[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