42 U.S.C. § 1395w–2 — Intermediate sanctions for providers or suppliers of clinical diagnostic laboratory tests

(a) If the Secretary decides that a provider or clinical laboratory approved to participate under this subchapter no longer substantially meets the applicable participation or coverage conditions for providing clinical diagnostic laboratory tests under this part, the Secretary may impose intermediate sanctions developed under subsection (b) for up to 1 year. The Secretary may do this instead of immediately ending the provider agreement or immediately canceling the laboratory’s approval. (b) (1) The Secretary must develop and implement (A) a range of intermediate sanctions for providers or laboratories in the situation described in subsection (a), and (B) procedures for appealing decisions to impose those sanctions. (2) (A) The sanctions must include: (i) directed plans of correction; (ii) civil money penalties of no more than $10,000 for each day of substantial noncompliance; (iii) payment of the costs of onsite monitoring by the agency responsible for conducting surveys; and (iv) suspension of all or part of the payments the provider or laboratory otherwise would receive under this subchapter for clinical diagnostic laboratory tests furnished on or after the date the Secretary decides sanctions should be imposed under subsection (a). Section 1320a–7a, except subsections (a) and (b), applies to a penalty under clause (ii) in the same way it applies to a penalty or proceeding under section 1320a–7a(a). (B) These sanctions are in addition to sanctions otherwise available under State or Federal law. (3) The Secretary must develop and implement specific procedures stating when and how each sanction is applied, the amounts of penalties, and the severity of each penalty. The procedures must minimize the time between finding a violation and imposing a sanction and must impose increasingly severe penalties for deficiencies that are repeated or not corrected.