[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 1545 Introduced in Senate (IS)]
107th CONGRESS
1st Session
S. 1545
To amend title XVIII of the Social Security Act to provide regulatory
relief and contracting flexibility under the Medicare Program.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
October 15, 2001
Mr. Inhofe introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
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.
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.
(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.
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) 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) 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) The Secretary, in consultation with the Director of the
Office of Management and Budget, shall establish a regular timeline for
the publication of final regulations based on the previous publication
of a proposed regulation or an interim final regulation. 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. 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.''.
(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
appropriation 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) Insofar as a final regulation (other than an interim
final regulation) includes a provision that is not a logical
outgrowth of the relevant notice of proposed rulemaking
relating to such regulation, 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, physicians,
practitioners, and other suppliers or would be necessary to comply with
statutory requirements.
``(B) No compliance action shall be made against a provider of
services, physician, practitioner, or other supplier with respect to
noncompliance with such a substantive change for items and services
furnished on or before the date that is 30 days after the date of
issuance of the change, unless the Secretary provides otherwise.''.
(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) If--
``(A) a provider of services, physician, practitioner, or
other supplier follows the written guidance provided by the
Secretary or by a medicare contractor (as defined in section
1889(f)) 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;
``(B) the Secretary determines that the provider of
services, physician, practitioner, or supplier has accurately
presented the circumstances relating to such items, services,
and claim to the contractor in writing; and
``(C) the guidance was in error;
the provider of services, physician, practitioner or supplier shall not
be subject to any sanction if the provider of services, physician,
practitioner, or supplier reasonably relied on such guidance.''.
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, physician, practitioner, or supplier (or
class of such providers of services, physicians,
practitioners, 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, physician, practitioner, or
supplier or class of provider of services, physician,
practitioner, 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, physicians,
practitioners, and suppliers.
``(B) Making payments.--Making payments described
in subparagraph (A).
``(C) Beneficiary education and assistance.--
Serving as a center for, and communicating to
individuals entitled to benefits under part A or
enrolled under part B, or both, with respect to
education and outreach for those individuals, and
assistance with specific issues, concerns or problems
of those individuals.
``(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,
physicians, practitioners, or suppliers.
``(E) Communication with providers.--Serving as a
center for, and communicating to providers of services,
physicians, practitioners, and suppliers, any
information or instructions furnished to the medicare
administrative contractor by the Secretary, and
serving as a channel of communication from such providers, physicians,
practitioners, and suppliers to the Secretary.
``(F) Provider education and technical
assistance.--Performing the functions described in
subsections (e) and (f), 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 functions 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.--Notwithstanding any law with
general applicability to Federal acquisition and
procurement and except as provided in subparagraph (B),
the Secretary shall use competitive procedures when
entering into contracts with medicare administrative
contractors under this section.
``(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.
``(C) Transfer of functions.--Functions may be
transferred among medicare administrative contractors
in accordance 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 financial incentives and such other incentives
as the Secretary determines appropriate 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,
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).
``(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 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 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.''.
(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) 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'';
(iii) by striking subparagraphs (C), (D),
and (E);
(iv) in subparagraph (H)--
(I) by striking ``it'' and
inserting ``the Secretary''; and
(II) by striking ``carrier'' and
inserting ``medicare administrative
contractor''; and
(v) in the seventh sentence, by inserting
``medicare administrative contractor,'' after
``carrier,''; and
(D) by striking paragraph (5); and
(E) in paragraph (7) and succeeding paragraphs, 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 shall provide that
the medicare administrative contractor'';
(C) in paragraph (4), by striking ``a carrier'' and
inserting ``medicare administrative contractor'';
(D) 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 inserting ``contract under
section 1874A that provides for making payments under
this part shall require the medicare administrative
contractor''; and
(E) 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''; and
(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''.
(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.--(A) 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).
(B) Any such contract under such sections 1816 or 1842
whose periods begin before or during the 1-year period that
begins on the first day of the fourth calendar month that
begins after the date of enactment of this Act may be entered
into without regard to any provision of law requiring the use
of competitive procedures.
(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).
(f) Secretarial Submission of Legislative Proposal.--Not later than
6 months after the date of the enactment of this Act, the Secretary of
Health and Human Services shall submit to the appropriate committees of
Congress a legislative proposal providing for such technical and
conforming amendments in the law as are required by the provisions of
this section.
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, physicians, practitioners, 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, physicians, practitioners, and
suppliers, the Secretary shall develop and implement by October
1, 2002, 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, physicians, practitioners, 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.
(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, physicians, practitioners, 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, physicians, practitioners,
and suppliers;
``(B) maintain a toll-free telephone number at
which providers of services, physicians, practitioners,
and suppliers may obtain information regarding billing,
coding, and other appropriate information under this
title;
``(C) maintain a system for identifying 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, physicians,
practitioners, 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, 2002.
(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, physicians,
practitioners, 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) an institutional provider of services with
fewer than 25 full-time-equivalent employees; or
``(B) a physician, practitioner, or 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:
``(c) Internet Sites; FAQs.--The Secretary, and each medicare
contractor insofar as it provides services (including claims
processing) for providers of services, physicians, practitioners, or
suppliers, shall maintain an Internet site which provides answers in an
easily accessible format to frequently asked questions relating to
providers of services, physicians, practitioners, 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:
``(d) 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,
physicians, practitioners, or suppliers for the purpose of conducting
any type of audit or prepayment review.
``(e) 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.
``(f) 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, physician, practitioner, or supplier an entity
that has no authority under this title or title IX with respect to such
activities and such provider of services, physician, practitioner, 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 is made available, upon request on a
voluntary basis, to small providers of services or suppliers to
evaluate their billing and related systems for 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) Small providers of services or suppliers.--In this
section, the term ``small providers of services or suppliers''
means--
(A) an institutional provider of services with
fewer than 25 full-time-equivalent employees; or
(B) a physician, practitioner, or 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(f)(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, physicians, practitioners, 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 may 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. 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 for 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.
(a) In General.--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, physicians, practitioners, 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, physicians, practitioners, 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, physicians, practitioners, and
suppliers.''.
(b) 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
provisions of subsection (b) of section 1868 (relating to the Medicare
Provider Ombudsman), as added by subsection (a)(5), amounts as follows:
(1) For fiscal year 2002, such sums as are necessary.
(2) For fiscal year 2003, $8,000,000.
(3) For fiscal year 2004, $17,000,000.
(c) Report on Additional Funding.--Not later than October 1, 2003,
the Secretary of Health and Human Services shall submit to Congress a
report that includes the Secretary's estimate of the amount of
additional funding necessary to carry out such provisions of subsection
(b) of section 1868, as so added, in fiscal year 2005 and subsequent
fiscal years.
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 administrative law judges
responsible solely 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 such 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.
``(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 under paragraph (1) and to improve
education and training opportunities for such judges and their
staffs, $5,000,000 for fiscal year 2003 and such sums as are
necessary for fiscal year 2004 and each subsequent fiscal
year.''.
(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 service 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) Effective date.--The amendment made by paragraph (1)
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 first external hearing or appeal at which
it could be introduced under this section, unless there is good
cause which precluded the introduction of such evidence at a
previous hearing or appeal.''.
(2) Effective date.--The amendment made by paragraph (1)
shall take effect on October 1, 2002.
(d) Provider Appeals on Behalf of Deceased Beneficiaries.--
(1) In general.--Section 1869(b)(1)(C) (42 U.S.C.
1395ff(b)(1)(C)), 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 by adding at the end the following:
``The Secretary shall establish a process under which, if such
an individual is deceased, the individual is deemed to have
provided written consent to the assignment of the individual's
right of appeal under this section to the provider of services
or supplier of the item or service involved, so long as the
estate of the individual, and the individual's family and
heirs, are not liable for paying for the item or service and
are not liable for any increased coinsurance or deductible
amounts resulting from any decision increasing the reimbursement amount
for the provider of services or supplier.''.
(2) Effective date.--Notwithstanding section 521(d) of the
Medicare, Medicaid, and SCHIP Benefits Improvement and
Protection Act of 2000, as enacted into law by section 1(a)(6)
of Public Law 106-554, the amendment made by paragraph (1)
shall take effect on the date of the enactment of this Act.
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, physician, practitioner, or
other 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, physician, practitioner, or supplier for the offset or
repayment of such overpayment over a period of not longer than 3 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, physician,
practitioner, 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, physician, practitioner, 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,
physician, practitioner, or supplier has
entered into a repayment plan under
subparagraph (A) with respect to a specific
overpayment amount, such payment amount 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, physician, practitioner, 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, physician,
practitioner, 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 reconsideration
exercised.--
``(A) In general.--In the case of a provider of
services, physician, practitioner, or supplier that is
determined to have received an overpayment under this
title and that seeks a reconsideration of 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, physician, practitioner, 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,
physician, practitioner, 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.
``(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); 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, physician, practitioner, 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, physician, practitioner, or
supplier a consent settlement, the Secretary shall--
``(i) communicate to the provider of
services, physician, practitioner, or supplier
in a non-threatening manner that, based on a
review of the medical records requested by the
Secretary, a preliminary indication appears
that there would be an overpayment; and
``(ii) provide for a 45-day period during
which the provider of services, physician,
practitioner, 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, physician, practitioner, 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,
physician, practitioner, 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, physician,
practitioner, 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, physician, practitioner, 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, physician,
practitioner, 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,
physician, practitioner, or supplier based on
the initial identification by that provider of
services, physician, practitioner, 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, physician, practitioner, or supplier under
this title, the contractor shall provide the provider
of services, physician, practitioner, 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, physician, practitioner,
or supplier under this title, the contractor shall--
``(i) give the provider of services,
physician, practitioner, or supplier a full
review and explanation of the findings of the
audit in a manner that is understandable to the
provider of services, physician, practitioner,
or supplier and permits the development of an
appropriate corrective action plan;
``(ii) inform the provider of services,
physician, practitioner, or supplier of the
appeal rights under this title; and
``(iii) give the provider of services,
physician, practitioner, or supplier an
opportunity to provide additional information
to the contractor.
``(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(f).
``(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, physicians, practitioners, 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, physicians, practitioners, 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, Physicians,
Practitioners, and Suppliers.--
``(1) In general.--The Secretary shall establish by
regulation a process for the enrollment of providers of
services, physicians, practitioners, and suppliers under this
title.
``(2) Appeal process.--Such process shall provide--
``(A) a method by which providers of services,
physicians, practitioners, 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(f) of the Social Security Act,
as inserted by section 5(f)(1)) and representatives of providers of
services, physicians, practitioners, 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, physician, practitioner, or supplier is given
an opportunity to correct such an error or omission without the need to
initiate an appeal. Such process may 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 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 medical specialists at local social security
offices.
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 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; and
(4) finds that the objectives described in subsection (c)
will be met in the implementation of such guidelines.
The Secretary may 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) 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
(C) 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.--The Secretary shall submit to
Congress a report on the results of the study conducted under
paragraph (1).
(e) 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.
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