever appearing in subsec. 
(d), to reflect the probable intent of Congress, because Pub. L. 103-
296, Sec. 108(b)(10)(A)(i), (iii)(I), substituted ``Commissioner of 
Social Security'' for ``Secretary'' throughout this section and in 
subsec. (g) substituted ``Commissioner's'' for ``Secretary's''.
    Subsecs. (e), (f). Pub. L. 103-296, Sec. 108(b)(10)(A)(i), which 
directed amendment of this section by substituting ``Commissioner of 
Social Security'' for ``Secretary'' each place it appears, was executed 
in subsecs. (e) and (f) by making the substitution wherever appearing 
except where appearing before ``of the Treasury'' in subsec. (e)(1)(B) 
to reflect the probable intent of Congress.
    Subsec. (g). Pub. L. 103-296, Sec. 108(b)(10)(A)(iii), substituted 
``Commissioner's'' for ``Secretary's'' and ``the Commissioner shall 
notify the Secretary of the final determination and the reasons 
therefor, and the Secretary shall then notify the entities described in 
section 1320a-7a(h) of this title of such final determination.'' for 
``the provisions of section 1320a-7a(h) of this title shall apply.''
    Subsecs. (h), (i). Pub. L. 103-296, Sec. 108(b)(10)(A)(i), 
substituted ``Commissioner of Social Security'' for ``Secretary'' 
wherever appearing.
    Subsec. (k). Pub. L. 103-296, Sec. 108(b)(10)(A)(iv), inserted 
``based on a recommendation under subsection (a) of this section'' after 
``section 1320a-7 of this title''.
    Subsec. (l). Pub. L. 103-296, Sec. 206(e)(1), added subsec. (l).
    Pub. L. 103-296, Sec. 108(b)(10)(A)(i), (v), in subsec. (l) as added 
by Pub. L. 103-296, Sec. 206(e)(1), substituted ``Social Security 
Administration'' for ``Department of Health and Human Services'' and 
``Commissioner of Social Security'' for ``Secretary''.


                    Effective Date of 1994 Amendment

    Amendment by section 108(b)(10)(A) of Pub. L. 103-296 effective Mar. 
31, 1995, see section 110(a) of Pub. L. 103-296, set out as a note under 
section 401 of this title.
    Section 206(e)(2) of Pub. L. 103-296 provided that: ``The amendment 
made by paragraph (1) [amending this section] shall take effect on 
October 1, 1994.''


                             Effective Date

    Section applicable to conduct occurring on or after Oct. 1, 1994, 
see section 206(b)(3) of Pub. L. 103-296, set out as an Effective Date 
of 1994 Amendment note under section 1320a-7 of this title.


       Study on Possible Measures to Improve Fraud Prevention and 
                        Administrative Processing

    Pub. L. 106-169, title II, Sec. 210, Dec. 14, 1999, 113 Stat. 1842, 
provided that:
    ``(a) Study.--As soon as practicable after the date of the enactment 
of this Act [Dec. 14, 1999], the Commissioner of Social Security, in 
consultation with the Inspector General of the Social Security 
Administration and the Attorney General, shall conduct a study of 
possible measures to improve--
        ``(1) prevention of fraud on the part of individuals entitled to 
    disability benefits under section 223 of the Social Security Act 
    [section 423 of this title] or benefits under section 202 of such 
    Act [section 402 of this title] based on the beneficiary's 
    disability, individuals eligible for supplemental security income 
    benefits under title XVI of such Act [subchapter XVI of this 
    chapter], and applicants for any such benefits; and
        ``(2) timely processing of reported income changes by 
    individuals receiving such benefits.
    ``(b) Report.--Not later than 1 year after the date of the enactment 
of this Act [Dec. 14, 1999], the Commissioner shall submit to the 
Committee on Ways and Means of the House of Representatives and the 
Committee on Finance of the Senate a written report that contains the 
results of the Commissioner's study under subsection (a). The report 
shall contain such recommendations for legislative and administrative 
changes as the Commissioner considers appropriate.''

                  Section Referred to in Other Sections

    This section is referred to in sections 1320a-7, 1320b-6 of this 
title.
