[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1250 Introduced in House (IH)]
113th CONGRESS
1st Session
H. R. 1250
To amend title XVIII of the Social Security Act to improve operations
of recovery auditors under the Medicare integrity program, to increase
transparency and accuracy in audits conducted by contractors, and for
other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 19, 2013
Mr. Graves of Missouri (for himself, Mr. Schiff, Mr. Hanna, Mr.
Huelskamp, Mr. Loebsack, Mr. Owens, Mr. Farr, Mr. Pompeo, Mr. Long, Mr.
King of Iowa, and Mr. King of New York) introduced the following bill;
which was referred to the Committee on Ways and Means, and in addition
to the Committee on Energy and Commerce, for a period to be
subsequently determined by the Speaker, in each case for consideration
of such provisions as fall within the jurisdiction of the committee
concerned
_______________________________________________________________________
A BILL
To amend title XVIII of the Social Security Act to improve operations
of recovery auditors under the Medicare integrity program, to increase
transparency and accuracy in audits conducted by contractors, 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 Audit
Improvement Act of 2013''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Combined additional documentation request limit.
Sec. 3. Improvement of recovery auditor operations.
Sec. 4. Greater transparency of recovery auditor performance.
Sec. 5. Accurate payment for rebilled claims.
Sec. 6. Requirement for physician validation for medical necessity
denials.
Sec. 7. Assuring due process in application of guidelines for reopening
and revision of determinations.
SEC. 2. COMBINED ADDITIONAL DOCUMENTATION REQUEST LIMIT.
(a) Establishment of Limits Per Hospital.--The Secretary of Health
and Human Services shall establish a process under which the number of
additional documentation requests made to a hospital (as defined in
subsection (c)(3)) by Medicare contractors (as defined in subsection
(c)(1)) pursuant to prepayment and postpayment audits that require a
hospital to submit a medical record for audit purposes, as required
under chapter 3 of the Medicare Program Integrity Manual, or otherwise,
shall be subject to a single, combined maximum limit of additional
documentation requests per year for the Medicare contractors specified
in subsection (c)(1). However, such maximum limit shall be applied
incrementally as a limit for requests for additional documentation in
45-day periods during the year so that the maximum number of such
requests in a 45-day period is 500 or, in the case of a hospital that
receives less than $100,000,000 in Medicare inpatient hospital payments
in the previous year, 350.
(b) Establishment of Percentage-Based Limits Per Claim Type.--In
addition to the limit established under subsection (a), the Secretary
shall establish a distinct additional documentation request limit for
each hospital claim type (as defined in subsection (c)(2)) for each
hospital for a 45-day period in a year. For a hospital for each
hospital claim type for a 45-day period in a calendar year, the
additional documentation request limit under this subsection for a
claim type shall be 2 percent of the total number of hospital
discharges for such hospital for the previous calendar year divided by
8.
(c) Definitions.--In this section:
(1) Medicare contractor.--The term ``Medicare contractor''
means any of the following:
(A) A Medicare administrative contractor under
section 1874A of the Social Security Act (42 U.S.C.
1395kk), including a fiscal intermediary and a carrier
under sections 1816 and 1842, respectively.
(B) A recovery audit contractor under section
1893(h) of such Act (42 U.S.C. 1395ddd(h)).
(C) A Comprehensive Error Rate Testing (CERT)
program contractor with a contract with the Secretary
of Health and Human Services to review error rates
under title XVIII of the Social Security Act (42 U.S.C.
1395 et seq.).
(2) Hospital claim type.--Each of the following shall be
considered a separate ``hospital claim type'':
(A) IPPS.--A claim for payment under section
1886(d) of the Social Security Act (42 U.S.C.
1395ww(d)) made by a hospital for furnishing inpatient
hospital services.
(B) Outpatient hospital services.--A claim for
payment under section 1833(t) of such Act (42 U.S.C.
1395l(t)) made by a hospital for furnishing covered OPD
services.
(C) CAH services.--A claim for payment for
inpatient or outpatient critical access hospital
services, whether under section 1814(l) of such Act (42
U.S.C. 1395f(l)) or under section 1834(g) of such Act
(42 U.S.C. 1395m(g)).
(D) Inpatient rehabilitation services.--A claim for
payment under section 1886(j) of such Act (42 U.S.C.
1395ww(j)) made by a hospital for furnishing inpatient
rehabilitation services.
(E) Other inpatient services.--A claim for payment
under any other provision of section 1886 of such Act
(42 U.S.C. 1395ww) made by a hospital for furnishing
inpatient hospital services, such as subsection (s)
(relating to inpatient hospital services furnish by a
psychiatric hospital) or subsection (m) (relating to
inpatient hospital services furnish by a long term care
hospital).
(F) Skilled nursing facility services.--A claim for
payment under section 1888(e) of such Act (42 U.S.C.
1395yy(e)) made by a hospital for furnishing covered
skilled nursing facility services.
(3) Hospital.--The term ``hospital'' means the campus of a
hospital (as defined in subsection (e) of section 1861 of the
Social Security Act (42 U.S.C. 1395x)) or of a psychiatric
hospital (as defined in subsection (f) of such section), a
comprehensive outpatient rehabilitation facility (as defined in
subsection (cc)(2) of such section), a critical access hospital
(as defined in subsection (mm) of such section), or a long-term
care hospital (as defined in subsection (ccc) of such section),
as identified by the tax identification number of the hospital,
and includes all inpatient hospital facilities under such
number located in the same area as such campus.
(d) Effective Date.--This section takes effect on the date of the
enactment of this Act and shall apply with respect to claims submitted
for payment under title XVIII of the Social Security Act for items or
services furnished by providers of services or suppliers on or after
the first day of the first month beginning 60 days after the date of
the enactment of this Act.
SEC. 3. IMPROVEMENT OF RECOVERY AUDITOR OPERATIONS.
(a) Recovery Auditors.--
(1) In general.--Section 1893(h) of the Social Security Act
(42 U.S.C. 1395ddd(h)) is amended by adding at the end the
following new paragraph:
``(10) Mandatory terms and conditions under contracts with
recovery audit contractors.--In addition to such other terms
and conditions as the Secretary may require under contracts
with recovery audit contractors under this subsection with
respect to a hospital, including a psychiatric hospital (as
defined in section 1861(f)), the Secretary shall ensure each of
the following requirements are included under such contracts:
``(A) Penalties for certain compliance failures.--
``(i) In general.--Each such contract shall
provide for the imposition of financial
penalties by the Secretary under such contract
in the case of any recovery audit contractor
with respect to which the Secretary determines
there is a pattern of failure by such
contractor to meet any program requirement
described in clause (ii). The Secretary shall
establish the amount of financial penalties and
the periodicity under which such penalties
shall be imposed under this subparagraph, in no
case less often than annually.
``(ii) Program requirement described.--For
purposes of this subparagraph, each of the
following requirements under the statement of
work for a recovery audit contractor
constitutes a program requirement with respect
to which failure to meet such requirement shall
result in the imposition of a financial penalty
under clause (i):
``(I) Audit deadline.--Completing a
determination with respect to each
audit of a hospital the recovery audit
contractor conducts within the
timeframes applicable under guidelines
of the Secretary.
``(II) Timely communication.--In
the case of a denial of a claim of a
hospital, furnishing the hospital the
required notice of the pending denial
in a timely fashion consistent with
claims and appeals timeframes specified
in guidelines of the Secretary.
``(B) Penalty for overturned appeals.--
``(i) In general.--Each such contract shall
require a recovery audit contractor to pay a
fee to the prevailing party in the case of a
claim denial that is overturned on appeal.
``(ii) Fee amount.--The amount of the fee
payable by a recovery audit contractor to a
prevailing party under clause (i) shall be
determined under a fee schedule established by
the Secretary for such purpose. The amount of
such fee under such fee schedule shall reflect
the cost incurred by a typical hospital in
appealing a claim denied by a recovery audit
contractor.
``(C) Postpayment and prepayment audits.--
``(i) Requiring focus on widespread payment
errors.--
``(I) In general.--The Secretary
shall not approve the conduct of a
postpayment or prepayment medical
necessity audit by a recovery audit
contractor unless such review addresses
a widespread payment error rate (as
defined in clause (ii)).
``(II) Cessation of audit.--A
recovery audit contractor that
commences an audit under subclause (I)
shall cease such audit or any similar
audits, if upon annual review, the
applicable payment error rate is no
longer a widespread payment error rate
(as so defined).
``(ii) Widespread payment error rate
defined.--
``(I) In general.--In this
subparagraph, the term `widespread
payment error rate' means, with respect
to medical necessity reviews conducted
by a recovery audit contractor, a
payment error rate that exceeds the
rate specified in subclause (II) for a
particular medical necessity audit
determined by the Secretary using a
statistically significant sampling of
claims submitted by hospitals in the
jurisdiction of the recovery audit
contractor and adjusted to take into
account claim denials overturned on
appeal.
``(II) Rate specified.--The rate
specified in this subclause is 40
percent, except that the Secretary
shall annually evaluate such rate and
reduce it as necessary to account for
changes in payment error rates with the
aim of continued, steady improvement of
billing practices.
``(D) Guidelines for prepayment review.--
``(i) In general.--A recovery audit
contractor may conduct prepayment review only
in the manner provided under prepayment review
guidelines (described in clause (ii))
established by the Secretary.
``(ii) Consistent prepayment review
guidelines.--For purposes of prepayment review
activities authorized under this subsection and
section 1874A(h) (relating to prepayment review
by medicare administrative contractors), the
Secretary shall establish guidelines under
which consistent criteria for minimum payment
error rates or improper billing practices
occasion prepayment review by contractors under
this subsection and section 1874A. Such
guidelines shall include criteria and
timeframes for termination of prepayment
review.''.
(2) Conforming amendment to apply financial penalties
imposed on recovery contractors to the trust funds.--Section
1893(h)(2) of the Social Security Act (42 U.S.C. 1395ddd(h)(2))
is amended by inserting ``, and amounts collected by the
Secretary under paragraph (10)(A)(i) (relating to financial
penalties for contractor compliance failures),'' after
``paragraph (1)(C)''.
(b) Conforming Amendment for Medicare Administrative Contractors.--
Section 1874A of the Social Security Act (42 U.S.C. 1395kk-1) is
amended by adding at the end the following new subsection:
``(h) Mandatory Terms and Conditions Under Contracts With Medicare
Administrative Contractors.--In addition to such other terms and
conditions as the Secretary may require under contracts with medicare
administrative contractors under this section with respect to a
hospital, including a psychiatric hospital (as defined in section
1861(f)), the Secretary shall ensure each of the following requirements
are included under such contracts:
``(1) Postpayment and prepayment audits.--
``(A) Requiring focus on widespread payment
errors.--
``(i) In general.--The Secretary shall not
approve the conduct of a postpayment or
prepayment medical necessity audit by a
medicare administrative contractor unless such
review addresses a widespread payment error
rate (as defined in subparagraph (B)).
``(ii) Cessation of audit.--A medicare
administrative contractor that commences an
audit under clause (i) shall cease such audit
or any similar audits, if upon annual review,
the applicable payment error rate is no longer
a widespread payment error rate (as so
defined).
``(B) Widespread payment error rate defined.--In
this paragraph, the term `widespread payment error
rate' means, with respect to medical necessity reviews
conducted by a medicare administrative contractor, a
payment error rate of 40 percent or greater for a
particular medical necessity audit determined by the
Secretary using a statistically significant sampling of
claims submitted by hospitals in the jurisdiction of
the medicare administrative contractor and adjusted to
take into account claim denials overturned on appeal.
``(2) Guidelines for prepayment review.--A medicare
administrative contractor may only conduct prepayment review in
the manner provided under prepayment review guidelines
established by the Secretary under section
1893(h)(10)(D)(ii).''.
(c) Effective Date.--The amendments made by this section shall
apply to contracts entered into or renewed with recovery audit
contractors under section 1893(h) of the Social Security Act (42 U.S.C.
1395ddd(h)) and medicare administrative contractors under section 1874A
of the Social Security Act (42 U.S.C. 1395kk-1) on or after the date of
the enactment of this Act.
SEC. 4. GREATER TRANSPARENCY OF RECOVERY AUDITOR PERFORMANCE.
(a) Annual Publication of Relevant Performance Information.--
Section 1893(h) of the Social Security Act (42 U.S.C. 1395ddd(h)), as
amended by section 3(a), is further amended by adding at the end the
following new paragraph:
``(11) Information on recovery audit contractor
performance.--With respect to each recovery audit contractor
with a contract under this section for a contract year, the
Secretary shall publish on the Internet website of the Centers
for Medicare & Medicaid Services the following information with
respect to the performance of each such recovery audit
contractor:
``(A) Publicly available information on audit
rates, denials, and appeals outcomes.--With respect to
the performance of each such recovery audit contractor
during a contract year, the Secretary shall post on
such Internet website the following information:
``(i) Audits.--The aggregate number of
claims audited by the recovery audit contractor
during the contract year involved, as well as
the number of audits of each of the following
audit types (each in this paragraph referred to
as an `audit type'):
``(I) Automated.
``(II) Complex.
``(III) Medical necessity review.
``(IV) Part A claims.
``(V) Part B claims.
``(VI) Durable medical equipment
claims.
``(VII) Part A medical necessity.
``(ii) ADR requests.--The aggregate number
of requests for medical records, referred to as
additional documentation requests, for each
audit type during the contract year involved.
``(iii) Denials.--The aggregate number of
denials for each audit type made by the
recovery audit contractor during the contract
year involved.
``(iv) Denial rates.--The denial rate of
the recovery audit contractor during the
contract year involved for part A claims, part
B claims, and durable medical equipment claims
for each audit type during the contract year
involved.
``(v) Appeals.--The aggregate number of
appeals filed by providers of services and
suppliers with respect to denials for each
audit type made by the recovery audit
contractor during the contract year involved.
``(vi) Appeals rates.--The aggregate rate
of appeals filed by providers of services and
suppliers with respect to denials for each
audit type made by the recovery audit
contractor during the contract year involved.
``(vii) Appeals volume and outcomes at each
of the 5 stages of appeal.--For claims denied
by a recovery audit contractor, the number of
claims during the contract year that were
appealed by the provider, the number of
concluded appeals that did not advance to a
subsequent appeals stage, and the number and
percentage of completed appeals that were
decided in favor of the provider, for each
level of appeal as follows:
``(I) Reconsideration by the
relevant medicare contractor.
``(II) Redetermination by a
qualified independent contractor.
``(III) Administrative law judge
hearing.
``(IV) Medicare Appeals Council
review.
``(V) United States District Court
judicial review.
``(viii) Net denials; net denial rates.--
The net denials for each audit type, calculated
as the number of denials for such audit type
under clause (iii) minus the number of such
denials that are overturned on appeal and the
net denial rate for each audit type, calculated
in the same manner as denial rates under clause
(iv) but subtracting from denials those denials
that are overturned on appeal
``(B) Public availability of independent
performance evaluation.--The Secretary shall make
available on such Internet website the results of any
performance evaluation with respect to each recovery
audit contractor conducted by an independent entity
selected by the Secretary for such purpose. Each
performance evaluation shall include in its results for
posting on such Internet website a determination of
annual error rates of the recovery audit contractor for
each audit type and the net denials and net denial
rates described in subparagraph (A)(viii).''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to contracts entered into or renewed with recovery audit
contractors under section 1893(h) of the Social Security Act (42 U.S.C.
1395ddd(h)) on or after the date of the enactment of this Act.
SEC. 5. ACCURATE PAYMENT FOR REBILLED CLAIMS.
(a) Rebilling Under Part B Inpatient Claims Denied Based on Site of
Service Where Services Found Medically Necessary at the Outpatient
Level.--
(1) Recovery auditors.--Section 1893(h) of the Social
Security Act (42 U.S.C. 1395ddd(h)), as amended by sections
3(a) and 4(a), is further amended by adding at the end the
following new paragraph:
``(12) Treatment of resubmission of specified claims as
original claims.--
``(A) Treatment as original claim.--The
resubmission of a specified claim (as defined in
subparagraph (C)) shall be deemed to be an original
claim for purposes of--
``(i) payment under part B; and
``(ii) provisions under this title relating
to--
``(I) the authority of a hospital
to resubmit a claim for payment under
the appropriate section of this title;
and
``(II) requirements for the timely
submission of claims, including under
sections 1814(a), 1842(b)(3), and
1835(a).
``(B) Payment for items and services under
resubmitted claim.--Payment shall be made for a
specified claim resubmitted under subparagraph (A) for
all the items and services furnished for which payment
may be made under part B.
``(C) Definitions.--In this paragraph:
``(i) Specified claim.--
``(I) In general.--The term
`specified claim' means a claim
submitted by a hospital for payment
under part A for inpatient hospital
services which a recovery audit
contractor (or entity adjudicating a
provider appeal of a Medicare claim
denied payment by a recovery audit
contractor) determines, subject to
subclause (II), that the inpatient
hospital services were not medically
necessary and reasonable under section
1862(a)(1)(A).
``(II) Requirements for
determination.--A recovery audit
contractor or entity adjudicating such
provider appeal shall, before
completing a determination described in
subclause (I), assess and make a
specific finding as to whether the
denied inpatient hospital services were
medically necessary and reasonable in
an outpatient setting of the hospital.
``(ii) Resubmission.--The term
`resubmission' includes, with respect to a
specified claim of a hospital, the submission
by the hospital of a new claim or of an
adjusted original claim.''.
(2) Conforming amendment for medicare administrative
contractors.--Subsection (h) of section 1874A of the Social
Security Act (42 U.S.C. 1395kk-1), as added by section 3(b), is
further amended by adding at the end the following new
paragraph:
``(3) Treatment of resubmission of specified claims as
original claims.--
``(A) Treatment as original claim.--The
resubmission of a specified claim (as defined in
subparagraph (C)) shall be deemed to be an original
claim for purposes of--
``(i) payment under part B; and
``(ii) provisions under this title relating
to--
``(I) the authority of a hospital
to resubmit a claim for payment under
the appropriate section of this title;
and
``(II) requirements for the timely
submission of claims, including under
sections 1814(a), 1842(b)(3), and
1835(a).
``(B) Payment for items and services under
resubmitted claim.--Payment shall be made for a
specified claim resubmitted under subparagraph (A) for
all the items and services furnished for which payment
may be made under part B.
``(C) Definitions.--In this paragraph:
``(i) Specified claim.--
``(I) In general.--The term
`specified claim' means a claim
submitted by a hospital for payment
under part A for inpatient hospital
services which a medicare
administrative contractor (or entity
adjudicating a hospital appeal of a
Medicare claim denied payment by a
medicare administrative contractor)
determines, subject to subclause (II),
that the inpatient hospital services
were not medically necessary and
reasonable under section 1862(a)(1)(A).
``(II) Requirements for
determination.--A medicare
administrative contractor or entity
adjudicating such provider appeal
shall, before completing a
determination described in subclause
(I), assess and make a specific finding
as to whether the denied inpatient
hospital services were medically
necessary and reasonable in an
outpatient setting of the hospital.
``(ii) Resubmission.--The term
`resubmission' includes, with respect to a
specified claim of a hospital, the submission
by the hospital of a new claim or of an
adjusted original claim.''.
(3) Conforming amendment for cert contractors.--
(A) Treatment of resubmission of specified claims
as original claims.--A Comprehensive Error Rate Testing
(CERT) program contractor with a contract with the
Secretary of Health and Human Services to review error
rates under title XVIII of the Social Security Act (42
U.S.C. 1395 et seq.) shall deem the resubmission of a
specified claim (as defined in subparagraph (C)) as an
original claim for purposes of--
(i) payment under part B of such title
XVII; and
(ii) provisions under such title relating
to--
(I) the authority of a hospital to
resubmit a claim for payment under the
appropriate section of such title; and
(II) requirements for the timely
submission of claims, including under
sections 1814(a), 1842(b)(3), and
1835(a) of such Act (42 U.S.C.
1395f(a), 1395u(b)(3), and 1395n(a),
respectively).
(B) Payment for items and services under
resubmitted claim.--Payment shall be made for a
specified claim resubmitted under subparagraph (A) for
all the items and services furnished for which payment
may be made under part B of such title XVIII.
(C) Definitions.--In this paragraph:
(i) Specified claim.--
(I) In general.--The term
``specified claim'' means a claim
submitted by a hospital (as defined in
section 1861(e) of such Act (42 U.S.C.
1395x(e))) for payment under title
XVIII of such Act for inpatient
hospital services which a Comprehensive
Error Rate Testing (CERT) program
contractor (or entity adjudicating a
hospital appeal of a Medicare claim
denied payment by a CERT program
contractor) determines the inpatient
hospital services were not medically
necessary and reasonable under section
1862(a)(1)(A) of such Act (42 U.S.C.
1395y(a)(1)(A)).
(II) Requirements for
determination.--A CERT program
contractor or entity adjudicating such
provider appeal shall, before
completing a determination described in
subclause (I), assess and make a
specific finding as to whether the
denied inpatient hospital services were
medically necessary and reasonable in
an outpatient setting of the hospital.
(ii) Resubmission.--The term
``resubmission'' includes, with respect to a
specified claim of a hospital, the submission
by the hospital of a new claim or of an
adjusted original claim.
(iii) Effective date.--The amendments made
by paragraphs (1) and (2), and the provisions
of paragraph (3), shall apply to contracts
entered into or renewed with recovery audit
contractors under section 1893(h) of the Social
Security Act (42 U.S.C. 1395ddd(h)), medicare
administrative contractors under section 1874A
of the Social Security Act (42 U.S.C. 1395kk-1)
and Comprehensive Error Rate Testing (CERT)
program contractors, respectively, on or after
the date of the enactment of this Act.
(b) Treatment of Audited Claims as Reopened.--
(1) Recovery auditors.--Section 1893(h)(4) of the Social
Security Act (42 U.S.C. 1395ddd(h)(4)) is amended by adding
after and below subparagraph (B) the following: ``For purposes
of the ability of a hospital to resubmit a claim for payment
under the appropriate section of this title and for purposes of
requirements for the timely submission of claims by hospitals,
including under sections 1814(a), 1842(b)(3), and 1835(a), any
claim that is the subject of an audit by a recovery audit
contractor with a contract under this section shall be deemed
to be a reopened claim. Such reopened claims are not subject to
the timely filing limitations under such sections (and related
regulations) and shall be adjusted and paid without regard to
such timely filing limitations.''.
(2) Conforming amendment for medicare administrative
contractors.--Section 1874A(h) of the Social Security Act (42
U.S.C. 1395kk-1(h)), as added by section 3(b) and as amended by
subsection (a)(2), is further amended by adding at the end the
following new paragraph:
``(4) Treatment of audited claims as reopened.--For
purposes of the ability of a hospital to resubmit a claim for
payment under the appropriate provisions of this title and for
purposes of requirements for the timely submission of claims by
hospitals, including under sections 1814(a), 1842(b)(3), and
1835(a), any claim that is the subject of an audit by a
medicare administrative contractor with a contract under this
section shall be deemed to be a reopened claim. Such reopened
claims are not subject to the timely filing limitations under
such sections (and related regulations) and shall be adjusted
and paid without regard to such timely filing limitations.''.
(3) Conforming amendment for cert contractors.--
(A) Treatment of audited claims as reopened.--Any
claim made for payment for services furnished by a
hospital under title XVIII of the Social Security Act
(42 U.S.C. 1395 et seq.) that is the subject of an
audit by a Comprehensive Error Rate Testing (CERT)
program contractor with a contract with the Secretary
of Health and Human Services shall be deemed to be a
reopened claim for purposes of the ability of such
hospital to resubmit a claim for payment under the
appropriate provisions of such title XVIII and for
purposes of requirements for the timely submission of
claims by hospitals under such title XVIII, including
under sections 1814(a), 1842(b)(3), and 1835(a) of the
Social Security Act (42 U.S.C. 1395f(a), 1395u(b)(3),
and 1395n(a), respectively). Such reopened claims are
not subject to the timely filing limitations under such
sections (and related regulations) and shall be
adjusted and paid without regard to such timely filing
limitations.
(B) Definition.--In this paragraph, the term
``hospital'' has the meaning given such term in
subsection (e) of section 1861 of the Social Security
Act (42 U.S.C. 1395x), and includes a psychiatric
hospital as defined in subsection (f) of such section.
(4) Effective date.--The amendments made by paragraphs (1)
and (2), and the provisions of paragraph (3), shall take effect
on the date of the enactment of this Act and apply to claims
subject to audit on or after September 1, 2010.
SEC. 6. REQUIREMENT FOR PHYSICIAN VALIDATION FOR MEDICAL NECESSITY
DENIALS.
(a) Recovery Auditors.--Section 1893(h) of the Social Security Act
(42 U.S.C. 1395ddd(h)), as amended by sections 3(a), 4(a), and 6(a)(1),
is further amended by adding at the end the following new paragraph:
``(13) Physician validation of medical necessity denials
made by non-physician reviewers.--
``(A) In general.--Each contract under this section
for a recovery audit contractor shall require that a
physician (as defined in section 1861(r)(1)) review
each denial of a claim for medical necessity when a
medical necessity review of such claim is performed and
a denial is made by an employee of the contractor who
is not a physician (as so defined).
``(B) Determination; validation.--A physician
reviewing a claim under subparagraph (A) shall--
``(i) make a determination whether the
denial of the claim under the medical necessity
review by the non-physician employee is
appropriate;
``(ii) sign and certify such determination;
and
``(iii) append such signed and certified
determination to the claim file.
``(C) Treatment as medically necessary.--A claim
with respect to which a denial has been made as
described in subparagraph (A) for which the physician
determines the denial is not appropriate under
subparagraph (B) shall be deemed to be medically
necessary.
``(D) Medical necessity review defined.--In this
paragraph, the term `medical necessity review' means,
with respect to an audit of a claim of a provider of
services or supplier, a review conducted by a recovery
audit contractor for the purpose of determining whether
an item or service furnished for which the claim is
filed by such provider of services or supplier is
reasonable and necessary for the diagnosis or treatment
of illness or injury under section 1862(a)(1)(A).''.
(b) Conforming Amendment to Medicare Administrative Contractors.--
Subsection (h) of section 1874A of the Social Security Act (42 U.S.C.
1395kk-1), as added by section 3(b) and as amended by subsections
(a)(2) and (b)(2) of section 6, is further amended by adding at the end
the following new paragraph:
``(5) Physician validation of medical necessity denials
made by non-physician reviewers.--
``(A) In general.--A physician (as defined in
section 1861(r)(1)) shall review each denial of a claim
for medical necessity when a medical necessity review
of such claim is performed and a denial is made by an
employee of the contractor who is not a physician (as
so defined).
``(B) Determination; validation.--A physician
reviewing a claim under subparagraph (A) shall--
``(i) make a determination whether the
denial of the claim under the medical necessity
review by the non-physician employee is
appropriate;
``(ii) sign and certify such determination;
and
``(iii) append such signed and certified
determination to the claim file.
``(C) Treatment as medically necessary.--A claim
with respect to which a denial has been made as
described in subparagraph (A) for which the physician
determines the denial is not appropriate under
subparagraph (B) shall be deemed to be medically
necessary.
``(D) Medical necessity review defined.--In this
paragraph, the term `medical necessity review' means,
with respect to an audit of a claim of a provider of
services or supplier, a review conducted by a medicare
administrative contractor for the purpose of
determining whether an item or service furnished for
which the claim is filed by such provider of services
or supplier is reasonable and necessary for the
diagnosis or treatment of illness or injury under
section 1862(a)(1)(A).''.
(c) Conforming Requirement for CERT Contractors.--
(1) Contract requirement for physician validation of
medical necessity denials made by non-physician reviewers.--The
Secretary of Health and Human Services shall require under each
contract with a Comprehensive Error Rate Testing (CERT) program
contractor to review error rates under title XVIII of the
Social Security Act (42 U.S.C. 1395 et seq.) that the CERT
program contractor ensure that a physician (as defined in
section 1861(r)(1) of such Act (42 U.S.C. 1395x(r)(1))) reviews
each denial of a claim for medical necessity when a medical
necessity review of such claim is performed and a denial is
made by an employee of the contractor who is not a physician
(as so defined).
(2) Determination; validation.--A physician reviewing a
claim under paragraph (1) shall--
(A) make a determination whether the denial of the
claim under the medical necessity review by the non-
physician employee is appropriate;
(B) sign and certify such determination; and
(C) append such signed and certified determination
to the claim file.
(3) Treatment as medically necessary.--A claim with respect
to which a denial has been made as described in paragraph (1)
for which the physician determines the denial is not
appropriate under paragraph (2) shall be deemed to be medically
necessary.
(4) Medical necessity review defined.--In this subsection,
the term ``medical necessity review'' means, with respect to an
audit of a claim of a provider of services or supplier, a
review conducted by a CERT program contractor for the purpose
of determining whether an item or service furnished for which
the claim is filed by such provider of services or supplier is
reasonable and necessary for the diagnosis or treatment of
illness or injury under section 1862(a)(1)(A) of the Social
Security Act (42 U.S.C. 1395y(a)(1)(A)).
(d) Effective Date.--The amendments made by subsections (a) and
(b), and the provisions of subsection (c), shall apply to contracts
entered into or renewed with recovery audit contractors under section
1893(h) of the Social Security Act (42 U.S.C. 1395ddd(h)), medicare
administrative contractors under section 1874A of the Social Security
Act (42 U.S.C. 1395kk-1) and Comprehensive Error Rate Testing (CERT)
program contractors, respectively, on or after the date of the
enactment of this Act.
SEC. 7. ASSURING DUE PROCESS IN APPLICATION OF GUIDELINES FOR REOPENING
AND REVISION OF DETERMINATIONS.
Section 1869(b)(1)(G) of the Social Security Act (42 U.S.C.
1395ff(b)(1)(G)) is amended by adding at the end the following: ``The
Secretary's compliance with such guidelines shall be subject to
administrative and judicial review under this section.''.
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