[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 1332 Introduced in Senate (IS)]






108th CONGRESS
  1st Session
                                S. 1332

 To amend title XVIII of the Social Security Act to provide regulatory 
relief, appeals process reforms, contracting flexibility, and education 
    improvements under the medicare program, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 25, 2003

   Mr. Hatch 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, appeals process reforms, contracting flexibility, and education 
    improvements under the medicare program, and for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Medicare 
Education, Regulatory Reform, and Contracting Improvement Act of 
2003''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
                       TITLE I--REGULATORY REFORM

Sec. 101. Compliance with changes in regulations and policies.
Sec. 102. Report on legal and regulatory inconsistencies.
Sec. 103. Status of pending interim final regulations.
                    TITLE II--APPEALS PROCESS REFORM

Sec. 201. Submission of plan for transfer of responsibility for 
                            medicare appeals.
Sec. 202. Expedited access to judicial review.
Sec. 203. Cost report reform.
Sec. 204. Expedited review of certain provider agreement 
                            determinations.
Sec. 205. Revisions to medicare appeals process.
Sec. 206. Hearing rights related to decisions by the Secretary to deny 
                            or not renew a medicare enrollment 
                            agreement; consultation before changing 
                            provider enrollment forms.
Sec. 207. Appeals by providers when there is no other party available.
Sec. 208. Provider access to review of local coverage determinations.
                     TITLE III--CONTRACTING REFORM

Sec. 301. Increased flexibility in medicare administration.
             TITLE IV--EDUCATION AND OUTREACH IMPROVEMENTS

Sec. 401. Provider education and technical assistance.
Sec. 402. Access to and prompt responses from medicare contractors.
Sec. 403. Reliance on guidance.
Sec. 404. Medicare provider ombudsman; medicare beneficiary ombudsman.
Sec. 405. Beneficiary outreach demonstration program.
           TITLE V--REVIEW, RECOVERY, AND ENFORCEMENT REFORM

Sec. 501. Prepayment review.
Sec. 502. Recovery of overpayments.
Sec. 503. Process for correction of minor errors and omissions on 
                            claims without pursuing appeals process.
Sec. 504. Authority to waive a program exclusion.
Sec. 505. Recovery of overpayments.
                      TITLE VI--OTHER IMPROVEMENTS

Sec. 601. Inclusion of additional information in notices to 
                            beneficiaries about skilled nursing 
                            facility and hospital benefits.
Sec. 602. Information on medicare-certified skilled nursing facilities 
                            in hospital discharge plans.
Sec. 603. Evaluation and management documentation guidelines 
                            consideration.
Sec. 604. Improvement in oversight of technology and coverage.
Sec. 605. Treatment of hospitals for certain services under medicare 
                            secondary payor (MSP) provisions.
Sec. 606. EMTALA improvements.
Sec. 607. Emergency Medical Treatment and Active Labor Act (EMTALA) 
                            technical advisory group.
Sec. 608. Authorizing use of arrangements to provide core hospice 
                            services in certain circumstances.
Sec. 609. Coverage of hospice consultation services.
Sec. 610. Application of OSHA bloodborne pathogens standard to certain 
                            hospitals.
Sec. 611. BIPA-related technical amendments and corrections.
Sec. 612. Treatment of certain dental claims.
Sec. 613. Revisions to reassignment provisions.
Sec. 614. GAO study and report regarding Illinois Council decision.

                       TITLE I--REGULATORY REFORM

SEC. 101. COMPLIANCE WITH CHANGES IN REGULATIONS AND POLICIES.

    (a) No Retroactive Application of Substantive Changes.--
            (1) In general.--Section 1871 (42 U.S.C. 1395hh) is amended 
        by adding at the end the following new subsection:
    ``(d)(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 effective date of the change, unless the Secretary 
determines that--
            ``(i) such retroactive application is necessary to comply 
        with statutory requirements; or
            ``(ii) failure to apply the change retroactively would be 
        contrary to the public interest.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to substantive changes issued on or after the date 
        of the enactment of this Act.
    (b) Timeline for Compliance With Substantive Changes After 
Notice.--
            (1) In general.--Section 1871(d)(1), as added by subsection 
        (a), is amended by adding at the end the following:
    ``(B) A compliance action may be made against a provider of 
services, physician, practitioner, or other supplier with respect to 
noncompliance with such a substantive change only for items and 
services furnished on or after the effective date of the change.
    ``(C)(i) Except as provided in clause (ii), a substantive change 
may not take effect until not earlier than the date that is the end of 
the 30-day period that begins on the date that the Secretary has issued 
or published, as the case may be, the substantive change.
    ``(ii) The Secretary may provide for a substantive change to take 
effect on a date that precedes the end of the 30-day period under 
clause (i) if the Secretary finds that waiver of such 30-day period is 
necessary to comply with statutory requirements or that the application 
of such 30-day period is contrary to the public interest. If the 
Secretary provides for an earlier effective date pursuant to this 
clause, the Secretary shall include in the issuance or publication of 
the substantive change a finding described in the first sentence, and a 
brief statement of the reasons for such finding.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to compliance actions undertaken on or after the 
        date of the enactment of this Act.

SEC. 102. REPORT ON LEGAL AND REGULATORY INCONSISTENCIES.

    Section 1871 (42 U.S.C. 1395hh), as amended by section 101(a)(1), 
is amended by adding at the end the following new subsection:
    ``(e)(1) Not later than 2 years after the date of the enactment of 
this subsection, and every 2 years thereafter, the Secretary shall 
submit to Congress a report with respect to the administration of this 
title and areas of inconsistency or conflict among the various 
provisions under law and regulation.
    ``(2) In preparing a report under paragraph (1), the Secretary 
shall collect--
            ``(A) information from beneficiaries, providers of 
        services, physicians, practitioners, and other suppliers with 
        respect to such areas of inconsistency and conflict; and
            ``(B) information from medicare contractors that tracks the 
        nature of communications and correspondence, including the 
        communications and correspondence required under section 1874A.
    ``(3) A report under paragraph (1) shall include a description of 
efforts by the Secretary to reduce such inconsistency or conflicts, and 
recommendations for legislation or administrative action that the 
Secretary determines appropriate to further reduce such inconsistency 
or conflicts.''.

SEC. 103. STATUS OF PENDING INTERIM FINAL REGULATIONS.

    Section 1871 (42 U.S.C. 1395hh) as amended by sections 101 and 102, 
is amended by adding at the end the following new subsection:
    ``(f) The Secretary shall publish in the Federal Register at lease 
once every 6 months a list that provides the status of each interim 
final regulation for which no final regulation has been published. Such 
list shall include the date by which the Secretary plans to publish the 
final regulation that is based on the interim final regulation.''.

                    TITLE II--APPEALS PROCESS REFORM

SEC. 201. SUBMISSION OF PLAN FOR TRANSFER OF RESPONSIBILITY FOR 
              MEDICARE APPEALS.

    (a) Submission of Transition Plan.--
            (1) In general.--Not later than April 1, 2004, the 
        Commissioner of Social Security and the Secretary shall develop 
        and transmit to Congress and the Comptroller General of the 
        United States a plan under which the functions of 
        administrative law judges responsible for hearing cases under 
        title XVIII of the Social Security Act (and related provisions 
        in title XI of such Act) are transferred from the 
        responsibility of the Commissioner and the Social Security 
        Administration to the Secretary and the Department of Health 
        and Human Services.
            (2) Contents.--The plan shall include information on the 
        following:
                    (A) Workload.--The number of such administrative 
                law judges and support staff required now and in the 
                future to hear and decide such cases in a timely 
                manner, taking into account the current and anticipated 
                claims volume, appeals, number of beneficiaries, and 
                statutory changes.
                    (B) Cost projections and financing.--Funding levels 
                required for fiscal year 2005 and subsequent fiscal 
                years to carry out the functions transferred under the 
                plan and how such transfer should be financed.
                    (C) Transition timetable.--A timetable for the 
                transition.
                    (D) Regulations.--The establishment of specific 
                regulations to govern the appeals process.
                    (E) Case tracking.--The development of a unified 
                case tracking system that will facilitate the 
                maintenance and transfer of case specific data across 
                both the fee-for-service and managed care components of 
                the medicare program.
                    (F) Feasibility of precedential authority.--The 
                feasibility of developing a process to give decisions 
                of the Departmental Appeals Board in the Department of 
                Health and Human Services addressing broad legal issues 
                binding, precedential authority.
                    (G) Access to administrative law judges.--The 
                feasibility of--
                            (i) filing appeals with administrative law 
                        judges electronically; and
                            (ii) conducting hearings using tele- or 
                        video-conference technologies.
                    (H) Independence of judges.--The steps that should 
                be taken to ensure that judges who perform the 
                administrative law judge functions after the transfer 
                under the plan maintain their independence from the 
                Centers for Medicare & Medicaid Services and its 
                contractors.
                    (I) Geographic distribution.--The steps that should 
                be taken to provide for an appropriate geographic 
                distribution of judges performing the administrative 
                law judge functions that are transferred under the plan 
                throughout the United States to ensure timely access to 
                such judges.
                    (J) Hiring.--The steps that should be taken to hire 
                judges (and support staff) to perform the 
                administrative law judge functions that are transferred 
                under the plan.
                    (K) Performance standards.--The establishment of 
                performance standards for judges performing the 
                administrative law judge functions that are transferred 
                under the plan with respect to timelines for decisions 
                in cases under title XVIII.
                    (L) Shared resources.--The feasibility of the 
                Secretary entering into such arrangements with the 
                Commissioner of Social Security as may be appropriate 
                with respect to transferred functions under the plan to 
                share office space, support staff, and other resources, 
                with appropriate reimbursement.
                    (M) Training.--The training that should be provided 
                to judges performing the administrative law judge 
                functions that are transferred under the plan with 
                respect to laws and regulations under title XVIII.
            (3) Additional information.--The plan may also include 
        recommendations for further congressional action, including 
        modifications to the requirements and deadlines established 
        under section 1869 of the Social Security Act (as amended by 
        sections 521 and 522 of BIPA (114 Stat. 2763A-534) and this 
        Act).
    (b) GAO Evaluation.--The Comptroller General of the United States 
shall--
            (1) evaluate the plan submitted under subsection (a); and
            (2) not later than 6 months after such submission, submit 
        to Congress a report on such evaluation.

SEC. 202. EXPEDITED ACCESS TO JUDICIAL REVIEW.

    (a) In General.--Section 1869(b) (42 U.S.C. 1395ff(b)) is amended--
            (1) in paragraph (1)(A), by inserting ``, subject to 
        paragraph (2),'' before ``to judicial review of the Secretary's 
        final decision''; and
            (2) 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)(i)) may obtain 
                access to judicial review when a review entity 
                (described in subparagraph (D)), on its own motion or 
                at the request of the appellant, determines that the 
                Departmental Appeals Board 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 for a specific matter in dispute 
                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 entity that the 
                Departmental Appeals Board does not have 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 entity shall require for purposes of 
                making such determination, such review entity shall 
                make a determination on the request in writing within 
                60 days after the date such review entity receives the 
                request and such accompanying documents and materials. 
                Such a determination by such review entity 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 entity--
                                    ``(I) determines that there are no 
                                material issues of fact in dispute and 
                                that the only issue is one of law or 
                                regulation that the Departmental 
                                Appeals Board does not have 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 the date of the determination 
                                described in such clause; 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 any amounts in 
                        controversy.--Where a provider of services or 
                        supplier is granted judicial review pursuant to 
                        this paragraph, the amount in controversy (if 
                        any) 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 Supplementary Medical 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, physicians, practitioners, and other 
                        suppliers under this Act.
                    ``(D) Review entity defined.--For purposes of this 
                subsection, the term `review entity' means an entity of 
                up to 3 qualified reviewers drawn from existing appeals 
                levels other than the redetermination level.''.
    (b) Application to Provider Agreement Determinations.--Section 
1866(h)(1) (42 U.S.C. 1395cc(h)(1)) is amended--
            (1) by inserting ``(A)'' after ``(h)(1)''; and
            (2) by adding at the end the following new subparagraph:
    ``(B) An institution or agency described in subparagraph (A) that 
has filed for a hearing under subparagraph (A) shall have expedited 
access to judicial review under this subparagraph in the same manner as 
providers of services, suppliers, and beneficiaries may obtain 
expedited access to judicial review under the process established under 
section 1869(b)(2). Nothing in this subparagraph shall be construed to 
affect the application of any remedy imposed under section 1819 during 
the pendency of an appeal under this subparagraph.''.
    (c) Conforming Amendment.--Section 1869(b)(1)(F)(ii) (42 U.S.C. 
1395ff(b)(1)(F)(ii)) is amended to read as follows:
                            ``(ii) Reference to expedited access to 
                        judicial review.--For the provision relating to 
                        expedited access to judicial review, see 
                        paragraph (2).''.
    (d) Effective Date.--The amendments made by this section shall 
apply to appeals filed on or after October 1, 2004.

SEC. 203. COST REPORT REFORM.

    (a) Report.--Not later than the date that is 1 year after the date 
of enactment of this Act, the Secretary shall submit to the Committee 
on Finance of the Senate and the Committees on Ways and Means and 
Energy and Commerce of the House of Representatives a report 
recommending specific ways to modernize the cost reporting system under 
the medicare program under title XVIII of the Social Security Act (42 
U.S.C. 1395 et seq.). Such report shall be consistent with the 
recommendations of the Secretary's Advisory Committee on Regulatory 
Reform, including the use of Generally Accepted Accounting Principles.
    (b) Consultation.--In developing the report submitted under 
subsection (a), the Secretary shall consult with representatives of the 
hospital industry, the Medicare Payment Advisory Commission, the 
General Accounting Office, and such other individuals and entities as 
the Secretary determines to be appropriate.

SEC. 204. EXPEDITED REVIEW OF CERTAIN PROVIDER AGREEMENT 
              DETERMINATIONS.

    (a) Termination and Certain Other Immediate Remedies.--
            (1) In general.--The Secretary shall develop and implement 
        a process to expedite proceedings under sections 1866(h) of the 
        Social Security Act (42 U.S.C. 1395cc(h)) in which--
                    (A) the remedy of termination of participation has 
                been imposed;
                    (B) a sanction described in clause (i) or (iii) of 
                section 1819(h)(2)(B) of such Act (42 U.S.C. 1395i-
                3(h)(2)(B)) has been imposed, but only if such sanction 
                has been imposed on an immediate basis; or
                    (C) the Secretary has required a skilled nursing 
                facility to suspend operations of a nurse aide training 
                program.
            (2) Priority for cases of termination.--Under the process 
        described in paragraph (1), priority shall be provided in cases 
        of termination described in subparagraph (A) of such paragraph.
    (b) Increased Financial Support.--In addition to any amounts 
otherwise appropriated, to reduce by 50 percent the average time for 
administrative determinations on appeals under section 1866(h) of the 
Social Security Act (42 U.S.C. 1395cc(h)), 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 such sums for fiscal year 2004 and each subsequent 
fiscal year as may be necessary to increase the number of 
administrative law judges (and their staffs) at the Departmental 
Appeals Board of the Department of Health and Human Services and to 
educate such judges and staff on long-term care issues.

SEC. 205. REVISIONS TO MEDICARE APPEALS PROCESS.

    (a) Timeframes for the Completion of the Record.--Section 1869(b) 
(42 U.S.C. 1395ff(b)), as amended by section 202(a)(2), is amended by 
adding at the end the following new paragraph:
            ``(3) Timely completion of the record.--
                    ``(A) Deadline.--Subject to subparagraph (B), the 
                deadline to complete the record in a hearing before an 
                administrative law judge or a review by the 
                Departmental Appeals Board is 90 days after the date 
                the request for the review or hearing is filed.
                    ``(B) Extensions for good cause.--The person filing 
                a request under subparagraph (A) may request an 
                extension of such deadline for good cause. The 
                administrative law judge, in the case of a hearing, and 
                the Departmental Appeals Board, in the case of a 
                review, may extend such deadline based upon a finding 
                of good cause to a date specified by the judge or 
                Board, as the case may be.
                    ``(C) Delay in decision deadlines until completion 
                of record.--Notwithstanding any other provision of this 
                section, the deadlines otherwise established under 
                subsection (d) for the making of determinations in 
                hearings or review under this section are 90 days after 
                the date on which the record is complete.
                    ``(D) Complete record described.--For purposes of 
                this paragraph, a record is complete when the 
                administrative law judge, in the case of a hearing, or 
                the Departmental Appeals Board, in the case of a 
                review, has received--
                            ``(i) written or testimonial evidence, or 
                        both, submitted by the person filing the 
                        request,
                            ``(ii) written or oral argument, or both,
                            ``(iii) the decision of, and the record 
                        for, the prior level of appeal, and
                            ``(iv) such other evidence as such judge or 
                        Board, as the case may be, determines is 
                        required to make a determination on the 
                        request.''.
    (b) Revisions to Appeals Timeframes.--Section 1869 (42 U.S.C. 
1395ff) is amended--
            (1) in subsection (a)(3)(C)(ii), by striking ``30-day 
        period'' each place it appears and inserting ``60-day period'';
            (2) in subsection (c)(3)(C)(i), by striking ``30-day 
        period'' and inserting ``60-day period'';
            (3) in subsection (d)(1)(A), by striking ``90-day period'' 
        and inserting ``120-day period''; and
            (4) in subsection (d)(2)(A), by striking ``90-day period'' 
        and inserting ``120-day period''.
    (c) Use of Patients' Medical Records.--Section 1869(c)(3)(B)(i) (42 
U.S.C. 1395ff(c)(3)(B)(i)) is amended by inserting ``(including the 
medical records of the individual involved)'' after ``clinical 
experience''.
    (d) Notice Requirements for Medicare Appeals.--
            (1) Initial determinations and redeterminations.--Section 
        1869(a) (42 U.S.C. 1395ff(a)) is amended by adding at the end 
        the following new paragraph:
            ``(4) Requirements of notice of determinations and 
        redeterminations.--A written notice of a determination on an 
        initial determination or on a redetermination, insofar as such 
        determination or redetermination results in a denial of a claim 
        for benefits, shall be provided in printed form and written in 
        a manner to be understood by the beneficiary and shall 
        include--
                    ``(A) the reasons for the determination, including, 
                as appropriate--
                            ``(i) upon request in the case of an 
                        initial determination, the provision of the 
                        policy, manual, or regulation that resulted in 
                        the denial; and
                            ``(ii) upon request, in the case of a 
                        redetermination, a summary of the clinical or 
                        scientific evidence used in making the 
                        determination (as appropriate);
                    ``(B) the procedures for obtaining additional 
                information concerning the determination or 
                redetermination; and
                    ``(C) notification of the right to seek a 
                redetermination or otherwise appeal the determination 
                and instructions on how to initiate such a 
                redetermination or appeal under this section.''.
            (2) Reconsiderations.--Section 1869(c)(3)(E) (42 U.S.C. 
        1395ff(c)(3)(E)) is amended to read as follows:
                    ``(E) Explanation of decision.--Any decision with 
                respect to a reconsideration of a qualified independent 
                contractor shall be in writing in a manner to be 
                understood by the beneficiary and shall include--
                            ``(i) to the extent appropriate, an 
                        explanation of the decision as well as a 
                        discussion of the pertinent facts and 
                        applicable regulations applied in making such 
                        decision;
                            ``(ii) a notification of the right to 
                        appeal such determination and instructions on 
                        how to initiate such appeal under this section; 
                        and
                            ``(iii) in the case of a determination of 
                        whether an item or service is reasonable and 
                        necessary for the diagnosis or treatment of 
                        illness or injury (under section 1862(a)(1)(A)) 
                        an explanation of the decision.''.
            (3) Appeals.--Section 1869(d) (42 U.S.C. 1395ff(d)) is 
        amended--
                    (A) in the heading, by inserting ``; Notice'' after 
                ``Secretary''; and
                    (B) by adding at the end the following new 
                paragraph:
            ``(4) Notice.--Notice of the decision of an administrative 
        law judge shall be in writing in a manner to be understood by 
        the beneficiary and shall include--
                    ``(A) the specific reasons for the determination; 
                and
                    ``(B) notification of the right to appeal the 
                decision and instructions on how to initiate such an 
                appeal under this section.''.
            (4) Preparation of record for appeal.--Section 
        1869(c)(3)(J) (42 U.S.C. 1395ff(c)(3)(J)) is amended by 
        striking ``such information as is required for an appeal'' and 
        inserting ``the record for the appeal''.
    (e) Qualified Independent Contractors.--
            (1) Eligibility requirements of qualified independent 
        contractors.--Section 1869(c) (42 U.S.C. 1395ff(c)) is 
        amended--
                    (A) in paragraph (2)--
                            (i) by inserting ``(except in the case of a 
                        utilization and quality control peer review 
                        organization, as defined in section 1152)'' 
                        after ``means an entity or organization that''; 
                        and
                            (ii) by striking the period at the end and 
                        inserting the following: ``and meets the 
                        following requirements:
                    ``(A) General requirements.--
                            ``(i) The entity or organization has 
                        (directly or through contracts or other 
                        arrangements) sufficient medical, legal, and 
                        other expertise (including knowledge of the 
                        program under this title) and sufficient 
                        staffing to carry out duties of a qualified 
                        independent contractor under this section on a 
                        timely basis.
                            ``(ii) The entity or organization has 
                        provided assurances that it will conduct 
                        activities consistent with the applicable 
                        requirements of this section, including that it 
                        will not conduct any activities in a case 
                        unless the independence requirements of 
                        subparagraph (B) are met with respect to the 
                        case.
                            ``(iii) The entity or organization meets 
                        such other requirements as the Secretary 
                        provides by regulation.
                    ``(B) Independence requirements.--
                            ``(i) In general.--Subject to clause (ii), 
                        an entity or organization meets the 
                        independence requirements of this subparagraph 
                        with respect to any case if the entity--
                                    ``(I) is not a related party (as 
                                defined in subsection (g)(5));
                                    ``(II) does not have a material 
                                familial, financial, or professional 
                                relationship with such a party in 
                                relation to such case; and
                                    ``(III) does not otherwise have a 
                                conflict of interest with such a party 
                                (as determined under regulations).
                            ``(ii) Exception for compensation.--Nothing 
                        in clause (i) shall be construed to prohibit 
                        receipt by a qualified independent contractor 
                        of compensation from the Secretary for the 
                        conduct of activities under this section if the 
                        compensation is provided consistent with clause 
                        (iii).
                            ``(iii) Limitations on entity 
                        compensation.--Compensation provided by the 
                        Secretary to a qualified independent contractor 
                        in connection with reviews under this section 
                        shall not be contingent on any decision 
                        rendered by the contractor or by any reviewing 
                        professional.''; and
                    (B) in paragraph (3)(A), by striking ``, and shall 
                have sufficient training and expertise in medical 
                science and legal matters to make reconsiderations 
                under this subsection''.
            (2) Eligibility requirements of reviewers.--Section 1869 
        (42 U.S.C. 1395ff) is amended--
                    (A) in subsection (c)(3)(B)(i), by striking ``a 
                panel of physicians or other appropriate health care 
                professionals'' and inserting ``a physician or another 
                appropriate health care professional'';
                    (B) by striking subsection (c)(3)(D) and inserting 
                the following:
                    ``(D) Qualifications for reviewers.--The 
                requirements of subsection (g) shall be met (relating 
                to qualifications of reviewing professionals).''; and
                    (C) by adding at the end the following new 
                subsection:
    ``(g) Qualifications of Reviewers.--
            ``(1) In general.--In reviewing determinations under this 
        section, a qualified independent contractor shall ensure that--
                    ``(A) each individual conducting a review shall 
                meet the qualifications of paragraph (2);
                    ``(B) compensation provided by the contractor to 
                each such reviewer is consistent with paragraph (3); 
                and
                    ``(C) in the case of a review described in 
                subsection (c)(3)(B) and conducted by a physician or 
                another health care professional (each in this 
                subsection referred to as a `reviewing professional'), 
                that the reviewing professional meets the 
                qualifications described in paragraph (4).
            ``(2) Independence.--
                    ``(A) In general.--Subject to subparagraph (B), 
                each individual conducting a review in a case shall--
                            ``(i) not be a related party (as defined in 
                        paragraph (5));
                            ``(ii) not have a material familial, 
                        financial, or professional relationship with 
                        such a party in the case under review; and
                            ``(iii) not otherwise have a conflict of 
                        interest with such a party (as determined under 
                        regulations).
                    ``(B) Exception.--Nothing in subparagraph (A) shall 
                be construed to--
                            ``(i) prohibit an individual, solely on the 
                        basis of affiliation with a fiscal 
                        intermediary, carrier, or other contractor, 
                        from serving as a reviewing professional if--
                                    ``(I) a nonaffiliated individual is 
                                not reasonably available;
                                    ``(II) the affiliated individual is 
                                not involved in the provision of items 
                                or services in the case under review;
                                    ``(III) the fact of such an 
                                affiliation is disclosed to the 
                                Secretary and the beneficiary (or 
                                authorized representative) and neither 
                                party objects; and
                                    ``(IV) the affiliated individual is 
                                not an employee of the intermediary, 
                                carrier, or contractor and does not 
                                provide services exclusively or 
                                primarily to or on behalf of such 
                                intermediary, carrier, or contractor;
                            ``(ii) prohibit an individual who has staff 
                        privileges at the institution where the 
                        treatment involved takes place from serving as 
                        a reviewer merely on the basis of such 
                        affiliation if the affiliation is disclosed to 
                        the Secretary and the beneficiary (or 
                        authorized representative), and neither party 
                        objects; or
                            ``(iii) prohibit receipt of compensation by 
                        a reviewing professional from a contractor if 
                        the compensation is provided consistent with 
                        paragraph (3).
            ``(3) Limitations on reviewer compensation.--Compensation 
        provided by a qualified independent contractor to a reviewer in 
        connection with a review under this section shall not be 
        contingent on the decision rendered by the reviewer.
            ``(4) Licensure and expertise.--Each reviewing professional 
        shall be a physician (allopathic or osteopathic) or health care 
        professional who--
                    ``(A) is appropriately credentialed or licensed in 
                1 or more States to deliver health care services; and
                    ``(B) has medical expertise in the field of 
                practice that is appropriate for the items or services 
                at issue.
            ``(5) Related party defined.--For purposes of this section, 
        the term `related party' means, with respect to a case under 
        this title involving an individual beneficiary, any of the 
        following:
                    ``(A) The Secretary, the medicare administrative 
                contractor involved, or any fiduciary, officer, 
                director, or employee of the Department of Health and 
                Human Services, or of such contractor.
                    ``(B) The individual (or authorized 
                representative).
                    ``(C) The health care professional that provides 
                the items or services involved in the case.
                    ``(D) The institution at which the items or 
                services (or treatment) involved in the case are 
                provided.
                    ``(E) The manufacturer of any drug or other item 
                that is included in the items or services involved in 
                the case.
                    ``(F) Any other party determined under any 
                regulations to have a substantial interest in the case 
                involved.''.
            (3) Number of qualified independent contractors.--Section 
        1869(c)(4) (42 U.S.C. 1395ff(c)(4)) is amended by striking 
        ``12'' and inserting ``4''.
    (e) Implementation of Certain BIPA Reforms.--
            (1) Delay in certain bipa reforms.--Section 521(d) of BIPA 
        (114 Stat. 2763A-543) is amended to read as follows:
    ``(d) Effective Date.--
            ``(1) In general.--Except as specified in paragraph (2), 
        the amendments made by this section shall apply with respect to 
initial determinations made on or after January 1, 2005.
            ``(2) Expedited proceedings and reconsideration 
        requirements.--The amendments made by subsection (a) shall 
        apply with respect to initial determinations made on or after 
        October 1, 2003 under the following provisions:
                    ``(A) Subsection (b)(1)(F)(i) of section 1869 of 
                the Social Security Act.
                    ``(B) Subsection (c)(3)(C)(iii) of such section.
                    ``(C) Subsection (c)(3)(C)(iv) of such section to 
                the extent that it applies to expedited 
                reconsiderations under subsection (c)(3)(C)(iii) of 
                such section.
            ``(3) Transitional use of peer review organizations to 
        conduct expedited reconsiderations until qics are 
        operational.--Expedited reconsiderations of initial 
        determinations under section 1869(c)(3)(C)(iii) of the Social 
        Security Act shall be made by peer review organizations until 
        qualified independent contractors are available for such 
        expedited reconsiderations.''.
            (2) Conforming amendment.--Section 521(c) of BIPA (114 
        Stat. 2763A-543) and section 1869(c)(3)(C)(iii)(III) of the 
        Social Security Act (42 U.S.C. 1395ff(c)(3)(C)(iii)(III)), as 
        added by section 521 of BIPA, are repealed.
    (f) Effective Date.--The amendments made by this section shall be 
effective as if included in the enactment of the respective provisions 
of subtitle C of title V of BIPA, 114 Stat. 2763A-534.
    (g) Transition.--In applying section 1869(g) of the Social Security 
Act (as added by subsection (d)(2)), any reference to a medicare 
administrative contractor shall be deemed to include a reference to a 
fiscal intermediary under section 1816 of the Social Security Act (42 
U.S.C. 1395h) and a carrier under section 1842 of such Act (42 U.S.C. 
1395u).

SEC. 206. HEARING RIGHTS RELATED TO DECISIONS BY THE SECRETARY TO DENY 
              OR NOT RENEW A MEDICARE ENROLLMENT AGREEMENT; 
              CONSULTATION BEFORE CHANGING PROVIDER ENROLLMENT FORMS.

    (a) Hearing Rights.--
            (1) In general.--Section 1866 (42 U.S.C. 1395cc) is amended 
        by adding at the end the following new subsection:
    ``(j) Hearing Rights in Cases of Denial or Nonrenewal.--The 
Secretary shall establish by regulation procedures under which--
            ``(1) there are deadlines for actions on applications for 
        enrollment (and, if applicable, renewal of enrollment); and
            ``(2) a provider of services or supplier whose application 
        to enroll (or, if applicable, to renew enrollment) under this 
        title is denied may have a hearing and judicial review of such 
        denial under the procedures that apply under subsection 
        (h)(1)(A) to a provider of services that is dissatisfied with a 
        determination by the Secretary.''.
            (2) Effective date.--The Secretary shall provide for the 
        establishment of the procedures under the amendment made by 
        paragraph (1) within 18 months after the date of the enactment 
        of this Act.
    (b) Consultation Before Changing Provider Enrollment Forms.--
Section 1871 (42 U.S.C. 1395hh), as amended by sections 101, 102, and 
103, is amended by adding at the end the following new subsection:
    ``(g) The Secretary shall consult with providers of services, 
physicians, practitioners, and suppliers before making changes in the 
provider enrollment forms required of such providers, physicians, 
practitioners, and suppliers to be eligible to submit claims for which 
payment may be made under this title.''.

SEC. 207. APPEALS BY PROVIDERS WHEN THERE IS NO OTHER PARTY AVAILABLE.

    (a) In General.--Section 1870 (42 U.S.C. 1395gg) is amended by 
adding at the end the following new subsection:
    ``(h) Notwithstanding subsection (f) or any other provision of law, 
the Secretary shall permit a provider of services, physician, 
practitioner, or other supplier to appeal any determination of the 
Secretary under this title relating to services rendered under this 
title to an individual who subsequently dies if there is no other party 
available to appeal such determination and the provider of services, 
physician, practitioner, or other supplier would be prejudiced by the 
determination.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on the date of the enactment of this Act and shall apply to 
items and services furnished on or after such date.

SEC. 208. PROVIDER ACCESS TO REVIEW OF LOCAL COVERAGE DETERMINATIONS.

    (a) Provider Access To Review of Local Coverage Determinations.--
Section 1869(f)(5) (42 U.S.C. 1395ff(f)(5)) is amended to read as 
follows:
            ``(5) Aggrieved party defined.--In this section, with 
        respect to a national or local coverage determination, the term 
        `aggrieved party' means--
                    ``(A) an individual entitled to benefits under part 
                A, or enrolled under part B, or both, who is in need of 
                the items or services that are the subject of the 
                coverage determination; or
                    ``(B) a provider of services, physician, 
                practitioner, or supplier that is adversely affected by 
                such a determination.''.
    (b) Clarification of Local Coverage Determination Definition.--
Section 1869(f)(2)(B) (42 U.S.C. 1395ff(f)(2)(B)) is amended by 
inserting ``, including, where appropriate, a clear explanation of the 
reasons for the denial'' before the period at the end.
    (c) Request for Local Coverage Determinations by Providers.--
Section 1869 (42 U.S.C. 1395ff), as amended by section 205(d)(2)(B), is 
amended by adding at the end the following new subsection:
    ``(h) Request for Local Coverage Determinations by Providers.--
            ``(1) Establishment of process.--The Secretary shall 
        establish a process under which a provider of services, 
        physician, practitioner, or supplier who certifies that they 
        meet the requirements established in paragraph (3) may request 
        a local coverage determination in accordance with the 
        succeeding provisions of this subsection.
            ``(2) Provider local coverage determination request 
        defined.--In this subsection, the term `provider local coverage 
        determination request' means a request, filed with the 
        Secretary, at such time and in such form and manner as the 
        Secretary may specify, that the Secretary, pursuant to 
        paragraph (4)(A), require a fiscal intermediary, carrier, or 
        program safeguard contractor to make or revise a local coverage 
        determination under this section with respect to an item or 
        service.
            ``(3) Request requirements.--Under the process established 
        under paragraph (1), by not later than 30 days after the date 
        on which a provider local coverage determination request is 
        filed under paragraph (1), the Secretary shall determine 
        whether such request establishes that--
                    ``(A) there have been at least 5 reversals of 
                redeterminations made by a fiscal intermediary or 
                carrier after a hearing before an administrative law 
                judge on claims submitted by the provider in at least 2 
                different cases before an administrative law judge;
                    ``(B) each reversal described in subparagraph (A) 
                involves substantially similar material facts;
                    ``(C) each reversal described in subparagraph (A) 
                involves the same medical necessity issue; and
                    ``(D) at least 50 percent of the total number of 
                claims submitted by such provider within the past year 
                involving the substantially similar material facts 
                described in subparagraph (B) and the same medical 
                necessity issue described in subparagraph (C) have been 
                denied and have been reversed by an administrative law 
                judge.
            ``(4) Approval or rejection of request.--
                    ``(A) Approval of request.--If the Secretary 
                determines that subparagraphs (A) through (D) of 
                paragraph (3) have been satisfied, the Secretary shall 
                require the fiscal intermediary, carrier, or program 
                safeguard contractor identified in the provider local 
                coverage determination request, to make or revise a 
                local coverage determination with respect to the item 
                or service that is the subject of the request not later 
                than the date that is 210 days after the date on which 
                the Secretary makes the determination. Such fiscal 
                intermediary, carrier, or program safeguard contractor 
                shall retain the discretion to determine whether or 
                not, and/or the circumstances under which, to cover the 
                item or service for which a local coverage 
                determination is requested. Nothing in this subsection 
                shall be construed to require a fiscal intermediary, 
                carrier or program safeguard contractor to develop a 
                local coverage determination that is inconsistent with 
                any national coverage determination, or any coverage 
                provision in this title or in regulation, manual, or 
                interpretive guidance of the Secretary.
                    ``(B) Rejection of request.--If the Secretary 
                determines that subparagraphs (A) through (D) of 
                paragraph (3) have not been satisfied, the Secretary 
                shall reject the provider local coverage determination 
                request and shall notify the provider of services, 
                physician, practitioner, or supplier that filed the 
                request of the reason for such rejection and no further 
                proceedings in relation to such request shall be 
                conducted.''.
    (d) Study and Report on the Use of Contractors To Monitor Medicare 
Appeals.--
            (1) Study.--The Secretary of Health and Human Services (in 
        this section referred to as the ``Secretary'') shall conduct a 
        study on the feasibility and advisability of requiring fiscal 
        intermediaries and carriers to monitor and track--
                    (A) the subject matter and status of claims denied 
                by the fiscal intermediary or carrier (as applicable) 
                that are appealed under section 1869 of the Social 
                Security Act (42 U.S.C. 1395ff), as added by section 
                522 of BIPA (114 Stat. 2763A-543) and amended by this 
                Act; and
                    (B) any final determination made with respect to 
                such claims.
            (2) Report.--Not later than the date that is 1 year after 
        the date of the enactment of this Act, the Secretary shall 
        submit to Congress a report on the study conducted under 
        paragraph (1) together with such recommendations for 
        legislation and administrative action as the Commission 
        determines appropriate.
    (e) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out the amendments 
made by subsections (a), (b), and (c).
    (f) Effective Dates.--
            (1) Provider access to review of local coverage 
        determinations.--The amendments made by subsections (a) and (b) 
        shall apply to--
                    (A) any review of any local coverage determination 
                filed on or after January 1, 2004;
                    (B) any request to make such a determination made 
                on or after such date; or
                    (C) any local coverage determination made on or 
                after such date.
            (2) Provider local coverage determination requests.--The 
        amendment made by subsection (c) shall apply with respect to 
        provider local coverage determination requests (as defined in 
        section 1869(h)(2) of the Social Security Act, as added by 
        subsection (c)) filed on or after the date of the enactment of 
        this Act.

                     TITLE III--CONTRACTING REFORM

SEC. 301. 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 eligible entity to serve as a 
        medicare administrative contractor with respect to the 
        performance of any or all of the functions described in 
        paragraph (4) or parts of those functions (or, to the extent 
        provided in a contract, to secure performance thereof by other 
        entities).
            ``(2) Eligibility of entities.--An entity is eligible to 
        enter into a contract with respect to the performance of a 
        particular function described in paragraph (4) only if--
                    ``(A) the entity has demonstrated capability to 
                carry out such function;
                    ``(B) the entity complies with such conflict of 
                interest standards as are generally applicable to 
                Federal acquisition and procurement;
                    ``(C) the entity has sufficient assets to 
                financially support the performance of such function; 
                and
                    ``(D) the entity meets such other requirements as 
                the Secretary may impose.
            ``(3) 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 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, facility, or supplier (or 
                class of such providers of services, physicians, 
                practitioners, facilities, 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 in relation to that individual, provider 
                of services, physician, practitioner, facility, or 
                supplier or class of provider of services, physician, 
                practitioner, facility, or supplier.
            ``(4) Functions described.--The functions referred to in 
        paragraphs (1) and (2) 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, facilities, 
                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.--
                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, facilities, or suppliers.
                    ``(E) Communication with providers.--Serving as a 
                center for, and communicating to providers of services, 
                physicians, practitioners, facilities, 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, facilities, and 
                suppliers to the Secretary.
                    ``(F) Provider education and technical 
                assistance.--Performing the functions described in 
                subsections (e) and (f), relating to education, 
                training, and technical assistance to providers of 
                services, physicians, practitioners, facilities, and 
                suppliers.
                    ``(G) Additional functions.--Performing such other 
                functions, including (subject to paragraph (5)) 
                functions under the Medicare Integrity Program under 
                section 1893, as are necessary to carry out the 
                purposes of this title.
            ``(5) Relationship to mip contracts.--
                    ``(A) Nonduplication of activities.--In entering 
                into contracts under this section, the Secretary shall 
                assure that activities of medicare administrative 
                contractors do not duplicate activities carried out 
                under contracts entered into 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.
            ``(6) Application of federal acquisition regulation.--
        Except to the extent inconsistent with a specific requirement 
        of this title, the Federal Acquisition Regulation applies to 
        contracts under this title.
    ``(b) Contracting Requirements.--
            ``(1) Use of competitive procedures.--
                    ``(A) In general.--Except as provided in laws with 
                general applicability to Federal acquisition and 
                procurement, the Federal Acquisition Regulation, or 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, except that the 
                Secretary shall provide for the application of 
                competitive procedures, unless laws with general 
                applicability to Federal acquisition and procurement or 
                the Federal Acquisition Regulation authorize the use of 
                other procedures, under such a contract not less 
                frequently than once every 8 years.
                    ``(C) Transfer of functions.--The Secretary may 
                transfer functions among medicare administrative 
                contractors without regard to any provision of law 
                requiring competition. The Secretary shall ensure that 
                performance quality is considered in such transfers. 
                The Secretary shall provide notice (whether in the 
                Federal Register or otherwise) of any such transfer 
                (including a description of the functions so 
                transferred and contact information for the contractors 
                involved) to providers of services, physicians, 
                practitioners, facilities, and suppliers affected by 
                the transfer.
                    ``(D) Incentives for quality.--The Secretary may 
                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, 
        and other matters as the Secretary finds pertinent.
            ``(3) Performance requirements.--
                    ``(A) Development of specific performance 
                requirements.--The Secretary shall develop contract 
                performance requirements to carry out the specific 
                requirements applicable under this title to a function 
                described in subsection (a)(4) and shall develop 
                standards for measuring the extent to which a 
                contractor has met such requirements. In developing 
                such performance requirements and standards for 
                measurement, the Secretary shall consult with providers 
                of services, organizations representative of 
                beneficiaries under this title, and organizations and 
                agencies performing functions necessary to carry out 
                the purposes of this section with respect to such 
                performance requirements. The Secretary shall make such 
                performance requirements and measurement standards 
                available to the public.
                    ``(B) Considerations.--The Secretary shall include, 
                as one of the standards, provider and beneficiary 
                satisfaction levels.
                    ``(C) Inclusion in contracts.--All contractor 
                performance requirements shall be set forth in the 
                contract between the Secretary and the appropriate 
                medicare administrative contractor. Such performance 
                requirements--
                            ``(i) shall reflect the performance 
                        requirements published under subparagraph (A), 
                        but may include additional performance 
                        requirements;
                            ``(ii) shall be used for evaluating 
                        contractor performance under the contract; and
                            ``(iii) shall be consistent with the 
                        written statement of work provided under the 
                        contract.
            ``(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.--Subject to subsection (a)(6), 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)(4)(B).
            ``(2) Prohibition on mandates for certain data 
        collection.--The Secretary may not require, as a condition of 
        entering into, or renewing, 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 the reckless disregard of the 
        individual's obligations or the intent by that individual 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 the reckless disregard of the officer's 
        obligations or the intent by that officer 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.--No 
        medicare administrative contractor shall be liable to the 
        United States for a payment by a certifying or disbursing 
        officer unless, in connection with such a payment, the medicare 
        administrative contractor acted with reckless disregard of its 
        obligations under its medicare administrative contract or with 
        intent to defraud the United States.
            ``(4) Relationship to false claims act.--Nothing in this 
        subsection shall be construed to limit liability for conduct 
        that would constitute a violation of sections 3729 through 3731 
        of title 31, United States Code (commonly known as the ``False 
        Claims Act'').
            ``(5) Indemnification by secretary.--
                    ``(A) In general.--Notwithstanding any other 
                provision of law and subject to the succeeding 
                provisions of this paragraph, in the case of a medicare 
                administrative contractor (or a person who is a 
                director, officer, or employee of such a contractor or 
                who is engaged by the contractor to participate 
                directly in the claims administration process) who is 
                made a party to any judicial or administrative 
                proceeding arising from, or relating directly to, the 
                claims administration process under this title, the 
                Secretary may, to the extent specified in the contract 
                with the contractor, indemnify the contractor (and such 
                persons).
                    ``(B) Conditions.--The Secretary may not provide 
                indemnification under subparagraph (A) insofar as the 
                liability for such costs arises directly from conduct 
                that is determined by the Secretary to be criminal in 
                nature, fraudulent, or grossly negligent.
                    ``(C) Scope of indemnification.--Indemnification by 
                the Secretary under subparagraph (A) may include 
                payment of judgments, settlements (subject to 
                subparagraph (D)), awards, and costs (including 
                reasonable legal expenses).
                    ``(D) Written approval for settlements.--A 
                contractor or other person described in subparagraph 
                (A) may not propose to negotiate a settlement or 
                compromise of a proceeding described in such 
                subparagraph without the prior written approval of the 
                Secretary to negotiate a settlement. Any 
                indemnification under subparagraph (A) with respect to 
                amounts paid under a settlement are conditioned upon 
                the Secretary's prior written approval of the final 
                settlement.
                    ``(E) Construction.--Nothing in this paragraph 
                shall be construed--
                            ``(i) to change any common law immunity 
                        that may be available to a medicare 
                        administrative contractor or person described 
                        in subparagraph (A); or
                            ``(ii) to permit the payment of costs not 
                        otherwise allowable, reasonable, or allocable 
                        under the Federal Acquisition Regulations.''.
            (2) Consideration of incorporation of current law 
        standards.--In developing contract performance requirements 
        under section 1874A(b) of the Social Security Act (as added by 
        paragraph (1)) the Secretary 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,'';
                    (D) by striking paragraph (5);
                    (E) in paragraph (6)(D)(iv), by striking 
                ``carrier'' and inserting ``medicare administrative 
                contractor''; and
                    (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.--
                    (A) In general.--Except as otherwise provided in 
                this subsection, the amendments made by this section 
                shall take effect on October 1, 2005, and the Secretary 
                is authorized to take such steps before such date as 
                may be necessary to implement such amendments on a 
                timely basis.
                    (B) Construction for current contracts.--Such 
                amendments shall not apply to contracts in effect 
                before the date specified under subparagraph (A) that 
                continue to retain the terms and conditions in effect 
                on such date (except as otherwise provided under this 
                title, other than under this section) until such date 
                as the contract is let out for competitive bidding 
                under such amendments.
                    (C) Deadline for competitive bidding.--The 
                Secretary shall provide for the letting by competitive 
                bidding of all contracts for functions of medicare 
                administrative contractors for annual contract periods 
                that begin on or after October 1, 2011.
            (2) General transition rules.--
                    (A) Authority to continue to enter into new 
                agreements and contracts and waiver of provider 
                nomination provisions during transition.--Prior to the 
                date specified in paragraph (1)(A), the Secretary may, 
                consistent with subparagraph (B), continue to enter 
into agreements under section 1816 and contracts under section 1842 of 
the Social Security Act (42 U.S.C. 1395h, 1395u). The Secretary may 
enter into new agreements under section 1816 during the time period 
without regard to any of the provider nomination provisions of such 
section.
                    (B) Appropriate transition.--The Secretary shall 
                take such steps as are necessary to provide for an 
                appropriate transition from agreements under section 
                1816 and contracts under section 1842 of the Social 
                Security Act (42 U.S.C. 1395h, 1395u) to contracts 
                under section 1874A, as added by subsection (a)(1).
            (3) Authorizing continuation of mip activities under 
        current contracts and agreements and under transition 
        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 agreements and contracts entered into pursuant to 
        paragraph (2)(A).
    (e) References.--On and after the effective date provided under 
subsection (d)(1), 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 
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.
    (g) Reports on Implementation.--
            (1) Proposal for implementation.--At least 1 year before 
        the date specified in subsection (d)(1)(A), the Secretary shall 
        submit a report to Congress and the Comptroller General of the 
        United States that describes a plan for an appropriate 
        transition. The Comptroller General shall conduct an evaluation 
        of such plan and shall submit to Congress, not later than 6 
        months after the date the report is received, a report on such 
        evaluation and shall include in such report such 
        recommendations as the Comptroller General deems appropriate.
            (2) Status of implementation.--The Secretary shall submit a 
        report to Congress not later than October 1, 2008, that 
        describes the status of implementation of such amendments and 
        that includes a description of the following:
                    (A) The number of contracts that have been 
                competitively bid as of such date.
                    (B) The distribution of functions among contracts 
                and contractors.
                    (C) A timeline for complete transition to full 
                competition.
                    (D) A detailed description of how the Secretary has 
                modified oversight and management of medicare 
                contractors to adapt to full competition.

             TITLE IV--EDUCATION AND OUTREACH IMPROVEMENTS

SEC. 401. PROVIDER EDUCATION AND TECHNICAL ASSISTANCE.

    (a) Coordination of Education Funding.--
            (1) In general.--Title XVIII 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 (e), 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.
    (b) Incentives To Improve Contractor Performance.--Section 1874A, 
as added by section 301(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 contractors (as defined in paragraph 
        (3)) 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, 2004, a methodology to measure the specific claims 
        payment error rates of such contractors in the processing or 
        reviewing of medicare claims.
            ``(2) IG review of methodology.--The Inspector General of 
        the Department of Health and Human Services shall review, and 
        make recommendations to the Secretary, regarding the adequacy 
        of such methodology.
            ``(3) Medicare contractor defined.--For purposes of this 
        subsection, the term `medicare contractor' includes a medicare 
        administrative contractor, a fiscal intermediary with a 
        contract under section 1816, and a carrier with a contract 
        under section 1842.''.
    (c) Improved Provider Education and Training.--
            (1) Increased funding for enhanced education and training 
        through medicare integrity program.--Section 1817(k)(4) (42 
        U.S.C. 1395i(k)(4)) is amended--
                    (A) in subparagraph (A), by striking ``subparagraph 
                (B)'' and inserting ``subparagraphs (B) and (C)'';
                    (B) in subparagraph (B), by striking ``The amount 
                appropriated'' and inserting ``Subject to subparagraph 
                (C), the amount appropriated''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(C) Enhanced provider education and training.--
                            ``(i) In general.--In addition to the 
                        amount appropriated under subparagraph (B), the 
                        amount appropriated under subparagraph (A) for 
                        a fiscal year (beginning with fiscal year 2004) 
                        is increased by $35,000,000.
                            ``(ii) Use.--The funds made available under 
                        this subparagraph shall be used only 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 and may also be used to 
                        improve the accuracy, consistency, and 
                        timeliness of contractor responses to written 
                        and phone inquiries from providers of services, 
                        physicians, practitioners, and suppliers.''.
            (2) Tailoring education and training for small providers or 
        suppliers.--
                    (A) In general.--Section 1889, as added by 
                subsection (a), is amended by adding at the end the 
                following new subsection:
    ``(b) 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 take into 
        consideration the special needs of small providers of services 
        or suppliers (as defined in paragraph (2)). Such education and 
        training activities for small providers of services and 
        suppliers may include the provision of technical assistance 
        (such as review of billing systems and internal controls to 
        determine program compliance and to suggest more efficient and 
        effective means of achieving such compliance).
            ``(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.''.
                    (B) Effective date.--The amendment made by 
                subparagraph (A) shall take effect on January 1, 2004.
    (d) Additional Provider Education Provisions.--
            (1) In general.--Section 1889, as added by subsection (a) 
        and as amended by subsection (c)(2), is amended by adding at 
        the end the following new subsections:
    ``(c) 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.
    ``(d) 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.
    ``(e) Definitions.--For purposes of this section and section 
1817(k)(4)(C), the term `medicare contractor' includes the following:
            ``(1) A medicare administrative contractor with a contract 
        under section 1874A, 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 XI 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. 402. ACCESS TO AND PROMPT RESPONSES FROM MEDICARE CONTRACTORS.

    (a) In General.--Section 1874A, as added by section 301(a)(1) and 
as amended by section 401(b)(1), is amended by adding at the end the 
following new subsection:
    ``(f) Communicating With Beneficiaries and Providers.--
            ``(1) Communication process.--The Secretary shall develop a 
        process for medicare contractors to communicate with 
        beneficiaries and with providers of services, physicians, 
        practitioners, and suppliers under this title.
            ``(2) Response to written inquiries.--Each medicare 
        contractor (as defined in paragraph (5)) shall provide general 
        written responses (which may be through electronic 
        transmission) in a clear, concise, and accurate manner to 
        inquiries by beneficiaries, providers of services, physicians, 
        practitioners, and suppliers concerning the programs under this 
        title within a contractual timeframe established by the 
        Secretary.
            ``(3) Response to toll-free lines.--The Secretary shall 
        ensure that medicare contractors provide a toll-free telephone 
        number at which beneficiaries, providers, physicians, 
        practitioners, and suppliers may obtain information regarding 
        billing, coding, claims, coverage, and other appropriate 
        information under this title.
            ``(4) Monitoring of contractor responses.--
                    ``(A) In general.--Each medicare contractor shall, 
                consistent with standards developed by the Secretary 
                under subparagraph (B)--
                            ``(i) maintain a system for identifying who 
                        provides the information referred to in 
                        paragraphs (2) and (3); and
                            ``(ii) monitor the accuracy, consistency, 
                        and timeliness of the information so provided.
                    ``(B) Development of standards.--
                            ``(i) In general.--The Secretary shall 
                        establish (and publish in the Federal Register) 
                        standards regarding the accuracy, consistency, 
                        and timeliness of the information provided in 
                        response to inquiries under this subsection. 
                        Such standards shall be consistent with the 
                        performance requirements established under 
                        subsection (b)(3).
                            ``(ii) Evaluation.--In conducting 
                        evaluations of individual medicare contractors, 
                        the Secretary shall take into account the 
                        results of the monitoring conducted under 
                        subparagraph (A) taking into account as 
                        performance requirements the standards 
                        established under clause (i). The Secretary 
                        shall, in consultation with organizations 
                        representing providers of services, suppliers, 
                        and individuals entitled to benefits under part 
                        A or enrolled under part B, or both, establish 
                        standards relating to the accuracy, 
                        consistency, and timeliness of the information 
                        so provided.
                    ``(C) Direct monitoring.--Nothing in this paragraph 
                shall be construed as preventing the Secretary from 
                directly monitoring the accuracy, consistency, and 
                timeliness of the information so provided.
            ``(5) Medicare contractor defined.--For purposes of this 
        subsection, the term `medicare contractor' has the meaning 
        given such term in subsection (e)(3).''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect October 1, 2004.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary to carry out section 
1874A(f) of the Social Security Act, as added by subsection (a).

SEC. 403. RELIANCE ON GUIDANCE.

    (a) In General.--Section 1871(d), as added by section 101, is 
amended by adding at the end the following new paragraph:
    ``(2) If--
            ``(A) a provider of services, physician, practitioner, or 
        other supplier follows written guidance provided--
                    ``(i) by the Secretary; or
                    ``(ii) by a medicare contractor (as defined in 
                section 1889(e) and whether in the form of a written 
                response to a written inquiry under section 1874A(f)(1) 
                or otherwise) acting within the scope of the 
                contractor's contract authority,
        in response to a written inquiry with respect to the furnishing 
        of items or services or the submission of a claim for benefits 
        for such items or services;
            ``(B) the Secretary determines that--
                    ``(i) the provider of services, physician, 
                practitioner, or supplier has accurately presented the 
                circumstances relating to such items, services, and 
                claim to the Secretary or the contractor in the written 
                guidance; and
                    ``(ii) there is no indication of fraud or abuse 
                committed by the provider of services, physician, 
                practitioner, or supplier against the program under 
                this title; and
            ``(C) the guidance was in error;
the provider of services, physician, practitioner, or supplier shall 
not be subject to any penalty or interest under this title (or the 
provisions of title XI insofar as they relate to this title) relating 
to the provision of such items or service or such claim if the provider 
of services, physician, practitioner, or supplier reasonably relied on 
such guidance. In applying this paragraph with respect to guidance in 
the form of general responses to frequently asked questions, the 
Secretary retains authority to determine the extent to which such 
general responses apply to the particular circumstances of individual 
claims.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to penalties imposed on or after the date of the enactment of 
this Act.

SEC. 404. 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.--By not later than 1 year after 
the date of the enactment of the Medicare Education, Regulatory Reform, 
and Contracting Improvement Act of 2003, the Secretary shall appoint a 
Medicare Provider Ombudsman who shall have experience in health care. 
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);
                    ``(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; and
                    ``(C) recommendations to improve communication 
                between providers, contractors, and the Centers for 
                Medicare & Medicaid Services.
    ``(c) Staff.--The Secretary shall provide appropriate staff to 
assist in performing the duties described in subsection (b).''.
    (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.--By not later than 1 year after the 
date of the enactment of the Medicare Education, Regulatory Reform, and 
Contracting Improvement Act of 2003, the Secretary shall appoint within 
the Department of Health and Human Services a Medicare Beneficiary 
Ombudsman (including support staff) 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 (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 2004 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: ``By not later than 1 year after the date of the enactment 
of the Medicare Education, Regulatory Reform, and Contracting 
Improvement Act of 2003, 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. 405. BENEFICIARY OUTREACH DEMONSTRATION PROGRAM.

    (a) In General.--The Secretary 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 3 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 social security 
        offices.

           TITLE V--REVIEW, RECOVERY, AND ENFORCEMENT REFORM

SEC. 501. PREPAYMENT REVIEW.

    (a) In General.--Section 1874A, as added by section 301(a)(1) and 
as amended by sections 401(b)(1) and 402(a), is amended by adding at 
the end the following new subsection:
    ``(g) Conduct of Prepayment Review.--
            ``(1) Standardization of random prepayment review.--A 
        medicare administrative contractor shall conduct random 
        prepayment review only in accordance with a standard protocol 
        for random prepayment audits developed by the Secretary.
            ``(2) Limitations on initiation of nonrandom prepayment 
        review.--A medicare administrative contractor may not initiate 
        nonrandom 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 likelihood of sustained or high level of 
        payment error (as defined by the Secretary).
            ``(3) Termination of nonrandom prepayment review.--The 
        Secretary shall establish protocols or standards relating to 
        the termination, including termination dates, of nonrandom 
        prepayment review. Such regulations may vary such a termination 
        date based upon the differences in the circumstances triggering 
        prepayment review.
            ``(4) Construction.--Nothing in this subsection shall be 
        construed as preventing the denial of payments for claims 
        actually reviewed under a random prepayment review. In the case 
        of a provider of services, physician, practitioner, or supplier 
        with respect to which amounts were previously overpaid, nothing 
        in this subsection shall be construed as limiting the ability 
        of a medicare administrative contractor to 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.
            ``(5) Random prepayment review defined.--For purposes of 
        this subsection, the term `random prepayment review' means a 
        demand for the production of records or documentation absent 
        cause with respect to a claim.''.
    (b) Effective Date.--
            (1) In general.--Except as provided in this subsection, the 
        amendment made by subsection (a) shall take effect on the date 
        of the enactment of this Act.
            (2) Deadline for promulgation of certain regulations.--The 
        Secretary shall first issue regulations under section 1874A(g) 
        of the Social Security Act, as added by subsection (a), by not 
        later than 1 year after the date of the enactment of this Act.
            (3) Application of standard protocols for random prepayment 
        review.--Section 1874A(g)(1) of the Social Security Act, as 
        added by subsection (a), shall apply to random prepayment 
        reviews conducted on or after such date (not later than 1 year 
        after the date of the enactment of this Act) as the Secretary 
        shall specify. The Secretary shall develop and publish the 
        standard protocol under such section by not later than 1 year 
        after the date of the enactment of this Act.

SEC. 502. RECOVERY OF OVERPAYMENTS.

    (a) In General.--Section 1874A, as added by section 301(a)(1) and 
as amended by sections 401(b)(1), 402(a), and 501(a), is amended by 
adding at the end the following new subsection:
    ``(h) Recovery of Overpayments.--
            ``(1) Use of repayment plans.--
                    ``(A) In general.--If the repayment, within the 
                period otherwise permitted by a provider of services, 
                physician, practitioner, or other supplier, of an 
                overpayment under this title meets the standards 
                developed under subparagraph (B), subject to 
                subparagraph (C), and the provider, physician, 
                practitioner, or supplier requests the Secretary to 
                enter into a repayment plan with respect to such 
                overpayment, the Secretary shall enter into a plan with 
                the provider, physician, practitioner, or supplier for 
                the offset or repayment (at the election of the 
                provider, physician, practitioner, or supplier) of such 
                overpayment over a period of at least 1 year, but not 
                longer than 3 years. Interest shall accrue on the 
                balance through the period of repayment. The repayment 
                plan shall meet terms and conditions determined to be 
                appropriate by the Secretary.
                    ``(B) Development of standards.--The Secretary 
                shall develop standards for the recovery of 
                overpayments. Such standards shall--
                            ``(i) include a requirement that the 
                        Secretary take into account (and weigh in favor 
                        of the use of a repayment plan) the reliance 
                        (as described in section 1871(d)(2)) by a 
                        provider of services, physician, practitioner, 
                        and supplier on guidance when determining 
                        whether a repayment plan should be offered; and
                            ``(ii) provide for consideration of the 
                        financial hardship imposed on a provider of 
                        services, physician, practitioner, or supplier 
                        in considering such a repayment plan.
                In developing standards with regard to financial 
                hardship with respect to a provider of services, 
                physician, practitioner, or supplier, the Secretary 
                shall take into account the amount of the proposed 
                recovery as a proportion of payments made to that 
                provider, physician, practitioner, or supplier.
                    ``(C) Exceptions.--Subparagraph (A) shall not apply 
                if--
                            ``(i) 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 
                        discontinue participation in the program under 
                        this title; or
                            ``(ii) 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.
                    ``(E) Relation to no fault provision.--Nothing in 
                this paragraph shall be construed as affecting the 
                application of section 1870(c) (relating to no 
                adjustment in the cases of certain overpayments).
            ``(2) Limitation on recoupment.--
                    ``(A) No recoupment until reconsideration 
                exercised.--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 by a 
                qualified independent contractor under section 1869(c), 
                the Secretary may not take any action (or authorize any 
                other person, including any medicare contractor, as 
defined in subparagraph (C)) to recoup the overpayment until the date 
the decision on the reconsideration has been rendered. If the 
provisions of section 1869(b)(1) (providing for such a reconsideration 
by a qualified independent contractor) are not in effect, in applying 
the previous sentence any reference to such a reconsideration shall be 
treated as a reference to a redetermination by the fiscal intermediary 
or carrier involved.
                    ``(B) Payment of interest.--
                            ``(i) Return of recouped amount with 
                        interest in case of reversal.--Insofar as such 
                        determination on appeal against the provider of 
                        services, physician, practitioner, or supplier 
                        is later reversed, the Secretary shall provide 
                        for repayment of the amount recouped plus 
                        interest for the period in which the amount was 
                        recouped.
                            ``(ii) Interest in case of affirmation.--
                        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.
                            ``(iii) Rate of interest.--The rate of 
                        interest under this subparagraph shall be the 
                        rate otherwise applicable under this title in 
                        the case of overpayments.
                    ``(C) Medicare contractor defined.--For purposes of 
                this subsection, the term `medicare contractor' has the 
                meaning given such term in section 1889(e).
            ``(3) 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 (which may be in electronic form) 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 as well as 
                        consent settlement options (which are at the 
                        discretion of the Secretary); 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, whether 
                civil or criminal, or reveal findings of law 
                enforcement-related audits.
            ``(4) Notice of over-utilization of codes.--The Secretary 
        shall establish, in consultation with organizations 
        representing the classes of providers of services, physicians, 
        practitioners, and suppliers, a process under which the 
        Secretary provides for notice to classes of providers of 
        services, physicians, practitioners, and suppliers served by a 
        medicare contractor in cases in which the contractor has 
        identified that particular billing codes may be over utilized 
        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).
            ``(5) Standard methodology for probe sampling.--The 
        Secretary shall establish a standard methodology for medicare 
        administrative contractors to use in selecting a sample of 
        claims for review in the case of an abnormal billing pattern.
            ``(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 nonthreatening manner that, based on a 
                        review of the medical records requested by the 
                        Secretary, a preliminary evaluation of those 
                        records indicates 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.''.
    (b) Effective Dates and Deadlines.--
            (1) Not later than 1 year after the date of the enactment 
        of this Act, the Secretary shall first--
                    (A) develop standards for the recovery of 
                overpayments under section 1874A(h)(1)(B) of the Social 
                Security Act, as added by subsection (a);
                    (B) establish the process for notice of 
                overutilization of billing codes under section 
                1874A(h)(4) of the Social Security Act, as added by 
                subsection (a); and
                    (C) establish a standard methodology for selection 
                of sample claims for abnormal billing patterns under 
                section 1874A(h)(5) of the Social Security Act, as 
                added by subsection (a).
            (2) Section 1874A(h)(2) of the Social Security Act, as 
        added by subsection (a), shall apply to actions taken after the 
        date that is 1 year after the date of the enactment of this 
        Act.
            (3) Section 1874A(h)(3) of the Social Security Act, as 
        added by subsection (a), shall apply to audits initiated after 
        the date of the enactment of this Act.
            (4) Section 1874A(h)(6) of the Social Security Act, as 
        added by subsection (a), shall apply to consent settlements 
        entered into after the date of the enactment of this Act.

SEC. 503. PROCESS FOR CORRECTION OF MINOR ERRORS AND OMISSIONS ON 
              CLAIMS WITHOUT PURSUING APPEALS PROCESS.

    (a) In General.--The Secretary shall develop, in consultation with 
appropriate medicare contractors (as defined in section 1889(e) of the 
Social Security Act, as added by section 401(d)(1)) and representatives 
of providers of services, physicians, practitioners, facilities, and 
suppliers, a process whereby, in the case of minor errors or omissions 
(as defined by the Secretary) that are detected in the submission of 
claims under the programs under title XVIII of such Act, a provider of 
services, physician, practitioner, facility, 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.
    (b) Deadline.--Not later than 1 year after the date of the 
enactment of this Act, the Secretary shall first develop the process 
under subsection (a).

SEC. 504. AUTHORITY TO WAIVE A PROGRAM EXCLUSION.

    The first sentence of section 1128(c)(3)(B) (42 U.S.C. 1320a-
7(c)(3)(B)) is amended to read as follows: ``Subject to subparagraph 
(G), in the case of an exclusion under subsection (a), the minimum 
period of exclusion shall be not less than 5 years, except that, upon 
the request of an administrator of a Federal health care program (as 
defined in section 1128B(f)) who determines that the exclusion would 
impose a hardship on beneficiaries of that program, the Secretary may 
waive the exclusion under subsection (a)(1), (a)(3), or (a)(4) with 
respect to that program in the case of an individual or entity that is 
the sole community physician or sole source of essential specialized 
services in a community.

SEC. 505. RECOVERY OF OVERPAYMENTS.

    (a) In General.--Section 1893 (42 U.S.C. 1395ddd) is amended by 
adding at the end the following new subsection:
    ``(f) 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--
            ``(1) there is a sustained or high level of payment error 
        (as defined by the Secretary by regulation); or
            ``(2) documented educational intervention has failed to 
        correct the payment error (as determined by the Secretary).''.
    (b) Effective Date.--Section 1893(f) of the Social Security Act, as 
added by subsection (a), shall apply to statistically valid random 
samples initiated after the date that is 1 year after the date of the 
enactment of this Act.

                      TITLE VI--OTHER IMPROVEMENTS

SEC. 601. INCLUSION OF ADDITIONAL INFORMATION IN NOTICES TO 
              BENEFICIARIES ABOUT SKILLED NURSING FACILITY AND HOSPITAL 
              BENEFITS.

    (a) In General.--The Secretary shall provide that in medicare 
beneficiary notices provided (under section 1806(a) of the Social 
Security Act, 42 U.S.C. 1395b-7(a)) with respect to the provision of 
post-hospital extended care services and inpatient hospital services 
under part A of title XVIII of the Social Security Act, there shall be 
included information on the number of days of coverage of such services 
remaining under such part for the medicare beneficiary and spell of 
illness involved.
    (b) Effective Date.--Subsection (a) shall apply to notices provided 
during calendar quarters beginning more than 6 months after the date of 
the enactment of this Act.

SEC. 602. INFORMATION ON MEDICARE-CERTIFIED SKILLED NURSING FACILITIES 
              IN HOSPITAL DISCHARGE PLANS.

    (a) Availability of Data.--The Secretary shall publicly provide 
information that enables hospital discharge planners, medicare 
beneficiaries, and the public to identify skilled nursing facilities 
that are participating in the medicare program.
    (b) Inclusion of Information in Certain Hospital Discharge Plans.--
            (1) In general.--Section 1861(ee)(2)(D) (42 U.S.C. 
        1395x(ee)(2)(D)) is amended--
                    (A) by striking ``hospice services'' and inserting 
                ``hospice care and post-hospital extended care 
                services''; and
                    (B) by inserting before the period at the end the 
                following: ``and, in the case of individuals who are 
                likely to need post-hospital extended care services, 
                the availability of such services through facilities 
                that participate in the program under this title and 
                that serve the area in which the patient resides''.
            (2) Effective date.--The amendments made by paragraph (1) 
        shall apply to discharge plans made on or after such date as 
        the Secretary shall specify, but not later than 6 months after 
        the date the Secretary provides for availability of information 
        under subsection (a).

SEC. 603. EVALUATION AND MANAGEMENT DOCUMENTATION GUIDELINES 
              CONSIDERATION.

    The Secretary shall ensure, before making changes in documentation 
guidelines for, or clinical examples of, or codes to report evaluation 
and management physician services under title XVIII of Social Security 
Act, that the process used in developing such guidelines, examples, or 
codes was widely consultative among physicians, reflects a broad 
consensus among specialties, and would allow verification of reported 
and furnished services.

SEC. 604. IMPROVEMENT IN OVERSIGHT OF TECHNOLOGY AND COVERAGE.

    (a) Council for Technology and Innovation.--Section 1868 (42 U.S.C. 
1395ee), as amended by section 301(a), is amended by adding at the end 
the following new subsection:
    ``(c) Council for Technology and Innovation.--
            ``(1) Establishment.--The Secretary 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 this title 
        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 this title.''.
    (b) 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, 
2005 (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).''.
    (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, 2004, the 
        Comptroller General shall submit a report to Congress on the 
        study under paragraph (1).

SEC. 605. TREATMENT OF HOSPITALS FOR CERTAIN SERVICES UNDER MEDICARE 
              SECONDARY PAYOR (MSP) PROVISIONS.

    (a) In General.--The Secretary 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 subsection 
(b), if the Secretary does not impose such requirement in the case of 
such services furnished by an independent laboratory.
    (b) Reference Laboratory Services Described.--Reference laboratory 
services described in this subsection are clinical laboratory 
diagnostic tests (or the interpretation of such tests, or both) 
furnished without a face-to-face encounter between the individual 
entitled to benefits under part A or enrolled under part B, or both, 
and the hospital involved and in which the hospital submits a claim 
only for such test or interpretation.

SEC. 606. EMTALA IMPROVEMENTS.

    (a) Payment for EMTALA-Mandated Screening and Stabilization 
Services.--
            (1) In general.--Section 1862 (42 U.S.C. 1395y) is amended 
        by inserting after subsection (c) the following new subsection:
    ``(d) For purposes of subsection (a)(1)(A), in the case of any item 
or service that is required to be provided pursuant to section 1867 to 
an individual who is entitled to benefits under this title, 
determinations as to whether the item or service is reasonable and 
necessary shall be made on the basis of the information available to 
the treating physician or practitioner (including the patient's 
presenting symptoms or complaint) at the time the item or service was 
ordered or furnished by the physician or practitioner (and not on the 
patient's principal diagnosis). When making such determinations with 
respect to such an item or service, the Secretary shall not consider 
the frequency with which the item or service was provided to the 
patient before or after the time of the admission or visit.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to items and services furnished on or after January 
        1, 2004.
    (b) Notification of Providers When EMTALA Investigation Closed.--
Section 1867(d) (42 U.S.C. 42 U.S.C. 1395dd(d)) is amended by adding at 
the end the following new paragraph:
            ``(4) Notice upon closing an investigation.--The Secretary 
        shall establish a procedure to notify hospitals and physicians 
        when an investigation under this section is closed.''.
    (c) Prior Review by Peer Review Organizations in EMTALA Cases 
Involving Termination of Participation.--
            (1) In general.--Section 1867(d)(3) (42 U.S.C. 
        1395dd(d)(3)) is amended--
                    (A) in the first sentence, by inserting ``or in 
                terminating a hospital's participation under this 
                title'' after ``in imposing sanctions under paragraph 
                (1)''; and
                    (B) by adding at the end the following new 
                sentences: ``Except in the case in which a delay would 
                jeopardize the health or safety of individuals, the 
                Secretary shall also request such a review before 
                making a compliance determination as part of the 
                process of terminating a hospital's participation under 
                this title for violations related to the 
                appropriateness of a medical screening examination, 
                stabilizing treatment, or an appropriate transfer as 
                required by this section, and shall provide a period of 
                5 days for such review. The Secretary shall provide a 
                copy of the organization's report to the hospital or 
                physician consistent with confidentiality requirements 
                imposed on the organization under such part B.''.
            (2) Effective date.--The amendments made by paragraph (1) 
        shall apply to terminations of participation initiated on or 
        after the date of the enactment of this Act.

SEC. 607. EMERGENCY MEDICAL TREATMENT AND ACTIVE LABOR ACT (EMTALA) 
              TECHNICAL ADVISORY GROUP.

    (a) Establishment.--The Secretary shall establish a Technical 
Advisory Group (in this section referred to as the ``Advisory Group'') 
to review issues related to the Emergency Medical Treatment and Labor 
Act (EMTALA) and its implementation. In this section, the term 
``EMTALA'' refers to the provisions of section 1867 of the Social 
Security Act (42 U.S.C. 1395dd).
    (b) Membership.--The Advisory Group shall be composed of 19 
members, including the Administrator of the Centers for Medicare & 
Medicaid Services and the Inspector General of the Department of Health 
and Human Services and of which--
            (1) 4 shall be representatives of hospitals, including at 
        least one public hospital, that have experience with the 
        application of EMTALA and at least 2 of which have not been 
        cited for EMTALA violations;
            (2) 7 shall be practicing physicians drawn from the fields 
        of emergency medicine, cardiology or cardiothoracic surgery, 
        orthopedic surgery, neurosurgery, pediatrics or a pediatric 
        subspecialty, obstetrics-gynecology, and psychiatry, with not 
        more than one physician from any particular field;
            (3) 2 shall represent patients;
            (4) 2 shall be staff involved in EMTALA investigations from 
        different regional offices of the Centers for Medicare & 
        Medicaid Services; and
            (5) 1 shall be from a State survey office involved in 
        EMTALA investigations and 1 shall be from a peer review 
        organization, both of whom shall be from areas other than the 
        regions represented under paragraph (4).
In selecting members described in paragraphs (1) through (3), the 
Secretary shall consider qualified individuals nominated by 
organizations representing providers and patients.
    (c) General Responsibilities.--The Advisory Group--
            (1) shall review EMTALA regulations;
            (2) may provide advice and recommendations to the Secretary 
        with respect to those regulations and their application to 
        hospitals and physicians;
            (3) shall solicit comments and recommendations from 
        hospitals, physicians, and the public regarding the 
        implementation of such regulations; and
            (4) may disseminate information on the application of such 
        regulations to hospitals, physicians, and the public.
    (d) Administrative Matters.--
            (1) Chairperson.--The members of the Advisory Group shall 
        elect a member to serve as chairperson of the Advisory Group 
        for the life of the Advisory Group.
            (2) Meetings.--The Advisory Group shall first meet at the 
        direction of the Secretary. The Advisory Group shall then meet 
        twice per year and at such other times as the Advisory Group 
        may provide.
    (e) Termination.--The Advisory Group shall terminate 30 months 
after the date of its first meeting.
    (f) Waiver of Administrative Limitation.--The Secretary shall 
establish the Advisory Group notwithstanding any limitation that may 
apply to the number of advisory committees that may be established 
(within the Department of Health and Human Services or otherwise).

SEC. 608. AUTHORIZING USE OF ARRANGEMENTS TO PROVIDE CORE HOSPICE 
              SERVICES IN CERTAIN CIRCUMSTANCES.

    (a) In General.--Section 1861(dd)(5) (42 U.S.C. 1395x(dd)(5)) is 
amended by adding at the end the following:
    ``(D) In extraordinary, exigent, or other nonroutine 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.
    ``(E) A hospice program may provide services described in paragraph 
(1)(A) other than directly by the program if the services are highly 
specialized services provided by or under the supervision of a 
registered professional nurse and are provided nonroutinely and so 
infrequently so that the provision of such services directly would be 
impracticable and prohibitively expensive.''.
    (b) 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.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to hospice care provided on or after the date of the enactment of 
this Act.

SEC. 609. COVERAGE OF HOSPICE CONSULTATION SERVICES.

    (a) Coverage of Hospice Consultation Services.--Section 1812(a) (42 
U.S.C. 1395d(a)) is amended--
            (1) by striking ``and'' at the end of paragraph (3);
            (2) by striking the period at the end of paragraph (4) and 
        inserting ``; and''; and
            (3) by inserting after paragraph (4) the following new 
        paragraph:
            ``(5) for individuals who are terminally ill and who have 
        not made an election under subsection (d)(1), services that are 
        furnished by a physician who is either the medical director or 
        an employee of a hospice program and that consist of--
                    ``(A) an evaluation of the individual's need for 
                pain and symptom management, including the need for 
                hospice care;
                    ``(B) counseling the individual with respect to 
                end-of-life issues, the benefits of hospice care, and 
                care options; and
                    ``(C) if appropriate, advising the individual 
                regarding advanced care planning.''.
    (b) Payment.--Section 1814(i) (42 U.S.C. 1395f(i)) is amended by 
adding at the end the following new paragraph:
    ``(4) The amount paid to a hospice program with respect to the 
services under section 1812(a)(5) for which payment may be made under 
part A shall be the amount determined under a fee schedule established 
by the Secretary.''.
    (c) Conforming Amendment.--Section 1861(dd)(2)(A)(i) (42 U.S.C. 
1395x(dd)(2)(A)(i)) is amended by inserting before the comma at the end 
the following: ``and services described in section 1812(a)(5)''.
    (d) Effective Date.--The amendments made by this section shall 
apply to services provided by a hospice program on or after January 1, 
2004.

SEC. 610. APPLICATION OF OSHA BLOODBORNE PATHOGENS STANDARD TO CERTAIN 
              HOSPITALS.

    (a) In General.--Section 1866 (42 U.S.C. 1395cc) is amended--
            (1) in subsection (a)(1)--
                    (A) in subparagraph (R), by striking ``and'' at the 
                end;
                    (B) in subparagraph (S), by striking the period at 
                the end and inserting ``, and''; and
                    (C) 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 or a 
        State occupational safety and health plan that is approved 
        under section 18(b) of such Act, 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
            (2) 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.''.
    (b) Effective Date.--The amendments made by this subsection (a) 
shall apply to hospitals as of July 1, 2004.

SEC. 611. BIPA-RELATED TECHNICAL AMENDMENTS AND CORRECTIONS.

    (a) Technical Amendments Relating to Advisory Committee under BIPA 
Section 522.--(1) Subsection (i) of section 1114 (42 U.S.C. 1314)--
            (A) is transferred to section 1862 and added at the end of 
        such section; and
            (B) is redesignated as subsection (j).
    (2) Section 1862 (42 U.S.C. 1395y) is amended--
            (A) in the last sentence of subsection (a), by striking 
        ``established under section 1114(f)''; and
            (B) in subsection (j), as so transferred and redesignated--
                    (i) by striking ``under subsection (f)''; and
                    (ii) by striking ``section 1862(a)(1)'' and 
                inserting ``subsection (a)(1)''.
    (b) Terminology Corrections.--(1) Section 1869(c)(3)(I)(ii) (42 
U.S.C. 1395ff(c)(3)(I)(ii)), as amended by section 521 of BIPA, is 
amended--
            (A) in subclause (III), by striking ``policy'' and 
        inserting ``determination''; and
            (B) in subclause (IV), by striking ``medical review 
        policies'' and inserting ``coverage determinations''.
    (2) Section 1852(a)(2)(C) (42 U.S.C. 1395w-22(a)(2)(C)) is amended 
by striking ``policy'' and ``policy'' and inserting ``determination'' 
each place it appears and ``determination'', respectively.
    (c) Reference Corrections.--Section 1869(f)(4) (42 U.S.C. 
1395ff(f)(4)), as added by section 522 of BIPA, is amended--
            (1) in subparagraph (A)(iv), by striking ``subclause (I), 
        (II), or (III)'' and inserting ``clause (i), (ii), or (iii)'';
            (2) in subparagraph (B), by striking ``clause (i)(IV)'' and 
        ``clause (i)(III)'' and inserting ``subparagraph (A)(iv)'' and 
        ``subparagraph (A)(iii)'', respectively; and
            (3) in subparagraph (C), by striking ``clause (i)'', 
        ``subclause (IV)'' and ``subparagraph (A)'' and inserting 
        ``subparagraph (A)'', ``clause (iv)'' and ``paragraph (1)(A)'', 
        respectively each place it appears.
    (d) Other Corrections.--Effective as if included in the enactment 
of section 521(c) of BIPA, section 1154(e) (42 U.S.C. 1320c-3(e)) is 
amended by striking paragraph (5).
    (e) Effective Date.--Except as otherwise provided, the amendments 
made by this section shall be effective as if included in the enactment 
of BIPA.

SEC. 612. TREATMENT OF CERTAIN DENTAL CLAIMS.

    (a) In General.--Section 1862 (42 U.S.C. 1395y) is amended by 
adding after subsection (g) the following new subsection:
    ``(h)(1) Subject to paragraph (2), a group health plan (as defined 
in subsection (a)(1)(A)(v)) providing supplemental or secondary 
coverage to individuals also entitled to services under this title 
shall not require a medicare claims determination under this title for 
dental benefits specifically excluded under subsection (a)(12) as a 
condition of making a claims determination for such benefits under the 
group health plan.
    ``(2) A group health plan may require a claims determination under 
this title in cases involving or appearing to involve inpatient dental 
hospital services or dental services expressly covered under this title 
pursuant to actions taken by the Secretary.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on the date that is 60 days after the date of the enactment 
of this Act.

SEC. 613. REVISIONS TO REASSIGNMENT PROVISIONS.

    (a) In General.--Section 1842(b)(6)(A)(ii) (42 U.S.C. 
1395u(b)(6)(A)(ii)) is amended to read as follows: ``(ii) where the 
service was provided under a contractual arrangement between such 
physician or other person and a qualified entity (as defined by the 
Secretary) or other person, to the entity or other person if under such 
arrangement such entity or individual submits the bill for such service 
and such arrangement (I) includes joint and several liability for 
overpayment by such physician or other person and such entity or other 
person, and (II) meets such other program integrity and other 
safeguards as the Secretary may determine to be appropriate,''.
    (b) Conforming Amendments.--
            (1) The second sentence of section 1842(b)(6) (42 U.S.C. 
        1395u(b)(6)) is amended by striking ``except to an employer or 
        facility as described in clause (A)'' and inserting ``except to 
        an employer, entity, or other person as described in 
        subparagraph (A)''.
            (2) Section 1842(b)(6) (42 U.S.C. 1395u(b)(6)) is amended 
        by adding at the end the following new sentence: ``Nothing in 
        subparagraph (A)(ii) shall be construed to prohibit 
        requirements for joint and several liability for contractual 
        arrangements where such requirements are not explicitly stated 
        in a statute.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to payments made on or after 1 year after the date of the 
enactment of this Act.

SEC. 614. GAO STUDY AND REPORT REGARDING ILLINOIS COUNCIL DECISION.

    (a) Study.--The Comptroller General of the United States shall 
conduct a study on the access of health care providers and 
beneficiaries under the medicare program under title XVIII of the 
Social Security Act to judicial review of the actions of the Secretary 
of Health and Human Services and the effects of the decision of the 
Supreme Court of the United States in Shalala v. Illinois Council on 
Long Term Care, Inc., 529 U.S. 1 (1999) on such access.
    (b) Report.--Not later than the date that is 1 year after the date 
of enactment of this Act, the Comptroller General of the United States 
shall submit to Congress a report on the study conducted under 
subsection (a) together with recommendations for such legislation or 
administrative action as the Comptroller General determines to be 
appropriate.
                                 <all>