[Congressional Record Volume 147, Number 166 (Tuesday, December 4, 2001)]
[House]
[Pages H8778-H8801]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         MEDICARE REGULATORY AND CONTRACTING REFORM ACT OF 2001

  Mrs. JOHNSON of Connecticut. Mr. Speaker, I move to suspend the rules 
and pass the bill (H.R. 3391) to amend title XVIII of the Social 
Security Act to provide regulatory relief and contracting flexibility 
under the Medicare Program.
  The Clerk read as follows:

                               H.R. 3391

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

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

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

Sec. 1. Short title; amendments to Social Security Act; table of 
              contents.
Sec. 2. Findings and construction.
Sec. 3. Definitions.

                       TITLE I--REGULATORY REFORM

Sec. 101. Issuance of regulations.
Sec. 102. Compliance with changes in regulations and policies.
Sec. 103. Reports and studies relating to regulatory reform.

                      TITLE II--CONTRACTING REFORM

Sec. 201. Increased flexibility in medicare administration.
Sec. 202. Requirements for information security for medicare 
              administrative contractors.

                   TITLE III--EDUCATION AND OUTREACH

Sec. 301. Provider education and technical assistance.
Sec. 302. Small provider technical assistance demonstration program.
Sec. 303. Medicare Provider Ombudsman; Medicare Beneficiary Ombudsman.
Sec. 304. Beneficiary outreach demonstration program.

                     TITLE IV--APPEALS AND RECOVERY

Sec. 401. Transfer of responsibility for medicare appeals.
Sec. 402. Process for expedited access to review.
Sec. 403. Revisions to medicare appeals process.
Sec. 404. Prepayment review.
Sec. 405. Recovery of overpayments.
Sec. 406. Provider enrollment process; right of appeal.
Sec. 407. Process for correction of minor errors and omissions on 
              claims without pursuing appeals process.
Sec. 408. Prior determination process for certain items and services; 
              advance beneficiary notices.

                   TITLE V--MISCELLANEOUS PROVISIONS

Sec. 501. Policy development regarding evaluation and management (E & 
              M) documentation guidelines.
Sec. 502. Improvement in oversight of technology and coverage.
Sec. 503. Treatment of hospitals for certain services under medicare 
              secondary payor (MSP) provisions.
Sec. 504. EMTALA improvements.
Sec. 505. Emergency Medical Treatment and Active Labor Act (EMTALA) 
              Technical Advisory Group.
Sec. 506. Authorizing use of arrangements with other hospice programs 
              to provide core hospice services in certain 
              circumstances.
Sec. 507. Application of OSHA bloodborne pathogens standard to certain 
              hospitals.
Sec. 508. One-year delay in lock in procedures for Medicare+Choice 
              plans; change in Medicare+Choice reporting deadlines and 
              annual, coordinated election period for 2002.
Sec. 509. BIPA-related technical amendments and corrections.
Sec. 510. Conforming authority to waive a program exclusion.
Sec. 511. Treatment of certain dental claims.
Sec. 512. Miscellaneous reports, studies, and publication requirements.

     SEC. 2. FINDINGS AND CONSTRUCTION.

       (a) Findings.--Congress finds the following:
       (1) The overwhelming majority of providers of services and 
     suppliers in the United States are law-abiding persons who 
     provide important health care services to patients each day.
       (2) The Secretary of Health and Human Services should work 
     to streamline paperwork requirements under the medicare 
     program and communicate clearer instructions to providers of 
     services and suppliers so that they may spend more time 
     caring for patients.
       (b) Construction.--Nothing in this Act shall be construed--
       (1) to compromise or affect existing legal remedies for 
     addressing fraud or abuse, whether it be criminal 
     prosecution, civil enforcement, or administrative remedies, 
     including under sections 3729 through 3733 of title 31, 
     United States Code (known as the False Claims Act); or
       (2) to prevent or impede the Department of Health and Human 
     Services in any way from its ongoing efforts to eliminate 
     waste, fraud, and abuse in the medicare program.

[[Page H8779]]

     Furthermore, the consolidation of medicare administrative 
     contracting set forth in this Act does not constitute 
     consolidation of the Federal Hospital Insurance Trust Fund 
     and the Federal Supplementary Medical Insurance Trust Fund or 
     reflect any position on that issue.

     SEC. 3. DEFINITIONS.

       (a) Use of Term Supplier in Medicare.--Section 1861 (42 
     U.S.C. 1395x) is amended by inserting after subsection (c) 
     the following new subsection:

                               ``Supplier

       ``(d) The term `supplier' means, unless the context 
     otherwise requires, a physician or other practitioner, a 
     facility, or other entity (other than a provider of services) 
     that furnishes items or services under this title.''.
       (b) Other Terms Used in Act.--In this Act:
       (1) BIPA.--The term ``BIPA'' means the Medicare, Medicaid, 
     and SCHIP Benefits Improvement and Protection Act of 2000, as 
     enacted into law by section 1(a)(6) of Public Law 106-554.
       (2) Secretary.--The term ``Secretary'' means the Secretary 
     of Health and Human Services.

                       TITLE I--REGULATORY REFORM

     SEC. 101. ISSUANCE OF REGULATIONS.

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

     SEC. 102. COMPLIANCE WITH CHANGES IN REGULATIONS AND 
                   POLICIES.

       (a) No Retroactive Application of Substantive Changes.--
       (1) In general.--Section 1871 (42 U.S.C. 1395hh), as 
     amended by section 101(a), is amended by adding at the end 
     the following new subsection:
       ``(e)(1)(A) A substantive change in regulations, manual 
     instructions, interpretative rules, statements of policy, or 
     guidelines of general applicability under this title shall 
     not be applied (by extrapolation or otherwise) retroactively 
     to items and services furnished before the 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(e)(1), as added by subsection 
     (a), is amended by adding at the end the following:
       ``(B)(i) Except as provided in clause (ii), a substantive 
     change referred to in subparagraph (A) shall not become 
     effective before 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 such 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.
       ``(C) No action shall be taken against a provider of 
     services or supplier with respect to noncompliance with such 
     a substantive change for items and services furnished before 
     the effective date of such a change.''.
       (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.
       (c) Reliance on Guidance.--
       (1) In general.--Section 1871(e), as added by subsection 
     (a), is further amended by adding at the end the following 
     new paragraph:
       ``(2)(A) If--
       ``(i) a provider of services or supplier follows the 
     written guidance (which may be transmitted electronically) 
     provided by the Secretary or by a medicare contractor (as 
     defined in section 1889(g)) acting within the scope of the 
     contractor's contract authority, with respect to the 
     furnishing of items or services and submission of a claim for 
     benefits for such items or services with respect to such 
     provider or supplier;
       ``(ii) the Secretary determines that the provider of 
     services or supplier has accurately presented the 
     circumstances relating to such items, services, and claim to 
     the contractor in writing; and
       ``(iii) the guidance was in error;
     the provider of services or supplier shall not be subject to 
     any sanction (including any penalty or requirement for 
     repayment of any amount) if the provider of services or 
     supplier reasonably relied on such guidance.
       ``(B) Subparagraph (A) shall not be construed as preventing 
     the recoupment or repayment (without any additional penalty) 
     relating to an overpayment insofar as the overpayment was 
     solely the result of a clerical or technical operational 
     error.''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall take effect on the date of the enactment of this Act 
     but shall not apply to any sanction for which notice was 
     provided on or before the date of the enactment of this Act.

     SEC. 103. REPORTS AND STUDIES RELATING TO REGULATORY REFORM.

       (a) GAO Study on Advisory Opinion Authority.--

[[Page H8780]]

       (1) Study.--The Comptroller General of the United States 
     shall conduct a study to determine the feasibility and 
     appropriateness of establishing in the Secretary authority to 
     provide legally binding advisory opinions on appropriate 
     interpretation and application of regulations to carry out 
     the medicare program under title XVIII of the Social Security 
     Act. Such study shall examine the appropriate timeframe for 
     issuing such advisory opinions, as well as the need for 
     additional staff and funding to provide such opinions.
       (2) Report.--The Comptroller General shall submit to 
     Congress a report on the study conducted under paragraph (1) 
     by not later than January 1, 2003.
       (b) Report on Legal and Regulatory Inconsistencies.--
     Section 1871 (42 U.S.C. 1395hh), as amended by section 2(a), 
     is amended by adding at the end the following new subsection:
       ``(f)(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 individuals entitled to benefits 
     under part A or enrolled under part B, or both, providers of 
     services, and suppliers and from the Medicare Beneficiary 
     Ombudsman and the Medicare Provider Ombudsman with respect to 
     such areas of inconsistency and conflict; and
       ``(B) information from medicare contractors that tracks the 
     nature of written and telephone inquiries.
       ``(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.''.

                      TITLE II--CONTRACTING REFORM

     SEC. 201. 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 or supplier (or class of such providers of services 
     or suppliers), the `appropriate' medicare administrative 
     contractor is the medicare administrative contractor that has 
     a contract under this section with respect to the performance 
     of that function in relation to that individual, provider of 
     services or supplier or class of provider of services or 
     supplier.
       ``(4) Functions described.--The functions referred to in 
     paragraphs (1) and (2) are payment functions, provider 
     services functions, and functions relating to services 
     furnished to individuals entitled to benefits under part A or 
     enrolled under part B, or both, as follows:
       ``(A) Determination of payment amounts.--Determining 
     (subject to the provisions of section 1878 and to such review 
     by the Secretary as may be provided for by the contracts) the 
     amount of the payments required pursuant to this title to be 
     made to providers of services, suppliers and individuals.
       ``(B) Making payments.--Making payments described in 
     subparagraph (A) (including receipt, disbursement, and 
     accounting for funds in making such payments).
       ``(C) Beneficiary education and assistance.--Providing 
     education and outreach to individuals entitled to benefits 
     under part A or enrolled under part B, or both, and providing 
     assistance to those individuals with specific issues, 
     concerns or problems.
       ``(D) Provider consultative services.--Providing 
     consultative services to institutions, agencies, and other 
     persons to enable them to establish and maintain fiscal 
     records necessary for purposes of this title and otherwise to 
     qualify as providers of services or suppliers.
       ``(E) Communication with providers.--Communicating to 
     providers of services and suppliers any information or 
     instructions furnished to the medicare administrative 
     contractor by the Secretary, and facilitating communication 
     between such providers and suppliers and the Secretary.
       ``(F) Provider education and technical assistance.--
     Performing the functions relating to provider education, 
     training, and technical assistance.
       ``(G) Additional functions.--Performing such other 
     functions as are necessary to carry out the purposes of this 
     title.
       ``(5) Relationship to mip contracts.--
       ``(A) Nonduplication of duties.--In entering into contracts 
     under this section, the Secretary shall assure that functions 
     of medicare administrative contractors in carrying out 
     activities under parts A and B do not duplicate activities 
     carried out under the Medicare Integrity Program under 
     section 1893. The previous sentence shall not apply with 
     respect to the activity described in section 1893(b)(5) 
     (relating to prior authorization of certain items of durable 
     medical equipment under section 1834(a)(15)).
       ``(B) Construction.--An entity shall not be treated as a 
     medicare administrative contractor merely by reason of having 
     entered into a contract with the Secretary under section 
     1893.
       ``(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 or in 
     subparagraph (B), the Secretary shall use competitive 
     procedures when entering into contracts with medicare 
     administrative contractors under this section, taking into 
     account performance quality as well as price and other 
     factors.
       ``(B) Renewal of contracts.--The Secretary may renew a 
     contract with a medicare administrative contractor under this 
     section from term to term without regard to section 5 of 
     title 41, United States Code, or any other provision of law 
     requiring competition, if the medicare administrative 
     contractor has met or exceeded the performance requirements 
     applicable with respect to the contract and contractor, 
     except that the Secretary shall provide for the application 
     of competitive procedures under such a contract not less 
     frequently than once every five years.
       ``(C) Transfer of functions.--The Secretary may transfer 
     functions among medicare administrative contractors 
     consistent with the provisions of this paragraph. The 
     Secretary shall ensure that performance quality is considered 
     in such transfers. The Secretary shall provide public notice 
     (whether in the Federal Register or otherwise) of any such 
     transfer (including a description of the functions so 
     transferred, a description of the providers of services and 
     suppliers affected by such transfer, and contact information 
     for the contractors involved).
       ``(D) Incentives for quality.--The Secretary shall provide 
     incentives for medicare administrative contractors to provide 
     quality service and to promote efficiency.
       ``(2) Compliance with requirements.--No contract under this 
     section shall be entered into with any medicare 
     administrative contractor unless the Secretary finds that 
     such medicare administrative contractor will perform its 
     obligations under the contract efficiently and effectively 
     and will meet such requirements as to financial 
     responsibility, legal authority, quality of services 
     provided, and other matters as the Secretary finds pertinent.
       ``(3) Performance requirements.--
       ``(A) Development of specific performance requirements.--In 
     developing contract performance requirements, the Secretary 
     shall develop performance requirements applicable to 
     functions described in subsection (a)(4).
       ``(B) Consultation.-- In developing such requirements, the 
     Secretary may consult with providers of services and 
     suppliers, organizations representing individuals entitled to 
     benefits under part A or enrolled under part B, or both, and 
     organizations and agencies performing functions necessary to 
     carry out the purposes of this section with respect to such 
     performance requirements.
       ``(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 developed 
     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

[[Page H8781]]

     may find necessary in performing his functions under this 
     title; and
       ``(B) to maintain such records and afford such access 
     thereto as the Secretary finds necessary to assure the 
     correctness and verification of the information and reports 
     under subparagraph (A) and otherwise to carry out the 
     purposes of this title.
       ``(5) Surety bond.--A contract with a medicare 
     administrative contractor under this section may require the 
     medicare administrative contractor, and any of its officers 
     or employees certifying payments or disbursing funds pursuant 
     to the contract, or otherwise participating in carrying out 
     the contract, to give surety bond to the United States in 
     such amount as the Secretary may deem appropriate.
       ``(c) Terms and Conditions.--
       ``(1) In general.--A contract with any medicare 
     administrative contractor under this section may contain such 
     terms and conditions as the Secretary finds necessary or 
     appropriate and may provide for advances of funds to the 
     medicare administrative contractor for the making of payments 
     by it under subsection (a)(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 gross negligence or intent 
     to defraud the United States, be liable with respect to any 
     payments certified by the individual under this section.
       ``(2) Disbursing officer.--No disbursing officer shall, in 
     the absence of gross negligence or intent to defraud the 
     United States, be liable with respect to any payment by such 
     officer under this section if it was based upon an 
     authorization (which meets the applicable requirements for 
     such internal controls established by the Comptroller 
     General) of a certifying officer designated as provided in 
     paragraph (1) of this subsection.
       ``(3) Liability of medicare administrative contractor.--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 payment or in the 
     supervision of or selection of such officer the medicare 
     administrative contractor acted with gross negligence.
       ``(4) Indemnification by secretary.--
       ``(A) In general.--Subject to subparagraphs (B) and (D), 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 the Secretary 
     determines to be appropriate and as 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 judicial proceeding or by the Secretary to 
     be criminal in nature, fraudulent, or grossly negligent. If 
     indemnification is provided by the Secretary with respect to 
     a contractor before a determination that such costs arose 
     directly from such conduct, the contractor shall reimburse 
     the Secretary for costs of indemnification.
       ``(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 such settlement or 
     compromise. Any indemnification under subparagraph (A) with 
     respect to amounts paid under a settlement or compromise of a 
     proceeding described in such subparagraph are conditioned 
     upon prior written approval by the Secretary of the final 
     settlement or compromise.
       ``(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 
     inserted 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,''; and
       (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''; and
       (E) by striking paragraphs (5) and (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

[[Page H8782]]

     (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, 2003, 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 Act, 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, 2008.
       (D) Waiver of provider nomination provisions during 
     transition.--During the period beginning on the date of the 
     enactment of this Act and before the date specified under 
     subparagraph (A), the Secretary may enter into new agreements 
     under section 1816 of the Social Security Act (42 U.S.C. 
     1395h) without regard to any of the provider nomination 
     provisions of such section.
       (2) General transition rules.--The Secretary shall take 
     such steps, consistent with paragraph (1)(B) and (1)(C), as 
     are necessary to provide for an appropriate transition from 
     contracts under section 1816 and section 1842 of the Social 
     Security Act (42 U.S.C. 1395h, 1395u) to contracts under 
     section 1874A, as added by subsection (a)(1).
       (3) Authorizing continuation of mip functions under current 
     contracts and agreements and under rollover contracts.--The 
     provisions contained in the exception in section 1893(d)(2) 
     of the Social Security Act (42 U.S.C. 1395ddd(d)(2)) shall 
     continue to apply notwithstanding the amendments made by this 
     section, and any reference in such provisions to an agreement 
     or contract shall be deemed to include a contract under 
     section 1874A of such Act, as inserted by subsection (a)(1), 
     that continues the activities referred to in such provisions.
       (e) References.--On and after the effective date provided 
     under subsection (d)(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) Reports on Implementation.--
       (1) Plan for implementation.--By not later than October 1, 
     2002, the Secretary shall submit a report to Congress and the 
     Comptroller General of the United States that describes the 
     plan for implementation of the amendments made by this 
     section. 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, 2006, 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.

     SEC. 202. REQUIREMENTS FOR INFORMATION SECURITY FOR MEDICARE 
                   ADMINISTRATIVE CONTRACTORS.

       (a) In General.--Section 1874A, as added by section 
     201(a)(1), is amended by adding at the end the following new 
     subsection:
       ``(e) Requirements for Information Security.--
       ``(1) Development of information security program.--A 
     medicare administrative contractor that performs the 
     functions referred to in subparagraphs (A) and (B) of 
     subsection (a)(4) (relating to determining and making 
     payments) shall implement a contractor-wide information 
     security program to provide information security for the 
     operation and assets of the contractor with respect to such 
     functions under this title. An information security program 
     under this paragraph shall meet the requirements for 
     information security programs imposed on Federal agencies 
     under section 3534(b)(2) of title 44, United States Code 
     (other than requirements under subparagraphs (B)(ii), 
     (F)(iii), and (F)(iv) of such section).
       ``(2) Independent audits.--
       ``(A) Performance of annual evaluations.--Each year a 
     medicare administrative contractor that performs the 
     functions referred to in subparagraphs (A) and (B) of 
     subsection (a)(4) (relating to determining and making 
     payments) shall undergo an evaluation of the information 
     security of the contractor with respect to such functions 
     under this title. The evaluation shall--
       ``(i) be performed by an entity that meets such 
     requirements for independence as the Inspector General of the 
     Department of Health and Human Services may establish; and
       ``(ii) test the effectiveness of information security 
     control techniques for an appropriate subset of the 
     contractor's information systems (as defined in section 
     3502(8) of title 44, United States Code) relating to such 
     functions under this title and an assessment of compliance 
     with the requirements of this subsection and related 
     information security policies, procedures, standards and 
     guidelines.
       ``(B) Deadline for initial evaluation.--
       ``(i) New contractors.--In the case of a medicare 
     administrative contractor covered by this subsection that has 
     not previously performed the functions referred to in 
     subparagraphs (A) and (B) of subsection (a)(4) (relating to 
     determining and making payments) as a fiscal intermediary or 
     carrier under section 1816 or 1842, the first independent 
     evaluation conducted pursuant subparagraph (A) shall be 
     completed prior to commencing such functions.
       ``(ii) Other contractors.--In the case of a medicare 
     administrative contractor covered by this subsection that is 
     not described in clause (i), the first independent evaluation 
     conducted pursuant subparagraph (A) shall be completed within 
     1 year after the date the contractor commences functions 
     referred to in clause (i) under this section.
       ``(C) Reports on evaluations.--
       ``(i) To the inspector general.--The results of independent 
     evaluations under subparagraph (A) shall be submitted 
     promptly to the Inspector General of the Department of Health 
     and Human Services.
       ``(ii) To congress.--The Inspector General of Department of 
     Health and Human Services shall submit to Congress annual 
     reports on the results of such evaluations.''.
       (b) Application of Requirements to Fiscal Intermediaries 
     and Carriers.--
       (1) In general.--The provisions of section 1874A(e)(2) of 
     the Social Security Act (other than subparagraph (B)), as 
     added by subsection (a), shall apply to each fiscal 
     intermediary under section 1816 of the Social Security Act 
     (42 U.S.C. 1395h) and each carrier under section 1842 of such 
     Act (42 U.S.C. 1395u) in the same manner as they apply to 
     medicare administrative contractors under such provisions.
       (2) Deadline for initial evaluation.--In the case of such a 
     fiscal intermediary or carrier with an agreement or contract 
     under such respective section in effect as of the date of the 
     enactment of this Act, the first evaluation under section 
     1874A(e)(2)(A) of the Social Security Act (as added by 
     subsection (a)), pursuant to paragraph (1), shall be 
     completed (and a report on the evaluation submitted to the 
     Secretary) by not later than 1 year after such date.

                   TITLE III--EDUCATION AND OUTREACH

     SEC. 301. PROVIDER EDUCATION AND TECHNICAL ASSISTANCE.

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


             ``provider education and technical assistance

       ``Sec. 1889. (a) Coordination of Education Funding.--The 
     Secretary shall coordinate the educational activities 
     provided through medicare contractors (as defined in 
     subsection (g), including under section 1893) in order to 
     maximize the effectiveness of Federal education efforts for 
     providers of services and suppliers.''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall take effect on the date of the enactment of this Act.
       (3) Report.--Not later than October 1, 2002, the Secretary 
     shall submit to Congress a report that includes a description 
     and evaluation of the steps taken to coordinate the funding 
     of provider education under section 1889(a) of the Social 
     Security Act, as added by paragraph (1).
       (b) Incentives To Improve Contractor Performance.--
       (1) In general.--Section 1874A, as added by section 
     201(a)(1) and as amended by section 202(a), is amended by 
     adding at the end the following new subsection:
       ``(f) Incentives To Improve Contractor Performance in 
     Provider Education and

[[Page H8783]]

     Outreach.--In order to give medicare administrative 
     contractors an incentive to implement effective education and 
     outreach programs for providers of services and suppliers, 
     the Secretary shall develop and implement a methodology to 
     measure the specific claims payment error rates of such 
     contractors in the processing or reviewing of medicare 
     claims.''.
       (2) Application to fiscal intermediaries and carriers.--The 
     provisions of section 1874A(f) of the Social Security Act, as 
     added by paragraph (1), shall apply to each fiscal 
     intermediary under section 1816 of the Social Security Act 
     (42 U.S.C. 1395h) and each carrier under section 1842 of such 
     Act (42 U.S.C. 1395u) in the same manner as they apply to 
     medicare administrative contractors under such provisions.
       (3) GAO report on adequacy of methodology.--Not later than 
     October 1, 2002, the Comptroller General of the United States 
     shall submit to Congress and to the Secretary a report on the 
     adequacy of the methodology under section 1874A(f)(1) of the 
     Social Security Act, as added by paragraph (1), and shall 
     include in the report such recommendations as the Comptroller 
     General determines appropriate with respect to the 
     methodology.
       (4) Report on Use of methodology in assessing contractor 
     performance.--Not later than October 1, 2002, the Secretary 
     shall submit to Congress a report that describes how the 
     Secretary intends to use such methodology in assessing 
     medicare contractor performance in implementing effective 
     education and outreach programs, including whether to use 
     such methodology as a basis for performance bonuses. The 
     report shall include an analysis of the sources of identified 
     errors and potential changes in systems of contractors and 
     rules of the Secretary that could reduce claims error rates.
       (c) Provision of Access to and Prompt Responses From 
     Medicare Administrative Contractors.--
       (1) In general.--Section 1874A, as added by section 
     201(a)(1) and as amended by section 202(a) and subsection 
     (b), is further amended by adding at the end the following 
     new subsection:
       ``(g) Communications with Beneficiaries, Providers of 
     Services and Suppliers.--
       ``(1) Communication strategy.--The Secretary shall develop 
     a strategy for communications with individuals entitled to 
     benefits under part A or enrolled under part B, or both, and 
     with providers of services and suppliers under this title.
       ``(2) Response to written inquiries.--Each medicare 
     administrative contractor shall, for those providers of 
     services and suppliers which submit claims to the contractor 
     for claims processing and for those individuals entitled to 
     benefits under part A or enrolled under part B, or both, with 
     respect to whom claims are submitted for claims processing, 
     provide general written responses (which may be through 
     electronic transmission) in a clear, concise, and accurate 
     manner to inquiries of providers of services, suppliers and 
     individuals entitled to benefits under part A or enrolled 
     under part B, or both, concerning the programs under this 
     title within 45 business days of the date of receipt of such 
     inquiries.
       ``(3) Response to toll-free lines.--The Secretary shall 
     ensure that each medicare administrative contractor shall 
     provide, for those providers of services and suppliers which 
     submit claims to the contractor for claims processing and for 
     those individuals entitled to benefits under part A or 
     enrolled under part B, or both, with respect to whom claims 
     are submitted for claims processing, a toll-free telephone 
     number at which such individuals, providers of services 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 administrative 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 make 
     public standards to monitor the accuracy, consistency, and 
     timeliness of the information provided in response to written 
     and telephone 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 administrative 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.''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall take effect October 1, 2002.
       (3) Application to fiscal intermediaries and carriers.--The 
     provisions of section 1874A(g) of the Social Security Act, as 
     added by paragraph (1), shall apply to each fiscal 
     intermediary under section 1816 of the Social Security Act 
     (42 U.S.C. 1395h) and each carrier under section 1842 of such 
     Act (42 U.S.C. 1395u) in the same manner as they apply to 
     medicare administrative contractors under such provisions.
       (d) Improved Provider Education and Training.--
       (1) In general.--Section 1889, as added by subsection (a), 
     is amended by adding at the end the following new 
     subsections:
       ``(b) Enhanced Education and Training.--
       ``(1) Additional resources.--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) $25,000,000 for 
     each of fiscal years 2003 and 2004 and such sums as may be 
     necessary for succeeding fiscal years.
       ``(2) Use.--The funds made available under paragraph (1) 
     shall be used to increase the conduct by medicare contractors 
     of education and training of providers of services and 
     suppliers regarding billing, coding, and other appropriate 
     items and may also be used to improve the accuracy, 
     consistency, and timeliness of contractor responses.
       ``(c) Tailoring Education and Training Activities for Small 
     Providers or Suppliers.--
       ``(1) In general.--Insofar as a medicare contractor 
     conducts education and training activities, it shall tailor 
     such activities to meet the special needs of small providers 
     of services or suppliers (as defined in paragraph (2)).
       ``(2) Small provider of services or supplier.--In this 
     subsection, the term `small provider of services or supplier' 
     means--
       ``(A) a provider of services with fewer than 25 full-time-
     equivalent employees; or
       ``(B) a supplier with fewer than 10 full-time-equivalent 
     employees.''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall take effect on October 1, 2002.
       (e) Requirement To Maintain Internet Sites.--
       (1) In general.--Section 1889, as added by subsection (a) 
     and as amended by subsection (d), is further amended by 
     adding at the end the following new subsection:
       ``(d) Internet Sites; FAQs.--The Secretary, and each 
     medicare contractor insofar as it provides services 
     (including claims processing) for providers of services or 
     suppliers, shall maintain an Internet site which--
       ``(1) provides answers in an easily accessible format to 
     frequently asked questions, and
       ``(2) includes other published materials of the contractor,
     that relate to providers of services and suppliers under the 
     programs under this title (and title XI insofar as it relates 
     to such programs).''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall take effect on October 1, 2002.
       (f) Additional Provider Education Provisions.--
       (1) In general.--Section 1889, as added by subsection (a) 
     and as amended by subsections (d) and (e), is further amended 
     by adding at the end the following new subsections:
       ``(e) Encouragement of Participation in Education Program 
     Activities.--A medicare contractor may not use a record of 
     attendance at (or failure to attend) educational activities 
     or other information gathered during an educational program 
     conducted under this section or otherwise by the Secretary to 
     select or track providers of services or suppliers for the 
     purpose of conducting any type of audit or prepayment review.
       ``(f) Construction.--Nothing in this section or section 
     1893(g) shall be construed as providing for disclosure by a 
     medicare contractor of information that would compromise 
     pending law enforcement activities or reveal findings of law 
     enforcement-related audits.
       ``(g) Definitions.--For purposes of this section, the term 
     `medicare contractor' includes the following:
       ``(1) A medicare administrative contractor with a contract 
     under section 1874A, including a fiscal intermediary with a 
     contract under section 1816 and a carrier with a contract 
     under section 1842.
       ``(2) An eligible entity with a contract under section 
     1893.
     Such term does not include, with respect to activities of a 
     specific provider of services or supplier an entity that has 
     no authority under this title or title IX with respect to 
     such activities and such provider of services or supplier.''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall take effect on the date of the enactment of this Act.

     SEC. 302. SMALL PROVIDER TECHNICAL ASSISTANCE DEMONSTRATION 
                   PROGRAM.

       (a) Establishment.--
       (1) In general.--The Secretary shall establish a 
     demonstration program (in this section referred to as the 
     ``demonstration program'') under which technical assistance 
     described in paragraph (2) is made available, upon request 
     and on a voluntary basis, to small providers of services or 
     suppliers in order to improve compliance with the applicable 
     requirements of the programs under

[[Page H8784]]

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

     SEC. 303. MEDICARE PROVIDER OMBUDSMAN; MEDICARE BENEFICIARY 
                   OMBUDSMAN.

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


                    ``medicare beneficiary ombudsman

       ``Sec. 1807. (a) In General.--The Secretary shall appoint 
     within the Department of Health and Human Services a Medicare 
     Beneficiary Ombudsman who shall have expertise and experience 
     in the fields of health care and education of (and assistance 
     to) individuals entitled to benefits under this title.
       ``(b) Duties.--The Medicare Beneficiary Ombudsman shall--
       ``(1) receive complaints, grievances, and requests for 
     information submitted by individuals entitled to benefits 
     under part A or enrolled under part B, or both, 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 individuals, 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 individuals 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.
     The Ombudsman shall not serve as an advocate for any 
     increases in payments or new coverage of services, but may 
     identify issues and problems in payment or coverage policies.
       ``(c) Working with Health Insurance Counseling Programs.--
     To the extent possible, the Ombudsman shall work with health 
     insurance counseling programs (receiving funding under 
     section 4360 of Omnibus Budget Reconciliation Act of 1990) to 
     facilitate the provision of information to individuals 
     entitled to benefits under part A or enrolled under part B, 
     or both regarding Medicare+Choice plans and changes to those 
     plans. Nothing in this subsection shall preclude further 
     collaboration between the Ombudsman and such programs.''.
       (c) Deadline for Appointment.--The Secretary shall appoint 
     the Medicare Provider Ombudsman and the Medicare Beneficiary 
     Ombudsman, under the amendments made by subsections (a) and 
     (b), respectively, by not later than 1 year after the date of 
     the enactment of this Act.
       (d) 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 2002 and each 
     succeeding fiscal year.
       (e) Use of Central, Toll-Free Number (1-800-MEDICARE).--
       (1) Phone triage system; listing in medicare handbook 
     instead of other toll-free numbers.--Section 1804(b) (42 
     U.S.C. 1395b-2(b)) is amended by adding at the end the 
     following: ``The Secretary shall provide, through the toll-
     free number 1-800-MEDICARE, for a means by which individuals 
     seeking information about, or assistance with, such programs 
     who phone such toll-free number are transferred (without 
     charge) to appropriate entities for the provision of such 
     information or assistance. Such toll-free number shall be the 
     toll-free number listed for general information and 
     assistance in the annual notice under subsection (a) instead 
     of the listing of numbers of individual contractors.''.
       (2) Monitoring accuracy.--
       (A) Study.--The Comptroller General of the United States 
     shall conduct a study to monitor the accuracy and consistency 
     of information provided to individuals entitled to

[[Page H8785]]

     benefits under part A or enrolled under part B, or both, 
     through the toll-free number 1-800-MEDICARE, including an 
     assessment of whether the information provided is sufficient 
     to answer questions of such individuals. In conducting the 
     study, the Comptroller General shall examine the education 
     and training of the individuals providing information through 
     such number.
       (B) Report.--Not later than 1 year after the date of the 
     enactment of this Act, the Comptroller General shall submit 
     to Congress a report on the study conducted under 
     subparagraph (A).

     SEC. 304. 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 individuals entitled to 
     benefits under part A of title XVIII of the Social Security 
     Act, or enrolled under part B of such title, or both, 
     regarding the medicare program at the location of existing 
     local offices of the Social Security Administration.
       (b) Locations.--
       (1) In general.--The demonstration program shall be 
     conducted in at least 6 offices or areas. Subject to 
     paragraph (2), in selecting such offices and areas, the 
     Secretary shall provide preference for offices with a high 
     volume of visits by individuals referred to in subsection 
     (a).
       (2) Assistance for rural beneficiaries.--The Secretary 
     shall provide for the selection of at least 2 rural areas to 
     participate in the demonstration program. In conducting the 
     demonstration program in such rural areas, the Secretary 
     shall provide for medicare specialists to travel among local 
     offices in a rural area on a scheduled basis.
       (c) Duration.--The demonstration program shall be conducted 
     over a 3-year period.
       (d) Evaluation and Report.--
       (1) Evaluation.--The Secretary shall provide for an 
     evaluation of the demonstration program. Such evaluation 
     shall include an analysis of--
       (A) utilization of, and satisfaction of those individuals 
     referred to in subsection (a) with, the assistance provided 
     under the program; and
       (B) the cost-effectiveness of providing beneficiary 
     assistance through out-stationing medicare specialists at 
     local offices of the Social Security Administration.
       (2) Report.--The Secretary shall submit to Congress a 
     report on such evaluation and shall include in such report 
     recommendations regarding the feasibility of permanently out-
     stationing medicare specialists at local offices of the 
     Social Security Administration.

                     TITLE IV--APPEALS AND RECOVERY

     SEC. 401. TRANSFER OF RESPONSIBILITY FOR MEDICARE APPEALS.

       (a) Transition Plan.--
       (1) In general.--Not later than October 1, 2002, 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) GAO evaluation.--The Comptroller General of the United 
     States shall evaluate the plan and, not later than April 1, 
     2003, shall submit to Congress a report on such evaluation.
       (b) Transfer of Adjudication Authority.--
       (1) In general.--Not earlier than July 1, 2003, and not 
     later than October 1, 2003, the Commissioner of Social 
     Security and the Secretary shall implement the transition 
     plan under subsection (a) and transfer the administrative law 
     judge functions described in such subsection from the Social 
     Security Administration to the Secretary.
       (2) Assuring independence of judges.--The Secretary shall 
     assure the independence of administrative law judges 
     performing the administrative law judge functions transferred 
     under paragraph (1) from the Centers for Medicare & Medicaid 
     Services and its contractors.
       (3) Geographic distribution.--The Secretary shall provide 
     for an appropriate geographic distribution of administrative 
     law judges performing the administrative law judge functions 
     transferred under paragraph (1) throughout the United States 
     to ensure timely access to such judges.
       (4) Hiring authority.--Subject to the amounts provided in 
     advance in appropriations Act, the Secretary shall have 
     authority to hire administrative law judges to hear such 
     cases, giving priority to those judges with prior experience 
     in handling medicare appeals and in a manner consistent with 
     paragraph (3), and to hire support staff for such judges.
       (5) Financing.--Amounts payable under law to the 
     Commissioner for administrative law judges performing the 
     administrative law judge functions transferred under 
     paragraph (1) from the Federal Hospital Insurance Trust Fund 
     and the Federal Supplementary Medical Insurance Trust Fund 
     shall become payable to the Secretary for the functions so 
     transferred.
       (6) Shared resources.--The Secretary shall enter into such 
     arrangements with the Commissioner as may be appropriate with 
     respect to transferred functions of administrative law judges 
     to share office space, support staff, and other resources, 
     with appropriate reimbursement from the Trust Funds described 
     in paragraph (5).
       (c) Increased Financial Support.--In addition to any 
     amounts otherwise appropriated, to ensure timely action on 
     appeals before administrative law judges and the Departmental 
     Appeals Board consistent with section 1869 of the Social 
     Security Act (as amended by section 521 of BIPA, 114 Stat. 
     2763A-534), 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 as are necessary for fiscal 
     year 2003 and each subsequent fiscal year to--
       (1) increase the number of administrative law judges (and 
     their staffs) under subsection (b)(4);
       (2) improve education and training opportunities for 
     administrative law judges (and their staffs); and
       (3) increase the staff of the Departmental Appeals Board.
       (d) Conforming Amendment.--Section 1869(f)(2)(A)(i) (42 
     U.S.C. 1395ff(f)(2)(A)(i)), as added by section 522(a) of 
     BIPA (114 Stat. 2763A-543), is amended by striking ``of the 
     Social Security Administration''.

     SEC. 402. PROCESS FOR EXPEDITED ACCESS TO REVIEW.

       (a) Expedited Access to Judicial Review.--Section 1869(b) 
     (42 U.S.C. 1395ff(b)) as amended by BIPA, is amended--
       (1) in paragraph (1)(A), by inserting ``, subject to 
     paragraph (2),'' before ``to judicial review of the 
     Secretary's final decision'';
       (2) in paragraph (1)(F)--
       (A) by striking clause (ii);
       (B) by striking ``proceeding'' and all that follows through 
     ``determination'' and inserting ``determinations and 
     reconsiderations''; and
       (C) by redesignating subclauses (I) and (II) as clauses (i) 
     and (ii) and by moving the indentation of such subclauses 
     (and the matter that follows) 2 ems to the left; and
       (3) 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 an individual entitled to benefits 
     under part A or enrolled under part B, or both, who has filed 
     an appeal under paragraph (1) may obtain access to judicial 
     review when a review panel (described in subparagraph (D)), 
     on its own motion or at the request of the appellant, 
     determines that no entity in the administrative appeals 
     process has the authority to decide the question of law or 
     regulation relevant to the matters in controversy and that 
     there is no material issue of fact in dispute. The appellant 
     may make such request only once with respect to a question of 
     law or regulation in a case of an appeal.
       ``(B) Prompt determinations.--If, after or coincident with 
     appropriately filing a request for an administrative hearing, 
     the appellant requests a determination by the appropriate 
     review panel that no review panel has the authority to decide 
     the question of law or regulations relevant to the matters in 
     controversy and that there is no material issue of fact in 
     dispute and if such request is accompanied by the documents 
     and materials as the appropriate review panel shall require 
     for purposes of making such determination, such review panel 
     shall make a determination on the request in writing within 
     60 days after the date such review panel receives the request 
     and such accompanying documents and materials. Such a 
     determination by such review panel shall be considered a 
     final decision and not subject to review by the Secretary.
       ``(C) Access to judicial review.--
       ``(i) In general.--If the appropriate review panel--

       ``(I) determines that there are no material issues of fact 
     in dispute and that the only issue is one of law or 
     regulation that no review panel has the authority to decide; 
     or
       ``(II) fails to make such determination within the period 
     provided under subparagraph (B);

     then the appellant may bring a civil action as described in 
     this subparagraph.
       ``(ii) Deadline for filing.--Such action shall be filed, in 
     the case described in--

       ``(I) clause (i)(I), within 60 days of date of the 
     determination described in such subparagraph; or
       ``(II) clause (i)(II), within 60 days of the end of the 
     period provided under subparagraph (B) for the determination.

       ``(iii) Venue.--Such action shall be brought in the 
     district court of the United States for the judicial district 
     in which the appellant is located (or, in the case of an 
     action brought jointly by more than one applicant, the 
     judicial district in which the greatest number of applicants 
     are located) or in the district court for the District of 
     Columbia.
       ``(iv) Interest on amounts in controversy.--Where a 
     provider of services or supplier seeks judicial review 
     pursuant to this paragraph, the amount in controversy shall 
     be subject to annual interest beginning on the first day of 
     the first month beginning after the 60-day period as 
     determined pursuant to clause (ii) and equal to the rate of 
     interest on obligations issued for purchase by the Federal 
     Hospital Insurance Trust Fund

[[Page H8786]]

     and 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 or suppliers under this Act.
       ``(D) Review panels.--For purposes of this subsection, a 
     `review panel' is a panel consisting of 3 members (who shall 
     be administrative law judges, members of the Departmental 
     Appeals Board, or qualified individuals associated with a 
     qualified independent contractor (as defined in subsection 
     (c)(2)) or with another independent entity) designated by the 
     Secretary for purposes of making determinations under this 
     paragraph.''.
       (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 individuals entitled to benefits under part A 
     or enrolled under part B, or both, 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) Effective Date.--The amendments made by this section 
     shall apply to appeals filed on or after October 1, 2002.
       (d) Expedited Review of Certain Provider Agreement 
     Determinations.--
       (1) Termination and certain other immediate remedies.--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 the remedy of termination of 
     participation, or a remedy described in clause (i) or (iii) 
     of section 1819(h)(2)(B) of such Act (42 U.S.C. 1395i-
     3(h)(2)(B)) which is applied on an immediate basis, has been 
     imposed. Under such process priority shall be provided in 
     cases of termination.
       (2) 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 additional sums for fiscal year 
     2003 and each subsequent fiscal year as may be necessary. The 
     purposes for which such amounts are available include 
     increasing the number of administrative law judges (and their 
     staffs) and the appellate level staff at the Departmental 
     Appeals Board of the Department of Health and Human Services 
     and educating such judges and staffs on long-term care 
     issues.

     SEC. 403. REVISIONS TO MEDICARE APPEALS PROCESS.

       (a) Requiring Full and Early Presentation of Evidence.--
       (1) In general.--Section 1869(b) (42 U.S.C. 1395ff(b)), as 
     amended by BIPA and as amended by section 402(a), is further 
     amended by adding at the end the following new paragraph:
       ``(3) Requiring full and early presentation of evidence by 
     providers.--A provider of services or supplier may not 
     introduce evidence in any appeal under this section that was 
     not presented at the reconsideration conducted by the 
     qualified independent contractor under subsection (c), unless 
     there is good cause which precluded the introduction of such 
     evidence at or before that reconsideration.''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall take effect on October 1, 2002.
       (b) Use of Patients' Medical Records.--Section 
     1869(c)(3)(B)(i) (42 U.S.C. 1395ff(c)(3)(B)(i)), as amended 
     by BIPA, is amended by inserting ``(including the medical 
     records of the individual involved)'' after ``clinical 
     experience''.
       (c) Notice Requirements for Medicare Appeals.--
       (1) Initial determinations and redeterminations.--Section 
     1869(a) (42 U.S.C. 1395ff(a)), as amended by BIPA, 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 include--
       ``(A) the specific reasons for the determination, 
     including--
       ``(i) upon request, the provision of the policy, manual, or 
     regulation used in making the determination; and
       ``(ii) as appropriate in the case of a redetermination, a 
     summary of the clinical or scientific evidence used in making 
     the determination;
       ``(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.
     The written notice on a redetermination shall be provided in 
     printed form and written in a manner calculated to be 
     understood by the individual entitled to benefits under part 
     A or enrolled under part B, or both.''.
       (2) Reconsiderations.--Section 1869(c)(3)(E) (42 U.S.C. 
     1395ff(c)(3)(E)), as amended by BIPA, is amended--
       (A) by inserting ``be written in a manner calculated to be 
     understood by the individual entitled to benefits under part 
     A or enrolled under part B, or both, and shall include (to 
     the extent appropriate)'' after ``in writing, ''; and
       (B) by inserting ``and a notification of the right to 
     appeal such determination and instructions on how to initiate 
     such appeal under this section'' after ``such decision, ''.
       (3) Appeals.--Section 1869(d) (42 U.S.C. 1395ff(d)), as 
     amended by BIPA, 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 calculated to be 
     understood by the individual entitled to benefits under part 
     A or enrolled under part B, or both, and shall include--
       ``(A) the specific reasons for the determination 
     (including, to the extent appropriate, a summary of the 
     clinical or scientific evidence used in making the 
     determination);
       ``(B) the procedures for obtaining additional information 
     concerning the decision; and
       ``(C) notification of the right to appeal the decision and 
     instructions on how to initiate such an appeal under this 
     section.''.
       (4) Submission of record for appeal.--Section 
     1869(c)(3)(J)(i) (42 U.S.C. 1395ff(c)(3)(J)(i)) by striking 
     ``prepare'' and inserting ``submit'' and by striking ``with 
     respect to'' and all that follows through ``and relevant 
     policies''.
       (d) Qualified Independent Contractors.--
       (1) Eligibility requirements of qualified independent 
     contractors.--Section 1869(c)(3) (42 U.S.C. 1395ff(c)(3)), as 
     amended by BIPA, is amended--
       (A) in subparagraph (A), by striking ``sufficient training 
     and expertise in medical science and legal matters'' and 
     inserting ``sufficient medical, legal, and other expertise 
     (including knowledge of the program under this title) and 
     sufficient staffing''; and
       (B) by adding at the end the following new subparagraph:
       ``(K) Independence requirements.--
       ``(i) In general.--Subject to clause (ii), a qualified 
     independent contractor shall not conduct any activities in a 
     case unless 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.

       ``(ii) Exception for reasonable 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.''.
       (2) Eligibility requirements for reviewers.--Section 1869 
     (42 U.S.C. 1395ff), as amended by BIPA, is amended--
       (A) by amending subsection (c)(3)(D) to read as follows:
       ``(D) Qualifications for reviewers.--The requirements of 
     subsection (g) shall be met (relating to qualifications of 
     reviewing professionals).''; and
       (B) 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 assure 
     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 by a panel described in 
     subsection (c)(3)(B) composed of physicians or other health 
     care professionals (each in this subsection referred to as a 
     `reviewing professional'), each reviewing professional meets 
     the qualifications described in paragraph (4) and, where a 
     claim is regarding the furnishing of treatment by a physician 
     (allopathic or osteopathic) or the provision of items or 
     services by a physician (allopathic or osteopathic), each 
     reviewing professional shall be a physician (allopathic or 
     osteopathic).
       ``(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));

[[Page H8787]]

       ``(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.
       ``(B) Exception.--Nothing in subparagraph (A) shall be 
     construed to--
       ``(i) prohibit an individual, solely on the basis of a 
     participation agreement with a fiscal intermediary, carrier, 
     or other contractor, from serving as a reviewing professional 
     if--

       ``(I) the individual is not involved in the provision of 
     items or services in the case under review;
       ``(II) the fact of such an agreement is disclosed to the 
     Secretary and the individual entitled to benefits under part 
     A or enrolled under part B, or both, (or authorized 
     representative) and neither party objects; and
       ``(III) the 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 having such 
     staff privileges if the existence of such privileges is 
     disclosed to the Secretary and such individual (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).
     For purposes of this paragraph, the term `participation 
     agreement' means an agreement relating to the provision of 
     health care services by the individual and does not include 
     the provision of services as a reviewer under this 
     subsection.
       ``(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) a physician (allopathic or osteopathic) who is 
     appropriately credentialed or licensed in one or more States 
     to deliver health care services and has medical expertise in 
     the field of practice that is appropriate for the items or 
     services at issue; or
       ``(B) a health care professional who is legally authorized 
     in one or more States (in accordance with State law or the 
     State regulatory mechanism provided by State law) to furnish 
     the health care items or services at issue and has medical 
     expertise in the field of practice that is appropriate for 
     such items or services.
       ``(5) Related party defined.--For purposes of this section, 
     the term `related party' means, with respect to a case under 
     this title involving a specific individual entitled to 
     benefits under part A or enrolled under part B, or both, 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) Effective date.--The amendments made by paragraphs (1) 
     and (2) 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).
       (4) Transition.--In applying section 1869(g) of the Social 
     Security Act (as added by paragraph (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. 404. PREPAYMENT REVIEW.

       (a) In General.--Section 1874A, as added by section 
     201(a)(1) and as amended by sections 202(b), 301(b)(1), and 
     301(c)(1), is further amended by adding at the end the 
     following new subsection:
       ``(h) Conduct of Prepayment Review.--
       ``(1) Conduct of random prepayment review.--
       ``(A) In general.--A medicare administrative contractor may 
     conduct random prepayment review only to develop a 
     contractor-wide or program-wide claims payment error rates or 
     under such additional circumstances as may be provided under 
     regulations, developed in consultation with providers of 
     services and suppliers.
       ``(B) Use of standard protocols when conducting prepayment 
     reviews.--When a medicare administrative contractor conducts 
     a random prepayment review, the contractor may conduct such 
     review only in accordance with a standard protocol for random 
     prepayment audits developed by the Secretary.
       ``(C) Construction.--Nothing in this paragraph shall be 
     construed as preventing the denial of payments for claims 
     actually reviewed under a random prepayment review.
       ``(D) Random prepayment review.--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.
       ``(2) Limitations on non-random prepayment review.--
       ``(A) Limitations on initiation of non-random prepayment 
     review.--A medicare administrative contractor may not 
     initiate non-random prepayment review of a provider of 
     services or supplier based on the initial identification by 
     that provider of services or supplier of an improper billing 
     practice unless there is a likelihood of sustained or high 
     level of payment error (as defined in subsection (i)(3)(A)).
       ``(B) Termination of non-random prepayment review.--The 
     Secretary shall issue regulations relating to the 
     termination, including termination dates, of non-random 
     prepayment review. Such regulations may vary such a 
     termination date based upon the differences in the 
     circumstances triggering prepayment review.''.
       (b) Effective Date.--
       (1) In general.--Except as provided in this subsection, the 
     amendment made by subsection (a) shall take effect 1 year 
     after the date of the enactment of this Act.
       (2) Deadline for promulgation of certain regulations.--The 
     Secretary shall first issue regulations under section 
     1874A(h) 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(h)(1)(B) 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.
       (c) Application to Fiscal Intermediaries and Carriers.--The 
     provisions of section 1874A(h) of the Social Security Act, as 
     added by subsection (a), shall apply to each fiscal 
     intermediary under section 1816 of the Social Security Act 
     (42 U.S.C. 1395h) and each carrier under section 1842 of such 
     Act (42 U.S.C. 1395u) in the same manner as they apply to 
     medicare administrative contractors under such provisions.

     SEC. 405. 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) Recovery of Overpayments.--
       ``(1) Use of repayment plans.--
       ``(A) In general.--If the repayment, within 30 days by a 
     provider of services or supplier, of an overpayment under 
     this title would constitute a hardship (as defined in 
     subparagraph (B)), subject to subparagraph (C), upon request 
     of the provider of services or supplier the Secretary shall 
     enter into a plan with the provider of services or supplier 
     for the repayment (through offset or otherwise) of such 
     overpayment over a period of at least 6 months but not longer 
     than 3 years (or not longer than 5 years in the case of 
     extreme hardship, as determined by the Secretary). Interest 
     shall accrue on the balance through the period of repayment. 
     Such plan shall meet terms and conditions determined to be 
     appropriate by the Secretary.
       ``(B) Hardship.--
       ``(i) In general.--For purposes of subparagraph (A), the 
     repayment of an overpayment (or overpayments) within 30 days 
     is deemed to constitute a hardship if--

       ``(I) in the case of a provider of services that files cost 
     reports, the aggregate amount of the overpayments exceeds 10 
     percent of the amount paid under this title to the provider 
     of services for the cost reporting period covered by the most 
     recently submitted cost report; or
       ``(II) in the case of another provider of services or 
     supplier, the aggregate amount of the overpayments exceeds 10 
     percent of the amount paid under this title to the provider 
     of services or supplier for the previous calendar year.

       ``(ii) Rule of application.--The Secretary shall establish 
     rules for the application of this subparagraph in the case of 
     a provider of services or supplier that was not paid under 
     this title during the previous year or was paid under this 
     title only during a portion of that year.
       ``(iii) Treatment of previous overpayments.--If a provider 
     of services or supplier has entered into a repayment plan 
     under subparagraph (A) with respect to a specific overpayment 
     amount, such payment amount under the repayment plan shall 
     not be taken into account under clause (i) with respect to 
     subsequent overpayment amounts.
       ``(C) Exceptions.--Subparagraph (A) shall not apply if--
       ``(i) the Secretary has reason to suspect that the provider 
     of services 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 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

[[Page H8788]]

     as affecting the application of section 1870(c) (relating to 
     no adjustment in the cases of certain overpayments).
       ``(2) Limitation on recoupment.--
       ``(A) In general.--In the case of a provider of services or 
     supplier that is determined to have received an overpayment 
     under this title and that seeks a reconsideration by a 
     qualified independent contractor on such determination under 
     section 1869(b)(1), the Secretary may not take any action (or 
     authorize any other person, including any medicare 
     contractor, as defined in 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) Collection with interest.--Insofar as the 
     determination on such appeal is against the provider of 
     services or supplier, interest on the overpayment shall 
     accrue on and after the date of the original notice of 
     overpayment. Insofar as such determination against the 
     provider of services or supplier is later reversed, the 
     Secretary shall provide for repayment of the amount recouped 
     plus interest at the same rate as would apply under the 
     previous sentence for the period in which the amount was 
     recouped.
       ``(C) Medicare contractor defined.--For purposes of this 
     subsection, the term `medicare contractor' has the meaning 
     given such term in section 1889(g).
       ``(3) Limitation on use of extrapolation.--A medicare 
     contractor may not use extrapolation to determine overpayment 
     amounts to be recovered by recoupment, offset, or otherwise 
     unless--
       ``(A) there is a sustained or high level of payment error 
     (as defined by the Secretary by regulation); or
       ``(B) documented educational intervention has failed to 
     correct the payment error (as determined by the Secretary).
       ``(4) Provision of supporting documentation.--In the case 
     of a provider of services or supplier with respect to which 
     amounts were previously overpaid, a medicare contractor may 
     request the periodic production of records or supporting 
     documentation for a limited sample of submitted claims to 
     ensure that the previous practice is not continuing.
       ``(5) Consent settlement reforms.--
       ``(A) In general.--The Secretary may use a consent 
     settlement (as defined in subparagraph (D)) to settle a 
     projected overpayment.
       ``(B) Opportunity to submit additional information before 
     consent settlement offer.--Before offering a provider of 
     services or supplier a consent settlement, the Secretary 
     shall--
       ``(i) communicate to the provider of services or supplier--

       ``(I) 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;
       ``(II) the nature of the problems identified in such 
     evaluation; and
       ``(III) the steps that the provider of services or supplier 
     should take to address the problems; and

       ``(ii) provide for a 45-day period during which the 
     provider of services or supplier may furnish additional 
     information concerning the medical records for the claims 
     that had been reviewed.
       ``(C) Consent settlement offer.--The Secretary shall review 
     any additional information furnished by the provider of 
     services or supplier under subparagraph (B)(ii). Taking into 
     consideration such information, the Secretary shall determine 
     if there still appears to be an overpayment. If so, the 
     Secretary--
       ``(i) shall provide notice of such determination to the 
     provider of services or supplier, including an explanation of 
     the reason for such determination; and
       ``(ii) in order to resolve the overpayment, may offer the 
     provider of services or supplier--

       ``(I) the opportunity for a statistically valid random 
     sample; or
       ``(II) a consent settlement.

     The opportunity provided under clause (ii)(I) does not waive 
     any appeal rights with respect to the alleged overpayment 
     involved.
       ``(D) Consent settlement defined.--For purposes of this 
     paragraph, the term `consent settlement' means an agreement 
     between the Secretary and a provider of services or supplier 
     whereby both parties agree to settle a projected overpayment 
     based on less than a statistically valid sample of claims and 
     the provider of services or supplier agrees not to appeal the 
     claims involved.
       ``(6) Notice of over-utilization of codes.--The Secretary 
     shall establish, in consultation with organizations 
     representing the classes of providers of services and 
     suppliers, a process under which the Secretary provides for 
     notice to classes of providers of services and suppliers 
     served by the contractor in cases in which the contractor has 
     identified that particular billing codes may be overutilized 
     by that class of providers of services or suppliers under the 
     programs under this title (or provisions of title XI insofar 
     as they relate to such programs).
       ``(7) Payment audits.--
       ``(A) Written notice for post-payment audits.--Subject to 
     subparagraph (C), if a medicare contractor decides to conduct 
     a post-payment audit of a provider of services or supplier 
     under this title, the contractor shall provide the provider 
     of services or supplier with written notice (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 or supplier under this title, the contractor 
     shall--
       ``(i) give the provider of services or supplier a full 
     review and explanation of the findings of the audit in a 
     manner that is understandable to the provider of services or 
     supplier and permits the development of an appropriate 
     corrective action plan;
       ``(ii) inform the provider of services or supplier of the 
     appeal rights under this title as well as consent settlement 
     options (which are at the discretion of the Secretary);
       ``(iii) give the provider of services or supplier an 
     opportunity to provide additional information to the 
     contractor; and
       ``(iv) take into account information provided, on a timely 
     basis, by the provider of services or supplier under clause 
     (iii).
       ``(C) Exception.--Subparagraphs (A) and (B) shall not apply 
     if the provision of notice or findings would compromise 
     pending law enforcement activities, whether civil or 
     criminal, or reveal findings of law enforcement-related 
     audits.
       ``(8) Standard methodology for probe sampling.--The 
     Secretary shall establish a standard methodology for medicare 
     contractors to use in selecting a sample of claims for review 
     in the case of an abnormal billing pattern.''.
       (b) Effective Dates and Deadlines.--
       (1) Use of repayment plans.--Section 1893(f)(1) of the 
     Social Security Act, as added by subsection (a), shall apply 
     to requests for repayment plans made after the date of the 
     enactment of this Act.
       (2) Limitation on recoupment.--Section 1893(f)(2) of the 
     Social Security Act, as added by subsection (a), shall apply 
     to actions taken after the date of the enactment of this Act.
       (3) Use of extrapolation.--Section 1893(f)(3) 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.
       (4) Provision of supporting documentation.--Section 
     1893(f)(4) of the Social Security Act, as added by subsection 
     (a), shall take effect on the date of the enactment of this 
     Act.
       (5) Consent settlement.--Section 1893(f)(5) 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.
       (6) Notice of overutilization.--Not later than 1 year after 
     the date of the enactment of this Act, the Secretary shall 
     first establish the process for notice of overutilization of 
     billing codes under section 1893A(f)(6) of the Social 
     Security Act, as added by subsection (a).
       (7) Payment audits.--Section 1893A(f)(7) of the Social 
     Security Act, as added by subsection (a), shall apply to 
     audits initiated after the date of the enactment of this Act.
       (8) Standard for abnormal billing patterns.--Not later than 
     1 year after the date of the enactment of this Act, the 
     Secretary shall first establish a standard methodology for 
     selection of sample claims for abnormal billing patterns 
     under section 1893(f)(8) of the Social Security Act, as added 
     by subsection (a).

     SEC. 406. PROVIDER ENROLLMENT PROCESS; RIGHT OF APPEAL.

       (a) In General.--Section 1866 (42 U.S.C. 1395cc) is 
     amended--
       (1) by adding at the end of the heading the following: ``; 
     enrollment processes''; and
       (2) by adding at the end the following new subsection:
       ``(j) Enrollment Process for Providers of Services and 
     Suppliers.--
       ``(1) Enrollment process.--
       ``(A) In general.--The Secretary shall establish by 
     regulation a process for the enrollment of providers of 
     services and suppliers under this title.
       ``(B) Deadlines.--The Secretary shall establish by 
     regulation procedures under which there are deadlines for 
     actions on applications for enrollment (and, if applicable, 
     renewal of enrollment). The Secretary shall monitor the 
     performance of medicare administrative contractors in meeting 
     the deadlines established under this subparagraph.
       ``(C) Consultation before changing provider enrollment 
     forms.--The Secretary shall consult with providers of 
     services and suppliers before making changes in the provider 
     enrollment forms required of such providers and suppliers to 
     be eligible to submit claims for which payment may be made 
     under this title.
       ``(2) Hearing rights in cases of denial or non-renewal.--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.''.
       (b) Effective Dates.--
       (1) Enrollment process.--The Secretary shall provide for 
     the establishment of the enrollment process under section 
     1866(j)(1) of the Social Security Act, as added by subsection 
     (a)(2), within 6 months after the date of the enactment of 
     this Act.

[[Page H8789]]

       (2) Consultation.--Section 1866(j)(1)(C) of the Social 
     Security Act, as added by subsection (a)(2), shall apply with 
     respect to changes in provider enrollment forms made on or 
     after January 1, 2002.
       (3) Hearing rights.--Section 1866(j)(2) of the Social 
     Security Act, as added by subsection (a)(2), shall apply to 
     denials occurring on or after such date (not later than 1 
     year after the date of the enactment of this Act) as the 
     Secretary specifies.

     SEC. 407. PROCESS FOR CORRECTION OF MINOR ERRORS AND 
                   OMISSIONS ON CLAIMS WITHOUT PURSUING APPEALS 
                   PROCESS.

       The Secretary shall develop, in consultation with 
     appropriate medicare contractors (as defined in section 
     1889(g) of the Social Security Act, as inserted by section 
     301(a)(1)) and representatives of providers of services 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 or supplier is given an 
     opportunity to correct such an error or omission without the 
     need to initiate an appeal. Such process shall include the 
     ability to resubmit corrected claims.

     SEC. 408. PRIOR DETERMINATION PROCESS FOR CERTAIN ITEMS AND 
                   SERVICES; ADVANCE BENEFICIARY NOTICES.

       (a) In General.--Section 1869 (42 U.S.C. 1395ff(b)), as 
     amended by sections 521 and 522 of BIPA and section 
     403(d)(2)(B), is further amended by adding at the end the 
     following new subsection:
       ``(h) Prior Determination Process for Certain Items and 
     Services.--
       ``(1) Establishment of process.--
       ``(A) In general.--With respect to a medicare 
     administrative contractor that has a contract under section 
     1874A that provides for making payments under this title with 
     respect to eligible items and services described in 
     subparagraph (C), the Secretary shall establish a prior 
     determination process that meets the requirements of this 
     subsection and that shall be applied by such contractor in 
     the case of eligible requesters.
       ``(B) Eligible requester.--For purposes of this subsection, 
     each of the following shall be an eligible requester:
       ``(i) A physician, but only with respect to eligible items 
     and services for which the physician may be paid directly.
       ``(ii) An individual entitled to benefits under this title, 
     but only with respect to an item or service for which the 
     individual receives, from the physician who may be paid 
     directly for the item or service, an advance beneficiary 
     notice under section 1879(a) that payment may not be made (or 
     may no longer be made) for the item or service under this 
     title.
       ``(C) Eligible items and services.--For purposes of this 
     subsection and subject to paragraph (2), eligible items and 
     services are items and services which are physicians' 
     services (as defined in paragraph (4)(A) of section 1848(f) 
     for purposes of calculating the sustainable growth rate under 
     such section).
       ``(2) Secretarial flexibility.--The Secretary shall 
     establish by regulation reasonable limits on the categories 
     of eligible items and services for which a prior 
     determination of coverage may be requested under this 
     subsection. In establishing such limits, the Secretary may 
     consider the dollar amount involved with respect to the item 
     or service, administrative costs and burdens, and other 
     relevant factors.
       ``(3) Request for prior determination.--
       ``(A) In general.--Subject to paragraph (2), under the 
     process established under this subsection an eligible 
     requester may submit to the contractor a request for a 
     determination, before the furnishing of an eligible item or 
     service involved as to whether the item or service is covered 
     under this title consistent with the applicable requirements 
     of section 1862(a)(1)(A) (relating to medical necessity).
       ``(B) Accompanying documentation.--The Secretary may 
     require that the request be accompanied by a description of 
     the item or service, supporting documentation relating to the 
     medical necessity for the item or service, and any other 
     appropriate documentation. In the case of a request submitted 
     by an eligible requester who is described in paragraph 
     (1)(B)(ii), the Secretary may require that the request also 
     be accompanied by a copy of the advance beneficiary notice 
     involved.
       ``(4) Response to request.--
       ``(A) In general.--Under such process, the contractor shall 
     provide the eligible requester with written notice of a 
     determination as to whether--
       ``(i) the item or service is so covered;
       ``(ii) the item or service is not so covered; or
       ``(iii) the contractor lacks sufficient information to make 
     a coverage determination.
     If the contractor makes the determination described in clause 
     (iii), the contractor shall include in the notice a 
     description of the additional information required to make 
     the coverage determination.
       ``(B) Deadline to respond.--Such notice shall be provided 
     within the same time period as the time period applicable to 
     the contractor providing notice of initial determinations on 
     a claim for benefits under subsection (a)(2)(A).
       ``(C) Informing beneficiary in case of physician request.--
     In the case of a request in which an eligible requester is 
     not the individual described in paragraph (1)(B)(ii), the 
     process shall provide that the individual to whom the item or 
     service is proposed to be furnished shall be informed of any 
     determination described in clause (ii) (relating to a 
     determination of non-coverage) and the right (referred to in 
     paragraph (6)(B)) to obtain the item or service and have a 
     claim submitted for the item or service.
       ``(5) Effect of determinations.--
       ``(A) Binding nature of positive determination.--If the 
     contractor makes the determination described in paragraph 
     (4)(A)(i), such determination shall be binding on the 
     contractor in the absence of fraud or evidence of 
     misrepresentation of facts presented to the contractor.
       ``(B) Notice and right to redetermination in case of a 
     denial.--
       ``(i) In general.--If the contractor makes the 
     determination described in paragraph (4)(A)(ii)--

       ``(I) the eligible requester has the right to a 
     redetermination by the contractor on the determination that 
     the item or service is not so covered; and
       ``(II) the contractor shall include in notice under 
     paragraph (4)(A) a brief explanation of the basis for the 
     determination, including on what national or local coverage 
     or noncoverage determination (if any) the determination is 
     based, and the right to such a redetermination.

       ``(ii) Deadline for redeterminations.--The contractor shall 
     complete and provide notice of such redetermination within 
     the same time period as the time period applicable to the 
     contractor providing notice of redeterminations relating to a 
     claim for benefits under subsection (a)(3)(C)(ii).
       ``(6) Limitation on further review.--
       ``(A) In general.--Contractor determinations described in 
     paragraph (4)(A)(ii) or (4)(A)(iii) (and redeterminations 
     made under paragraph (5)(B)), relating to pre-service claims 
     are not subject to further administrative appeal or judicial 
     review under this section or otherwise.
       ``(B) Decision not to seek prior determination or negative 
     determination does not impact right to obtain services, seek 
     reimbursement, or appeal rights.--Nothing in this subsection 
     shall be construed as affecting the right of an individual 
     who--
       ``(i) decides not to seek a prior determination under this 
     subsection with respect to items or services; or
       ``(ii) seeks such a determination and has received a 
     determination described in paragraph (4)(A)(ii)), from 
     receiving (and submitting a claim for) such items services 
     and from obtaining administrative or judicial review 
     respecting such claim under the other applicable provisions 
     of this section. Failure to seek a prior determination under 
     this subsection with respect to items and services shall not 
     be taken into account in such administrative or judicial 
     review.
       ``(C) No prior determination after receipt of services.--
     Once an individual is provided items and services, there 
     shall be no prior determination under this subsection with 
     respect to such items or services.''.
       (b) Effective Date; Transition.--
       (1) Effective date.--The Secretary shall establish the 
     prior determination process under the amendment made by 
     subsection (a) in such a manner as to provide for the 
     acceptance of requests for determinations under such process 
     filed not later than 18 months after the date of the 
     enactment of this Act.
       (2) Transition.--During the period in which the amendment 
     made by subsection (a) has become effective but contracts are 
     not provided under section 1874A of the Social Security Act 
     with medicare administrative contractors, any reference in 
     section 1869(g) of such Act (as added by such amendment) to 
     such a contractor is deemed a reference to a fiscal 
     intermediary or carrier with an agreement under section 1816, 
     or contract under section 1842, respectively, of such Act.
       (3) Limitation on application to sgr.--For purposes of 
     applying section 1848(f)(2)(D) of the Social Security Act (42 
     U.S.C. 1395w-4(f)(2)(D)), the amendment made by subsection 
     (a) shall not be considered to be a change in law or 
     regulation.
       (c) Provisions Relating to Advance Beneficiary Notices; 
     Report on Prior Determination Process.--
       (1) Data collection.--The Secretary shall establish a 
     process for the collection of information on the instances in 
     which an advance beneficiary notice (as defined in paragraph 
     (4)) has been provided and on instances in which a 
     beneficiary indicates on such a notice that the beneficiary 
     does not intend to seek to have the item or service that is 
     the subject of the notice furnished.
       (2) Outreach and education.--The Secretary shall establish 
     a program of outreach and education for beneficiaries and 
     providers of services and other persons on the appropriate 
     use of advance beneficiary notices and coverage policies 
     under the medicare program.
       (3) GAO report report on use of advance beneficiary 
     notices.--Not later than 18 months after the date on which 
     section 1869(g) of the Social Security Act (as added by 
     subsection (a)) takes effect, the Comptroller General of the 
     United States shall submit to Congress a report on the use of 
     advance beneficiary notices under title XVIII of such Act. 
     Such report shall include information concerning the 
     providers of services and other persons that have provided 
     such notices and the response of beneficiaries to such 
     notices.

[[Page H8790]]

       (4) GAO report on use of prior determination process.--Not 
     later than 18 months after the date on which section 1869(g) 
     of the Social Security Act (as added by subsection (a)) takes 
     effect, the Comptroller General of the United States shall 
     submit to Congress a report on the use of the prior 
     determination process under such section. Such report shall 
     include--
       (A) information concerning the types of procedures for 
     which a prior determination has been sought, determinations 
     made under the process, and changes in receipt of services 
     resulting from the application of such process; and
       (B) an evaluation of whether the process was useful for 
     physicians (and other suppliers) and beneficiaries, whether 
     it was timely, and whether the amount of information required 
     was burdensome to physicians and beneficiaries.
       (5) Advance beneficiary notice defined.--In this 
     subsection, the term ``advance beneficiary notice'' means a 
     written notice provided under section 1879(a) of the Social 
     Security Act (42 U.S.C. 1395pp(a)) to an individual entitled 
     to benefits under part A or B of title XVIII of such Act 
     before items or services are furnished under such part in 
     cases where a provider of services or other person that would 
     furnish the item or service believes that payment will not be 
     made for some or all of such items or services under such 
     title.

                   TITLE V--MISCELLANEOUS PROVISIONS

     SEC. 501. POLICY DEVELOPMENT REGARDING EVALUATION AND 
                   MANAGEMENT (E & M) DOCUMENTATION GUIDELINES.

       (a) In General.--The Secretary may not implement any new 
     documentation guidelines for evaluation and management 
     physician services under the title XVIII of the Social 
     Security Act on or after the date of the enactment of this 
     Act unless the Secretary--
       (1) has developed the guidelines in collaboration with 
     practicing physicians (including both generalists and 
     specialists) and provided for an assessment of the proposed 
     guidelines by the physician community;
       (2) has established a plan that contains specific goals, 
     including a schedule, for improving the use of such 
     guidelines;
       (3) has conducted appropriate and representative pilot 
     projects under subsection (b) to test modifications to the 
     evaluation and management documentation guidelines;
       (4) finds that the objectives described in subsection (c) 
     will be met in the implementation of such guidelines; and
       (5) has established, and is implementing, a program to 
     educate physicians on the use of such guidelines and that 
     includes appropriate outreach.
     The Secretary shall make changes to the manner in which 
     existing evaluation and management documentation guidelines 
     are implemented to reduce paperwork burdens on physicians.
       (b) Pilot Projects to Test Evaluation and Management 
     Documentation Guidelines.--
       (1) In general.--The Secretary shall conduct under this 
     subsection appropriate and representative pilot projects to 
     test new evaluation and management documentation guidelines 
     referred to in subsection (a).
       (2) Length and consultation.--Each pilot project under this 
     subsection shall--
       (A) be voluntary;
       (B) be of sufficient length as determined by the Secretary 
     to allow for preparatory physician and medicare contractor 
     education, analysis, and use and assessment of potential 
     evaluation and management guidelines; and
       (C) be conducted, in development and throughout the 
     planning and operational stages of the project, in 
     consultation with practicing physicians (including both 
     generalists and specialists).
       (3) Range of pilot projects.--Of the pilot projects 
     conducted under this subsection--
       (A) at least one shall focus on a peer review method by 
     physicians (not employed by a medicare contractor) which 
     evaluates medical record information for claims submitted by 
     physicians identified as statistical outliers relative to 
     definitions published in the Current Procedures Terminology 
     (CPT) code book of the American Medical Association;
       (B) at least one shall focus on an alternative method to 
     detailed guidelines based on physician documentation of face 
     to face encounter time with a patient;
       (C) at least one shall be conducted for services furnished 
     in a rural area and at least one for services furnished 
     outside such an area; and
       (D) at least one shall be conducted in a setting where 
     physicians bill under physicians' services in teaching 
     settings and at least one shall be conducted in a setting 
     other than a teaching setting.
       (4) Banning of targeting of pilot project participants.--
     Data collected under this subsection shall not be used as the 
     basis for overpayment demands or post-payment audits. Such 
     limitation applies only to claims filed as part of the pilot 
     project and lasts only for the duration of the pilot project 
     and only as long as the provider is a participant in the 
     pilot project.
       (5) Study of impact.--Each pilot project shall examine the 
     effect of the new evaluation and management documentation 
     guidelines on--
       (A) different types of physician practices, including those 
     with fewer than 10 full-time-equivalent employees (including 
     physicians); and
       (B) the costs of physician compliance, including education, 
     implementation, auditing, and monitoring.
       (6) Periodic reports.--The Secretary shall submit to 
     Congress periodic reports on the pilot projects under this 
     subsection.
       (c) Objectives for Evaluation and Management Guidelines.--
     The objectives for modified evaluation and management 
     documentation guidelines developed by the Secretary shall be 
     to--
       (1) identify clinically relevant documentation needed to 
     code accurately and assess coding levels accurately;
       (2) decrease the level of non-clinically pertinent and 
     burdensome documentation time and content in the physician's 
     medical record;
       (3) increase accuracy by reviewers; and
       (4) educate both physicians and reviewers.
       (d) Study of Simpler, Alternative Systems of Documentation 
     for Physician Claims.--
       (1) Study.--The Secretary shall carry out a study of the 
     matters described in paragraph (2).
       (2) Matters described.--The matters referred to in 
     paragraph (1) are--
       (A) the development of a simpler, alternative system of 
     requirements for documentation accompanying claims for 
     evaluation and management physician services for which 
     payment is made under title XVIII of the Social Security Act; 
     and
       (B) consideration of systems other than current coding and 
     documentation requirements for payment for such physician 
     services.
       (3) Consultation with practicing physicians.--In designing 
     and carrying out the study under paragraph (1), the Secretary 
     shall consult with practicing physicians, including 
     physicians who are part of group practices and including both 
     generalists and specialists.
       (4) Application of hipaa uniform coding requirements.--In 
     developing an alternative system under paragraph (2), the 
     Secretary shall consider requirements of administrative 
     simplification under part C of title XI of the Social 
     Security Act.
       (5) Report to congress.--(A) Not later than October 1, 
     2003, the Secretary shall submit to Congress a report on the 
     results of the study conducted under paragraph (1).
       (B) The Medicare Payment Advisory Commission shall conduct 
     an analysis of the results of the study included in the 
     report under subparagraph (A) and shall submit a report on 
     such analysis to Congress.
       (e) Study on Appropriate Coding of Certain Extended Office 
     Visits.--The Secretary shall conduct a study of the 
     appropriateness of coding in cases of extended office visits 
     in which there is no diagnosis made. Not later than October 
     1, 2003, the Secretary shall submit a report to Congress on 
     such study and shall include recommendations on how to code 
     appropriately for such visits in a manner that takes into 
     account the amount of time the physician spent with the 
     patient.
       (f) Definitions.--In this section--
       (1) the term ``rural area'' has the meaning given that term 
     in section 1886(d)(2)(D) of the Social Security Act, 42 
     U.S.C. 1395ww(d)(2)(D); and
       (2) the term ``teaching settings'' are those settings 
     described in section 415.150 of title 42, Code of Federal 
     Regulations.

     SEC. 502. IMPROVEMENT IN OVERSIGHT OF TECHNOLOGY AND 
                   COVERAGE.

       (a) Improved Coordination Between FDA and CMS on Coverage 
     of Breakthrough Medical Devices.--
       (1) In general.--Upon request by an applicant and to the 
     extent feasible (as determined by the Secretary), the 
     Secretary shall, in the case of a class III medical device 
     that is subject to premarket approval under section 515 of 
     the Federal Food, Drug, and Cosmetic Act, ensure the sharing 
     of appropriate information from the review for application 
     for premarket approval conducted by the Food and Drug 
     Administration for coverage decisions under title XVIII of 
     the Social Security Act.
       (2) Publication of plan.--Not later than 6 months after the 
     date of the enactment of this Act, the Secretary shall submit 
     to appropriate Committees of Congress a report that contains 
     the plan for improving such coordination and for shortening 
     the time lag between the premarket approval by the Food and 
     Drug Administration and coding and coverage decisions by the 
     Centers for Medicare & Medicaid Services.
       (3) Construction.--Nothing in this subsection shall be 
     construed as changing the criteria for coverage of a medical 
     device under title XVIII of the Social Security Act nor 
     premarket approval by the Food and Drug Administration and 
     nothing in this subsection shall be construed to increase 
     premarket approval application requirements under the Federal 
     Food, Drug, and Cosmetic Act.
       (b) 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

[[Page H8791]]

     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.''.
       (c) GAO Study on Improvements in External Data Collection 
     for Use in the Medicare Inpatient Payment System.--
       (1) Study.--The Comptroller General of the United States 
     shall conduct a study that analyzes which external data can 
     be collected in a shorter time frame by the Centers for 
     Medicare & Medicaid Services for use in computing payments 
     for inpatient hospital services. The study may include an 
     evaluation of the feasibility and appropriateness of using of 
     quarterly samples or special surveys or any other methods. 
     The study shall include an analysis of whether other 
     executive agencies, such as the Bureau of Labor Statistics in 
     the Department of Commerce, are best suited to collect this 
     information.
       (2) Report.--By not later than October 1, 2002, the 
     Comptroller General shall submit a report to Congress on the 
     study under paragraph (1).
       (d) IOM Study on Local Coverage Determinations.--
       (1) Study.--The Secretary shall enter into an arrangement 
     with the Institute of Medicine of the National Academy of 
     Sciences under which the Institute shall conduct a study on 
     local coverage determinations (including the application of 
     local medical review policies) under the medicare program 
     under title XVIII of the Social Security Act. Such study 
     shall examine--
       (A) the consistency of the definitions used in such 
     determinations;
       (B) the types of evidence on which such determinations are 
     based, including medical and scientific evidence;
       (C) the advantages and disadvantages of local coverage 
     decisionmaking, including the flexibility it offers for 
     ensuring timely patient access to new medical technology for 
     which data are still be collected;
       (D) the manner in which the local coverage determination 
     process is used to develop data needed for a national 
     coverage determination, including the need for collection of 
     such data within a protocol and informed consent by 
     individuals entitled to benefits under part A of title XVIII 
     of the Social Security Act, or enrolled under part B of such 
     title, or both; and
       (E) the advantages and disadvantages of maintaining local 
     medicare contractor advisory committees that can advise on 
     local coverage decisions based on an open, collaborative 
     public process.
       (2) Report.--Such arrangement shall provide that the 
     Institute shall submit to the Secretary a report on such 
     study by not later than 3 years after the date of the 
     enactment of this Act. The Secretary shall promptly transmit 
     a copy of such report to Congress.
       (e) Methods for Determining Payment Basis For New Lab 
     Tests.--Section 1833(h) (42 U.S.C. 1395l(h)) is amended by 
     adding at the end the following:
       ``(8)(A) The Secretary shall establish by regulation 
     procedures for determining the basis for, and amount of, 
     payment under this subsection for any clinical diagnostic 
     laboratory test with respect to which a new or substantially 
     revised HCPCS code is assigned on or after January 1, 2003 
     (in this paragraph referred to as `new tests').
       ``(B) Determinations under subparagraph (A) shall be made 
     only after the Secretary--
       ``(i) makes available to the public (through an Internet 
     site and other appropriate mechanisms) a list that includes 
     any such test for which establishment of a payment amount 
     under this subsection is being considered for a year;
       ``(ii) on the same day such list is made available, causes 
     to have published in the Federal Register notice of a meeting 
     to receive comments and recommendations (and data on which 
     recommendations are based) from the public on the appropriate 
     basis under this subsection for establishing payment amounts 
     for the tests on such list;
       ``(iii) not less than 30 days after publication of such 
     notice convenes a meeting, that includes representatives of 
     officials of the Centers for Medicare & Medicaid Services 
     involved in determining payment amounts, to receive such 
     comments and recommendations (and data on which the 
     recommendations are based);
       ``(iv) taking into account the comments and recommendations 
     (and accompanying data) received at such meeting, develops 
     and makes available to the public (through an Internet site 
     and other appropriate mechanisms) a list of proposed 
     determinations with respect to the appropriate basis for 
     establishing a payment amount under this subsection for each 
     such code, together with an explanation of the reasons for 
     each such determination, the data on which the determinations 
     are based, and a request for public written comments on the 
     proposed determination; and
       ``(v) taking into account the comments received during the 
     public comment period, develops and makes available to the 
     public (through an Internet site and other appropriate 
     mechanisms) a list of final determinations of the payment 
     amounts for such tests under this subsection, together with 
     the rationale for each such determination, the data on which 
     the determinations are based, and responses to comments and 
     suggestions received from the public.
       ``(C) Under the procedures established pursuant to 
     subparagraph (A), the Secretary shall--
       ``(i) set forth the criteria for making determinations 
     under subparagraph (A); and
       ``(ii) make available to the public the data (other than 
     proprietary data) considered in making such determinations.
       ``(D) The Secretary may convene such further public 
     meetings to receive public comments on payment amounts for 
     new tests under this subsection as the Secretary deems 
     appropriate.
       ``(E) For purposes of this paragraph:
       ``(i) The term `HCPCS' refers to the Health Care Procedure 
     Coding System.
       ``(ii) A code shall be considered to be `substantially 
     revised' if there is a substantive change to the definition 
     of the test or procedure to which the code applies (such as a 
     new analyte or a new methodology for measuring an existing 
     analyte-specific test).''.

     SEC. 503. 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. 504. 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, 2002.
       (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 report on 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.

[[Page H8792]]

     SEC. 505. 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 Active 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. 506. AUTHORIZING USE OF ARRANGEMENTS WITH OTHER HOSPICE 
                   PROGRAMS 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 
     new subparagraph:
       ``(D) In extraordinary, exigent, or other non-routine 
     circumstances, such as unanticipated periods of high patient 
     loads, staffing shortages due to illness or other events, or 
     temporary travel of a patient outside a hospice program's 
     service area, a hospice program may enter into arrangements 
     with another hospice program for the provision by that other 
     program of services described in paragraph (2)(A)(ii)(I). The 
     provisions of paragraph (2)(A)(ii)(II) shall apply with 
     respect to the services provided under such arrangements.''.
       (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. 507. 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, to 
     comply with the Bloodborne Pathogens standard under section 
     1910.1030 of title 29 of the Code of Federal Regulations (or 
     as subsequently redesignated).''; and
       (B) by adding at the end of subsection (b) the following 
     new paragraph:
       ``(4)(A) A hospital that fails to comply with the 
     requirement of subsection (a)(1)(T) (relating to the 
     Bloodborne Pathogens standard) is subject to a civil money 
     penalty in an amount described in subparagraph (B), but is 
     not subject to termination of an agreement under this 
     section.
       ``(B) The amount referred to in subparagraph (A) is an 
     amount that is similar to the amount of civil penalties that 
     may be imposed under section 17 of the Occupational Safety 
     and Health Act of 1970 for a violation of the Bloodborne 
     Pathogens standard referred to in subsection (a)(1)(T) by a 
     hospital that is subject to the provisions of such Act.
       ``(C) A civil money penalty under this paragraph shall be 
     imposed and collected in the same manner as civil money 
     penalties under subsection (a) of section 1128A are imposed 
     and collected under that section.''.
       (b) Effective Date.--The amendments made by this subsection 
     (a) shall apply to hospitals as of July 1, 2002.

     SEC. 508. ONE-YEAR DELAY IN LOCK IN PROCEDURES FOR 
                   MEDICARE+CHOICE PLANS; CHANGE IN 
                   MEDICARE+CHOICE REPORTING DEADLINES AND ANNUAL, 
                   COORDINATED ELECTION PERIOD FOR 2002.

       (a) Lock-In Delay.--Section 1851(e) (42 U.S.C. 1395w-21(e)) 
     is amended--
       (1) in paragraph (2)(A), by striking ``through 2001'' and 
     ``and 2001'' and inserting ``through 2002'' and ``2001, and 
     2002'', respectively;
       (2) in paragraph (2)(B), by striking ``during 2002'' and 
     inserting ``during 2003'';
       (3) in paragraphs (2)(B)(i) and (2)(C)(i), by striking 
     ``2002'' and inserting ``2003'' each place it appears;
       (4) in paragraph (2)(D), by striking ``2001'' and inserting 
     ``2002''; and
       (5) in paragraph (4), by striking ``2002'' and inserting 
     ``2003'' each place it appears.
       (b) Change in Deadlines and Election Period.--
       (1) In general.--Notwithstanding any other provision of 
     law--
       (A) the deadline for submittal of information under section 
     1854(a)(1) of the Social Security Act (42 U.S.C. 1395w-
     24(a)(1)) for 2002 is changed from July 1, 2002, to the third 
     Monday in September of 2002; and
       (B) the annual, coordinated election period under section 
     1851(e)(3)(B) of such Act (42 U.S.C. 1395w-21(e)(3)(B)) with 
     respect to 2003 shall be the period beginning on November 15, 
     2002, and ending on December 31, 2002.
       (2) GAO study on impact of change on beneficiaries and 
     plans.--The Comptroller General of the United States shall 
     conduct a review of the Medicare+Choice open enrollment 
     process that occurred during 2001, including the offering of 
     Medicare+Choice plans for 2002. By not later than May 31, 
     2002, the Comptroller General shall submit a report to 
     Congress and the Secretary on such review. Such report shall 
     include the following:
       (A) An analysis of the effect of allowing additional time 
     for the submittal of adjusted community rates and other data 
     on the extent of participation of Medicare+Choice 
     organizations and on the benefits offered under 
     Medicare+Choice plans.
       (B) An evaluation of the plan-specific information provided 
     to beneficiaries, the timeliness of the receipt of such 
     information, the adequacy of the duration of the open 
     enrollment period, and relevant operational issues that arise 
     as a result of the timing and duration of the open enrollment 
     period, including any problems related to the provision 
     services immediately following enrollment.
       (C) The results of surveys of beneficiaries and 
     Medicare+Choice organizations.
       (D) Such recommendations regarding the appropriateness of 
     the changes provided under paragraph (1) as the Comptroller 
     General finds appropriate.

     SEC. 509. 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)'';

[[Page H8793]]

       (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. 510. CONFORMING 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 five years, except that, upon the request of the 
     administrator of a Federal health care program (as defined in 
     section 1128B(f)) who determines that the exclusion would 
     impose a hardship on individuals entitled to benefits under 
     part A of title XVIII or enrolled under part B of such title, 
     or both, 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. 511. TREATMENT OF CERTAIN DENTAL CLAIMS.

       (a) In General.--Section 1862 (42 U.S.C. 1395y) is amended 
     by inserting after subsection (c) the following new 
     subsection:
       ``(d)(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. 512. MISCELLANEOUS REPORTS, STUDIES, AND PUBLICATION 
                   REQUIREMENTS.

       (a) GAO Reports on the Physician Compensation.--
       (1) Sustainable Growth Rate and Updates.--Not later than 6 
     months after the date of the enactment of this Act, the 
     Comptroller General of the United States shall submit to 
     Congress a report on the appropriateness of the updates in 
     the conversion factor under subsection (d)(3) of section 1848 
     of the Social Security Act (42 U.S.C. 1395w-4), including the 
     appropriateness of the sustainable growth rate formula under 
     subsection (f) of such section for 2002 and succeeding years. 
     Such report shall examine the stability and predictability of 
     such updates and rate and alternatives for the use of such 
     rate in the updates.
       (2) Physician compensation generally.--Not later than 12 
     months after the date of the enactment of this Act, the 
     Comptroller General shall submit to Congress a report on all 
     aspects of physician compensation for services furnished 
     under title XVIII of the Social Security Act, and how those 
     aspects interact and the effect on appropriate compensation 
     for physician services. Such report shall review alternatives 
     for the physician fee schedule under section 1848 of such 
     title (42 U.S.C. 1395w-4).
       (b) Prompt Submission of Overdue Reports on Payment and 
     Utilization of Outpatient Therapy Services.--The Secretary 
     shall submit to Congress as expeditiously as practicable the 
     reports required under section 4541(d)(2) of the Balanced 
     Budget Act of 1997 (relating to alternatives to a single 
     annual dollar cap on outpatient therapy) and under section 
     221(d) of the Medicare, Medicaid, and SCHIP Balanced Budget 
     Refinement Act of 1999 (relating to utilization patterns for 
     outpatient therapy).
       (c) Annual Publication of List of National Coverage 
     Determinations.--The Secretary shall provide, in an 
     appropriate annual publication available to the public, a 
     list of national coverage determinations made under title 
     XVIII of the Social Security Act in the previous year and 
     information on how to get more information with respect to 
     such determinations.

  The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from 
Connecticut (Mrs. Johnson) and the gentleman from California (Mr. 
Stark) each will control 20 minutes.
  The Chair recognizes the gentlewoman from Connecticut (Mrs. Johnson).
  Mrs. JOHNSON of Connecticut. Mr. Speaker, I yield 10 minutes to the 
gentleman from Louisiana (Mr. Tauzin), and I ask unanimous consent that 
he be allowed to control that time.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentlewoman from Connecticut?
  There was no objection.
  Mrs. JOHNSON of Connecticut. Mr. Speaker, I yield myself such time as 
I may consume.
  Mr. Speaker, Secretary Thompson said about Medicare, ``Complexity is 
over the system, criminalizing honest mistakes, and driving doctors, 
nurses, and other health care professionals out of the program.''
  I agree.
  Medicare and Medicaid are governed by 132,000 pages of regulations. 
That is 3 times the IRS Code and its regulations and the result is 
exactly as the Secretary described.
  Memorial Hospital in Gonzales, Texas has 33 beds and 20 billing 
staff. Northwestern Memorial Hospital in Chicago just hired 26 new 
full-time employees to meet new regulatory requirements.
  At a time when we need Medicare dollars for more nursing care, 
prescription drugs, annual physicals, and new systems to help seniors 
manage multiple chronic illnesses, we cannot in good conscience ignore 
the costly administrative burdens and the multitude of injustices being 
heaped on Medicare doctors, hospitals, home health care providers, 
nursing homes, and other providers by a literal explosion of complex 
law, regulation directives, and paperwork.
  To address what I consider to be a crisis endangering the ability of 
small providers and many doctors to continue to serve our Nation's 
seniors, last January my subcommittee began taking a hard look at 
provider complaints. Today we bring to you a bipartisan bill to address 
the severe problems that have developed in Medicare.
  The bill before us does many radical things. It disciplines the 
regulatory process so regulations will be issued through a predictable 
and timely process, with provider input before proposed regulations are 
made public.
  Another radical thing it does, it stops, it prohibits government from 
imposing regulations retroactively. There will be no more changing the 
rules of the game and then punishing providers for noncompliance. It 
prohibits, read that ``stops,'' government from imposing sanctions and 
demanding repayment if they provided care to seniors in compliance with 
written guidance from the government. It speeds up the process Medicare 
uses to set payments for new diagnostic and treatment technologies by 
creating a Council of Technology and Innovation. It requires a simple 
process to correct technical error, relieving our caregivers of all the 
paperwork and severe cash flow problems that result from the laborious 
appeals process, a killer of small providers.
  Radically, we require through this bill that the people who process 
payments for Medicare services answer questions accurately. GAO found 
that these contractors answered only 15 percent of routine questions 
accurately, and, worse yet, 32 percent of provider questions were 
answered completely inaccurately.
  By setting performance standards in competitive contracting, Medicare 
can assure better-quality provider support services.
  Under this bill, doctors get fairer treatment when audited for 
billing inaccuracy. They will get explanations, the right to discuss 
coding differences, and written explanations when differences remain. 
This should stop the arbitrary decisions that result in tens of 
thousands of dollars of unjust fines.
  When a physician who is responsible for running the Medicare program 
tells me she cannot tell the difference between a comprehensive 
physical and a detailed physical, two entirely different levels of care 
for billing purposes, should we be surprised that doctors who make 
coding errors are frustrated and angered by Medicare's arbitrary, 
confrontational audits by nonmedical people and its complex, irrational 
documentation requirements?

                              {time}  1700

  I am proud that this is a bipartisan bill. It has been developed with 
the study and input of every member of the Ways and Means Subcommittee 
on Health, and then the follow-on input of the Committee on Energy and 
Commerce, Republicans and Democrats, as well as the administration and 
the Inspector General.
  I want to especially thank John McManus, Jennifer Baxendell, Deborah

[[Page H8794]]

Williams, Joel White, Cybele Bjorklund and Carl Taylor, our Republican 
and Democratic staff members of the Committee on Ways and Means, 
because this has been an incredibly time-consuming, work-intensive 
bill. Without their endless attention to detail and thoughtful, sound 
judgments, it would not be before us today.
  Please support H.R. 3391. It is a giant step toward a stronger 
Medicare program.

                        Thank Yous on H.R. 3391


                          legislative counsel

       Ed Grossman.
       Pierre Poisson.


                     congressional research service

       Siby Tilson.


                      congressional budget office

       Tom Bradley.
       Alexis Ahlstrom.


                        ways and means minority

       Cybele Bjorklund.
       Carl Taylor.


                       energy and commerce staff

       Pat Morrisey.
       Erin Kuhls.
       Julie Corcoran.
       Bridgett Taylor.
       Karen Folk.
       Amy Hall.
       Susan Christensen.
       Jayna Gadomski.


                   dept. of health and human services

       Staff.
  Mr. Speaker, I reserve the balance of my time.
  Mr. STARK. Mr. Speaker, I ask unanimous consent that at the 
conclusion of 10 minutes of my time that 10 minutes be yielded to the 
gentleman from Ohio (Mr. Brown) for the purposes of control.
  The SPEAKER pro tempore (Mr. Culberson). Is there objection to the 
request of the gentleman from California?
  There was no objection.
  Mr. STARK. Mr. Speaker, I yield myself such time as I may consume.
  The bill we are moving today embodies basically the way Congress used 
to work, with the majority and minority working together to enact 
improvements to the Medicare program. On this bill, the Medicare 
Regulatory and Contracting Reform Act, both sides have worked closely 
with the administration, with providers, consumers groups and others. 
It has been a bipartisan, consultative process as it should be.
  In addition, Mr. Speaker, I think it is important to acknowledge the 
outstanding leadership and hard work of the gentlewoman from Nevada 
(Ms. Berkley). She brought this matter to the attention of Congress and 
has shepherded it along the way and has been an invaluable help in 
seeing this legislation be completed.
  The legislation contains important beneficiary provisions which I 
think are important to emphasize. We have established a beneficiary 
ombudsman program that will provide a voice for beneficiaries within 
the Centers for Medicare and Medicaid Services, now CMS, I still want 
to call it HCFA, but will enable that agency to better respond to and 
anticipate beneficiary needs. As every Member knows, Members must now 
help Medicare beneficiaries with their casework because no office 
really exists within CMS to help the beneficiaries.
  We have also established a single national toll free telephone 
number, 1-800-MEDICARE, I hope it answers, for the beneficiaries to 
call with their questions; and this single telephone number will 
replace the many pages of telephone numbers that beneficiaries now must 
sort through in the Medicare handbook to find the correct place to call 
with their questions.
  I am particularly pleased that a demonstration program will place 
Medicare staff in Social Security field offices to answer beneficiary 
questions and provide assistance on Medicare issues. Beneficiaries are 
accustomed to going to Social Security offices, as indeed are the 
caseworkers in our local offices, for help and assistance in these 
programs. This will help by having Medicare assistance for them in 
these same offices.
  I would also like to suggest accolades for the gentleman from 
Pennsylvania (Mr. English), who has worked with me on a bill to protect 
nurses and other health care workers from needle stick injuries by 
requiring the use of safe needle technology in public hospitals, as 
well as has been required by those hospitals under OSHA supervision. We 
have been working on this issue for years, and we have made significant 
progress; and this legislation completes those efforts, and this 
provision in the bill will save lives. It is an important component of 
the bill.
  Importantly, this bill delays for a year the requirement in law that 
would begin in 2002 to lock beneficiaries into the Medicare+Choice 
plans, and under this legislation beneficiaries would continue to be 
able to enroll in and disenroll from these plans throughout the year. I 
would strongly prefer to repeal the lock-in altogether, but I believe a 
1-year delay is a good start.
  Finally, the bill takes long overdue steps to fundamentally reform 
Medicare's contracting system. We have worked on this for years. I am 
confident under this new system we can get a better deal for our 
government and still maintain quality service and performance goals for 
the beneficiary.
  This will place additional administrative burdens on CMS; and as we 
discussed earlier today with the gentleman from Ohio (Mr. Hobson) and 
others, we will continue to see that Labor HHS appropriation bills 
provide modest increases in administrative resources for CMS to 
complete this work.
  I guess that said, Mr. Speaker, I have to add that I think it is 
somewhat disgraceful that this ends up being our really only Medicare 
legislation this year. We started the 107th Congress with a record 
budget surplus and the ability to easily enact and pay for 
comprehensive, affordable prescription drug coverage and other 
significant improvements through all Medicare beneficiaries, in 
addition to funding other key national priorities in education and 
other social areas.
  The surplus, instead, was squandered on excessive tax breaks for the 
wealthy, and it is now clear that the Bush recession that began last 
spring and the Republican tax package have sealed the deal. Our 
legislative record at the end of the first session of the 107th 
Congress is a tribute to misplaced priorities.
  I look forward to changing that and working with my colleagues as we 
have on this bill on the Subcommittee on Health to see if in the next 
session of Congress we can reverse this course and improve the Medicare 
system as it has long been set aside from doing.
  Mr. Speaker, I reserve the balance of my time.
  Mrs. JOHNSON of Connecticut. Mr. Speaker, it is my privilege to yield 
1\1/2\ minutes to the gentlewoman from Washington (Ms. Dunn), a 
hardworking member of our subcommittee.
  Ms. DUNN. Mr. Speaker, I rise in support of this bill to provide 
regulatory relief to doctors throughout the Nation. I want to thank the 
gentleman from California (Mr. Thomas) for being involved in developing 
this legislation; but I want to give special kudos to the gentlewoman 
from Connecticut (Mrs. Johnson), the subcommittee chairman, and the 
gentleman from California (Mr. Stark), her ranking member, because they 
worked together. This is bipartisan and we are very pleased with the 
result of our work. It will cost nothing, but it does true regulatory 
reform.
  I also want to thank my colleagues, the gentleman from Maryland (Mr. 
Ehrlich) and the gentleman from Washington (Mr. McDermott), for working 
with me to ensure that in this bill our seniors have access to the 
latest clinical laboratory tests.
  I am very pleased that this regulatory relief bill creates a 
transparent, timely and public process at CMS to evaluate and to 
incorporate new technologies into the Medicare program. This is a 
critical step in ensuring that doctors have every tool available to 
assist our seniors.
  Medical innovations are moving too fast to wait for Medicare's 
coverage and payments. This is especially true for new laboratory 
tests, a field that has been rapidly advancing in innovations 
exponentially.
  The quality of our health care system here in the United States 
depends on our ability to prevent, diagnose, and treat illnesses and 
diseases. Support this legislation so that our Nation's seniors will be 
able to access breakthrough tests that can help save their lives.
  Mr. STARK. Mr. Speaker, I am pleased to yield 2 minutes to the 
gentlewoman from Nevada (Ms. Berkley), who is one of the originators of 
this legislation.
  Ms. BERKLEY. Mr. Speaker, I rise today in strong support of H.R. 
3391, to

[[Page H8795]]

provide long-awaited Medicare regulatory relief to health care 
providers. I would like to particularly thank my colleagues who have 
worked so hard to make this piece of legislation a reality, the 
gentlewoman from Connecticut (Mrs. Johnson); the gentleman from 
California (Mr. Stark), especially for his very generous praise, I 
appreciate that; the gentleman from Ohio (Mr. Brown); the gentleman 
from Florida (Mr. Bilirakis); the gentleman from New York (Mr. Rangel); 
the gentleman from California (Mr. Thomas); the gentleman from 
Louisiana (Mr. Tauzin); and the gentleman from Michigan (Mr. Dingell) 
for their hard work on this legislation. I would especially like to 
thank the gentleman from Pennsylvania (Mr. Toomey) for his leadership 
on this issue.
  I became involved with this legislation when doctor after doctor in 
the Las Vegas area came to me with horror stories of how they had been 
treated by HCFA and how it had inhibited their ability to care for 
their patients. The cornerstone of health care in this country is the 
doctor-patient relationship, and many of us have fought consistently to 
maintain the integrity of this fundamental and very personal 
relationship.
  Over the years, excessive paperwork and overburdensome government 
regulation have interfered with that relationship. This legislation 
will help cut red tape and bureaucratic excesses so doctors can spend 
more time with their patients and less time on paperwork.
  Reform is important to the doctors, important to our seniors, and 
vital to the health of Medicare. While this bill, as the gentleman from 
California (Mr. Stark) says, does not include everything I had hoped 
for, it is a very significant step in the right direction. I am proud 
that my name is associated with this bill, and I urge all of my 
colleagues to support it.
  Mrs. JOHNSON of Connecticut. Mr. Speaker, I yield myself such time as 
I may consume.
  I would like to thank the gentlewoman from Nevada (Ms. Berkley) and 
the gentleman from Pennsylvania (Mr. Toomey), who is going to speak 
later, for their hard work on behalf of physicians, most of which is 
reflected in this legislation.
  Mr. Speaker, I yield 2 minutes to the gentleman from New York (Mr. 
Gilman).
  (Mr. GILMAN asked and was given permission to revise and extend his 
remarks.)
  Mr. GILMAN. Mr. Speaker, I am pleased to rise in support of H.R. 
3391. This legislation makes extensive changes and modifications in the 
regulatory and contracting systems within Medicare, and I commend the 
gentlewoman from Connecticut (Mrs. Johnson) and the gentleman from 
California (Mr. Stark) for their work on this measure.
  Along with many of our colleagues, I have heard in recent years that 
increasing drumbeat of criticism, from health care providers and 
patients in my own district, over a cumbersome Medicare system that was 
slow to adapt to rapid changes in health care, cumbersome in its 
management of existing benefits, and required far too much time spent 
in processing paperwork for claims reimbursements.
  Moreover, there is also a widespread perception that the Centers for 
Medicare and Medicaid Services, formerly known as HCFA, has in the past 
issued new regulations in an arbitrary and capricious manner, with 
little regard for the interests and situations of those health care 
providers who would be impacted by a regulatory change. The fact that 
many of these changes came without sufficient accompanying explanations 
further exacerbated problems for providers and patients who often have 
difficulty divining the arcane and often confusing world of Medicare 
regulations.
  There is also the issue of the Medicare contracting program which, in 
this age of open government, remains a closed system. This has fostered 
inefficiency and prevented the Medicare contracting program from 
keeping up with rapid developments in the delivery of health care in 
the private sector.
  H.R. 3391 is a bipartisan solution to address these problems and to 
serve as the first step in modernizing overhaul of the Medicare system, 
which streamlines the regulatory process, reforms the contracting 
system to make it more open and accountable, expanding outreach and 
education to better inform both providers and patients of their rights 
and responsibilities, and makes important improvements to the appeals 
and recovery process.
  Mr. Speaker, Medicare, along with the Social Security system, 
represents the most popular and successful program for seniors ever 
enacted. This bill will ensure the continued success of the system by 
making it easier for Medicare health care providers to operate within 
the system, as well as to offer relief through the reduction of 
paperwork burdens.
  This measure will both reform the Medicare system and improve 
confidence in its future on the part of both providers and patients. 
Accordingly, I urge my colleagues to fully join in supporting this 
measure.
  Mr. STARK. Mr. Speaker, I am pleased to yield 2\1/2\ minutes to the 
gentlewoman from Florida (Mrs. Thurman), who has worked diligently on 
this legislation in behalf of all the seniors, most of whom I think 
reside in her district in Florida, but for all of the rest of us 
seniors who do not.
  Mrs. THURMAN. Mr. Speaker, I want to thank the gentleman from 
California (Mr. Stark) for yielding me this time and those nice 
remarks, but I also want to thank the gentlewoman from Connecticut 
(Mrs. Johnson) and the gentleman from Florida (Mr. Bilirakis) and the 
gentleman from Ohio (Mr. Brown). Without their diligence and all of the 
committees working together, this piece of legislation would not have 
been brought forward to this floor.
  People sometimes do not realize how complicated Medicare can be at 
times; and when one is trying to balance beneficiaries and the doctors 
and the contractors, sometimes we have to work through some very 
difficult situations.
  I will tell my colleagues that in talking with my doctors in the 
fifth district, one of the things that I heard over and over again was 
the sheer volume and complexity of the Medicare regulations and what it 
has meant to them. Most of what it means to them is they do not have 
the time to spend with their patients because they are spending so much 
time on the complexities.
  Another issue that I think is very important about this is that these 
doctors also tell me, in talking with their staffs and their offices, 
that their administrative expenses can represent as much as 25 percent 
of their cost. That means, again, the cost to Medicare and the dollars 
that we have available is not being spent on the patient, but on 
administrative costs. So hiring an extra person, doing something more 
for the patient can sometimes cause a problem.
  In seeing that in this piece of legislation, one of the things that 
we fought very hard for and I think is going to be a wonderful 
opportunity for us to look at in the future is the demonstration 
program that we provided to on-site technical assistance for doctors to 
help with the complexity of Medicare coding.

                              {time}  1715

  We heard an awful lot about that. So this was an issue we thought put 
them on site, they get the opportunity to really sit down with folks 
and figure out where their problems might be.
  Then I also want to thank the gentleman from Minnesota (Mr. Ramstad) 
for his leadership on a piece of legislation that he and I introduced 
for a couple of years in a row dealing with technology. And so what we 
have done in this bill is we have actually set up a Council for 
Technology and Innovation within CMS. This council will have an 
executive coordinator who acts as a single point of contact between CMS 
and outside entities to help explain coverage, coding, and payment 
questions about new and innovative technologies.
  We are all very proud of what happens in this country with 
innovation. So I would just like to take this opportunity to thank all, 
and our staffs, that were involved in this, and ask for my colleagues' 
support for this bill.
  Mr. STARK. Mr. Speaker, I yield back the balance of my time.
  Mrs. JOHNSON of Connecticut. Mr. Speaker, I yield myself such time as 
I may consume.
  Mr. Speaker, I conclude by thanking the gentleman from California for 
his

[[Page H8796]]

cooperation throughout this long process, and our joint efforts, and 
also his staff, as I did earlier. They have worked very, very long 
hours on this.
  And I would like to say that this bill is only the beginning of 
strengthening Medicare. The administration is organizing task forces 
with real-world providers on them to rethink the most time consuming 
forms that health care providers have to fill out. If we can collect 
only the data we need, streamline and simplify billing systems and 
administrative processes, we can literally free millions of hours of 
caregiver time for the benefit of our seniors. It will take the 
leadership of Secretary Thompson and Administrator Scully, and it will 
take long hearings and attention to detail next year and the year 
after, working together, our committee and the Committee on Energy and 
Commerce.
  Together, we can make Medicare a model of smart, responsive 
government and reverse the belief expressed by so many in our hearings, 
but summed up by a doctor who said, ``Medicare has lost a sense of 
fairness, due process and common sense.'' We intend to restore those 
qualities to the most beloved and important program in our Nation not 
just for seniors but for their children and grandchildren as well.
  Mr. TAUZIN. Mr. Speaker, I yield myself such time as I may consume, 
and I rise today in strong support of H.R. 3391, the Medicare 
Regulatory Contracting Reform Act of 2001.
  The bill captures the best of two bills. The legislation reported out 
of the Committee on Ways and Means, and H.R. 3046, the Medicare RACER 
Act, which was reported from the Committee on Energy and Commerce. It 
represents the diligent work of the many Members of Congress to make 
the Medicare program more flexible and less bureaucratic. It is also a 
shining example of what can be achieved when we have true bipartisan 
cooperation.
  Earlier this year, the Committee on Energy and Commerce began a 
project we called ``patients first.'' The idea was indeed to try to see 
if we could not reform the regulations and the burdens at CMS to indeed 
put patients first; to make sure that physicians and health care 
providers, who are forced to spend too much time filling out forms and 
trying to learn the rules of the road and the changing rules of the 
road, might in fact get some relief.
  Our committee held a number of hearings and we disseminated surveys 
to elicit input from beneficiaries and health care providers about the 
complexities of the Medicare program and its rules. We also brought 
together beneficiary groups, provider associations, and government 
officials to talk about regulatory relief.
  Because of the leadership particularly of the gentleman from 
Pennsylvania (Mr. Toomey) and the gentlewoman from Nevada (Ms. 
Berkley), we are standing here today with an opportunity to vote on 
legislation that will enable doctors to spend more of their time caring 
for patients, putting patients first, and putting in less time 
completing paperwork for the government and bureaucrats.
  The Toomey-Berkley Medicare RACER Act was successfully reported from 
the Subcommittee on Health, thanks to the dedication and commitment of 
the chairman, the gentleman from Florida (Mr. Bilirakis) and the 
gentleman from Georgia (Mr. Norwood). It was also successfully reported 
out of the full Committee on Energy and Commerce. It requires 
contractors to provide general written responses to written inquiries 
from beneficiaries and health care providers within 45 business days, 
and it requires Medicare contractors to notify health care providers of 
problems that have been identified in a probe sample, and to alert 
providers as to the steps they should take to resolve the problems.
  Each of these improvements is significant and each of them has been 
included in the bill we are about to vote on today. And I wish to thank 
my colleagues from the Committee on Ways and Means for working so well 
with the gentleman from Florida (Mr. Bilirakis), the gentleman from 
Ohio (Mr. Brown), the gentleman from Michigan (Mr. Dingell), and myself 
to consolidate the work of our two committees. Lord knows, we need to 
thank the staff who put in hours and hours and hours, late nights and 
weekends, to bring all this together.
  We worked to strike an appropriate balance between the need for 
regulatory relief and the government's obligation to protect taxpayer 
funds from waste, fraud, and abuse. This captures the hard work of both 
committees. It has broad support with the beneficiary groups, the 
health care community and, by the way, the administration.
  I urge my colleagues to join us in full support of the legislation.
  Mr. Speaker, I reserve the balance of my time.
  Mr. BROWN of Ohio. Mr. Speaker, I yield myself such time as I may 
consume.
  I am pleased to join my colleagues both on the Committee on Ways and 
Means and the Committee on Energy and Commerce in support of H.R. 3391. 
I want to thank my colleagues, the gentleman from Pennsylvania (Mr. 
Toomey) and the gentlewoman from Nevada (Ms. Berkley) for taking on 
this daunting task. In a resource-limited environment, they were 
determined to identify reforms in Medicare operations that serve the 
best interests of beneficiaries and respond to a host of legitimate 
issues raised by providers, while making sure to in no way compromise 
the program's efforts to fight fraud, waste and abuse. It is a tall 
order and the gentleman from Pennsylvania and the gentlewoman from 
Nevada did an excellent job.
  This bipartisan legislation was a collective effort, to say the 
least. It was written and rewritten and rewritten with the input of the 
health care community, consumer advocates, the committees of 
jurisdiction, and the administration. It took months, it took difficult 
compromises, but the final product will make a tangible, positive 
difference for beneficiaries and providers alike.
  Key provisions of the bill bolster communications between and among 
the Medicare program and its beneficiaries and providers, improve the 
Medicare appeals process, and establish new performance standards for 
Medicare contractors.
  No one is well served when providers either cannot get the 
information they need or coverage policies are unclear, or anti-fraud 
and abuse measures elicit such mistrust that providers second-guess 
every treatment decision. This legislation takes those issues seriously 
and does something about them. Importantly, the bill also provides and 
improves Medicare responsiveness to its 39 million beneficiaries.
  I want to thank my colleagues, the gentleman from Louisiana (Mr. 
Tauzin), the gentleman from Florida (Mr. Bilirakis), and the gentleman 
from Michigan (Mr. Dingell) especially, and staff members Bridgett 
Taylor, Karen Folk, Amy Hall, and on my staff, Katie Porter and Ellie 
Dehoney for fighting tooth and nail to ensure this legislation, in 
effect, keeps our eye on the ball. They made sure the bill contains 
provisions that relate directly to Medicare's fundamental mission, to 
make sure seniors and disabled individuals receive the care that they 
need.
  Thanks largely to their resolve and hard work, this legislation 
ensures that seniors know definitively and up front whether Medicare 
covers the health care their doctor recommends. Especially for low-
income seniors, that is a crucial and overdue change in Medicare rules, 
and I appreciate the negotiated work that we all could do on that 
issue.
  The Medicare fee-for-service program is the largest insurance program 
in the United States, serving 36 million Americans, contracting with 
almost 1 million providers. Recent surveys document what most of us 
know from speaking with our constituents; that is, an overwhelming 
majority of Medicare beneficiaries trust in and are very satisfied with 
their coverage under fee-for-service Medicare.
  Americans overwhelmingly oppose Republican efforts to privatize this 
system, Americans overwhelmingly reject Republican efforts to allow 
more insurance company intrusion into fee-for-service Medicare, and 
Americans overwhelmingly want prescription drug coverage, an area where 
this Congress and the Bush administration have so far failed miserably 
to achieve. But since that level of trust and satisfaction the people 
in this country have for Medicare is a fundamental measure of this 
program's success, changing the

[[Page H8797]]

Medicare rules was a high-stakes exercise that we, bipartisanly, were 
able to achieve.
  I am confident that the changes encompassed in this bill are in the 
best interest of beneficiaries, most importantly; also to providers and 
taxpayers, and I encourage my colleagues to support it.
  Mr. TAUZIN. Mr. Speaker, I am pleased to yield 2 minutes to the 
gentleman from Florida (Mr. Bilirakis), the distinguished chairman of 
the Subcommittee on Health of the Committee on Energy and Commerce.
  Mr. BILIRAKIS. Mr. Speaker, I too rise today in support of patients. 
The legislation before us is good for patients. By reducing regulatory 
burdens and easing paperwork requirements, this legislation allows 
doctors to spend more of their time providing health care and less of 
their time wading through pages over rules and regulations.
  At the beginning of this session, the Committee on Energy and 
Commerce launched an ambitious bipartisan initiative to reform the 
Centers for Medicare and Medicaid Services and to put patients first. 
This initiative became known as the ``patients first'' project. Much of 
the legislation before us today stems from the committee's work on this 
project, which was led by my colleague, the gentleman from Georgia (Mr. 
Norwood). Foundational to this work was the prior work of the gentleman 
from Pennsylvania (Mr. Toomey) and the gentlewoman from Nevada (Ms. 
Berkley).
  The bill we will vote on today includes many of the provisions of the 
Medicare RACER Act, which was favorably reported out of my Subcommittee 
on Health as well as the full Committee on Energy and Commerce last 
month. It includes improvements focused on the Emergency Medical 
Treatment and Labor Act. Also included in the legislation is important 
language regarding advanced beneficiary notices. This language allows 
physicians to find out whether a specific physician service they are 
providing will be covered by Medicare before delivering the care.
  Mr. Speaker, I would like to thank all of the staff who put so much 
time into this legislation, especially Erin Kuhls, Julie Corcoran, 
Nandan Kenkeremath, Pat Morriset, Anne Esposito, Steve Tilton, Karen 
Folk, Amy Hall, and, of course, last but not least, Karen Taylor.
  H.R. 3391 is good for patients and providers alike, and I encourage 
my fellow colleagues to vote in favor of this legislation today.
  Mr. BROWN of Ohio. Mr. Speaker, I yield 3 minutes to the gentleman 
from Michigan (Mr. Dingell), the ranking Democrat on the Committee on 
Energy and Commerce that was here and presided over this House when 
Medicare was passed in 1965.
  (Mr. DINGELL asked and was given permission to revise and extend his 
remarks.)
  Mr. DINGELL. Mr. Speaker, I thank my good friend for yielding me this 
time, and I rise today to speak in favor of H.R. 3391, the Medicare 
Regulatory and Contracting Reform Act of 2001. I rise also to praise my 
colleagues on the committee, the distinguished chairman of the 
committee, the distinguished chairman of the subcommittee, and my good 
friend, the gentleman from Ohio, Mr. Brown and others, including the 
very fine staffs on both sides of the aisle that worked so hard.
  The legislation is a product of bipartisan collaboration between two 
great committees, the Committee on Energy and Commerce and the 
Committee on Ways and Means, and also with seniors' groups, providers, 
and others. This is a bill which is fair. It strikes a balance between 
addressing the program administration concerns of beneficiaries and 
providers and ensuring integrity of the program itself.
  This legislation makes a number of wise improvements in the Medicare 
program. It gives the Centers for Medicare and Medicaid Services, CMS, 
additional flexibility with claims processors. It also strengthens the 
independent standards for appeals. It entitles the beneficiaries and 
the reviewers to ensure independent appeals are really independent, are 
fair, and in fact take place.
  I do wish again to commend my friend, the gentleman from Louisiana 
(Mr. Tauzin), the gentleman from Florida (Mr. Bilirakis), the staff at 
CMS, as well as my good friend the gentleman from Ohio, for their work 
on this, and also our friends on the Committee on Ways and Means and 
the majority and minority staff of both committees for the work they 
have done.
  In addition to strengthening the requirements for organizations that 
will be reviewing appeals, we have improved upon notices that 
beneficiaries receive when a service is denied, making this situation 
more user friendly and understandable to beneficiaries who are most 
often in their later years. More importantly, we have developed a 
process where seniors can learn whether or not a particular item and 
service is covered under Medicare before they are financially committed 
to that service, something which is not presently the case and which 
creates immense hardship either by denying benefits or imposing 
unanticipated costs on senior citizens on fixed and limited incomes.
  Currently the only way a senior can find out if Medicare covers an 
item or a service is to potentially risk thousands of his or her 
dollars by getting the service and then pray Medicare will pay the 
claim. Obviously, this is unfair, and many seniors choose not to get a 
service rather than take a chance that Medicare will not cover it. This 
legislation fixes this, a situation which is clearly unjust. And while 
the provision as it stands now is limited only to physician service in 
order to meet scoring requirements, I hope, and I intend that in the 
future we will give the beneficiaries this right for all Medicare 
services.

                              {time}  1730

  Mr. Speaker, I urge my colleagues to support the bill. Medicare is 
the most socially successful and valuable program of this day. The 
program works for beneficiaries and providers alike, but we must ensure 
that it continues to be a success. The Medicare Regulatory and 
Contracting Reform Act will do just that.
  More remains to be done, and I look forward to working with the same 
fine colleagues that I did to bring this about. The Medicare 
legislation that we have before us ensures that Medicare fee for 
services will continue to serve beneficiaries, and it will cause 
further approval and satisfaction with one of our great legislative 
accomplishments, Medicare.
  Mr. TAUZIN. Mr. Speaker, I yield 2 minutes to the gentleman from 
Pennsylvania (Mr. Toomey), the author of this legislation, who, 
together with the gentlewoman from Nevada (Ms. Berkley), put together 
240 co-sponsors.
  (Mr. TOOMEY asked and was given permission to revise and extend his 
remarks.)
  Mr. TOOMEY. Mr. Speaker, I thank the gentleman from Louisiana (Mr. 
Tauzin) for yielding me the time and also thank the gentleman for 
recognizing my efforts in the area of Medicare regulatory reform and 
for inviting me to join in with the Committee on Energy and Commerce in 
developing this terrific compromise legislation.
  Since my first term in Congress, I have been working on Medicare 
regulatory reform to help alleviate some of the burdens that the health 
care providers carry when dealing with Medicare's bureaucracy. We need 
to give health care providers due process rights so they are not 
treated like criminals when they make honest mistakes. We need to make 
billing procedures easier for providers to understand and comply with 
and reduce the huge volume of paperwork that staff have to contend 
with.
  This is important so health care providers can spend more time caring 
for their patients and less time dealing with bureaucracy. This bill 
addresses these problems. It is a step in the right direction, but it 
is a modest step. We need to do more. For instance, we need profound 
Medicare reform. As long as we have a Medicare bureaucracy that 
enumerates, regulates, and prices every conceivable medical procedure, 
we will continue to have enormous costs and inefficiencies in complying 
with these staggering regulations. But we cannot wait until we fully 
overhaul Medicare to provide the significant regulatory relief of this 
bill.
  Mr. Speaker, I thank my colleagues who made this bill possible: the 
gentlewoman from Nevada (Ms. Berkley), the gentlewoman from Connecticut 
(Mrs. Johnson), the gentleman from California (Mr. Stark), the 
gentleman

[[Page H8798]]

from California (Chairman Thomas), the gentleman from New York (Mr. 
Rangel), the gentleman from Michigan (Mr. Dingell), the gentleman from 
Florida (Mr. Bilirakis), and the gentleman from Ohio (Mr. Brown).
  I also thank some staff members, Gary Blank, formerly of my staff, 
Kelly Weiss, currently with my staff, and Pat Morrisey of the commerce 
staff, in particular.
  Mr. Speaker, we take a big step forward today. I hope the same 
combination of the bipartisan group that worked on this bill can come 
back next year and do more work for health care providers and for their 
patients; but in the meantime, I urge my colleagues to pass H.R. 3391 
and give the health care community some of the regulatory relief that 
they need and deserve.
  Mr. BROWN of Ohio. Mr. Speaker, I yield 3 minutes to the gentleman 
from Texas (Mr. Green).
  Mr. GREEN of Texas. Mr. Speaker, I rise today in support of the 
Medicare Regulatory and Contracting Reform Act. The legislation makes a 
number of important changes to the way that Medicare does business, and 
it comes not a second too late.
  For years we have been hearing from doctors and providers who 
complain that they are spending more time dealing with Medicare 
paperwork than they are treating patients. They express frustration 
where simple mistakes escalated into full-fledged investigations, where 
well-intentioned providers were penalized and accused of defrauding the 
system, and insufficient appeals process made it difficult for 
providers to make their case. Many are ready to stop treating Medicare 
patients altogether.
  The Committee on Energy and Commerce passed legislation earlier this 
year that addresses many of these issues and would have made 
improvements in the Medicare system. Working with the Committee on Ways 
and Means, we were able to come up with a consensus bill that addressed 
the problem and makes the Medicare program more navigable for our 
Medicare providers. This legislation streamlines key Medicare processes 
so that providers are not trapped in a maze of confusing regulations.
  It improves provider information and education so that doctors know 
who to call and what to do when they have trouble with a claim. The 
legislation also reforms the contracting system by giving the Secretary 
greater flexibility in selecting contractors, assigning contractor 
functions, and permitting competitive contracting.
  There are many significant changes in the bill that will improve the 
Medicare system for providers and beneficiaries alike, and I support 
the legislation. I urge my colleagues to support this legislation.
  Mr. TAUZIN. Mr. Speaker, I yield 2 minutes to the gentleman from 
Georgia (Mr. Norwood).
  Mr. NORWOOD. Mr. Speaker, I rise today in strong support of H.R. 
3391. I commend it to all Members of this body, and I hope every Member 
will vote for this bill. No doubt the outcome of this vote will be 
noted by the body across the way, and it is important that we vote for 
something that is needed so badly.
  Mr. Speaker, I thank the gentleman from Louisiana (Mr. Tauzin) and 
the gentleman from Florida (Mr. Bilirakis) and the gentleman from 
Michigan (Mr. Dingell) and the gentleman from Ohio (Mr. Brown). And a 
great deal of credit and thanks should go to the Committee on Ways and 
Means, especially to the gentlewoman from Connecticut (Mrs. Johnson). 
On the commerce staff, I thank Pat Morrisey. He put up with a lot to 
get us here, and Erin Kuhls, Julie Corcoran, and Bridgett Taylor. They 
worked so hard to get us to where we are today.
  Many Members have mentioned the good things that are in this bill. 
There are a lot of good things. I particularly would like to highlight 
the benefit that will be made available to patients for them to 
actually know if Medicare will cover a benefit that is a covered 
benefit. That is called preauthorization or predetermination, and 
probably in the end there is not much more in this bill that will be 
more important to the quality of care for Medicare patients to actually 
get treated.
  But I note, as the gentlewoman from Connecticut (Mrs. Johnson) has 
said, that this is a first step. I hope we will all recognize that, and 
I would like to have a colloquy with the gentlewoman from Connecticut 
(Mrs. Johnson) and the gentleman from Florida (Mr. Bilirakis); and I 
will ask both the question at the same time.
  Although many good things have been done in this bill, this is a 
first step and I want to be part of working these two committees 
together next year and I would like to hear from both Members. Can we 
plan to move forward next year?
  Mrs. JOHNSON of Connecticut. Mr. Speaker, will the gentleman yield?
  Mr. NORWOOD. I yield to the gentlewoman from Connecticut.
  Mrs. JOHNSON of Connecticut. Mr. Speaker, I can guarantee the 
gentleman that we will work together next year. We learned a lot this 
year. We solved some problems that we can understand. We laid aside 
what we could not understand. There is lots more work to be done to 
make Medicare a smart and efficient program.
  Mr. BILIRAKIS. Mr. Speaker, will the gentleman yield?
  Mr. NORWOOD. I yield to the gentleman from Florida.
  Mr. BILIRAKIS. Mr. Speaker, as the gentleman knows because he was in 
the room last week, I put my life on the line in terms of a question 
that was asked, and the gentleman from Louisiana (Chairman Tauzin) did, 
too; not the chairman's life, my life, on the line.
  I will not go quite that far this time around, but I feel very 
strongly that this is a first step. There is a tremendous amount of 
work to be done.
  Mr. BROWN of Ohio. Mr. Speaker, I reserve the balance of my time.
  Mr. TAUZIN. Mr. Speaker, I yield 1 minute to the gentleman from Iowa 
(Mr. Ganske).
  Mr. GANSKE. Mr. Speaker, I thank the gentleman for yielding me this 
time.
  Mr. Speaker, there is a provision that many have spoken of already 
that actually was something that I brought up and proved to be one of 
the more difficult things to work out between the two committees and 
that was on the predetermination of benefits.
  As a physician in the earlier 1990s when I was taking care of 
Medicare patients, sometimes we would do a procedure where it might or 
might not be considered medically necessary by Medicare. All that we 
wanted was to know whether Medicare would cover this or not. So at that 
time the data could be gathered together, send in the physical exam and 
tests, and Medicare would give their opinion. Then they stopped doing 
that. I think it scared a lot of patients from not having medically 
necessary procedures.
  Mr. Speaker, that has been worked out in this bill. I thank the 
members of both committees and both parties for working on this. I 
think this will be a big improvement for patients.
  Mr. TAUZIN. Mr. Speaker, I yield such time as he may consume to the 
gentleman from Indiana (Mr. Buyer).
  Mr. BUYER. Mr. Speaker, I rise in support of the Medicare Regulatory 
and Contracting Reform Act. I would like to express my appreciation to 
the gentleman from Louisiana (Mr. Tauzin), the gentleman from Florida 
(Mr. Bilirakis), the gentlewoman from Connecticut (Mrs. Johnson), the 
gentleman from Michigan (Mr. Dingell), and the gentleman from Ohio (Mr. 
Brown) for their assistance in working on the concern of dentists who 
often file Medicare claims even though the dental services are not 
covered by Medicare.
  The provision in the bill seeks to help reduce the paperwork burden 
on dentists and expedite payment for services from appropriate sources 
of that payment. In addition, I am grateful that language can be worked 
out that will assist the medical device manufacturing community, 
enhancing the communications and cooperation between the Food and Drug 
Administration and the Centers for Medicare and Medicaid Services. This 
is an excellent bill, and I urge its passage.
  Mr. CRANE. Mr. Speaker, I rise today in support of the Medicare 
Regulatory and Contracting Reform Act of 2001. This bipartisan 
legislation is the product of months of negotiations with the Center 
for Medicare and Medicaid Services (CMS), Medicare providers, 
beneficiaries, and the House Committees on Ways and Means and Energy 
and Commerce.
  This legislation is a first step in ensuring that the Medicare 
program delivers quality care to Medicare beneficiaries. Today, the

[[Page H8799]]

Medicare program has more that 110,000 pages of regulations governing 
it. This bill begins to finally address how to hold CMS accountable for 
its regulations and the costs they impose.
  The Medicare Regulatory and Contracting Reform Act creates a more 
collaborative, less confrontational relationship between providers and 
CMS. It takes steps to decrease the amount of complex and technical 
paperwork that is currently required so that providers will be able to 
spend more time delivering care to patients rather than filling out and 
filing federal forms. Finally, H.R. 3391 streamlines the regulatory 
process, enhances education and technical assistance for Medicare 
providers.
  I was also pleased to see inclusion of a provision to prohibit group 
health plans from requiring a Medicare claims determination for dental 
benefits that are specifically excluded from Medicare coverage as a 
condition of making a determination for coverage under the group health 
plan. This requirement to me does not serve any purpose other than the 
filing of needless paperwork and further delay payment to the dental 
provider. This provision ensures that dentists do not have to submit 
claims to the Medicare program (and thus enroll in the Medicare 
program) when the services they are providing are clearly those that 
are categorically excluded from coverage.
  I urge my colleagues to join me in support of this legislation.
  Mrs. CHRISTENSEN. Mr. Speaker, I rise in support of H.R. 3391, the 
Medicare Regulatory and Contracting Reform Act. As a physician in 
private practice for more than 20 years, I wholeheartedly applaud the 
work of the Ways and Means Committee and the Energy and Commerce 
Committee in moving legislation which lifts many of the burdens placed 
on physicians by the Medicare program and allow us to put our patients 
first.
  Mr. Speaker, I can't tell you the number of times over the four and a 
half years that I have been a member of this body that I have heard 
horror stories from providers in my district regarding the cumbersome 
and burdensome Medicare billing process. They only serve to remind me 
of my personal experience in over 21 years of practice. Whether it is 
undue delays in receiving payments or repeatedly questioning 
information that was already provided, the current Medicare system 
treats physicians as suspects and requires that we spend nearly half of 
our time on needless paper work. It further makes hard working 
providers the first targets for fee reductions, repudiating their long 
years of training and hard work.
  I applaud the authors of this legislation, Congresswoman Nancy 
Johnson and Pete Stark of the Ways and Means Committee, as well as 
Representatives Bilirakis, Sherrod Brown, Billy Tauzin and my friend 
John Dingell for their support of doctors and the patients that they 
serve. Indeed, Mr. Speaker, no less than the General Accounting Office 
documented the statements that I can personally attest to regarding the 
difficulties of dealing with the Medicare program, pointing out that 
Medicare is a complicated program requiring endless directives and long 
explanations and articles which are necessary to explain facet after 
facet.
  I urge my colleagues to support this badly needed bill which is but a 
first step in addressing what are myriad problems with this important 
health insurance program.
  Mr. SHADEGG. Mr. Speaker, I rise today to support the Medicare 
Regulatory and Contracting Reform Act. Since I have been in Congress, I 
have constantly heard from hospitals and physicians about the guessing 
game they must play in order to be compliant with Medicare regulations. 
The paperwork that providers must complete both for private insurance 
and for Medicare is overwhelming them. Where twenty years ago, it was 
uncommon to have more than one administrative person working in a 
physician's office, today it seems to be the norm to have multiple 
employees handling claims. Like a punch-drunk fighter, our nation's 
health care providers are dizzy from the barrage of notices, guidance, 
and issuances from Medicare describing ever-changing policies and 
regulations. Worse yet, many of these providers approach the billing 
process with trepidation. Fearful that they may be audited or have 
payments withheld, many physicians downcode so as to reduce their 
potential exposure even though they legitimately deserve reimbursement 
for a higher code. Moreover, a simple, honest mistake, providers fear, 
will result in harsh penalties and send them into a regulatory spiral, 
thus taking them away from their patients. This is one of the reasons I 
was a cosponsor of the Medicare Education and Regulatory Fairness Act 
and support the bill on the floor today. H.R. 3391 provides important 
reforms of the Medicare system to streamline Medicare's regulatory 
process, ease paperwork burdens, and improve Medicare's responsiveness 
to beneficiaries and health care providers.
  I am particularly pleased that H.R. 3391 includes provisions aimed at 
improving the functioning of the Emergency Medical Treatment and Active 
Labor Act, better known as EMTALA. While a well-intended provision to 
ensure that patients coming to hospital emergency departments are not 
shipped from hospital to hospital or ``dumped,'' EMTALA is now serving 
as an impediment to hospital emergency department access, the exact 
opposite of what the original legislation was intended to do. The 
provisions I included at the Full Committee markup include recreating 
the EMTALA task force, something suggested not only in the January 2001 
Inspector General's report, but also in the June 2001 GAO report. 
Physicians and providers are crying out for clarification and guidance 
on how to comply with the myriad, confusing EMTALA regulations and this 
task force will be charged to work synergistically to make the 
regulations manageable. In addition, the bill on the floor today 
implements another suggestion from the Inspector General, mandatory 
peer review organization. Under current law, a peer review organization 
must review any EMTALA deficiency or violation involving medical 
treatment before a civil monetary penalty can be levied, but the same 
does not apply to those providers facing removal from the Medicare 
program. The Medicare Regulatory and Contracting Reform Act will 
restore equity by requiring PRO review in the Medicare conditions of 
participation. Last, the bill will require the Centers for Medicare and 
Medicaid Services to notify providers directly when an EMTALA 
investigation is closed.
  Mr. Speaker, these are important provisions to address a complex 
situation--emergency department overcrowding--and I thank Chairman 
Tauzin for working with me in Committee as well as members of the Ways 
and Means Committee as we merged the two committee bills.
  Mr. UPTON. Mr. Speaker, on behalf of all of the physicians and other 
health professionals in my District who provide care to Medicare 
beneficiaries and on behalf of the beneficiaries themselves, I rise to 
express my strong support for H.R. 3391, the Medicare Regulatory and 
Contracting Reform Act of 2001. I am honored to be an original 
cosponsor of this bipartisan, common-sense bill that will provide much-
needed regulatory relief and greater program fairness, clarity, and 
transparency.
  From what I have been hearing for years now in my meetings with 
Medicare beneficiaries and health care providers across my District, 
the current program is simply not working well. Beneficiaries and 
health professionals often don't know if services will be covered, 
leading some beneficiaries to forgo needed care. It can take months--
and mounds of paperwork--just to get paid for health care services. 
I've seen the inch-thick paperwork that can be required just to 
document one claim.
  Doctors and other health professionals feel that they are practicing 
with a sword over their heads. The rules and regulations are so complex 
that the Medicare intermediaries and carriers all too often give 
conflicting advice and guidance. Regulations and guidance change so 
frequently that it is difficult to know what the rules are at any one 
time, and what they will be tomorrow. Making a simple mistake in coding 
or misunderstanding a program requirement, health professionals fear, 
could well open to a fraud charge. If a claim is denied, it can take 
several years to go through the current process for appealing that 
denial. Doctors are so frustrated with the program that they are 
retiring early, and some beneficiaries are having a hard time finding 
doctors willing to take them as patients once they turn 65.
  The Medicare Regulatory and Contracting Reform Act will give the 
Centers for Medicare and Medicaid Services the direction and 
flexibility needed to streamline the regulatory and contracting 
processes. It will provide strong incentives for intermediaries and 
carriers to be responsive to beneficiaries and health professionals. It 
will provide additional resources for provider education. One provision 
that could be particularly helpful for both beneficiaries and providers 
will test the effectiveness of placing Medicare experts in local Social 
Security offices so that questions and concerns can be addressed in a 
timely, accurate way. And when disputes do arise, Administrative Law 
Judges specifically trained in Medicare law and regulation will hear 
the cases.
  These are just a few of the reforms in this comprehensive, much-
needed bill.
  Mr. BENTSEN. Mr. Speaker, I rise today in strong support of the 
Medicare Regulatory and Contracting Reform Act (H.R. 3391), legislation 
which would reform our Medicare regulatory and contracting system. For 
too long, Medicare providers have encountered problems in resolving 
claims under the Medicare program. Today, many Medicare providers 
submit claims to their Medicare contractor who do not provide timely 
resolution for these claims. In addition, many Medicare providers face 
lengthy appeals which result in delayed reimbursements. This 
legislation would not only provide necessary regulatory relief to 
Medicare providers, but it would also ensure

[[Page H8800]]

that Medicare contracts are competitively bid so that taxpayers are 
paying the lowest price for these services.
  In order to help with better compliance by Medicare providers, this 
legislation would require that Medicare regulations should be 
promulgated only once a month. This bill requires the Department of 
Health and Human Services (HHS) to develop time lines for Center for 
Medicare and Medicaid Services (CMS) rules. As a result, Medicare 
providers would know when to expect changes in the Medicare system and 
would be able to plan for such changes. This measure prohibits 
regulations from being applied retroactively and requires that any 
substantive change in regulations from being applied retroactively and 
requires that any substantive change in regulations should not become 
effective until 30 days after the change has been announced. The bill 
also protects providers by ensuring that they cannot be sanctioned if 
they followed written guidance provide by HHS or by a contractor. 
Providers would also be eligible to call a new Medicare Ombudsman to 
assist Medicare providers with advice about Medicare regulations and 
rules.
  To ensure that contractors are more accountable to Medicare 
providers, this bill encourages HHS to competitively bid contracts for 
Medicare claims. This new procedure would eliminate the current system 
where health care providers can nominate entities to become Medicare 
contractors. We should eliminate this conflict of interest and would 
ensure that taxpayers receive the best value for this program.
  This bill allows providers to seek a hardship designation if they 
have received overpayments. Under this program, Medicare providers and 
suppliers could request to make repayments over a period of six months 
to three years if their obligation exceeds 10 percent of their annual 
payments from Medicare. In extreme circumstances, Medicare providers 
could apply for a five-year repayment schedule. Many medical small 
businesses which depend on Medicare for payments have requested this 
flexibility so that they continue to provide services to Medicare 
beneficiaries.
  This measure also includes several provisions related to physician 
payment fees. Under current law, these Medicare physician fees will be 
reduced by 5.9 percent effective January 1, 2001. For many physicians, 
this significant drop in Medicare payments will impose a financial 
burden and may result in fewer physicians being willing to participate 
in this program. This bill requires the General Accounting Office (GAO) 
to report of Congress on the conversion factor used to calculate 
physician payments and to make recommendations on how to reform it 
within 12 months. This GAO report would also examine whether the 
current sustainable growth formula for physician fees should be 
reformed I have been contacted by many physicians in my district who 
would be adversely impacted by this new fee schedule and I am committed 
to working to change these payments in a timely manner so that Medicare 
payments more accurately reflect the true cost of providing care for 
Medicare patients.
  As the representative for the Texas Medical Center, where many 
Medicare providers work, I urge my colleagues to support H.R. 3391 that 
will reform the Medicare program.
  Mr. CARDIN. Mr. Speaker, I rise today in strong support of the 
Medicare Regulatory and Contracting Reform Act of 2001. This bill is 
the result of months of collaborative efforts between Democrats and 
Republicans, between the ways and means and the Energy and Commerce 
Committees. In other words, it was developed the way that responsible 
Medicare legislation should be-in a bipartisan and deliberative manner.
  For too long, Congress has ignored the valid concerns of one of 
Medicare's most important assets--its health care providers. By easing 
regulatory burdens on physicians and allied health professionals, and 
by modifying the provider appeals process, this legislation speaks to 
some of the foremost concerns that have been brought to Congress by the 
dedicated health care professionals who participate in the Medicare 
program.
  This bill also provides important patient protections for 
beneficiaries--it guarantees them access to a truly independent 
external review process; it improves the advance beneficiary notice 
(ABN) process so that seniors may know in advance of receiving care 
whether the services will be reimbursed by Medicare; and it establishes 
a Beneficiary Ombudsman to assist seniors in navigating the Medicare 
program.
  As the Medicare+Choice program enters its fifth year, and enrollees 
across the country are witnessing their benefits reduced and their 
premiums increased, this bill contains an important beneficiary 
protection. It delays by one year the implementation of the enrollee 
``lock-in'' period, which will enable many seniors to move between HMOs 
as efforts are made to stabilize this program.
  The 1997 Balanced Budget Act imposed $1500 caps on physical, speech-
language, and occupational therapy. I have long supported replacing 
these caps with a rational payment mechanism. Congress has acted each 
year to delay these caps, which discriminate against the most frail 
beneficiaries. However, it is a waste of energy and resources for 
providers to return to Congress annually to seek a one-year moratorium 
on these caps. Medicare should implement a rational payment system that 
provides seniors with the level of care they need. We passed a law 
requiring the Secretary of Health and Human Services to establish a 
mechanism for assuring appropriate use of services and to study use of 
these services by last June. This bill directs the Secretary to produce 
these overdue reports so that Congress can enact sound reimbursement 
policy for outpatient therapy.
  Mr. Speaker, H.R. 3391 is a shining example of how Congress can act 
to greatly improve the Medicare program for beneficiaries and 
providers. I am pleased to be an original cosponsor of this legislation 
and I urge my colleagues to support it this evening.
  Mr. ENGLISH. Mr. Speaker, I rise in strong support of H.R. 3391, The 
Medicare Regulatory Reform Act of 2001. I urge my colleagues to vote in 
favor of this important legislation.
  The Occupational Safety and Health Administration (OSHA) estimates 
that each year 5.6 million workers in the health care industry are 
exposed to blood-borne diseases because of needlesticks. OSHA studies 
have shown that nurses sustain the majority of these injuries and that 
as many as one-third of all sharps injuries have been reported to be 
related to the disposal process.
  In addition, the Centers for Disease Control estimates that 62 to 88 
percent of sharps injuries can potentially be prevented by the use of 
safer medical devices. However, needlestick injuries and other sharps-
related injuries, that result in occupational blood-borne pathogens 
exposure, continue to be an important public health concern.
  H.R. 3391, The Medicare Regulatory Reform Act of 2001, includes a 
provision that will reduce needlestick injuries. This provision 
requires public hospitals, not otherwise covered by the OSHA rules, to 
meet the administration's standards which require employers to 
implement the use of safety-designed needles and sharps. The 
requirements will be established under Medicare statute and enforced 
through monetary fines similar to fines under OSHA. Violations would 
not cause hospitals to lose Medicare their eligibility.
  I also would like to take this opportunity to thank Subcommittee 
Chairwoman Nancy Johnson for not only including this provision to 
reduce needlestick injuries in the Medicare regulatory reform bill, but 
also for her many years of hard work on this issue. She has long been a 
champion of requiring public hospitals to use safety-designed needles 
and sharps. I was pleased to join her and Mr. Stark in this important 
effort.
  We have the technology to provide better protections for our 
healthcare workers. A vote in favor of this legislation ensures that 
hospitals are using state-of-the-art equipment while significantly 
reducing the risk to healthcare workers.
  Mr. KLECZKA. Mr. Speaker, I am pleased that the House of 
Representatives is considering the Medicare Regulatory and Contractor 
Reform Act of 2001 (H.R. 3391) on the suspension calendar today.
  This important, bipartisan legislation will address the very real and 
practical regulatory concerns health care providers, contractors, and 
beneficiaries are currently facing with the Medicare program. H.R. 3391 
helps providers and beneficiaries better understand the complexities of 
Medicare, while at the same time protecting the Federal Claims Act and 
maintaining strong efforts to eliminate waste, fraud and abuse. It is 
my hope that this legislation will allow providers to focus their 
attention on patients, and not bureaucracy.
  Of particular importance to me was the inclusion of language I 
offered during the Ways and Means Health Subcommittee markup that would 
establish a new Medicare Beneficiary Ombudsman. H.R. 2768, as 
originally introduced by the Ways and Means Committee, had included 
language requiring the U.S. Department of Health and Human Services 
(HHS) Secretary to appoint a Medicare Provider Ombudsman to provide 
confidential assistance to physicians and practitioners regarding 
complaints and grievances. I believed this point-of-contact should be 
extended to Medicare beneficiaries, who also have complex questions and 
receive conflicting guidance. I am pleased that my suggestion to create 
a comparable Beneficiary Ombudsman to serve as a voice for 
beneficiaries within the Centers of Medicare and Medicaid Services 
(CMS) was included. This provision should enable the Agency to better 
anticipate and address beneficiary needs.
  Furthermore, I requested language in Title II of the Act that would 
eliminate the provider

[[Page H8801]]

nomination provisions for contracting purposes. This provision 
effectively waives the prime contracts that the Centers of Medicare and 
Medicaid Services (CMS) currently has with national organizations and 
permits CMS to contract directly with entities during the transition 
period prior to the October 1, 2003 effective date without regard to 
competitive bidding procedures.
  I would like to express my sincere appreciation to both Ways and 
Means Health Subcommittee Chairwoman Johnson and Ranking Member Stark, 
and their respective staffs, for being so accommodating and working 
together to create responsible, well-targeted regulatory legislation.
  I urge my colleagues to support H.R. 3391, and I hope the Senate will 
work quickly to pass this legislation prior to the end of this 
Congressional Session.
  Mr. BROWN of Ohio. Mr. Speaker, I yield back the balance of my time.
  Mr. TAUZIN. Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore (Mr. Culberson). The question is on the 
motion offered by the gentlewoman from Connecticut (Mrs. Johnson) that 
the House suspend the rules and pass the bill, H.R. 3391.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds of 
those present have voted in the affirmative.
  Mr. TAUZIN. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the 
Chair's prior announcement, further proceedings on this motion will be 
postponed.

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