BRIBES, KICKBACKS, MEDICAL REFERRAL PAYMENTS, ETC.

SEC. 310. BRIBES, KICKBACKS, MEDICAL REFERRAL PAYMENTS, ETC. (a) Amendments to Section 162(c)—Section 162(c) (relating to bribes and illegal kickbacks) is amended— (1) by striking out paragraphs (2) and (3) and inserting in lieu thereof the following new paragraphs: “(2) Other illegal payments.—No deduction shall be allowed under subsection (a) for any payment (other than a payment described in paragraph (1)) made, directly or indirectly, to any person, if the payment constitutes an illegal bribe, illegal kick-back, or other illegal payment under any law of the United States, or under any law of a State (but only if such State law is generally enforced), which subjects the payor to a criminal penalty or the loss of license or privilege to engage in a trade or business. For purposes of this paragraph, a kickback includes a payment in consideration of the referral of a client, patient, or customer. The burden of proof in respect of the issue, for purposes of this paragraph, as to whether a payment constitutes an illegal bribe, illegal kickback, or other illegal payment shall be upon the Secretary or his delegate to the same extent as he bears the burden of proof under section 7454 (concerning the burden of proof when the issue relates to fraud). “(3) Kickbacks, rebates, and bribes under medicare and medicaid—No deduction shall be allowed under subsection (a) for any kickback, rebate, or bribe made by any provider of services, supplier, physician, or other person who furnishes items or services for which payment is or may be made under the Social Security Act, or in whole or in part out of Federal funds under a State plan approved under such Act, if such kickback, rebate, or bribe is made in connection with the furnishing of such items or services or the making or receipt of such payments. For purposes of this paragraph, a kickback includes a payment in consideration of the referral of a client, patient, or customer.”; and (2) by striking out “Bribes and Illegal Kickbacks.” in the heading of such section and inserting in lieu thereof “Illegal Bribes, Kickbacks, and Other Payments.”. (b) Effective Date—The amendments made by subsection (a) shall apply with respect to payments after December 30, 1969, except that section 162(c) (3) of the internal Revenue Act of 1954 (as added by subsection (a)) shall apply only with respect to kickbacks, rebates, and bribes payment of which is made on or after the date of the enactment of this Act.