[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2768 Reported in House (RH)]






                                                 Union Calendar No. 200
107th CONGRESS
  1st Session
                                H. R. 2768

                      [Report No. 107-288, Part I]

 To amend title XVIII of the Social Security Act to provide regulatory 
     relief and contracting flexibility under the Medicare Program.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             August 2, 2001

  Mrs. Johnson of Connecticut (for herself, Mr. Stark, Mr. Camp, Mr. 
Cardin, Mr. Crane, Ms. Dunn of Washington, Mr. English, Mr. Foley, Mr. 
Hayworth, Mr. Sam Johnson of Texas, Mr. Kleczka, Mr. Lewis of Georgia, 
  Mr. Lewis of Kentucky, Mr. McCrery, Mr. McDermott, Mr. McNulty, Mr. 
    Ramstad, Mr. Shaw, Mrs. Thurman, and Mr. Weller) introduced the 
following bill; which was referred to the Committee on Ways and Means, 
 and in addition to the Committee on Energy and Commerce, for a period 
    to be subsequently determined by the Speaker, in each case for 
consideration of such provisions as fall within the jurisdiction of the 
                          committee concerned

                           November 13, 2001

    Reported from the Committee on Ways and Means with an amendment
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]

                           November 13, 2001

Referral to the Committee on Energy and Commerce extended for a period 
                ending not later than November 16, 2001

                           November 16, 2001

Referral to the Committee on Energy and Commerce extended for a period 
                 ending not later than December 7, 2001

                            December 7, 2001

  Additional sponsors: Mr. Portman, Mr. Abercrombie, Mr. McHugh, Mr. 
Lampson, Mr. Crowley, Mr. Stenholm, and Mr. George Miller of California

                            December 7, 2001

Committee on Energy and Commerce discharged; committed to the Committee 
 of the Whole House on the State of the Union and ordered to be printed
[For text of introduced bill, see copy of bill as introduced on August 
                                2, 2001]

_______________________________________________________________________

                                 A BILL


 
 To amend title XVIII of the Social Security Act to provide regulatory 
     relief and contracting flexibility under the Medicare Program.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; AMENDMENTS TO SOCIAL SECURITY ACT; TABLE OF 
              CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Medicare 
Regulatory and Contracting Reform Act of 2001''.
    (b) Amendments to Social Security Act.--Except as otherwise 
specifically provided, whenever in this Act an amendment is expressed 
in terms of an amendment to or repeal of a section or other provision, 
the reference shall be considered to be made to that section or other 
provision of the Social Security Act.
    (c) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; amendments to Social Security Act; table of 
                            contents.
Sec. 2. Issuance of regulations.
Sec. 3. Compliance with changes in regulations and policies.
Sec. 4. Increased flexibility in medicare administration.
Sec. 5. Provider education and technical assistance.
Sec. 6. Small provider technical assistance demonstration program.
Sec. 7. Medicare Provider Ombudsman; Medicare Beneficiary Ombudsman.
Sec. 8. Provider appeals.
Sec. 9. Recovery of overpayments and prepayment review; enrollment of 
                            providers.
Sec. 10. Beneficiary outreach demonstration program.
Sec. 11. Policy development regarding evaluation and management (E & M) 
                            documentation guidelines.
Sec. 12. Improvement in oversight of technology and coverage.
Sec. 13. Miscellaneous provisions.
    (d) Construction.--Nothing in this Act shall be construed--
            (1) to compromise or affect existing legal authority for 
        addressing fraud or abuse, whether it be criminal prosecution, 
        civil enforcement, or administrative remedies, including under 
        sections 3729 through 3733 of title 31, United States Code 
        (known as the False Claims Act); or
            (2) to prevent or impede the Department of Health and Human 
        Services in any way from its ongoing efforts to eliminate 
        waste, fraud, and abuse in the medicare program.
Furthermore, the consolidation of medicare administrative contracting 
set forth in this Act does not constitute consolidation of the Federal 
Hospital Insurance Trust Fund and the Federal Supplementary Medical 
Insurance Trust Fund or reflect any position on that issue.
    (e) Use of Term Supplier in Medicare.--Section 1861 (42 U.S.C. 
1395x) is amended by inserting after subsection (c) the following new 
subsection:

                               ``Supplier

    ``(d) The term `supplier' means, unless the context otherwise 
requires, a physician or other practitioner, a facility, or other 
entity (other than a provider of services) that furnishes items or 
services under this title.''.

SEC. 2. ISSUANCE OF REGULATIONS.

    (a) Consolidation of Promulgation to Once a Month.--
            (1) In general.--Section 1871 (42 U.S.C. 1395hh) is amended 
        by adding at the end the following new subsection:
    ``(d)(1) The Secretary shall issue proposed or final (including 
interim final) regulations to carry out this title only on one business 
day of every month unless publication on another date is necessary to 
comply with requirements under law.
    ``(2) The Secretary shall coordinate issuance of new regulations 
relating to a category of provider of services or suppliers based on an 
analysis of the collective impact of regulatory changes on that 
category of providers or suppliers.''.
            (2) Report on publication of regulations on a quarterly 
        basis.--Not later than 3 years after the date of the enactment 
        of this Act, the Secretary of Health and Human Services shall 
        submit to Congress a report on the feasibility of requiring 
        that regulations described in section 1871(d) of the Social 
        Security Act only be promulgated on a single day every calendar 
        quarter.
            (3) Effective date.--The amendment made by paragraph (1) 
        shall apply to regulations promulgated on or after the date 
        that is 30 days after the date of the enactment of this Act.
    (b) Regular Timeline for Publication of Final Rules.--
            (1) In general.--Section 1871(a) (42 U.S.C. 1395hh(a)) is 
        amended by adding at the end the following new paragraph:
    ``(3)(A) The Secretary, in consultation with the Director of the 
Office of Management and Budget, shall establish and publish a regular 
timeline for the publication of final regulations based on the previous 
publication of a proposed regulation or an interim final regulation.
    ``(B) Such timeline may vary among different regulations based on 
differences in the complexity of the regulation, the number and scope 
of comments received, and other relevant factors. If the Secretary 
intends to vary such timeline with respect to the publication of a 
final regulation, the Secretary shall cause to have published in the 
Federal Register notice of the different timeline by not later than the 
end of the comment period respecting such regulation. Such notice shall 
include a brief explanation of the justification for such variation.
    ``(C) In the case of interim final regulations, upon the expiration 
of the regular timeline established under this paragraph for the 
publication of a final regulation after opportunity for public comment, 
the interim final regulation shall not continue in effect unless the 
Secretary publishes a notice of continuation of the regulation that 
includes an explanation of why the regular timeline was not complied 
with. If such a notice is published, the regular timeline for 
publication of the final regulation shall be treated as having begun 
again as of the date of publication of the notice.
    ``(D) The Secretary shall annually submit to Congress a report that 
describes the instances in which the Secretary failed to publish a 
final regulation within the applicable timeline under this paragraph 
and that provides an explanation for such failures.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall take effect on the date of the enactment of this Act. The 
        Secretary of Health and Human Services shall provide for an 
        appropriate transition to take into account the backlog of 
        previously published interim final regulations.
    (c) Limitations on New Matter in Final Regulations.--
            (1) In general.--Section 1871(a) (42 U.S.C. 1395hh(a)), as 
        amended by subsection (b), is further amended by adding at the 
        end the following new paragraph:
    ``(4) If the Secretary publishes notice of proposed rulemaking 
relating to a regulation (including an interim final regulation), 
insofar as such final regulation includes a provision that is not a 
logical outgrowth of such notice of proposed rulemaking, that provision 
shall be treated as a proposed regulation and shall not take effect 
until there is the further opportunity for public comment and a 
publication of the provision again as a final regulation.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to final regulations published on or after the date 
        of the enactment of this Act.

SEC. 3. COMPLIANCE WITH CHANGES IN REGULATIONS AND POLICIES.

    (a) No Retroactive Application of Substantive Changes; Timeline for 
Compliance With Substantive Changes After Notice.--Section 1871 (42 
U.S.C. 1395hh), as amended by section 2(a), is amended by adding at the 
end the following new subsection:
    ``(e)(1)(A) A substantive change in regulations, manual 
instructions, interpretative rules, statements of policy, or guidelines 
of general applicability under this title shall not be applied (by 
extrapolation or otherwise) retroactively to items and services 
furnished before the date the change was issued, unless the Secretary 
determines that such retroactive application would have a positive 
impact on beneficiaries or providers of services and suppliers or would 
be necessary to comply with statutory requirements.
    ``(B) A substantive change in regulations, manual instructions, 
interpretative rules, statements of policy, or guidelines of general 
applicability under this title shall not become effective until at 
least 30 days after the Secretary issues the substantive change.
    ``(C) No action shall be taken against a provider of services or 
supplier with respect to noncompliance with such a substantive change 
for items and services furnished before the effective date of such a 
change.''.
    (b) Reliance on Guidance.--Section 1871(e), as added by subsection 
(a), is further amended by adding at the end the following new 
paragraph:
    ``(2)(A) If--
            ``(i) a provider of services or supplier follows the 
        written guidance (which may be transmitted electronically) 
        provided by the Secretary or by a medicare contractor (as 
        defined in section 1889(g)) acting within the scope of the 
        contractor's contract authority, with respect to the furnishing 
        of items or services and submission of a claim for benefits for 
        such items or services with respect to such provider or 
        supplier;
            ``(ii) the Secretary determines that the provider of 
        services or supplier has accurately presented the circumstances 
        relating to such items, services, and claim to the contractor 
        in writing; and
            ``(iii) the guidance was in error;
the provider of services or supplier shall not be subject to any 
sanction (including any penalty or requirement for repayment of any 
amount) if the provider of services or supplier reasonably relied on 
such guidance.
    ``(B) Subparagraph (A) shall not be construed as preventing the 
recoupment or repayment (without any additional penalty) relating to an 
overpayment insofar as the overpayment was solely the result of a 
clerical or technical operational error.''.
    (c) GAO Study on Advisory Opinion Authority.--
            (1) Study.--The Comptroller General of the United States 
        shall conduct a study to determine the feasibility and 
        appropriateness of establishing in the Secretary of Health and 
        Human Services and the Secretary's contractors authority to 
        provide legally binding advisory opinions on appropriate 
        interpretation and application of regulations to carry out the 
        medicare program under title XVIII of the Social Security Act. 
        Such study shall examine the appropriate timeframe for issuing 
        such advisory opinions, as well as the need for additional 
        staff and funding to provide such opinions.
            (2) Report.--The Comptroller General shall submit to 
        Congress a report on the study conducted under paragraph (1) by 
        not later than January 1, 2003.

SEC. 4. INCREASED FLEXIBILITY IN MEDICARE ADMINISTRATION.

    (a) Consolidation and Flexibility in Medicare Administration.--
            (1) In general.--Title XVIII is amended by inserting after 
        section 1874 the following new section:

          ``contracts with medicare administrative contractors

    ``Sec. 1874A. (a) Authority.--
            ``(1) Authority to enter into contracts.--The Secretary may 
        enter into contracts with any entity to serve as a medicare 
        administrative contractor with respect to the performance of 
        any or all of the functions described in paragraph (3) or parts 
        of those functions (or, to the extent provided in a contract, 
        to secure performance thereof by other entities).
            ``(2) Medicare administrative contractor defined.--For 
        purposes of this title and title XI--
                    ``(A) In general.--The term `medicare 
                administrative contractor' means an agency, 
                organization, or other person with a contract under 
                this section.
                    ``(B) Appropriate medicare administrative 
                contractor.--With respect to the performance of a 
                particular function or activity in relation to an 
                individual entitled to benefits under part A or 
                enrolled under part B, or both, a specific provider of 
                services or supplier (or class of such providers of 
                services or suppliers), the `appropriate' medicare 
                administrative contractor is the medicare 
                administrative contractor that has a contract under 
                this section with respect to the performance of that 
                function or activity in relation to that individual, 
                provider of services or supplier or class of provider 
                of services or supplier.
            ``(3) Functions described.--The functions referred to in 
        paragraph (1) are payment functions, provider services 
        functions, and beneficiary services functions as follows:
                    ``(A) Determination of payment amounts.--
                Determining (subject to the provisions of section 1878 
                and to such review by the Secretary as may be provided 
                for by the contracts) the amount of the payments 
                required pursuant to this title to be made to providers 
                of services, suppliers and individuals.
                    ``(B) Making payments.--Making payments described 
                in subparagraph (A) (including receipt, disbursement, 
                and accounting for funds in making such payments).
                    ``(C) Beneficiary education and assistance.--
                Providing education and outreach to individuals 
                entitled to benefits under part A or enrolled under 
                part B, or both, and providing assistance to those 
                individuals with specific issues, concerns or problems.
                    ``(D) Provider consultative services.--Providing 
                consultative services to institutions, agencies, and 
                other persons to enable them to establish and maintain 
                fiscal records necessary for purposes of this title and 
                otherwise to qualify as providers of services or 
                suppliers.
                    ``(E) Communication with providers.--Communicating 
                to providers of services and suppliers any information 
                or instructions furnished to the medicare 
                administrative contractor by the Secretary and serving 
                as a channel of communication from providers of 
                services and suppliers to the Secretary.
                    ``(F) Provider education and technical 
                assistance.--Performing the functions relating to 
                provider education, training, and technical assistance.
                    ``(G) Additional functions.--Performing such other 
                functions as are necessary to carry out the purposes of 
                this title.
            ``(4) Relationship to mip contracts.--
                    ``(A) Nonduplication of duties.--In entering into 
                contracts under this section, the Secretary shall 
                assure that functions of medicare administrative 
                contractors in carrying out activities under parts A 
                and B do not duplicate activities carried out under the 
                Medicare Integrity Program under section 1893. The 
                previous sentence shall not apply with respect to the 
                activity described in section 1893(b)(5) (relating to 
                prior authorization of certain items of durable medical 
                equipment under section 1834(a)(15)).
                    ``(B) Construction.--An entity shall not be treated 
                as a medicare administrative contractor merely by 
                reason of having entered into a contract with the 
                Secretary under section 1893.
    ``(b) Contracting Requirements.--
            ``(1) Use of competitive procedures.--
                    ``(A) In general.--Except as provided in laws with 
                general applicability to Federal acquisition and 
                procurement or in subparagraph (B), the Secretary shall 
                use competitive procedures when entering into contracts 
                with medicare administrative contractors under this 
                section, taking into account performance quality as 
                well as price and other factors.
                    ``(B) Renewal of contracts.--The Secretary may 
                renew a contract with a medicare administrative 
                contractor under this section from term to term without 
                regard to section 5 of title 41, United States Code, or 
                any other provision of law requiring competition, if 
                the medicare administrative contractor has met or 
                exceeded the performance requirements applicable with 
                respect to the contract and contractor, except that the 
                Secretary shall provide for the application of 
                competitive procedures under such a contract not less 
                frequently than once every five years.
                    ``(C) Transfer of functions.--Functions may be 
                transferred among medicare administrative contractors 
                consistent with the provisions of this paragraph. The 
                Secretary shall ensure that performance quality is 
considered in such transfers.
                    ``(D) Incentives for quality.--The Secretary shall 
                provide incentives for medicare administrative 
                contractors to provide quality service and to promote 
                efficiency.
            ``(2) Compliance with requirements.--No contract under this 
        section shall be entered into with any medicare administrative 
        contractor unless the Secretary finds that such medicare 
        administrative contractor will perform its obligations under 
        the contract efficiently and effectively and will meet such 
        requirements as to financial responsibility, legal authority, 
        quality of services provided, and other matters as the 
        Secretary finds pertinent.
            ``(3) Development of specific performance requirements.--In 
        developing contract performance requirements, the Secretary 
        shall develop performance requirements to carry out the 
        specific requirements applicable under this title to a function 
        described in subsection (a)(3). In developing such 
        requirements, the Secretary may consult with providers of 
        services and suppliers and organizations and agencies 
        performing functions necessary to carry out the purposes of 
        this section with respect to such performance requirements.
            ``(4) Information requirements.--The Secretary shall not 
        enter into a contract with a medicare administrative contractor 
        under this section unless the contractor agrees--
                    ``(A) to furnish to the Secretary such timely 
                information and reports as the Secretary may find 
                necessary in performing his functions under this title; 
                and
                    ``(B) to maintain such records and afford such 
                access thereto as the Secretary finds necessary to 
                assure the correctness and verification of the 
                information and reports under subparagraph (A) and 
                otherwise to carry out the purposes of this title.
            ``(5) Surety bond.--A contract with a medicare 
        administrative contractor under this section may require the 
        medicare administrative contractor, and any of its officers or 
        employees certifying payments or disbursing funds pursuant to 
        the contract, or otherwise participating in carrying out the 
        contract, to give surety bond to the United States in such 
        amount as the Secretary may deem appropriate.
    ``(c) Terms and Conditions.--
            ``(1) In general.--A contract with any medicare 
        administrative contractor under this section may contain such 
        terms and conditions as the Secretary finds necessary or 
        appropriate and may provide for advances of funds to the 
        medicare administrative contractor for the making of payments 
        by it under subsection (a)(3)(B).
            ``(2) Prohibition on mandates for certain data 
        collection.--The Secretary may not require, as a condition of 
        entering into a contract under this section, that the medicare 
        administrative contractor match data obtained other than in its 
        activities under this title with data used in the 
        administration of this title for purposes of identifying 
        situations in which the provisions of section 1862(b) may 
        apply.
    ``(d) Limitation on Liability of Medicare Administrative 
Contractors and Certain Officers.--
            ``(1) Certifying officer.--No individual designated 
        pursuant to a contract under this section as a certifying 
        officer shall, in the absence of gross negligence or intent to 
        defraud the United States, be liable with respect to any 
        payments certified by the individual under this section.
            ``(2) Disbursing officer.--No disbursing officer shall, in 
        the absence of gross negligence or intent to defraud the United 
        States, be liable with respect to any payment by such officer 
        under this section if it was based upon an authorization (which 
        meets the applicable requirements for such internal controls 
        established by the Comptroller General) of a certifying officer 
        designated as provided in paragraph (1) of this subsection.
            ``(3) Liability of medicare administrative contractor.--A 
        medicare administrative contractor shall be liable to the 
        United States for a payment referred to in paragraph (1) or (2) 
        if, in connection with such payment, an individual referred to 
        in either such paragraph acted with gross negligence or intent 
        to defraud the United States.
            ``(4) Indemnification by secretary.--The Secretary shall 
        make payment to a medicare administrative contractor under 
        contract with the Secretary pursuant to this section, or to any 
        member or employee thereof, or to any person who furnishes 
        legal counsel or services to such medicare administrative 
        contractor, in an amount equal to the reasonable amount of the 
        expenses incurred, as determined by the Secretary, in 
        connection with the defense of any civil suit, action, or 
        proceeding brought against such medicare administrative 
        contractor or person related to the performance of any duty, 
        function, or activity under such contract, if due care was 
        exercised by the contractor or person in the performance of 
        such duty, function, or activity.''.
            (2) Consideration of incorporation of current law 
        standards.--In developing contract performance requirements 
        under section 1874A(b) of the Social Security Act, as inserted 
        by paragraph (1), the Secretary of Health and Human Services 
        shall consider inclusion of the performance standards described 
        in sections 1816(f)(2) of such Act (relating to timely 
        processing of reconsiderations and applications for exemptions) 
        and section 1842(b)(2)(B) of such Act (relating to timely 
        review of determinations and fair hearing requests), as such 
        sections were in effect before the date of the enactment of 
        this Act.
    (b) Conforming Amendments to Section 1816 (Relating to Fiscal 
Intermediaries).--Section 1816 (42 U.S.C. 1395h) is amended as follows:
            (1) The heading is amended to read as follows:

              ``provisions relating to the administration

                              of part a''.

            (2) Subsection (a) is amended to read as follows:
    ``(a) The administration of this part shall be conducted through 
contracts with medicare administrative contractors under section 
1874A.''.
            (3) Subsection (b) is repealed.
            (4) Subsection (c) is amended--
                    (A) by striking paragraph (1); and
                    (B) in each of paragraphs (2)(A) and (3)(A), by 
                striking ``agreement under this section'' and inserting 
                ``contract under section 1874A that provides for making 
                payments under this part''.
            (5) Subsections (d) through (i) are repealed.
            (6) Subsections (j) and (k) are each amended--
                    (A) by striking ``An agreement with an agency or 
                organization under this section'' and inserting ``A 
                contract with a medicare administrative contractor 
                under section 1874A with respect to the administration 
                of this part''; and
                    (B) by striking ``such agency or organization'' and 
                inserting ``such medicare administrative contractor'' 
                each place it appears.
            (7) Subsection (l) is repealed.
    (c) Conforming Amendments to Section 1842 (Relating to Carriers).--
Section 1842 (42 U.S.C. 1395u) is amended as follows:
            (1) The heading is amended to read as follows:

              ``provisions relating to the administration

                              of part b''.

            (2) Subsection (a) is amended to read as follows:
    ``(a) The administration of this part shall be conducted through 
contracts with medicare administrative contractors under section 
1874A.''.
            (3) Subsection (b) is amended--
                    (A) by striking paragraph (1);
                    (B) in paragraph (2)--
                            (i) by striking subparagraphs (A) and (B);
                            (ii) in subparagraph (C), by striking 
                        ``carriers'' and inserting ``medicare 
                        administrative contractors''; and
                            (iii) by striking subparagraphs (D) and 
                        (E);
                    (C) in paragraph (3)--
                            (i) in the matter before subparagraph (A), 
                        by striking ``Each such contract shall provide 
                        that the carrier'' and inserting ``The 
                        Secretary'';
                            (ii) by striking ``will'' the first place 
                        it appears in each of subparagraphs (A), (B), 
                        (F), (G), (H), and (L) and inserting ``shall'';
                            (iii) in subparagraph (B), in the matter 
                        before clause (i), by striking ``to the 
                        policyholders and subscribers of the carrier'' 
                        and inserting ``to the policyholders and 
                        subscribers of the medicare administrative 
                        contractor'';
                            (iv) by striking subparagraphs (C), (D), 
                        and (E);
                            (v) in subparagraph (H)--
                                    (I) by striking ``if it makes 
                                determinations or payments with respect 
                                to physicians' services,''; and
                                    (II) by striking ``carrier'' and 
                                inserting ``medicare administrative 
                                contractor'';
                            (vi) by striking subparagraph (I);
                            (vii) in subparagraph (L), by striking the 
                        semicolon and inserting a period;
                            (viii) in the first sentence, after 
                        subparagraph (L), by striking ``and shall 
                        contain'' and all that follows through the 
                        period; and
                            (ix) in the seventh sentence, by inserting 
                        ``medicare administrative contractor,'' after 
                        ``carrier,''; and
                    (D) by striking paragraph (5);
                    (E) in paragraph (6)(D)(iv), by striking 
                ``carrier'' and inserting ``medicare administrative 
                contractor'';
                    (F) in paragraph (7), by striking ``the carrier'' 
                and inserting ``the Secretary'' each place it appears.
            (4) Subsection (c) is amended--
                    (A) by striking paragraph (1);
                    (B) in paragraph (2), by striking ``contract under 
                this section which provides for the disbursement of 
                funds, as described in subsection (a)(1)(B),'' and 
                inserting ``contract under section 1874A that provides 
                for making payments under this part'';
                    (C) in paragraph (3)(A), by striking ``subsection 
                (a)(1)(B)'' and inserting ``section 1874A(a)(3)(B)'';
                    (D) in paragraph (4), by striking ``carrier'' and 
                inserting ``medicare administrative contractor'';
                    (E) in paragraph (5), by striking ``contract under 
                this section which provides for the disbursement of 
                funds, as described in subsection (a)(1)(B), shall 
                require the carrier'' and ``carrier responses'' and 
                inserting ``contract under section 1874A that provides 
                for making payments under this part shall require the 
                medicare administrative contractor'' and ``contractor 
                responses'', respectively; and
                    (F) by striking paragraph (6).
            (5) Subsections (d), (e), and (f) are repealed.
            (6) Subsection (g) is amended by striking ``carrier or 
        carriers'' and inserting ``medicare administrative contractor 
        or contractors''.
            (7) Subsection (h) is amended--
                    (A) in paragraph (2)--
                            (i) by striking ``Each carrier having an 
                        agreement with the Secretary under subsection 
                        (a)'' and inserting ``The Secretary''; and
                            (ii) by striking ``Each such carrier'' and 
                        inserting ``The Secretary'';
                    (B) in paragraph (3)(A)--
                            (i) by striking ``a carrier having an 
                        agreement with the Secretary under subsection 
                        (a)'' and inserting ``medicare administrative 
                        contractor having a contract under section 
                        1874A that provides for making payments under 
                        this part''; and
                            (ii) by striking ``such carrier'' and 
                        inserting ``such contractor'';
                    (C) in paragraph (3)(B)--
                            (i) by striking ``a carrier'' and inserting 
                        ``a medicare administrative contractor'' each 
                        place it appears; and
                            (ii) by striking ``the carrier'' and 
                        inserting ``the contractor'' each place it 
                        appears; and
                    (D) in paragraphs (5)(A) and (5)(B)(iii), by 
                striking ``carriers'' and inserting ``medicare 
                administrative contractors'' each place it appears.
            (8) Subsection (l) is amended--
                    (A) in paragraph (1)(A)(iii), by striking 
                ``carrier'' and inserting ``medicare administrative 
                contractor''; and
                    (B) in paragraph (2), by striking ``carrier'' and 
                inserting ``medicare administrative contractor''.
            (9) Subsection (p)(3)(A) is amended by striking ``carrier'' 
        and inserting ``medicare administrative contractor''.
            (10) Subsection (q)(1)(A) is amended by striking 
        ``carrier''.
    (d) Effective Date; Transition Rule.--
            (1) Effective date.--Except as otherwise provided in this 
        subsection, the amendments made by this section shall take 
        effect on October 1, 2003, and the Secretary of Health and 
        Human Services is authorized to take such steps before such 
        date as may be necessary to implement such amendments on a 
        timely basis.
            (2) General transition rules.--The Secretary shall take 
        such steps as are necessary to provide for an appropriate 
        transition from contracts under section 1816 and section 1842 
        of the Social Security Act (42 U.S.C. 1395h, 1395u) to 
        contracts under section 1874A, as added by subsection (a)(1), 
        consistent with the requirements under such section to 
        competitively bid all contracts within 5 years after the 
        effective date in paragraph (1).
            (3) Authorizing continuation of mip functions under current 
        contracts and agreements and under rollover contracts.--The 
        provisions contained in the exception in section 1893(d)(2) of 
        the Social Security Act (42 U.S.C. 1395ddd(d)(2)) shall 
        continue to apply notwithstanding the amendments made by this 
        section, and any reference in such provisions to an agreement 
        or contract shall be deemed to include a contract under section 
        1874A of such Act, as inserted by subsection (a)(1), that 
        continues the activities referred to in such provisions.
    (e) References.--On and after the effective date provided under 
subsection (d), any reference to a fiscal intermediary or carrier under 
title XI or XVIII of the Social Security Act (or any regulation, manual 
instruction, interpretative rule, statement of policy, or guideline 
issued to carry out such titles) shall be deemed a reference to an 
appropriate medicare administrative contractor (as provided under 
section 1874A of the Social Security Act).

SEC. 5. PROVIDER EDUCATION AND TECHNICAL ASSISTANCE.

    (a) Coordination of Education Funding.--
            (1) In general.--The Social Security Act is amended by 
        inserting after section 1888 the following new section:

             ``provider education and technical assistance

    ``Sec. 1889. (a) Coordination of Education Funding.--The Secretary 
shall coordinate the educational activities provided through medicare 
contractors (as defined in subsection (i), including under section 
1893) in order to maximize the effectiveness of Federal education 
efforts for providers of services and suppliers.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall take effect on the date of the enactment of this Act.
            (3) Report.--Not later than October 1, 2002, the Secretary 
        of Health and Human Services shall submit to Congress a report 
        that includes a description and evaluation of the steps taken 
        to coordinate the funding of provider education under section 
        1889(a) of the Social Security Act, as added by paragraph (1).
    (b) Incentives To Improve Contractor Performance.--
            (1) In general.--Section 1874A, as added by section 
        4(a)(1), is amended by adding at the end the following new 
        subsection:
    ``(e) Incentives To Improve Contractor Performance in Provider 
Education and Outreach.--
            ``(1) Methodology to measure contractor error rates.--In 
        order to give medicare administrative contractors an incentive 
        to implement effective education and outreach programs for 
        providers of services and suppliers, the Secretary shall, in 
        consultation with representatives of providers and suppliers, 
        develop and implement by October 1, 2003, a methodology to 
        measure the specific claims payment error rates of such 
        contractors in the processing or reviewing of medicare claims.
            ``(2) Identification of best practices.--The Secretary 
        shall identify the best practices developed by individual 
        medicare administrative contractors for educating providers of 
        services and suppliers and how to encourage the use of such 
        best practices nationwide.''.
            (2) Report.--Not later than October 1, 2003, the Secretary 
        of Health and Human Services shall submit to Congress a report 
        that describes how the Secretary intends to use the methodology 
        developed under section 1874A(e)(1) of the Social Security Act, 
        as added by paragraph (1), in assessing medicare contractor 
        performance in implementing effective education and outreach 
        programs, including whether to use such methodology as the 
        basis for performance bonuses. The report shall include an 
        analysis of the sources of identified errors and potential 
        changes in systems of contractors and rules of the Secretary 
        that could reduce claims error rates.
    (c) Provision of Access to and Prompt Responses From Medicare 
Administrative Contractors.--
            (1) In general.--Section 1874A, as added by section 4(a)(1) 
        and as amended by subsection (b), is further amended by adding 
        at the end the following new subsection:
    ``(f) Response to Inquiries; Toll-Free Lines.--
            ``(1) Contractor responsibility.--Each medicare 
        administrative contractor shall, for those providers of 
        services and suppliers which submit claims to the contractor 
        for claims processing--
                    ``(A) respond in a clear, concise, and accurate 
                manner to specific billing and cost reporting questions 
                of providers of services and suppliers;
                    ``(B) maintain a toll-free telephone number at 
                which providers of services and suppliers may obtain 
                information regarding billing, coding, and other 
                appropriate information under this title;
                    ``(C) maintain a system for identifying (and 
                disclosing, upon request) who provides the information 
                referred to in subparagraphs (A) and (B); and
                    ``(D) monitor the accuracy, consistency, and 
                timeliness of the information so provided.
            ``(2) Evaluation.--In conducting evaluations of individual 
        medicare administrative contractors, the Secretary shall take 
into account the results of the monitoring conducted under paragraph 
(1)(D). The Secretary shall, in consultation with organizations 
representing providers of services and suppliers, establish standards 
relating to the accuracy, consistency, and timeliness of the 
information so provided.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall take effect October 1, 2003.
    (d) Improved Provider Education and Training.--
            (1) In general.--Section 1889, as added by subsection (a), 
        is amended by adding at the end the following new subsections:
    ``(b) Enhanced Education and Training.--
            ``(1) Additional resources.--For each of fiscal years 2003 
        and 2004, there are authorized to be appropriated to the 
        Secretary (in appropriate part from the Federal Hospital 
        Insurance Trust Fund and the Federal Supplementary Medical 
        Insurance Trust Fund) $10,000,000.
            ``(2) Use.--The funds made available under paragraph (1) 
        shall be used to increase the conduct by medicare contractors 
        of education and training of providers of services and 
        suppliers regarding billing, coding, and other appropriate 
        items.
    ``(c) Tailoring Education and Training Activities for Small 
Providers or Suppliers.--
            ``(1) In general.--Insofar as a medicare contractor 
        conducts education and training activities, it shall tailor 
        such activities to meet the special needs of small providers of 
        services or suppliers (as defined in paragraph (2)).
            ``(2) Small provider of services or supplier.--In this 
        subsection, the term `small provider of services or supplier' 
        means--
                    ``(A) a provider of services with fewer than 25 
                full-time-equivalent employees; or
                    ``(B) a supplier with fewer than 10 full-time-
                equivalent employees.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall take effect on October 1, 2002.
    (e) Requirement To Maintain Internet Sites.--
            (1) In general.--Section 1889, as added by subsection (a) 
        and as amended by subsection (d), is further amended by adding 
        at the end the following new subsection:
    ``(d) Internet Sites; FAQs.--The Secretary, and each medicare 
contractor insofar as it provides services (including claims 
processing) for providers of services or suppliers, shall maintain an 
Internet site which--
            ``(1) provides answers in an easily accessible format to 
        frequently asked questions, and
            ``(2) includes other published materials of the contractor,
that relate to providers of services and suppliers under the programs 
under this title (and title XI insofar as it relates to such 
programs).''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall take effect on October 1, 2002.
    (f) Additional Provider Education Provisions.--
            (1) In general.--Section 1889, as added by subsection (a) 
        and as amended by subsections (d) and (e), is further amended 
        by adding at the end the following new subsections:
    ``(e) Encouragement of Participation in Education Program 
Activities.--A medicare contractor may not use a record of attendance 
at (or failure to attend) educational activities or other information 
gathered during an educational program conducted under this section or 
otherwise by the Secretary to select or track providers of services or 
suppliers for the purpose of conducting any type of audit or prepayment 
review.
    ``(f) Construction.--Nothing in this section or section 1893(g) 
shall be construed as providing for disclosure by a medicare 
contractor--
            ``(1) of the screens used for identifying claims that will 
        be subject to medical review; or
            ``(2) of information that would compromise pending law 
        enforcement activities or reveal findings of law enforcement-
        related audits.
    ``(g) Definitions.--For purposes of this section, the term 
`medicare contractor' includes the following:
            ``(1) A medicare administrative contractor with a contract 
        under section 1874A, including a fiscal intermediary with a 
        contract under section 1816 and a carrier with a contract under 
        section 1842.
            ``(2) An eligible entity with a contract under section 
        1893.
Such term does not include, with respect to activities of a specific 
provider of services or supplier an entity that has no authority under 
this title or title IX with respect to such activities and such 
provider of services or supplier.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall take effect on the date of the enactment of this Act.

SEC. 6. SMALL PROVIDER TECHNICAL ASSISTANCE DEMONSTRATION PROGRAM.

    (a) Establishment.--
            (1) In general.--The Secretary of Health and Human Services 
        shall establish a demonstration program (in this section 
        referred to as the ``demonstration program'') under which 
        technical assistance described in paragraph (2) is made 
        available, upon request and on a voluntary basis, to small 
        providers of services or suppliers in order to improve 
        compliance with the applicable requirements of the programs 
        under medicare program under title XVIII of the Social Security 
        Act (including provisions of title XI of such Act insofar as 
        they relate to such title and are not administered by the 
        Office of the Inspector General of the Department of Health and 
        Human Services).
            (2) Forms of technical assistance.--The technical 
        assistance described in this paragraph is--
                    (A) evaluation and recommendations regarding 
                billing and related systems; and
                    (B) information and assistance regarding policies 
                and procedures under the medicare program, including 
                coding and reimbursement.
            (3) Small providers of services or suppliers.--In this 
        section, the term ``small providers of services or suppliers'' 
        means--
                    (A) a provider of services with fewer than 25 full-
                time-equivalent employees; or
                    (B) a supplier with fewer than 10 full-time-
                equivalent employees.
    (b) Qualification of Contractors.--In conducting the demonstration 
program, the Secretary of Health and Human Services shall enter into 
contracts with qualified organizations (such as peer review 
organizations or entities described in section 1889(g)(2) of the Social 
Security Act, as inserted by section 5(f)(1)) with appropriate 
expertise with billing systems of the full range of providers of 
services and suppliers to provide the technical assistance. In awarding 
such contracts, the Secretary shall consider any prior investigations 
of the entity's work by the Inspector General of Department of Health 
and Human Services or the Comptroller General of the United States.
    (c) Description of Technical Assistance.--The technical assistance 
provided under the demonstration program shall include a direct and in-
person examination of billing systems and internal controls of small 
providers of services or suppliers to determine program compliance and 
to suggest more efficient or effective means of achieving such 
compliance.
    (d) Avoidance of Recovery Actions for Problems Identified as 
Corrected.--The Secretary of Health and Human Services shall provide 
that, absent evidence of fraud and notwithstanding any other provision 
of law, any errors found in a compliance review for a small provider of 
services or supplier that participates in the demonstration program 
shall not be subject to recovery action if the technical assistance 
personnel under the program determine that--
            (1) the problem that is the subject of the compliance 
        review has been corrected to their satisfaction within 30 days 
        of the date of the visit by such personnel to the small 
        provider of services or supplier; and
            (2) such problem remains corrected for such period as is 
        appropriate.
    (e) GAO Evaluation.--Not later than 2 years after the date of the 
date the demonstration program is first implemented, the Comptroller 
General, in consultation with the Inspector General of the Department 
of Health and Human Services, shall conduct an evaluation of the 
demonstration program. The evaluation shall include a determination of 
whether claims error rates are reduced for small providers of services 
or suppliers who participated in the program and the extent of improper 
payments made as a result of the demonstration program. The Comptroller 
General shall submit a report to the Secretary and the Congress on such 
evaluation and shall include in such report recommendations regarding 
the continuation or extension of the demonstration program.
    (f) Financial Participation by Providers.--The provision of 
technical assistance to a small provider of services or supplier under 
the demonstration program is conditioned upon the small provider of 
services or supplier paying an amount estimated (and disclosed in 
advance of a provider's or supplier's participation in the program) to 
be equal to 25 percent of the cost of the technical assistance.
    (g) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary of Health and Human Services (in 
appropriate part from the Federal Hospital Insurance Trust Fund and the 
Federal Supplementary Medical Insurance Trust Fund) to carry out the 
demonstration program--
            (1) for fiscal year 2003, $1,000,000, and
            (2) for fiscal year 2004, $6,000,000.

SEC. 7. MEDICARE PROVIDER OMBUDSMAN; MEDICARE BENEFICIARY OMBUDSMAN.

    (a) Medicare Provider Ombudsman.--Section 1868 (42 U.S.C. 1395ee) 
is amended--
            (1) by adding at the end of the heading the following: ``; 
        medicare provider ombudsman'';
            (2) by inserting ``Practicing Physicians Advisory 
        Council.--(1)'' after ``(a)'';
            (3) in paragraph (1), as so redesignated under paragraph 
        (2), by striking ``in this section'' and inserting ``in this 
        subsection'';
            (4) by redesignating subsections (b) and (c) as paragraphs 
        (2) and (3), respectively; and
            (5) by adding at the end the following new subsection:
    ``(b) Medicare Provider Ombudsman.--The Secretary shall appoint a 
Medicare Provider Ombudsman. The Ombudsman shall--
            ``(1) provide assistance, on a confidential basis, to 
        providers of services and suppliers with respect to complaints, 
        grievances, and requests for information concerning the 
        programs under this title (including provisions of title XI 
        insofar as they relate to this title and are not administered 
        by the Office of the Inspector General of the Department of 
        Health and Human Services) and in the resolution of unclear or 
        conflicting guidance given by the Secretary and medicare 
        contractors to such providers of services and suppliers 
        regarding such programs and provisions and requirements under 
        this title and such provisions; and
            ``(2) submit recommendations to the Secretary for 
        improvement in the administration of this title and such 
        provisions, including--
                    ``(A) recommendations to respond to recurring 
                patterns of confusion in this title and such provisions 
                (including recommendations regarding suspending 
                imposition of sanctions where there is widespread 
                confusion in program administration), and
                    ``(B) recommendations to provide for an appropriate 
                and consistent response (including not providing for 
                audits) in cases of self-identified overpayments by 
                providers of services and suppliers.''.
    (b) Medicare Beneficiary Ombudsman.--Title XVIII is amended by 
inserting after section 1806 the following new section:

                    ``medicare beneficiary ombudsman

    ``Sec. 1807. (a) In General.--The Secretary shall appoint within 
the Department of Health and Human Services a Medicare Beneficiary 
Ombudsman who shall have expertise and experience in the fields of 
health care and advocacy.
    ``(b) Duties.--The Medicare Beneficiary Ombudsman shall--
            ``(1) receive complaints, grievances, and requests for 
        information submitted by a medicare beneficiary, with respect 
        to any aspect of the medicare program;
            ``(2) provide assistance with respect to complaints, 
        grievances, and requests referred to in paragraph (1), 
        including--
                    ``(A) assistance in collecting relevant information 
                for such beneficiaries, to seek an appeal of a decision 
                or determination made by a fiscal intermediary, 
                carrier, Medicare+Choice organization, or the 
                Secretary; and
                    ``(B) assistance to such beneficiaries with any 
                problems arising from disenrollment from a 
                Medicare+Choice plan under part C; and
            ``(3) submit annual reports to Congress and the Secretary 
        that describe the activities of the Office and that include 
        such recommendations for improvement in the administration of 
        this title as the Ombudsman determines appropriate.''.
    (c) Funding.--There are authorized to be appropriated to the 
Secretary of Health and Human Services (in appropriate part from the 
Federal Hospital Insurance Trust Fund and the Federal Supplementary 
Medical Insurance Trust Fund) to carry out the provisions of subsection 
(b) of section 1868 of the Social Security Act (relating to the 
Medicare Provider Ombudsman), as added by subsection (a)(5) and section 
1807 of such Act (relating to the Medicare Beneficiary Ombudsman), as 
added by subsection (b), such sums as are necessary for fiscal year 
2002 and each succeeding fiscal year.
    (d) Use of Central, Toll-Free Number (1-800-MEDICARE).--Section 
1804(b) (42 U.S.C. 1395b-2(b)) is amended by adding at the end the 
following: ``The Secretary shall provide, through the toll-free number 
1-800-MEDICARE, for a means by which individuals seeking information 
about, or assistance with, such programs who phone such toll-free 
number are transferred (without charge) to appropriate entities for the 
provision of such information or assistance. Such toll-free number 
shall be the toll-free number listed for general information and 
assistance in the annual notice under subsection (a) instead of the 
listing of numbers of individual contractors.''.

SEC. 8. PROVIDER APPEALS.

    (a) Medicare Administrative Law Judges.--Section 1869 (42 U.S.C. 
1395ff), as amended by section 521(a) of Medicare, Medicaid, and SCHIP 
Benefits Improvement and Protection Act of 2000 (114 Stat. 2763A-534), 
as enacted into law by section 1(a)(6) of Public Law 106-554, is 
amended by adding at the end the following new subsection:
    ``(g) Medicare Administrative Law Judges.--
            ``(1) Transition plan.--Not later than October 1, 2003, the 
        Commissioner of Social Security and the Secretary shall develop 
        and implement a plan under which the functions of 
        administrative law judges responsible for hearing cases under 
        this title (and related provisions in title XI) shall be 
        transferred from the responsibility of the Commissioner and the 
        Social Security Administration to the Secretary and the 
        Department of Health and Human Services. The plan shall include 
        recommendations with respect to--
                    ``(A) the number of administrative law judges and 
                support staff required to hear and decide such cases in 
                a timely manner; and
                    ``(B) funding levels required for fiscal year 2004 
                and subsequent fiscal years under this subsection to 
                hear such cases in a timely manner.
        Nothing in this subsection shall be construed as affecting the 
        independence of administrative law judges from the Department 
        of Health and Human Services and from medicare contractors in 
        carrying out their responsibilities for hearing and deciding 
        cases.
            ``(2) Increased financial support.--In addition to any 
        amounts otherwise appropriated, there are authorized to be 
        appropriated (in appropriate part from the Federal Hospital 
        Insurance Trust Fund and the Federal Supplementary Medical 
        Insurance Trust Fund) to the Secretary to increase the number 
        of administrative law judges described in paragraph (1) and to 
        improve education and training for such judges and their staffs 
        in carrying out functions under this title, $5,000,000 for 
        fiscal year 2003 and such sums as are necessary for fiscal year 
        2004 and each subsequent fiscal year.
            ``(3) Submittal of plan to congress and gao; report of 
        gao.--Not later than July 1, 2003, the Secretary shall submit 
        to the Committee on Ways and Means of the House of 
        Representatives, the Committee on Finance of the Senate, and 
        the Comptroller General of the United States the terms of the 
        plan developed under paragraph (1). No later than September 1, 
        2003, the Comptroller General shall submit to such Committees a 
        report containing an evaluation of the terms of such plan.''.
    (b) Process for Expedited Access to Judicial Review.--
            (1) In general.--Section 1869(b) (42 U.S.C. 1395ff(b)) as 
        amended by Medicare, Medicaid, and SCHIP Benefits Improvement 
        and Protection Act of 2000 (114 Stat. 2763A-534), as enacted 
        into law by section 1(a)(6) of Public Law 106-554, is amended--
                    (A) in paragraph (1)(A), by inserting ``, subject 
                to paragraph (2),'' before ``to judicial review of the 
                Secretary's final decision''; and
                    (B) by adding at the end the following new 
                paragraph:
            ``(2) Expedited access to judicial review.--
                    ``(A) In general.--The Secretary shall establish a 
                process under which a provider of services or supplier 
                that furnishes an item or service or a beneficiary who 
                has filed an appeal under paragraph (1) (other than an 
                appeal filed under paragraph (1)(F)) may obtain access 
                to judicial review when a review panel (described in 
                subparagraph (D)), on its own motion or at the request 
                of the appellant, determines that it does not have the 
                authority to decide the question of law or regulation 
                relevant to the matters in controversy and that there 
                is no material issue of fact in dispute. The appellant 
                may make such request only once with respect to a 
                question of law or regulation in a case of an appeal.
                    ``(B) Prompt determinations.--If, after or 
                coincident with appropriately filing a request for an 
                administrative hearing, the appellant requests a 
                determination by the appropriate review panel that no 
                review panel has the authority to decide the question 
                of law or regulations relevant to the matters in 
                controversy and that there is no material issue of fact 
                in dispute and if such request is accompanied by the 
                documents and materials as the appropriate review panel 
                shall require for purposes of making such 
                determination, such review panel shall make a 
                determination on the request in writing within 60 days 
                after the date such review panel receives the request 
                and such accompanying documents and materials. Such a 
                determination by such review panel shall be considered 
                a final decision and not subject to review by the 
                Secretary.
                    ``(C) Access to judicial review.--
                            ``(i) In general.--If the appropriate 
                        review panel--
                                    ``(I) determines that there are no 
                                material issues of fact in dispute and 
                                that the only issue is one of law or 
                                regulation that no review panel has the 
                                authority to decide; or
                                    ``(II) fails to make such 
                                determination within the period 
                                provided under subparagraph (B);
                        then the appellant may bring a civil action as 
                        described in this subparagraph.
                            ``(ii) Deadline for filing.--Such action 
                        shall be filed, in the case described in--
                                    ``(I) clause (i)(I), within 60 days 
                                of date of the determination described 
                                in such subparagraph; or
                                    ``(II) clause (i)(II), within 60 
                                days of the end of the period provided 
                                under subparagraph (B) for the 
                                determination.
                            ``(iii) Venue.--Such action shall be 
                        brought in the district court of the United 
                        States for the judicial district in which the 
                        appellant is located (or, in the case of an 
                        action brought jointly by more than one 
                        applicant, the judicial district in which the 
                        greatest number of applicants are located) or 
                        in the district court for the District of 
                        Columbia.
                            ``(iv) Interest on amounts in 
                        controversy.--Where a provider of services or 
                        supplier seeks judicial review pursuant to this 
                        paragraph, the amount in controversy shall be 
                        subject to annual interest beginning on the 
                        first day of the first month beginning after 
                        the 60-day period as determined pursuant to 
                        clause (ii) and equal to the rate of interest 
                        on obligations issued for purchase by the 
                        Federal Hospital Insurance Trust Fund for the 
                        month in which the civil action authorized 
                        under this paragraph is commenced, to be 
                        awarded by the reviewing court in favor of the 
                        prevailing party. No interest awarded pursuant 
                        to the preceding sentence shall be deemed 
                        income or cost for the purposes of determining 
                        reimbursement due providers of services or 
                        suppliers under this Act.
                    ``(D) Review panels.--For purposes of this 
                subsection, a `review panel' is an administrative law 
                judge, the Departmental Appeals Board, a qualified 
                independent contractor (as defined in subsection 
                (c)(2)), or an entity designated by the Secretary for 
                purposes of making determinations under this 
                paragraph.''.
            (2) Application to termination proceedings.--Section 
        1866(h) (42 U.S.C. 1395cc(h)) is amended by adding at the end 
        the following new paragraph:
    ``(3) The provisions of section 1869(b)(2) shall apply with respect 
to determinations described in paragraph (1) in the same manner as they 
apply to a provider of services that has filed an appeal under section 
1869(b)(1).''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to appeals filed on or after October 1, 2002.
    (c) Requiring Full and Early Presentation of Evidence.--
            (1) In general.--Section 1869(b) (42 U.S.C. 1395ff(b)), as 
        amended by Medicare, Medicaid, and SCHIP Benefits Improvement 
        and Protection Act of 2000 (114 Stat. 2763A-534), as enacted 
        into law by section 1(a)(6) of Public Law 106-554, and as 
        amended by subsection (b), is further amended by adding at the 
        end the following new paragraph:
            ``(3) Requiring full and early presentation of evidence by 
        providers.--A provider of services or supplier may not 
        introduce evidence in any appeal under this section that was 
        not presented at the reconsideration conducted by the qualified 
        independent contractor under subsection (c), unless there is 
        good cause which precluded the introduction of such evidence at 
        or before that reconsideration.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall take effect on October 1, 2002.

SEC. 9. RECOVERY OF OVERPAYMENTS AND PREPAYMENT REVIEW; ENROLLMENT OF 
              PROVIDERS.

    (a) Recovery of Overpayments and Prepayment Review.--Section 1893 
(42 U.S.C. 1395ddd) is amended by adding at the end the following new 
subsections:
    ``(f) Recovery of Overpayments and Prepayment Review.--
            ``(1) Use of repayment plans.--
                    ``(A) In general.--If the repayment, within 30 days 
                by a provider of services or supplier, of an 
                overpayment under this title would constitute a 
                hardship (as defined in subparagraph (B)), subject to 
                subparagraph (C), the Secretary shall enter into a plan 
                (which meets terms and conditions determined to be 
                appropriate by the Secretary) with the provider of 
                services or supplier for the offset or repayment of 
                such overpayment over a period of not longer than 3 
                years, or in the case of extreme hardship (as 
                determined by the Secretary) over a period of not 
                longer than 5 years. Interest shall accrue on the 
                balance through the period of repayment.
                    ``(B) Hardship.--
                            ``(i) In general.--For purposes of 
                        subparagraph (A), the repayment of an 
                        overpayment (or overpayments) within 30 days is 
                        deemed to constitute a hardship if--
                                    ``(I) in the case of a provider of 
                                services that files cost reports, the 
                                aggregate amount of the overpayments 
                                exceeds 10 percent of the amount paid 
                                under this title to the provider of 
                                services for the cost reporting period 
                                covered by the most recently submitted 
                                cost report; or
                                    ``(II) in the case of another 
                                provider of services or supplier, the 
                                aggregate amount of the overpayments 
                                exceeds 10 percent of the amount paid 
                                under this title to the provider of 
                                services or supplier for the previous 
                                calendar year.
                            ``(ii) Rule of application.--The Secretary 
                        shall establish rules for the application of 
                        this subparagraph in the case of a provider of 
                        services or supplier that was not paid under 
                        this title during the previous year or was paid 
                        under this title only during a portion of that 
                        year.
                            ``(iii) Treatment of previous 
                        overpayments.--If a provider of services or 
                        supplier has entered into a repayment plan 
                        under subparagraph (A) with respect to a 
                        specific overpayment amount, such payment 
                        amount under the repayment plan shall not be 
                        taken into account under clause (i) with 
                        respect to subsequent overpayment amounts.
                    ``(C) Exceptions.--Subparagraph (A) shall not apply 
                if the Secretary has reason to suspect that the 
                provider of services or supplier may file for 
                bankruptcy or otherwise cease to do business or if 
                there is an indication of fraud or abuse committed 
                against the program.
                    ``(D) Immediate collection if violation of 
                repayment plan.--If a provider of services or supplier 
                fails to make a payment in accordance with a repayment 
                plan under this paragraph, the Secretary may 
                immediately seek to offset or otherwise recover the 
                total balance outstanding (including applicable 
                interest) under the repayment plan.
            ``(2) Limitation on recoupment until determination by 
        qualified independent contractor.--
                    ``(A) In general.--In the case of a provider of 
                services or supplier that is determined to have 
                received an overpayment under this title and that seeks 
                a reconsideration by a qualified independent contractor 
                on such determination under section 1869(b)(1), the 
                Secretary may not take any action (or authorize any 
                other person, including any medicare contractor, as 
                defined in paragraph (9)) to recoup the overpayment 
                until the date the decision on the reconsideration has 
                been rendered.
                    ``(B) Collection with interest.--Insofar as the 
                determination on such appeal is against the provider of 
                services or supplier, interest on the overpayment shall 
                accrue on and after the date of the original notice of 
                overpayment. Insofar as such determination against the 
                provider of services or supplier is later reversed, the 
                Secretary shall provide for repayment of the amount 
                recouped plus interest at the same rate as would apply 
                under the previous sentence for the period in which the 
                amount was recouped.
            ``(3) Standardization of random prepayment review.--
                    ``(A) In general.--A medicare contractor may 
                conduct random prepayment review only to develop a 
                contractor-wide or program-wide claims payment error 
                rates or under such additional circumstances as may be 
                provided under regulations, developed in consultation 
                with providers of services and suppliers.
                    ``(B) Construction.--Nothing in subparagraph (A) 
                shall be construed as preventing the denial of payments 
                for claims actually reviewed under a random prepayment 
                review.
            ``(4) Limitation on use of extrapolation.--A medicare 
        contractor may not use extrapolation to determine overpayment 
        amounts to be recovered by recoupment, offset, or otherwise 
        unless--
                    ``(A) there is a sustained or high level of payment 
                error (as defined by the Secretary by regulation); or
                    ``(B) documented educational intervention has 
                failed to correct the payment error (as determined by 
                the Secretary).
            ``(5) Provision of supporting documentation.--In the case 
        of a provider of services or supplier with respect to which 
        amounts were previously overpaid, a medicare contractor may 
        request the periodic production of records or supporting 
        documentation for a limited sample of submitted claims to 
        ensure that the previous practice is not continuing.
            ``(6) Consent settlement reforms.--
                    ``(A) In general.--The Secretary may use a consent 
                settlement (as defined in subparagraph (D)) to settle a 
                projected overpayment.
                    ``(B) Opportunity to submit additional information 
                before consent settlement offer.--Before offering a 
                provider of services or supplier a consent settlement, 
                the Secretary shall--
                            ``(i) communicate to the provider of 
                        services or supplier in a non-threatening 
                        manner that, based on a review of the medical 
                        records requested by the Secretary, a 
                        preliminary analysis indicates that there would 
                        be an overpayment; and
                            ``(ii) provide for a 45-day period during 
                        which the provider of services or supplier may 
                        furnish additional information concerning the 
                        medical records for the claims that had been 
                        reviewed.
                    ``(C) Consent settlement offer.--The Secretary 
                shall review any additional information furnished by 
                the provider of services or supplier under subparagraph 
                (B)(ii). Taking into consideration such information, 
                the Secretary shall determine if there still appears to 
                be an overpayment. If so, the Secretary--
                            ``(i) shall provide notice of such 
                        determination to the provider of services or 
                        supplier, including an explanation of the 
                        reason for such determination; and
                            ``(ii) in order to resolve the overpayment, 
                        may offer the provider of services or 
                        supplier--
                                    ``(I) the opportunity for a 
                                statistically valid random sample; or
                                    ``(II) a consent settlement.
                The opportunity provided under clause (ii)(I) does not 
                waive any appeal rights with respect to the alleged 
                overpayment involved.
                    ``(D) Consent settlement defined.--For purposes of 
                this paragraph, the term `consent settlement' means an 
                agreement between the Secretary and a provider of 
                services or supplier whereby both parties agree to 
                settle a projected overpayment based on less than a 
                statistically valid sample of claims and the provider 
                of services or supplier agrees not to appeal the claims 
                involved.
            ``(7) Limitations on non-random prepayment review.--
                            ``(A) Limitation on initiation of non-
                        random prepayment review.--A medicare 
                        contractor may not initiate non-random 
                        prepayment review of a provider of services or 
                        supplier based on the initial identification by 
                        that provider of services or supplier of an 
                        improper billing practice unless there is a 
                        sustained or high level of payment error (as 
                        defined in paragraph (4)(A)).
                            ``(B) Termination of non-random prepayment 
                        review.--The Secretary shall issue regulations 
                        relating to the termination, including 
                        termination dates, of non-random prepayment 
                        review. Such regulations may vary such a 
                        termination date based upon the differences in 
                        the circumstances triggering prepayment review.
            ``(8) Payment audits.--
                    ``(A) Written notice for post-payment audits.--
                Subject to subparagraph (C), if a medicare contractor 
                decides to conduct a post-payment audit of a provider 
                of services or supplier under this title, the 
                contractor shall provide the provider of services or 
                supplier with written notice of the intent to conduct 
                such an audit.
                    ``(B) Explanation of findings for all audits.--
                Subject to subparagraph (C), if a medicare contractor 
                audits a provider of services or supplier under this 
                title, the contractor shall provide for an exit 
                conference with the provider or supplier during which 
                the contractor shall--
                            ``(i) give the provider of services or 
                        supplier a full review and explanation of the 
                        findings of the audit in a manner that is 
                        understandable to the provider of services or 
                        supplier and permits the development of an 
                        appropriate corrective action plan;
                            ``(ii) inform the provider of services or 
                        supplier of the appeal rights under this title;
                            ``(iii) give the provider of services or 
                        supplier an opportunity to provide additional 
                        information to the contractor; and
                            ``(iv) take into account information 
                        provided, on a timely basis, by the provider of 
                        services or supplier under clause (iii).
                    ``(C) Exception.--Subparagraphs (A) and (B) shall 
                not apply if the provision of notice or findings would 
                compromise pending law enforcement activities or reveal 
                findings of law enforcement-related audits.
            ``(9) Definitions.--For purposes of this subsection:
                    ``(A) Medicare contractor.--The term `medicare 
                contractor' has the meaning given such term in section 
                1889(g).
                    ``(B) Random prepayment review.--The term `random 
                prepayment review' means a demand for the production of 
                records or documentation absent cause with respect to a 
                claim.
    ``(g) Notice of Over-Utilization of Codes.--The Secretary shall 
establish a process under which the Secretary provides for notice to 
classes of providers of services and suppliers served by the contractor 
in cases in which the contractor has identified that particular billing 
codes may be overutilized by that class of providers of services or 
suppliers under the programs under this title (or provisions of title 
XI insofar as they relate to such programs).''.
    (b) Provider Enrollment Process; Right of Appeal.--
            (1) In general.--Section 1866 (42 U.S.C. 1395cc) is 
        amended--
                    (A) by adding at the end of the heading the 
                following: ``; enrollment processes''; and
                    (B) by adding at the end the following new 
                subsection:
    ``(j) Enrollment Process for Providers of Services and Suppliers.--
            ``(1) In general.--The Secretary shall establish by 
        regulation a process for the enrollment of providers of 
        services and suppliers under this title.
            ``(2) Appeal process.--Such process shall provide--
                    ``(A) a method by which providers of services and 
                suppliers whose application to enroll (or, if 
                applicable, to renew enrollment) are denied are 
                provided a mechanism to appeal such denial; and
                    ``(B) prompt deadlines for actions on applications 
                for enrollment (and, if applicable, renewal of 
                enrollment) and for consideration of appeals.''.
            (2) Effective date.--The Secretary of Health and Human 
        Services shall provide for the establishment of the enrollment 
        and appeal process under the amendment made by paragraph (1) 
        within 6 months after the date of the enactment of this Act.
    (c) Process for Correction of Minor Errors and Omissions on Claims 
Without Pursuing Appeals Process.--The Secretary of Health and Human 
Services shall develop, in consultation with appropriate medicare 
contractors (as defined in section 1889(g) of the Social Security Act, 
as inserted by section 5(f)(1)) and representatives of providers of 
services and suppliers, a process whereby, in the case of minor errors 
or omissions that are detected in the submission of claims under the 
programs under title XVIII of such Act, a provider of services or 
supplier is given an opportunity to correct such an error or omission 
without the need to initiate an appeal. Such process shall include the 
ability to resubmit corrected claims.

SEC. 10. BENEFICIARY OUTREACH DEMONSTRATION PROGRAM.

    (a) In General.--The Secretary of Health and Human Services shall 
establish a demonstration program (in this section referred to as the 
``demonstration program'') under which medicare specialists employed by 
the Department of Health and Human Services provide advice and 
assistance to medicare beneficiaries regarding the medicare program at 
the location of existing local offices of the Social Security 
Administration.
    (b) Locations.--
            (1) In general.--The demonstration program shall be 
        conducted in at least 6 offices or areas. Subject to paragraph 
        (2), in selecting such offices and areas, the Secretary shall 
        provide preference for offices with a high volume of visits by 
        medicare beneficiaries.
            (2) Assistance for rural beneficiaries.--The Secretary 
        shall provide for the selection of at least 2 rural areas to 
        participate in the demonstration program. In conducting the 
        demonstration program in such rural areas, the Secretary shall 
        provide for medicare specialists to travel among local offices 
        in a rural area on a scheduled basis.
    (c) Duration.--The demonstration program shall be conducted over a 
3-year period.
    (d) Evaluation and Report.--
            (1) Evaluation.--The Secretary shall provide for an 
        evaluation of the demonstration program. Such evaluation shall 
        include an analysis of--
                    (A) utilization of, and beneficiary satisfaction 
                with, the assistance provided under the program; and
                    (B) the cost-effectiveness of providing beneficiary 
                assistance through out-stationing medicare specialists 
                at local social security offices.
            (2) Report.--The Secretary shall submit to Congress a 
        report on such evaluation and shall include in such report 
        recommendations regarding the feasibility of permanently out-
        stationing medicare specialists at local offices of the Social 
        Security Administration.

SEC. 11. POLICY DEVELOPMENT REGARDING EVALUATION AND MANAGEMENT (E & M) 
              DOCUMENTATION GUIDELINES.

    (a) In General.--The Secretary of Health and Human Services may not 
implement any new documentation guidelines for evaluation and 
management physician services under the title XVIII of the Social 
Security Act on or after the date of the enactment of this Act unless 
the Secretary--
            (1) has developed the guidelines in collaboration with 
        practicing physicians and provided for an assessment of the 
        proposed guidelines by the physician community;
            (2) has established a plan that contains specific goals, 
        including a schedule, for improving the use of such guidelines;
            (3) has conducted appropriate and representative pilot 
        projects under subsection (b) to test modifications to the 
        evaluation and management documentation guidelines;
            (4) finds that the objectives described in subsection (c) 
        will be met in the implementation of such guidelines; and
            (5) has conducted appropriate outreach to physicians for 
        education and training with respect to the guidelines.
The Secretary shall make changes to the manner in which existing 
evaluation and management documentation guidelines are implemented to 
reduce paperwork burdens on physicians.
    (b) Pilot Projects To Test Evaluation and Management Documentation 
Guidelines.--
            (1) Length and consultation.--Each pilot project under this 
        subsection shall--
                    (A) be of sufficient length to allow for 
                preparatory physician and medicare contractor 
                education, analysis, and use and assessment of 
                potential evaluation and management guidelines; and
                    (B) be conducted, in development and throughout the 
                planning and operational stages of the project, in 
                consultation with practicing physicians.
            (2) Range of pilot projects.--Of the pilot projects 
        conducted under this subsection--
                    (A) at least one shall focus on a peer review 
                method by physicians (not employed by a medicare 
                contractor) which evaluates medical record information 
                for claims submitted by physicians identified as 
                statistical outliers relative to definitions published 
                in the Current Procedures Terminology (CPT) code book 
                of the American Medical Association;
                    (B) one shall focus on an alternative method to 
                detailed guidelines based on physician documentation of 
                face to face encounter time with a patient;
                    (C) at least one shall be conducted for services 
                furnished in a rural area and at least one for services 
                furnished outside such an area; and
                    (D) at least one shall be conducted in a setting 
                where physicians bill under physicians services in 
                teaching settings and at one shall be conducted in a 
                setting other than a teaching setting.
            (3) Banning of targeting of pilot project participants.--
        Data collected under this subsection shall not be used as the 
        basis for overpayment demands or post-payment audits.
            (4) Study of impact.--Each pilot project shall examine the 
        effect of the modified evaluation and management documentation 
        guidelines on--
                    (A) different types of physician practices, 
                including those with fewer than 10 full-time-equivalent 
                employees (including physicians); and
                    (B) the costs of physician compliance, including 
                education, implementation, auditing, and monitoring.
    (c) Objectives for Evaluation and Management Guidelines.--The 
objectives for modified evaluation and management documentation 
guidelines developed by the Secretary shall be to--
            (1) enhance clinically relevant documentation needed to 
        code accurately and assess coding levels accurately;
            (2) decrease the level of non-clinically pertinent and 
        burdensome documentation time and content in the physician's 
        medical record;
            (3) increase accuracy by reviewers; and
            (4) educate both physicians and reviewers.
    (d) Study of Simpler, Alternative Systems of Documentation for 
Physician Claims.--
            (1) Study.--The Secretary of Health and Human Services 
        shall carry out a study of the matters described in paragraph 
        (2).
            (2) Matters described.--The matters referred to in 
        paragraph (1) are--
                    (A) the development of a simpler, alternative 
                system of requirements for documentation accompanying 
                claims for evaluation and management physician services 
                for which payment is made under title XVIII of the 
                Social Security Act; and
                    (B) consideration of systems other than current 
                coding and documentation requirements for payment for 
                such physician services.
            (3) Consultation with practicing physicians.--In designing 
        and carrying out the study under paragraph (1), the Secretary 
        shall consult with practicing physicians, including physicians 
        who are part of group practices.
            (4) Application of hipaa uniform coding requirements.--In 
        developing an alternative system under paragraph (2), the 
        Secretary shall consider requirements of administrative 
        simplification under part C of title XI of the Social Security 
        Act.
            (5) Report to congress.--(A) The Secretary shall submit to 
        Congress a report on the results of the study conducted under 
        paragraph (1).
            (B) The Medicare Payment Advisory Commission shall conduct 
        an analysis of the results of the study included in the report 
        under subparagraph (A) and shall submit a report on such 
        analysis to Congress.
    (e) Study on Appropriate Coding of Certain Extended Office 
Visits.--The Secretary shall conduct a study of the appropriateness of 
coding in cases of extended office visits in which there is no 
diagnosis made. The Secretary shall submit a report to Congress on such 
study and shall include recommendations on how to code appropriately 
for such visits in a manner that takes into account the amount of time 
the physician spent with the patient.
    (f) Definitions.--In this section--
            (1) the term ``rural area'' has the meaning given that term 
        in section 1886(d)(2)(D) of the Social Security Act, 42 U.S.C. 
        1395ww(d)(2)(D); and
            (2) the term ``teaching settings'' are those settings 
        described in section 415.150 of title 42, Code of Federal 
        Regulations.

SEC. 12. IMPROVEMENT IN OVERSIGHT OF TECHNOLOGY AND COVERAGE.

    (a) Improved Coordination Between FDA and CMS on Coverage of 
Breakthrough Medical Devices.--
            (1) In general.--Upon request by an applicant and to the 
        extent feasible (as determined by the Secretary of Health and 
        Human Services), the Secretary shall, in the case of a class 
        III medical device that is subject to premarket approval under 
        section 515 of the Federal Food, Drug, and Cosmetic Act, 
        coordinate reviews of coverage decisions under title XVIII of 
        the Social Security Act with the review for application for 
        premarket approval conducted by the Food and Drug 
        Administration under such section. Such coordination shall 
        include the sharing of appropriate information.
            (2) Publication of plan.--Not later than 6 months after the 
        date of the enactment of this Act, the Secretary shall submit 
        to appropriate Committees of Congress a report that contains 
        the plan for improving such coordination and for shortening the 
        time lag between the premarket approval by the Food and Drug 
        Administration and coding and coverage decisions by the Centers 
        for Medicare & Medicaid Services.
            (3) Construction.--Nothing in this subsection shall be 
        construed as changing the criteria for coverage of a medical 
        device under title XVIII of the Social Security Act nor 
        premarket approval by the Food and Drug Administration.
    (b) Council for Technology and Innovation.--
            (1) Establishment.--The Secretary of Health and Human 
        Services shall establish a Council for Technology and 
        Innovation within the Centers for Medicare & Medicaid Services 
        (in this section referred to as ``CMS'').
            (2) Composition.--The Council shall be composed of senior 
        CMS staff and clinicians and shall be chaired by the Executive 
        Coordinator for Technology and Innovation (appointed or 
        designated under paragraph (4)).
            (3) Duties.--The Council shall coordinate the activities of 
        coverage, coding, and payment processes under title XVIII of 
        the Social Security Act with respect to new technologies and 
        procedures, including new drug therapies, and shall coordinate 
        the exchange of information on new technologies between CMS and 
        other entities that make similar decisions.
            (4) Executive coordinator for technology and innovation.--
        The Secretary shall appoint (or designate) a noncareer 
        appointee (as defined in section 3132(a)(7) of title 5, United 
        States Code) who shall serve as the Executive Coordinator for 
        Technology and Innovation. Such executive coordinator shall 
        report to the Administrator of CMS, shall chair the Council, 
        shall oversee the execution of its duties, and shall serve as a 
        single point of contact for outside groups and entities 
        regarding the coverage, coding, and payment processes under 
        title XVIII of the Social Security Act.
    (c) GAO Study on Improvements in External Data Collection for Use 
in the Medicare Inpatient Payment System.--
            (1) Study.--The Comptroller General of the United States 
        shall conduct a study that analyzes which external data can be 
        collected in a shorter time frame by the Centers For Medicare & 
        Medicaid Services for use in computing payments for inpatient 
        hospital services. The study may include an evaluation of the 
        feasibility and appropriateness of using of quarterly samples 
        or special surveys or any other methods. The study shall 
        include an analysis of whether other executive agencies, such 
        as the Bureau of Labor Statistics in the Department of 
        Commerce, are best suited to collect this information.
            (2) Report.--By not later than October 1, 2002, the 
        Comptroller General shall submit a report to Congress on the 
        study under paragraph (1).
    (d) Application of OSHA Bloodborne Pathogens Standard to Certain 
Hospitals.--
            (1) In general.--Section 1866 (42 U.S.C. 1395cc) is 
        amended--
                    (A) in subsection (a)(1)--
                            (i) in subparagraph (R), by striking 
                        ``and'' at the end;
                            (ii) in subparagraph (S), by striking the 
                        period at the end and inserting ``, and''; and
                            (iii) by inserting after subparagraph (S) 
                        the following new subparagraph:
            ``(T) in the case of hospitals that are not otherwise 
        subject to the Occupational Safety and Health Act of 1970, to 
        comply with the Bloodborne Pathogens standard under section 
        1910.1030 of title 29 of the Code of Federal Regulations (or as 
        subsequently redesignated).''; and
                    (B) by adding at the end of subsection (b) the 
                following new paragraph:
    ``(4)(A) A hospital that fails to comply with the requirement of 
subsection (a)(1)(T) (relating to the Bloodborne Pathogens standard) is 
subject to a civil money penalty in an amount described in subparagraph 
(B), but is not subject to termination of an agreement under this 
section.
    ``(B) The amount referred to in subparagraph (A) is an amount that 
is similar to the amount of civil penalties that may be imposed under 
section 17 of the Occupational Safety and Health Act of 1970 for a 
violation of the Bloodborne Pathogens standard referred to in 
subsection (a)(1)(T) by a hospital that is subject to the provisions of 
such Act.
    ``(C) A civil money penalty under this paragraph shall be imposed 
and collected in the same manner as civil money penalties under 
subsection (a) of section 1128A are imposed and collected under that 
section.''.
            (2) Effective date.--The amendments made by this paragraph 
        (1) shall apply to hospitals as of July 1, 2002.
    (e) IOM Study on Local Coverage Determinations.--
            (1) Study.--The Secretary shall enter into an arrangement 
        with the Institute of Medicine of the National Academy of 
        Sciences under which the Institute shall conduct a study on the 
        capabilities and information available for local coverage 
        determinations (including the application of local medical 
        review policies) under the medicare program under title XVIII 
        of the Social Security Act. Such study shall examine--
                    (A) the consistency of the definitions used in such 
                determinations;
                    (B) the extent to which such determinations are 
                based on evidence, including medical and scientific 
                evidence;
                    (C) the advantages and disadvantages of local 
                coverage decisionmaking, including the flexibility it 
                offers for ensuring timely patient access to new 
                medical technology for which data are still be 
                collected;
                    (D) whether local coverage determinations are made, 
                in the absence of adequate data, in order to collect 
                such data in a manner that results in coverage of 
                experimental items or services; and
                    (E) the advantages and disadvantages of maintaining 
                local medicare contractor advisory committees that can 
                advise on local coverage decisions based on an open, 
                collaborative public process.
            (2) Report.--Such arrangement shall provide that the 
        Institute shall submit to the Secretary a report on such study 
        by not later than 3 years after the date of the enactment of 
        this Act. The Secretary shall promptly transmit a copy of such 
        report to Congress.
    (f) Methods for Determining Payment Basis for New Lab Tests.--
Section 1833(h) (42 U.S.C. 1395l(h)) is amended by adding at the end 
the following:
    ``(8)(A) The Secretary shall establish by regulation procedures for 
determining the basis for, and amount of, payment under this subsection 
for any clinical diagnostic laboratory test with respect to which a new 
or substantially revised HCPCS code is assigned on or after January 1, 
2003 (in this paragraph referred to as `new tests').
    ``(B) Determinations under subparagraph (A) shall be made only 
after the Secretary--
            ``(i) makes available to the public (through an Internet 
        site and other appropriate mechanisms) a list that includes any 
        such test for which establishment of a payment amount under 
        this subsection is being considered for a year;
            ``(ii) on the same day such list is made available, causes 
        to have published in the Federal Register notice of a meeting 
        to receive comments and recommendations (and data on which 
        recommendations are based) from the public on the appropriate 
        basis under this subsection for establishing payment amounts 
        for the tests on such list;
            ``(iii) not less than 30 days after publication of such 
        notice convenes a meeting, that includes representatives of 
        officials of the Centers for Medicare & Medicaid Services 
        involved in determining payment amounts, to receive such 
        comments and recommendations (and data on which the 
        recommendations are based);
            ``(iv) taking into account the comments and recommendations 
        (and accompanying data) received at such meeting, develops and 
makes available to the public (through an Internet site and other 
appropriate mechanisms) a list of proposed determinations with respect 
to the appropriate basis for establishing a payment amount under this 
subsection for each such code, together with an explanation of the 
reasons for each such determination, the data on which the 
determinations are based, and a request for public written comments on 
the proposed determination; and
            ``(v) taking into account the comments received during the 
        public comment period, develops and makes available to the 
        public (through an Internet site and other appropriate 
        mechanisms) a list of final determinations of the payment 
        amounts for such tests under this subsection, together with the 
        rationale for each such determination, the data on which the 
        determinations are based, and responses to comments and 
        suggestions received from the public.
    ``(C) Under the procedures established pursuant to subparagraph 
(A), the Secretary shall--
            ``(i) set forth the criteria for making determinations 
        under subparagraph (A); and
            ``(ii) make available to the public the data (other than 
        proprietary data) considered in making such determinations.
    ``(D) The Secretary may convene such further public meetings to 
receive public comments on payment amounts for new tests under this 
subsection as the Secretary deems appropriate.
    ``(E) For purposes of this paragraph:
            ``(i) The term `HCPCS' refers to the Health Care Procedure 
        Coding System.
            ``(ii) A code shall be considered to be `substantially 
        revised' if there is a substantive change to the definition of 
        the test or procedure to which the code applies (such as a new 
        analyte or a new methodology for measuring an existing analyte-
        specific test).''.

SEC. 13. MISCELLANEOUS PROVISIONS.

    (a) Treatment of Hospitals for Certain Services Under Medicare 
Secondary Payor (MSP) Provisions.--
            (1) In general.--The Secretary of Health and Human Services 
        shall not require a hospital (including a critical access 
        hospital) to ask questions (or obtain information) relating to 
        the application of section 1862(b) of the Social Security Act 
        (relating to medicare secondary payor provisions) in the case 
        of reference laboratory services described in paragraph (2), if 
        the Secretary does not impose such requirement in the case of 
        such services furnished by an independent laboratory.
            (2) Reference laboratory services described.--Reference 
        laboratory services described in this paragraph are clinical 
        laboratory diagnostic tests (or the interpretation of such 
        tests, or both) furnished without a face-to-face encounter 
        between the beneficiary and the hospital involved and in which 
        the hospital submits a claim only for such test or 
        interpretation.
    (b) Clarification of Prudent Layperson Test for Emergency Services 
Under the Medicare Fee-for-Service Program.--
            (1) In general.--Section 1862 (42 U.S.C. 1395y) is amended 
        by inserting after subsection (c) the following new subsection:
    ``(d) In the case of hospital services and physicians' services 
that--
            ``(1) are furnished, to an individual who is not enrolled 
        in a Medicare+Choice plan under part C, by a hospital or a 
        critical access hospital; and
            ``(2) are needed to evaluate or stabilize an emergency 
        medical condition (as defined in section 1852(d)(3)(B), 
        relating to application of a prudent layperson rule) and that 
        are provided to meet the requirements of section 1867,
such services shall be deemed to be reasonable and necessary for the 
diagnosis or treatment of illness or injury for purposes of subsection 
(a)(1)(A).''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to items and services furnished on or after January 
        1, 2002.
    (c) Prompt Submission of Overdue Reports on Payment and Utilization 
of Outpatient Therapy Services.--The Secretary of Health and Human 
Services shall submit to Congress as expeditiously as practicable the 
reports required under section 4541(d)(2) of the Balanced Budget Act of 
1997 (relating to alternatives to a single annual dollar cap on 
outpatient therapy) and under section 221(d) of the Medicare, Medicaid, 
and SCHIP Balanced Budget Refinement Act of 1999 (relating to 
utilization patterns for outpatient therapy).
    (d) Authorizing Use of Arrangements With Other Hospice Programs To 
Provide Core Hospice Services in Certain Circumstances.--
            (1) In general.--Section 1861(dd)(5) (42 U.S.C. 
        1395x(dd)(5)) is amended by adding at the end the following new 
        subparagraph:
    ``(D) In extraordinary, exigent, or other non-routine 
circumstances, such as unanticipated periods of high patient loads, 
staffing shortages due to illness or other events, or temporary travel 
of a patient outside a hospice program's service area, a hospice 
program may enter into arrangements with another hospice program for 
the provision by that other program of services described in paragraph 
(2)(A)(ii)(I). The provisions of paragraph (2)(A)(ii)(II) shall apply 
with respect to the services provided under such arrangements.''.
            (2) Conforming payment provision.--Section 1814(i) (42 
        U.S.C. 1395f(i)) is amended by adding at the end the following 
        new paragraph:
    ``(4) In the case of hospice care provided by a hospice program 
under arrangements under section 1861(dd)(5)(D) made by another hospice 
program, the hospice program that made the arrangements shall bill and 
be paid for the hospice care.''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to hospice care provided on or after the date of 
        the enactment of this Act.
                                                 Union Calendar No. 200

107th CONGRESS

  1st Session

                               H. R. 2768

                      [Report No. 107-288, Part I]

_______________________________________________________________________

                                 A BILL

 To amend title XVIII of the Social Security Act to provide regulatory 
     relief and contracting flexibility under the Medicare Program.

_______________________________________________________________________

                            December 7, 2001

Committee on Energy and Commerce discharged; committed to the Committee 
 of the Whole House on the State of the Union and ordered to be printed