This bill amends title XVIII (Medicare) of the Social Security Act to prohibit payment under Medicare part B (Supplementary Medical Insurance) for an item or service furnished: (1) in a state that requires licensure unless the provider or supplier possesses all applicable state licensure, or (2) in a state that does not require licensure unless the provider or supplier meets all qualifications established by the Secretary of Health and Human Services.

The Secretary shall designate and approve independent accreditation organizations that apply quality standards for suppliers only if they are Boards for Orthotist/Prosthetist Certification or essentially equivalent programs.

Special payment rules for certain prosthetics and custom-fabricated orthotics are extended to custom-fitted orthotics. Such rules do not apply, however, to off-the-shelf orthotics furnished on or after January 1, 2016, which are included in a competitive acquisition program.

Decisions about Medicare coverage of orthotics and prosthetics on or after January 1, 2016, must take into account the complexity of the item as well as supplier qualifications (which do not apply, however, to physicians, occupational therapists, or physical therapists state-licensed to provide such items).

Documentation created by an orthotist or prosthetist is considered part of the patient's medical record.

Requirements for suppliers of orthotics and prosthetics are separated from those for suppliers of durable medical equipment.

Orthotists and prosthetists must have a supplier number for Medicare payment to be made.

Patients are not liable for payment of furnished orthotics or prosthetics where payment may not be made or where payment is denied. Only the orthotists or prosthetists are liable in such circumstances.

The Secretary must publish on the Internet website of the Centers for Medicare and Medicaid Services specified performance information about each recovery audit contractor (RAC).

The Secretary is prohibited from recouping more than 50% of any overpayments for qualified providers and hospitals in response to a RAC audit until an administrative law judge has rendered a decision.

The Secretary may recoup any overpayments, though, related to or resulting from fraudulent activity on the part of a Medicare provider or supplier.

Only the patient may make the minimal self-adjustment required to qualify off-the-shelf orthotics for Medicare coverage in a competitive acquisition program.