42 U.S.C. § 1395w–2

(a) If the Secretary determines that any provider or clinical laboratory approved for participation under this subchapter no longer substantially meets the conditions of participation or for coverage specified under this subchapter with respect to the provision of clinical diagnostic laboratory tests under this part, the Secretary may (for a period not to exceed one year) impose intermediate sanctions developed pursuant to subsection (b), in lieu of terminating immediately the provider agreement or cancelling immediately approval of the clinical laboratory. (b) (1) The Secretary shall develop and implement— (A) a range of intermediate sanctions to apply to providers or clinical laboratories under the conditions described in subsection (a), and (B) appropriate procedures for appealing determinations relating to the imposition of such sanctions. (2) (A) The intermediate sanctions developed under paragraph (1) shall include— (i) directed plans of correction, (ii) civil money penalties in an amount not to exceed $10,000 for each day of substantial noncompliance, (iii) payment for the costs of onsite monitoring by an agency responsible for conducting surveys, and (iv) suspension of all or part of the payments to which a provider or clinical laboratory would otherwise be entitled under this subchapter with respect to clinical diagnostic laboratory tests furnished on or after the date on which the Secretary determines that intermediate sanctions should be imposed pursuant to subsection (a). The provisions of section 1320a–7a of this title (other than subsections (a) and (b)) shall apply to a civil money penalty under clause (ii) in the same manner as such provisions apply to a penalty or proceeding under section 1320a–7a(a) of this title . (B) The sanctions specified in subparagraph (A) are in addition to sanctions otherwise available under State or Federal law. (3) The Secretary shall develop and implement specific procedures with respect to when and how each of the intermediate sanctions developed under paragraph (1) is to be applied, the amounts of any penalties, and the severity of each of these penalties. Such procedures shall be designed so as to minimize the time between identification of violations and imposition of these sanctions and shall provide for the imposition of incrementally more severe penalties for repeated or uncorrected deficiencies.