[Congressional Record (Bound Edition), Volume 147 (2001), Part 14]
[Senate]
[Pages 19767-19781]
[From the U.S. Government Publishing Office, www.gpo.gov]


[[Page 19767]]

          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. KENNEDY:
  S. 1544. A bill to direct the Secretary of Transportation to give 
certain workers who have lost their jobs as a result of the terrorist 
attacks of September 11, 2001, priority in hiring for aviation-


related security positions; to the Committee on Commerce, Science, and 
Transportation.
  Mr. KENNEDY. Mr. President it's a privilege to introduce this bill to 
ensure that laid-off aviation industry workers receive first priority 
when the Federal Government and private security firms under Federal 
contracts hire new employees. Identical legislation was introduced last 
week in the House of Representatives by Representative Jane Harman of 
California, and I commend her for her leadership.
  Under our legislation, the Secretary of Transportation will develop 
regulations giving priority in such hiring for aviation-related 
security positions to qualified airline workers who were laid-off as a 
result of the September 11 terrorist attacks.
  Those attacks have had a devastating impact on large numbers of the 
men and women who work in aviation and related industries. Immense job 
losses have taken place. Since September 11, layoffs of more than 
140,000 aviation workers have been announced, and nearly 80,000 of 
those workers are already out of work. Clearly, Congress should do all 
it can to help the men and women in the industry who have lost their 
jobs. These workers should get preference for training and new 
employment opportunities.
  Last week, the Senate passed the aviation security bill that 
federalizes airport security, including 18,000 baggage screeners and 
10,000 other security-related positions. The bill that Representative 
Harman and I am sponsoring gives first priority in hiring for these 
airport security jobs to the thousands of men and women who were 
working in the aviation industry and at airports before September 11, 
and who have been laid off as a result of the terrorist attacks.
  The time to help these workers is now. We must help these workers get 
back to work. One of the most effective ways to do that is by giving 
preference to those who lost their jobs for these airport security 
positions. I urge my colleagues to help these dedicated men and women 
by supporting this important legislation.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  Without objection, it is so ordered.

                                S. 1544

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

     SECTION 1. PRIORITY IN HIRING.

       Not later than 30 days after the date of enactment of this 
     Act, the Secretary of Transportation shall issue regulations 
     directing that the Department of Transportation, agencies 
     within the Department, and private companies contracted to 
     provide aviation-related security shall give first priority 
     in hiring, for employment related to security at airports and 
     on aircraft operated by air carriers in air transportation 
     and intrastate air transportation, to individuals who--
       (1) were employed before September 11, 2001--
       (A) in a security-related position at an airport;
       (B) by an air carrier;
       (C) at a facility at, or immediately adjacent to, an 
     airport;
       (D) in providing transportation to or from an airport; or
       (E) in other employment directly related to commercial 
     aviation;
       (2) have been laid off, terminated, released, or otherwise 
     lost their jobs as a result of the terrorist attacks of 
     September 11, 2001; and
       (3) are qualified for those positions or for training 
     programs needed to qualify for those positions.
                                 ______
                                 
      By Mr. INHOFE:
  S. 1545. A bill to amend title XVIII of the Social Security Act to 
provide regulatory relief and contracting flexibility under the 
Medicare Program; to the Committee on Finance.
  Mr. INHOFE. Mr. President, Today I rise to introduce the Medicare 
Regulatory and Contracting Reform Act of 2001.
  I do so at this time because, within the past month, I have received 
two letters from Medicare Contractors who are withdrawing their 
services from some Oklahoma counties and other markets across the 
country. One letter reads, ``. . .over-regulation will force health 
plans to make the difficult decision to withdraw from some markets. . 
.''. Nearly half a million seniors will lose their Medicare+Choice 
health coverage this year. This is unacceptable. Over-regulation and 
reimbursement issues plague many Medicare contractors and providers. If 
we do not act to alleviate the ills of this system, more and more 
Americans will suffer the consequence.
  This legislation will substantially alter the current system to 
reduce the regulatory burden on Medicare providers, carriers, fiscal 
intermediaries and beneficiaries, and it will improve the efficiency 
and quality of the contracting system by which Medicare operates on a 
daily basis.
  In order to help providers, carriers, and beneficiaries understand 
and implement Medicare regulations, this legislation consolidates the 
rule-making process for the Secretary of the Department of Health and 
Human Services, HHS. It also provides for the education and training of 
all parties involved. Should this bill become law, the Secretary of HHS 
will be required to utilize the mechanisms of competition and 
incentives in the Medicare contracting process. Both competition and 
incentives increase performance and quality of service. Streamlining 
the claims-appeals process to expedite reviews and amending the process 
of payment recovery will further benefit providers. This legislation 
enhances the technical support for small rural providers that currently 
do not have the resources to comply with electronic billing 
requirements. Finally, to directly assist Medicare recipients, this 
bill establishes a resource person to answer questions and work through 
obstacles that arise in the health care process.
  Passage of this legislation is necessary to stabilize and strengthen 
a Medicare system that is disintegrating. I am confident that we can 
bring about beneficial change for millions of Americans who depend on 
Medicare. I hope that my colleagues will join me in this effort.
  Mr. INHOFE. Mr. President, I ask unanimous consent that the text of 
the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1545

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

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

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

Sec. 1. Short title; amendments to Social Security Act; table of 
              contents.
Sec. 2. Issuance of regulations.
Sec. 3. Compliance with changes in regulations and policies.
Sec. 4. Increased flexibility in medicare administration.
Sec. 5. Provider education and technical assistance.
Sec. 6. Small provider technical assistance demonstration program.
Sec. 7. Medicare Provider Ombudsman.
Sec. 8. Provider appeals.
Sec. 9. Recovery of overpayments and prepayment review; enrollment of 
              providers.
Sec. 10. Beneficiary outreach demonstration program.
Sec. 11. Policy development regarding evaluation and management (E & M) 
              documentation guidelines.

       (d) Construction.--Nothing in this Act shall be construed--
       (1) to compromise or affect existing legal authority for 
     addressing fraud or abuse, whether it be criminal 
     prosecution, civil enforcement, or administrative remedies, 
     including under sections 3729 through 3733 of title 31, 
     United States Code (known as the False Claims Act); or
       (2) to prevent or impede the Department of Health and Human 
     Services in any way from its ongoing efforts to eliminate 
     waste, fraud, and abuse in the medicare program.

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

     SEC. 2. ISSUANCE OF REGULATIONS.

       (a) Consolidation of Promulgation to Once a Month.--

[[Page 19768]]

       (1) In general.--Section 1871 (42 U.S.C. 1395hh) is amended 
     by adding at the end the following new subsection:
       ``(d) The Secretary shall issue proposed or final 
     (including interim final) regulations to carry out this title 
     only on one business day of every month unless publication on 
     another date is necessary to comply with requirements under 
     law.''.
       (2) Report on publication of regulations on a quarterly 
     basis.--Not later than 3 years after the date of the 
     enactment of this Act, the Secretary of Health and Human 
     Services shall submit to Congress a report on the feasibility 
     of requiring that regulations described in section 1871(d) of 
     the Social Security Act only be promulgated on a single day 
     every calendar quarter.
       (3) Effective date.--The amendment made by paragraph (1) 
     shall apply to regulations promulgated on or after the date 
     that is 30 days after the date of the enactment of this Act.
       (b) Regular Timeline for Publication of Final Rules.--
       (1) In general.--Section 1871(a) (42 U.S.C. 1395hh(a)) is 
     amended by adding at the end the following new paragraph:
       ``(3) The Secretary, in consultation with the Director of 
     the Office of Management and Budget, shall establish a 
     regular timeline for the publication of final regulations 
     based on the previous publication of a proposed regulation or 
     an interim final regulation. Such timeline may vary among 
     different regulations based on differences in the complexity 
     of the regulation, the number and scope of comments received, 
     and other relevant factors. In the case of interim final 
     regulations, upon the expiration of the regular timeline 
     established under this paragraph for the publication of a 
     final regulation after opportunity for public comment, the 
     interim final regulation shall not continue in effect unless 
     the Secretary publishes a notice of continuation of the 
     regulation that includes an explanation of why the regular 
     timeline was not complied with. If such a notice is 
     published, the regular timeline for publication of the final 
     regulation shall be treated as having begun again as of the 
     date of publication of the notice.''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall take effect on the date of the enactment of this Act. 
     The Secretary of Health and Human Services shall provide for 
     an appropriation transition to take into account the backlog 
     of previously published interim final regulations.
       (c) Limitations on New Matter in Final Regulations.--
       (1) In general.--Section 1871(a) (42 U.S.C. 1395hh(a)), as 
     amended by subsection (b), is further amended by adding at 
     the end the following new paragraph:
       ``(4) Insofar as a final regulation (other than an interim 
     final regulation) includes a provision that is not a logical 
     outgrowth of the relevant notice of proposed rulemaking 
     relating to such regulation, that provision shall be treated 
     as a proposed regulation and shall not take effect until 
     there is the further opportunity for public comment and a 
     publication of the provision again as a final regulation.''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall apply to final regulations published on or after the 
     date of the enactment of this Act.

     SEC. 3. COMPLIANCE WITH CHANGES IN REGULATIONS AND POLICIES.

       (a) No Retroactive Application of Substantive Changes; 
     Timeline for Compliance With Substantive Changes After 
     Notice.--Section 1871 (42 U.S.C. 1395hh), as amended by 
     section 2(a), is amended by adding at the end the following 
     new subsection:
       ``(e)(1)(A) A substantive change in regulations, manual 
     instructions, interpretative rules, statements of policy, or 
     guidelines of general applicability under this title shall 
     not be applied (by extrapolation or otherwise) retroactively 
     to items and services furnished before the date the change 
     was issued, unless the Secretary determines that such 
     retroactive application would have a positive impact on 
     beneficiaries or providers of services, physicians, 
     practitioners, and other suppliers or would be necessary to 
     comply with statutory requirements.
       ``(B) No compliance action shall be made against a provider 
     of services, physician, practitioner, or other supplier with 
     respect to noncompliance with such a substantive change for 
     items and services furnished on or before the date that is 30 
     days after the date of issuance of the change, unless the 
     Secretary provides otherwise.''.
       (b) Reliance on Guidance.--Section 1871(e), as added by 
     subsection (a), is further amended by adding at the end the 
     following new paragraph:
       ``(2) If--
       ``(A) a provider of services, physician, practitioner, or 
     other supplier follows the written guidance provided by the 
     Secretary or by a medicare contractor (as defined in section 
     1889(f)) acting within the scope of the contractor's contract 
     authority with respect to the furnishing of items or services 
     and submission of a claim for benefits for such items or 
     services;
       ``(B) the Secretary determines that the provider of 
     services, physician, practitioner, or supplier has accurately 
     presented the circumstances relating to such items, services, 
     and claim to the contractor in writing; and
       ``(C) the guidance was in error;

     the provider of services, physician, practitioner or supplier 
     shall not be subject to any sanction if the provider of 
     services, physician, practitioner, or supplier reasonably 
     relied on such guidance.''.

     SEC. 4. INCREASED FLEXIBILITY IN MEDICARE ADMINISTRATION.

       (a) Consolidation and Flexibility in Medicare 
     Administration.--
       (1) In general.--Title XVIII is amended by inserting after 
     section 1874 the following new section:


          ``contracts with medicare administrative contractors

       ``Sec. 1874A. (a) Authority.--
       ``(1) Authority to enter into contracts.--The Secretary may 
     enter into contracts with any entity to serve as a medicare 
     administrative contractor with respect to the performance of 
     any or all of the functions described in paragraph (3) or 
     parts of those functions (or, to the extent provided in a 
     contract, to secure performance thereof by other entities).
       ``(2) Medicare administrative contractor defined.--For 
     purposes of this title and title XI:
       ``(A) In general.--The term `medicare administrative 
     contractor' means an agency, organization, or other person 
     with a contract under this section.
       ``(B) Appropriate medicare administrative contractor.--With 
     respect to the performance of a particular function or 
     activity in relation to an individual entitled to benefits 
     under part A or enrolled under part B, or both, a specific 
     provider of services, physician, practitioner, or supplier 
     (or class of such providers of services, physicians, 
     practitioners, or suppliers), the `appropriate' medicare 
     administrative contractor is the medicare administrative 
     contractor that has a contract under this section with 
     respect to the performance of that function or activity in 
     relation to that individual, provider of services, physician, 
     practitioner, or supplier or class of provider of services, 
     physician, practitioner, or supplier.
       ``(3) Functions described.--The functions referred to in 
     paragraph (1) are payment functions, provider services 
     functions, and beneficiary services functions as follows:
       ``(A) Determination of payment amounts.--Determining 
     (subject to the provisions of section 1878 and to such review 
     by the Secretary as may be provided for by the contracts) the 
     amount of the payments required pursuant to this title to be 
     made to providers of services, physicians, practitioners, and 
     suppliers.
       ``(B) Making payments.--Making payments described in 
     subparagraph (A).
       ``(C) Beneficiary education and assistance.--Serving as a 
     center for, and communicating to individuals entitled to 
     benefits under part A or enrolled under part B, or both, with 
     respect to education and outreach for those individuals, and 
     assistance with specific issues, concerns or problems of 
     those individuals.
       ``(D) Provider consultative services.--Providing 
     consultative services to institutions, agencies, and other 
     persons to enable them to establish and maintain fiscal 
     records necessary for purposes of this title and otherwise to 
     qualify as providers of services, physicians, practitioners, 
     or suppliers.
       ``(E) Communication with providers.--Serving as a center 
     for, and communicating to providers of services, physicians, 
     practitioners, and suppliers, any information or instructions 
     furnished to the medicare administrative contractor by the 
     Secretary, and serving as a channel of communication from 
     such providers, physicians, practitioners, and suppliers to 
     the Secretary.
       ``(F) Provider education and technical assistance.--
     Performing the functions described in subsections (e) and 
     (f), relating to provider education, training, and technical 
     assistance.
       ``(G) Additional functions.--Performing such other 
     functions as are necessary to carry out the purposes of this 
     title.
       ``(4) Relationship to mip contracts.--
       ``(A) Nonduplication of duties.--In entering into contracts 
     under this section, the Secretary shall assure that functions 
     of medicare administrative contractors in carrying out 
     activities under parts A and B do not duplicate functions 
     carried out under the Medicare Integrity Program under 
     section 1893. The previous sentence shall not apply with 
     respect to the activity described in section 1893(b)(5) 
     (relating to prior authorization of certain items of durable 
     medical equipment under section 1834(a)(15)).
       ``(B) Construction.--An entity shall not be treated as a 
     medicare administrative contractor merely by reason of having 
     entered into a contract with the Secretary under section 
     1893.
       ``(b) Contracting Requirements.--
       ``(1) Use of competitive procedures.--
       ``(A) In general.--Notwithstanding any law with general 
     applicability to Federal acquisition and procurement and 
     except as provided in subparagraph (B), the Secretary shall 
     use competitive procedures when entering into contracts with 
     medicare administrative contractors under this section.
       ``(B) Renewal of contracts.--The Secretary may renew a 
     contract with a medicare administrative contractor under this

[[Page 19769]]

     section from term to term without regard to section 5 of 
     title 41, United States Code, or any other provision of law 
     requiring competition, if the medicare administrative 
     contractor has met or exceeded the performance requirements 
     applicable with respect to the contract and contractor.
       ``(C) Transfer of functions.--Functions may be transferred 
     among medicare administrative contractors in accordance with 
     the provisions of this paragraph. The Secretary shall ensure 
     that performance quality is considered in such transfers.
       ``(D) Incentives for quality.--The Secretary shall provide 
     financial incentives and such other incentives as the 
     Secretary determines appropriate for medicare administrative 
     contractors to provide quality service and to promote 
     efficiency.
       ``(2) Compliance with requirements.--No contract under this 
     section shall be entered into with any medicare 
     administrative contractor unless the Secretary finds that 
     such medicare administrative contractor will perform its 
     obligations under the contract efficiently and effectively 
     and will meet such requirements as to financial 
     responsibility, legal authority, and other matters as the 
     Secretary finds pertinent.
       ``(3) Development of specific performance requirements.--In 
     developing contract performance requirements, the Secretary 
     shall develop performance requirements to carry out the 
     specific requirements applicable under this title to a 
     function described in subsection (a)(3).
       ``(4) Information requirements.--The Secretary shall not 
     enter into a contract with a medicare administrative 
     contractor under this section unless the contractor agrees--
       ``(A) to furnish to the Secretary such timely information 
     and reports as the Secretary may find necessary in performing 
     his functions under this title; and
       ``(B) to maintain such records and afford such access 
     thereto as the Secretary finds necessary to assure the 
     correctness and verification of the information and reports 
     under subparagraph (A) and otherwise to carry out the 
     purposes of this title.
       ``(5) Surety bond.--A contract with a medicare 
     administrative contractor under this section may require the 
     medicare administrative contractor, and any of its officers 
     or employees certifying payments or disbursing funds pursuant 
     to the contract, or otherwise participating in carrying out 
     the contract, to give surety bond to the United States in 
     such amount as the Secretary may deem appropriate.
       ``(c) Terms and Conditions.--
       ``(1) In general.--A contract with any medicare 
     administrative contractor under this section may contain such 
     terms and conditions as the Secretary finds necessary or 
     appropriate and may provide for advances of funds to the 
     medicare administrative contractor for the making of payments 
     by it under subsection (a)(3)(B).
       ``(2) Prohibition on mandates for certain data 
     collection.--The Secretary may not require, as a condition of 
     entering into a contract under this section, that the 
     medicare administrative contractor match data obtained other 
     than in its activities under this title with data used in the 
     administration of this title for purposes of identifying 
     situations in which the provisions of section 1862(b) may 
     apply.
       ``(d) Limitation on Liability of Medicare Administrative 
     Contractors and Certain Officers.--
       ``(1) Certifying officer.--No individual designated 
     pursuant to a contract under this section as a certifying 
     officer shall, in the absence of negligence or intent to 
     defraud the United States, be liable with respect to any 
     payments certified by the individual under this section.
       ``(2) Disbursing officer.--No disbursing officer shall, in 
     the absence of negligence or intent to defraud the United 
     States, be liable with respect to any payment by such officer 
     under this section if it was based upon an authorization 
     (which meets the applicable requirements for such internal 
     controls established by the Comptroller General) of a 
     certifying officer designated as provided in paragraph (1) of 
     this subsection.
       ``(3) Liability of medicare administrative contractor.--A 
     medicare administrative contractor shall be liable to the 
     United States for a payment referred to in paragraph (1) or 
     (2) if, in connection with such payment, an individual 
     referred to in either such paragraph acted with gross 
     negligence or intent to defraud the United States.''.
       (2) Consideration of incorporation of current law 
     standards.--In developing contract performance requirements 
     under section 1874A(b) of the Social Security Act, as 
     inserted by paragraph (1), the Secretary of Health and Human 
     Services shall consider inclusion of the performance 
     standards described in sections 1816(f)(2) of such Act 
     (relating to timely processing of reconsiderations and 
     applications for exemptions) and section 1842(b)(2)(B) of 
     such Act (relating to timely review of determinations and 
     fair hearing requests), as such sections were in effect 
     before the date of the enactment of this Act.
       (b) Conforming Amendments to Section 1816 (Relating to 
     Fiscal Intermediaries).--Section 1816 (42 U.S.C. 1395h) is 
     amended as follows:
       (1) The heading is amended to read as follows:


        ``provisions relating to the administration of part a''.

       (2) Subsection (a) is amended to read as follows:
       ``(a) The administration of this part shall be conducted 
     through contracts with medicare administrative contractors 
     under section 1874A.''.
       (3) Subsection (b) is repealed.
       (4) Subsection (c) is amended--
       (A) by striking paragraph (1); and
       (B) in each of paragraphs (2)(A) and (3)(A), by striking 
     ``agreement under this section'' and inserting ``contract 
     under section 1874A that provides for making payments under 
     this part''.
       (5) Subsections (d) through (i) are repealed.
       (6) Subsections (j) and (k) are each amended--
       (A) by striking ``An agreement with an agency or 
     organization under this section'' and inserting ``A contract 
     with a medicare administrative contractor under section 1874A 
     with respect to the administration of this part''; and
       (B) by striking ``such agency or organization'' and 
     inserting ``such medicare administrative contractor'' each 
     place it appears.
       (7) Subsection (l) is repealed.
       (c) Conforming Amendments to Section 1842 (Relating to 
     Carriers).--Section 1842 (42 U.S.C. 1395u) is amended as 
     follows:
       (1) The heading is amended to read as follows:


        ``provisions relating to the administration of part b''.

       (2) Subsection (a) is amended to read as follows:
       ``(a) The administration of this part shall be conducted 
     through contracts with medicare administrative contractors 
     under section 1874A.''.
       (3) Subsection (b) is amended--
       (A) by striking paragraph (1);
       (B) in paragraph (2)--
       (i) by striking subparagraphs (A) and (B);
       (ii) in subparagraph (C), by striking ``carriers'' and 
     inserting ``medicare administrative contractors''; and
       (iii) by striking subparagraphs (D) and (E);
       (C) in paragraph (3)--
       (i) in the matter before subparagraph (A), by striking 
     ``Each such contract shall provide that the carrier'' and 
     inserting ``The Secretary'';
       (ii) in subparagraph (B), in the matter before clause (i), 
     by striking ``to the policyholders and subscribers of the 
     carrier'' and inserting ``to the policyholders and 
     subscribers of the medicare administrative contractor'';
       (iii) by striking subparagraphs (C), (D), and (E);
       (iv) in subparagraph (H)--

       (I) by striking ``it'' and inserting ``the Secretary''; and
       (II) by striking ``carrier'' and inserting ``medicare 
     administrative contractor''; and

       (v) in the seventh sentence, by inserting ``medicare 
     administrative contractor,'' after ``carrier,''; and
       (D) by striking paragraph (5); and
       (E) in paragraph (7) and succeeding paragraphs, by striking 
     ``the carrier'' and inserting ``the Secretary'' each place it 
     appears.
       (4) Subsection (c) is amended--
       (A) by striking paragraph (1);
       (B) in paragraph (2), by striking ``contract under this 
     section which provides for the disbursement of funds, as 
     described in subsection (a)(1)(B),'' and inserting ``contract 
     under section 1874A that provides for making payments under 
     this part shall provide that the medicare administrative 
     contractor'';
       (C) in paragraph (4), by striking ``a carrier'' and 
     inserting ``medicare administrative contractor'';
       (D) in paragraph (5), by striking ``contract under this 
     section which provides for the disbursement of funds, as 
     described in subsection (a)(1)(B), shall require the 
     carrier'' and inserting ``contract under section 1874A that 
     provides for making payments under this part shall require 
     the medicare administrative contractor''; and
       (E) by striking paragraph (6).
       (5) Subsections (d), (e), and (f) are repealed.
       (6) Subsection (g) is amended by striking ``carrier or 
     carriers'' and inserting ``medicare administrative contractor 
     or contractors''.
       (7) Subsection (h) is amended--
       (A) in paragraph (2)--
       (i) by striking ``Each carrier having an agreement with the 
     Secretary under subsection (a)'' and inserting ``The 
     Secretary''; and
       (ii) by striking ``Each such carrier'' and inserting ``The 
     Secretary''; and
       (B) in paragraph (3)(A)--
       (i) by striking ``a carrier having an agreement with the 
     Secretary under subsection (a)'' and inserting ``medicare 
     administrative contractor having a contract under section 
     1874A that provides for making payments under this part''; 
     and
       (ii) by striking ``such carrier'' and inserting ``such 
     contractor''.
       (d) Effective Date; Transition Rule.--
       (1) Effective date.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall take 
     effect on October 1, 2003, and the Secretary of Health and 
     Human Services is authorized to take such

[[Page 19770]]

     steps before such date as may be necessary to implement such 
     amendments on a timely basis.



       (2) General transition rules.--(A) The Secretary shall take 
     such steps as are necessary to provide for an appropriate 
     transition from contracts under section 1816 and section 1842 
     of the Social Security Act (42 U.S.C. 1395h, 1395u) to 
     contracts under section 1874A, as added by subsection (a)(1).
       (B) Any such contract under such sections 1816 or 1842 
     whose periods begin before or during the 1-year period that 
     begins on the first day of the fourth calendar month that 
     begins after the date of enactment of this Act may be entered 
     into without regard to any provision of law requiring the use 
     of competitive procedures.
       (3) Authorizing continuation of mip functions under current 
     contracts and agreements and under rollover contracts.--The 
     provisions contained in the exception in section 1893(d)(2) 
     of the Social Security Act (42 U.S.C. 1395ddd(d)(2)) shall 
     continue to apply notwithstanding the amendments made by this 
     section, and any reference in such provisions to an agreement 
     or contract shall be deemed to include a contract under 
     section 1874A of such Act, as inserted by subsection (a)(1), 
     that continues the activities referred to in such provisions.
       (e) References.--On and after the effective date provided 
     under subsection (d), any reference to a fiscal intermediary 
     or carrier under title XI or XVIII of the Social Security Act 
     (or any regulation, manual instruction, interpretative rule, 
     statement of policy, or guideline issued to carry out such 
     titles) shall be deemed a reference to an appropriate 
     medicare administrative contractor (as provided under section 
     1874A of the Social Security Act).
       (f) Secretarial Submission of Legislative Proposal.--Not 
     later than 6 months after the date of the enactment of this 
     Act, the Secretary of Health and Human Services shall submit 
     to the appropriate committees of Congress a legislative 
     proposal providing for such technical and conforming 
     amendments in the law as are required by the provisions of 
     this section.

     SEC. 5. PROVIDER EDUCATION AND TECHNICAL ASSISTANCE.

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


             ``provider education and technical assistance

       ``Sec. 1889. (a) Coordination of Education Funding.--The 
     Secretary shall coordinate the educational activities 
     provided through medicare contractors (as defined in 
     subsection (i), including under section 1893) in order to 
     maximize the effectiveness of Federal education efforts for 
     providers of services, physicians, practitioners, and 
     suppliers.''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall take effect on the date of the enactment of this Act.
       (3) Report.--Not later than October 1, 2002, the Secretary 
     of Health and Human Services shall submit to Congress a 
     report that includes a description and evaluation of the 
     steps taken to coordinate the funding of provider education 
     under section 1889(a) of the Social Security Act, as added by 
     paragraph (1).
       (b) Incentives To Improve Contractor Performance.--
       (1) In general.--Section 1874A, as added by section 
     4(a)(1), is amended by adding at the end the following new 
     subsection:
       ``(e) Incentives To Improve Contractor Performance in 
     Provider Education and Outreach.--
       ``(1) Methodology to measure contractor error rates.--In 
     order to give medicare administrative contractors an 
     incentive to implement effective education and outreach 
     programs for providers of services, physicians, 
     practitioners, and suppliers, the Secretary shall develop and 
     implement by October 1, 2002, a methodology to measure the 
     specific claims payment error rates of such contractors in 
     the processing or reviewing of medicare claims.
       ``(2) Identification of best practices.--The Secretary 
     shall identify the best practices developed by individual 
     medicare administrative contractors for educating providers 
     of services, physicians, practitioners, and suppliers and how 
     to encourage the use of such best practices nationwide.''.
       (2) Report.--Not later than October 1, 2003, the Secretary 
     of Health and Human Services shall submit to Congress a 
     report that describes how the Secretary intends to use the 
     methodology developed under section 1874A(e)(1) of the Social 
     Security Act, as added by paragraph (1), in assessing 
     medicare contractor performance in implementing effective 
     education and outreach programs, including whether to use 
     such methodology as the basis for performance bonuses.
       (c) Provision of Access to and Prompt Responses From 
     Medicare Administrative Contractors.--
       (1) In general.--Section 1874A, as added by section 4(a)(1) 
     and as amended by subsection (b), is further amended by 
     adding at the end the following new subsection:
       ``(f) Response to Inquiries; Toll-Free Lines.--
       ``(1) Contractor responsibility.--Each medicare 
     administrative contractor shall, for those providers of 
     services, physicians, practitioners, and suppliers which 
     submit claims to the contractor for claims processing--
       ``(A) respond in a clear, concise, and accurate manner to 
     specific billing and cost reporting questions of providers of 
     services, physicians, practitioners, and suppliers;
       ``(B) maintain a toll-free telephone number at which 
     providers of services, physicians, practitioners, and 
     suppliers may obtain information regarding billing, coding, 
     and other appropriate information under this title;
       ``(C) maintain a system for identifying who provides the 
     information referred to in subparagraphs (A) and (B); and
       ``(D) monitor the accuracy, consistency, and timeliness of 
     the information so provided.
       ``(2) Evaluation.--In conducting evaluations of individual 
     medicare administrative contractors, the Secretary shall take 
     into account the results of the monitoring conducted under 
     paragraph (1)(D). The Secretary shall, in consultation with 
     organizations representing providers of services, physicians, 
     practitioners, and suppliers, establish standards relating to 
     the accuracy, consistency, and timeliness of the information 
     so provided.''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall take effect October 1, 2002.
       (d) Improved Provider Education and Training.--
       (1) In general.--Section 1889, as added by subsection (a), 
     is amended by adding at the end the following new 
     subsections:
       ``(b) Enhanced Education and Training.--
       ``(1) Additional resources.--For each of fiscal years 2003 
     and 2004, there are authorized to be appropriated to the 
     Secretary (in appropriate part from the Federal Hospital 
     Insurance Trust Fund and the Federal Supplementary Medical 
     Insurance Trust Fund) $10,000,000.
       ``(2) Use.--The funds made available under paragraph (1) 
     shall be used to increase the conduct by medicare contractors 
     of education and training of providers of services, 
     physicians, practitioners, and suppliers regarding billing, 
     coding, and other appropriate items.
       ``(c) Tailoring Education and Training Activities for Small 
     Providers or Suppliers.--
       ``(1) In general.--Insofar as a medicare contractor 
     conducts education and training activities, it shall tailor 
     such activities to meet the special needs of small providers 
     of services or suppliers (as defined in paragraph (2)).
       ``(2) Small provider of services or supplier.--In this 
     subsection, the term `small provider of services or supplier' 
     means--
       ``(A) an institutional provider of services with fewer than 
     25 full-time-equivalent employees; or
       ``(B) a physician, practitioner, or supplier with fewer 
     than 10 full-time-equivalent employees.''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall take effect on October 1, 2002.
       (e) Requirement To Maintain Internet Sites.--
       (1) In general.--Section 1889, as added by subsection (a) 
     and as amended by subsection (d), is further amended by 
     adding at the end the following new subsection:
       ``(c) Internet Sites; FAQs.--The Secretary, and each 
     medicare contractor insofar as it provides services 
     (including claims processing) for providers of services, 
     physicians, practitioners, or suppliers, shall maintain an 
     Internet site which provides answers in an easily accessible 
     format to frequently asked questions relating to providers of 
     services, physicians, practitioners, and suppliers under the 
     programs under this title and title XI insofar as it relates 
     to such programs.''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall take effect on October 1, 2002.
       (f) Additional Provider Education Provisions.--
       (1) In general.--Section 1889, as added by subsection (a) 
     and as amended by subsections (d) and (e), is further amended 
     by adding at the end the following new subsections:
       ``(d) Encouragement of Participation in Education Program 
     Activities.--A medicare contractor may not use a record of 
     attendance at (or failure to attend) educational activities 
     or other information gathered during an educational program 
     conducted under this section or otherwise by the Secretary to 
     select or track providers of services, physicians, 
     practitioners, or suppliers for the purpose of conducting any 
     type of audit or prepayment review.
       ``(e) Construction.--Nothing in this section or section 
     1893(g) shall be construed as providing for disclosure by a 
     medicare contractor--
       ``(1) of the screens used for identifying claims that will 
     be subject to medical review; or
       ``(2) of information that would compromise pending law 
     enforcement activities or reveal findings of law enforcement-
     related audits.
       ``(f) Definitions.--For purposes of this section, the term 
     `medicare contractor' includes the following:
       ``(1) A medicare administrative contractor with a contract 
     under section 1874A, including a fiscal intermediary with a 
     contract

[[Page 19771]]

     under section 1816 and a carrier with a contract under 
     section 1842.
       ``(2) An eligible entity with a contract under section 
     1893.

     Such term does not include, with respect to activities of a 
     specific provider of services, physician, practitioner, or 
     supplier an entity that has no authority under this title or 
     title IX with respect to such activities and such provider of 
     services, physician, practitioner, or supplier.''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall take effect on the date of the enactment of this Act.

     SEC. 6. SMALL PROVIDER TECHNICAL ASSISTANCE DEMONSTRATION 
                   PROGRAM.

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

     SEC. 7. MEDICARE PROVIDER OMBUDSMAN.

       (a) In General.--Section 1868 (42 U.S.C. 1395ee) is 
     amended--
       (1) by adding at the end of the heading the following: ``; 
     medicare provider ombudsman'';
       (2) by inserting ``Practicing Physicians Advisory 
     Council.--(1)'' after ``(a)'';
       (3) in paragraph (1), as so redesignated under paragraph 
     (2), by striking ``in this section'' and inserting ``in this 
     subsection'';
       (4) by redesignating subsections (b) and (c) as paragraphs 
     (2) and (3), respectively; and
       (5) by adding at the end the following new subsection:
       ``(b) Medicare Provider Ombudsman.--The Secretary shall 
     appoint a Medicare Provider Ombudsman. The Ombudsman shall--
       ``(1) provide assistance, on a confidential basis, to 
     providers of services, physicians, practitioners, and 
     suppliers with respect to complaints, grievances, and 
     requests for information concerning the programs under this 
     title (including provisions of title XI insofar as they 
     relate to this title and are not administered by the Office 
     of the Inspector General of the Department of Health and 
     Human Services) and in the resolution of unclear or 
     conflicting guidance given by the Secretary and medicare 
     contractors to such providers of services, physicians, 
     practitioners, and suppliers regarding such programs and 
     provisions and requirements under this title and such 
     provisions; and
       ``(2) submit recommendations to the Secretary for 
     improvement in the administration of this title and such 
     provisions, including--
       ``(A) recommendations to respond to recurring patterns of 
     confusion in this title and such provisions (including 
     recommendations regarding suspending imposition of sanctions 
     where there is widespread confusion in program 
     administration), and
       ``(B) recommendations to provide for an appropriate and 
     consistent response (including not providing for audits) in 
     cases of self-identified overpayments by providers of 
     services, physicians, practitioners, and suppliers.''.
       (b) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary of Health and Human 
     Services (in appropriate part from the Federal Hospital 
     Insurance Trust Fund and the Federal Supplementary Medical 
     Insurance Trust Fund) to carry out the provisions of 
     subsection (b) of section 1868 (relating to the Medicare 
     Provider Ombudsman), as added by subsection (a)(5), amounts 
     as follows:
       (1) For fiscal year 2002, such sums as are necessary.
       (2) For fiscal year 2003, $8,000,000.
       (3) For fiscal year 2004, $17,000,000.
       (c) Report on Additional Funding.--Not later than October 
     1, 2003, the Secretary of Health and Human Services shall 
     submit to Congress a report that includes the Secretary's 
     estimate of the amount of additional funding necessary to 
     carry out such provisions of subsection (b) of section 1868, 
     as so added, in fiscal year 2005 and subsequent fiscal years.

     SEC. 8. PROVIDER APPEALS.

       (a) Medicare Administrative Law Judges.--Section 1869 (42 
     U.S.C. 1395ff), as amended by section 521(a) of Medicare, 
     Medicaid, and SCHIP Benefits Improvement and Protection Act 
     of 2000 (114 Stat. 2763A-534), as enacted into law by section 
     1(a)(6) of Public Law 106-554, is amended by adding at the 
     end the following new subsection:
       ``(g) Medicare Administrative Law Judges.--
       ``(1) Transition plan.--Not later than October 1, 2003, the 
     Commissioner of Social Security and the Secretary shall 
     develop and implement a plan under which administrative law 
     judges responsible solely for hearing cases under this title 
     (and related provisions in title XI) shall be transferred 
     from the responsibility of the Commissioner and the Social 
     Security Administration to the Secretary and the Department 
     of Health and Human Services. The plan shall include 
     recommendations with respect to--
       ``(A) the number of such administrative law judges and 
     support staff required to hear and decide such cases in a 
     timely manner; and
       ``(B) funding levels required for fiscal year 2004 and 
     subsequent fiscal years under this subsection to hear such 
     cases in a timely manner.
       ``(2) Increased financial support.--In addition to any 
     amounts otherwise appropriated, there are authorized to be 
     appropriated (in appropriate part from the Federal Hospital 
     Insurance Trust Fund and the Federal Supplementary Medical 
     Insurance Trust Fund) to the Secretary to increase the number 
     of administrative law judges under paragraph (1) and to 
     improve education and training opportunities for such judges 
     and their staffs, $5,000,000 for fiscal year 2003 and such 
     sums as are necessary for fiscal year 2004 and each 
     subsequent fiscal year.''.
       (b) Process for Expedited Access to Judicial Review.--
       (1) In general.--Section 1869(b) (42 U.S.C. 1395ff(b)) as 
     amended by Medicare, Medicaid, and SCHIP Benefits Improvement 
     and Protection Act of 2000 (114 Stat. 2763A-534), as enacted 
     into law by section 1(a)(6) of Public Law 106-554, is 
     amended--
       (A) in paragraph (1)(A), by inserting ``, subject to 
     paragraph (2),'' before ``to judicial review of the 
     Secretary's final decision''; and
       (B) by adding at the end the following new paragraph:
       ``(2) Expedited access to judicial review.--
       ``(A) In general.--The Secretary shall establish a process 
     under which a provider of

[[Page 19772]]

     service or supplier that furnishes an item or service or a 
     beneficiary who has filed an appeal under paragraph (1) 
     (other than an appeal filed under paragraph (1)(F)) may 
     obtain access to judicial review when a review panel 
     (described in subparagraph (D)), on its own motion or at the 
     request of the appellant, determines that it does not have 
     the authority to decide the question of law or regulation 
     relevant to the matters in controversy and that there is no 
     material issue of fact in dispute. The appellant may make 
     such request only once with respect to a question of law or 
     regulation in a case of an appeal.
       ``(B) Prompt determinations.--If, after or coincident with 
     appropriately filing a request for an administrative hearing, 
     the appellant requests a determination by the appropriate 
     review panel that no review panel has the authority to decide 
     the question of law or regulations relevant to the matters in 
     controversy and that there is no material issue of fact in 
     dispute and if such request is accompanied by the documents 
     and materials as the appropriate review panel shall require 
     for purposes of making such determination, such review panel 
     shall make a determination on the request in writing within 
     60 days after the date such review panel receives the request 
     and such accompanying documents and materials. Such a 
     determination by such review panel shall be considered a 
     final decision and not subject to review by the Secretary.
       ``(C) Access to judicial review.--
       ``(i) In general.--If the appropriate review panel--

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

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

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

       ``(iii) Venue.--Such action shall be brought in the 
     district court of the United States for the judicial district 
     in which the appellant is located (or, in the case of an 
     action brought jointly by more than one applicant, the 
     judicial district in which the greatest number of applicants 
     are located) or in the district court for the District of 
     Columbia.
       ``(iv) Interest on amounts in controversy.--Where a 
     provider of services or supplier seeks judicial review 
     pursuant to this paragraph, the amount in controversy shall 
     be subject to annual interest beginning on the first day of 
     the first month beginning after the 60-day period as 
     determined pursuant to clause (ii) and equal to the rate of 
     interest on obligations issued for purchase by the Federal 
     Hospital Insurance Trust Fund for the month in which the 
     civil action authorized under this paragraph is commenced, to 
     be awarded by the reviewing court in favor of the prevailing 
     party. No interest awarded pursuant to the preceding sentence 
     shall be deemed income or cost for the purposes of 
     determining reimbursement due providers of services or 
     suppliers under this Act.
       ``(D) Review panels.--For purposes of this subsection, a 
     `review panel' is an administrative law judge, the 
     Departmental Appeals Board, a qualified independent 
     contractor (as defined in subsection (c)(2)), or an entity 
     designated by the Secretary for purposes of making 
     determinations under this paragraph.''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall apply to appeals filed on or after October 1, 2002.
       (c) Requiring Full and Early Presentation of Evidence.--
       (1) In general.--Section 1869(b) (42 U.S.C. 1395ff(b)), as 
     amended by Medicare, Medicaid, and SCHIP Benefits Improvement 
     and Protection Act of 2000 (114 Stat. 2763A-534), as enacted 
     into law by section 1(a)(6) of Public Law 106-554, and as 
     amended by subsection (b), is further amended by adding at 
     the end the following new paragraph:
       ``(3) Requiring full and early presentation of evidence by 
     providers.--A provider of services or supplier may not 
     introduce evidence in any appeal under this section that was 
     not presented at the first external hearing or appeal at 
     which it could be introduced under this section, unless there 
     is good cause which precluded the introduction of such 
     evidence at a previous hearing or appeal.''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall take effect on October 1, 2002.
       (d) Provider Appeals on Behalf of Deceased Beneficiaries.--
       (1) In general.--Section 1869(b)(1)(C) (42 U.S.C. 
     1395ff(b)(1)(C)), as amended by Medicare, Medicaid, and SCHIP 
     Benefits Improvement and Protection Act of 2000 (114 Stat. 
     2763A-534), as enacted into law by section 1(a)(6) of Public 
     Law 106-554, is amended by adding at the end the following: 
     ``The Secretary shall establish a process under which, if 
     such an individual is deceased, the individual is deemed to 
     have provided written consent to the assignment of the 
     individual's right of appeal under this section to the 
     provider of services or supplier of the item or service 
     involved, so long as the estate of the individual, and the 
     individual's family and heirs, are not liable for paying for 
     the item or service and are not liable for any increased 
     coinsurance or deductible amounts resulting from any decision 
     increasing the reimbursement amount for the provider of 
     services or supplier.''.
       (2) Effective date.--Notwithstanding section 521(d) of the 
     Medicare, Medicaid, and SCHIP Benefits Improvement and 
     Protection Act of 2000, as enacted into law by section 
     1(a)(6) of Public Law 106-554, the amendment made by 
     paragraph (1) shall take effect on the date of the enactment 
     of this Act.

     SEC. 9. RECOVERY OF OVERPAYMENTS AND PREPAYMENT REVIEW; 
                   ENROLLMENT OF PROVIDERS.

       (a) Recovery of Overpayments and Prepayment Review.--
     Section 1893 (42 U.S.C. 1395ddd) is amended by adding at the 
     end the following new subsections:
       ``(f) Recovery of Overpayments and Prepayment Review.--
       ``(1) Use of repayment plans.--
       ``(A) In general.--If the repayment, within 30 days by a 
     provider of services, physician, practitioner, or other 
     supplier, of an overpayment under this title would constitute 
     a hardship (as defined in subparagraph (B)), subject to 
     subparagraph (C), the Secretary shall enter into a plan 
     (which meets terms and conditions determined to be 
     appropriate by the Secretary) with the provider of services, 
     physician, practitioner, or supplier for the offset or 
     repayment of such overpayment over a period of not longer 
     than 3 years. Interest shall accrue on the balance through 
     the period of repayment.
       ``(B) Hardship.--
       ``(i) In general.--For purposes of subparagraph (A), the 
     repayment of an overpayment (or overpayments) within 30 days 
     is deemed to constitute a hardship if--

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

       ``(ii) Rule of application.--The Secretary shall establish 
     rules for the application of this subparagraph in the case of 
     a provider of services, physician, practitioner, or supplier 
     that was not paid under this title during the previous year 
     or was paid under this title only during a portion of that 
     year.
       ``(iii) Treatment of previous overpayments.--If a provider 
     of services, physician, practitioner, or supplier has entered 
     into a repayment plan under subparagraph (A) with respect to 
     a specific overpayment amount, such payment amount shall not 
     be taken into account under clause (i) with respect to 
     subsequent overpayment amounts.
       ``(C) Exceptions.--Subparagraph (A) shall not apply if the 
     Secretary has reason to suspect that the provider of 
     services, physician, practitioner, or supplier may file for 
     bankruptcy or otherwise cease to do business or if there is 
     an indication of fraud or abuse committed against the 
     program.
       ``(D) Immediate collection if violation of repayment 
     plan.--If a provider of services, physician, practitioner, or 
     supplier fails to make a payment in accordance with a 
     repayment plan under this paragraph, the Secretary may 
     immediately seek to offset or otherwise recover the total 
     balance outstanding (including applicable interest) under the 
     repayment plan.
       ``(2) Limitation on recoupment until reconsideration 
     exercised.--
       ``(A) In general.--In the case of a provider of services, 
     physician, practitioner, or supplier that is determined to 
     have received an overpayment under this title and that seeks 
     a reconsideration of such determination under section 
     1869(b)(1), the Secretary may not take any action (or 
     authorize any other person, including any medicare 
     contractor, as defined in paragraph (9)) to recoup the 
     overpayment until the date the decision on the 
     reconsideration has been rendered.
       ``(B) Collection with interest.--Insofar as the 
     determination on such appeal is against the provider of 
     services, physician, practitioner, or supplier, interest on 
     the overpayment shall accrue on and after the date of the 
     original notice of overpayment. Insofar as such determination 
     against the provider of services, physician, practitioner, or 
     supplier is later reversed, the Secretary shall provide for 
     repayment of the amount recouped plus interest at the same 
     rate as would apply under the previous sentence for the 
     period in which the amount was recouped.
       ``(3) Standardization of random prepayment review.--
       ``(A) In general.--A medicare contractor may conduct random 
     prepayment review only to develop a contractor-wide or 
     program-wide claims payment error rates.
       ``(B) Construction.--Nothing in subparagraph (A) shall be 
     construed as preventing

[[Page 19773]]

     the denial of payments for claims actually reviewed under a 
     random prepayment review.
       ``(4) Limitation on use of extrapolation.--A medicare 
     contractor may not use extrapolation to determine overpayment 
     amounts to be recovered by recoupment, offset, or otherwise 
     unless--
       ``(A) there is a sustained or high level of payment error 
     (as defined by the Secretary); or
       ``(B) documented educational intervention has failed to 
     correct the payment error (as determined by the Secretary).
       ``(5) Provision of supporting documentation.--In the case 
     of a provider of services, physician, practitioner, or 
     supplier with respect to which amounts were previously 
     overpaid, a medicare contractor may request the periodic 
     production of records or supporting documentation for a 
     limited sample of submitted claims to ensure that the 
     previous practice is not continuing.
       ``(6) Consent settlement reforms.--
       ``(A) In general.--The Secretary may use a consent 
     settlement (as defined in subparagraph (D)) to settle a 
     projected overpayment.
       ``(B) Opportunity to submit additional information before 
     consent settlement offer.--Before offering a provider of 
     services, physician, practitioner, or supplier a consent 
     settlement, the Secretary shall--
       ``(i) communicate to the provider of services, physician, 
     practitioner, or supplier in a non-threatening manner that, 
     based on a review of the medical records requested by the 
     Secretary, a preliminary indication appears that there would 
     be an overpayment; and
       ``(ii) provide for a 45-day period during which the 
     provider of services, physician, practitioner, or supplier 
     may furnish additional information concerning the medical 
     records for the claims that had been reviewed.
       ``(C) Consent settlement offer.--The Secretary shall review 
     any additional information furnished by the provider of 
     services, physician, practitioner, or supplier under 
     subparagraph (B)(ii). Taking into consideration such 
     information, the Secretary shall determine if there still 
     appears to be an overpayment. If so, the Secretary--
       ``(i) shall provide notice of such determination to the 
     provider of services, physician, practitioner, or supplier, 
     including an explanation of the reason for such 
     determination; and
       ``(ii) in order to resolve the overpayment, may offer the 
     provider of services, physician, practitioner, or supplier--

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

     The opportunity provided under clause (ii)(I) does not waive 
     any appeal rights with respect to the alleged overpayment 
     involved.
       ``(D) Consent settlement defined.--For purposes of this 
     paragraph, the term `consent settlement' means an agreement 
     between the Secretary and a provider of services, physician, 
     practitioner, or supplier whereby both parties agree to 
     settle a projected overpayment based on less than a 
     statistically valid sample of claims and the provider of 
     services, physician, practitioner, or supplier agrees not to 
     appeal the claims involved.
       ``(7) Limitations on non-random prepayment review.--
       ``(A) Limitation on initiation of non-random prepayment 
     review.--A medicare contractor may not initiate non-random 
     prepayment review of a provider of services, physician, 
     practitioner, or supplier based on the initial identification 
     by that provider of services, physician, practitioner, or 
     supplier of an improper billing practice unless there is a 
     sustained or high level of payment error (as defined in 
     paragraph (4)(A)).
       ``(B) Termination of non-random prepayment review.--The 
     Secretary shall issue regulations relating to the 
     termination, including termination dates, of non-random 
     prepayment review. Such regulations may vary such a 
     termination date based upon the differences in the 
     circumstances triggering prepayment review.
       ``(8) Payment audits
       ``(A) Written notice for post-payment audits.--Subject to 
     subparagraph (C), if a medicare contractor decides to conduct 
     a post-payment audit of a provider of services, physician, 
     practitioner, or supplier under this title, the contractor 
     shall provide the provider of services, physician, 
     practitioner, or supplier with written notice of the intent 
     to conduct such an audit.
       ``(B) Explanation of findings for all audits.--Subject to 
     subparagraph (C), if a medicare contractor audits a provider 
     of services, physician, practitioner, or supplier under this 
     title, the contractor shall--
       ``(i) give the provider of services, physician, 
     practitioner, or supplier a full review and explanation of 
     the findings of the audit in a manner that is understandable 
     to the provider of services, physician, practitioner, or 
     supplier and permits the development of an appropriate 
     corrective action plan;
       ``(ii) inform the provider of services, physician, 
     practitioner, or supplier of the appeal rights under this 
     title; and
       ``(iii) give the provider of services, physician, 
     practitioner, or supplier an opportunity to provide 
     additional information to the contractor.
       ``(C) Exception.--Subparagraphs (A) and (B) shall not apply 
     if the provision of notice or findings would compromise 
     pending law enforcement activities or reveal findings of law 
     enforcement-related audits.
       ``(9) Definitions.--For purposes of this subsection:
       ``(A) Medicare contractor.--The term `medicare contractor' 
     has the meaning given such term in section 1889(f).
       ``(B) Random prepayment review.--The term `random 
     prepayment review' means a demand for the production of 
     records or documentation absent cause with respect to a 
     claim.
       ``(g) Notice of Over-Utilization of Codes.--The Secretary 
     shall establish a process under which the Secretary provides 
     for notice to classes of providers of services, physicians, 
     practitioners, and suppliers served by the contractor in 
     cases in which the contractor has identified that particular 
     billing codes may be overutilized by that class of providers 
     of services, physicians, practitioners, or suppliers under 
     the programs under this title (or provisions of title XI 
     insofar as they relate to such programs).''.
       (b) Provider Enrollment Process; Right of Appeal.--
       (1) In general.--Section 1866 (42 U.S.C. 1395cc) is 
     amended--
       (A) by adding at the end of the heading the following: ``; 
     enrollment processes''; and
       (B) by adding at the end the following new subsection:
       ``(j) Enrollment Process for Providers of Services, 
     Physicians, Practitioners, and Suppliers.--
       ``(1) In general.--The Secretary shall establish by 
     regulation a process for the enrollment of providers of 
     services, physicians, practitioners, and suppliers under this 
     title.
       ``(2) Appeal process.--Such process shall provide--
       ``(A) a method by which providers of services, physicians, 
     practitioners, and suppliers whose application to enroll (or, 
     if applicable, to renew enrollment) are denied are provided a 
     mechanism to appeal such denial; and
       ``(B) prompt deadlines for actions on applications for 
     enrollment (and, if applicable, renewal of enrollment) and 
     for consideration of appeals.''.
       (2) Effective date.--The Secretary of Health and Human 
     Services shall provide for the establishment of the 
     enrollment and appeal process under the amendment made by 
     paragraph (1) within 6 months after the date of the enactment 
     of this Act.
       (c) Process for Correction of Minor Errors and Omissions on 
     Claims Without Pursuing Appeals Process.--The Secretary of 
     Health and Human Services shall develop, in consultation with 
     appropriate medicare contractors (as defined in section 
     1889(f) of the Social Security Act, as inserted by section 
     5(f)(1)) and representatives of providers of services, 
     physicians, practitioners, and suppliers, a process whereby, 
     in the case of minor errors or omissions that are detected in 
     the submission of claims under the programs under title XVIII 
     of such Act, a provider of services, physician, practitioner, 
     or supplier is given an opportunity to correct such an error 
     or omission without the need to initiate an appeal. Such 
     process may include the ability to resubmit corrected claims.

     SEC. 10. BENEFICIARY OUTREACH DEMONSTRATION PROGRAM.

       (a) In General.--The Secretary of Health and Human Services 
     shall establish a demonstration program (in this section 
     referred to as the ``demonstration program'') under which 
     medicare specialists employed by the Department of Health and 
     Human Services provide advice and assistance to medicare 
     beneficiaries at the location of existing local offices of 
     the Social Security Administration.
       (b) Locations.--
       (1) In general.--The demonstration program shall be 
     conducted in at least 6 offices or areas. Subject to 
     paragraph (2), in selecting such offices and areas, the 
     Secretary shall provide preference for offices with a high 
     volume of visits by medicare beneficiaries.
       (2) Assistance for rural beneficiaries.--The Secretary 
     shall provide for the selection of at least 2 rural areas to 
     participate in the demonstration program. In conducting the 
     demonstration program in such rural areas, the Secretary 
     shall provide for medicare specialists to travel among local 
     offices in a rural area on a scheduled basis.
       (c) Duration.--The demonstration program shall be conducted 
     over a 3-year period.
       (d) Evaluation and Report.--
       (1) Evaluation.--The Secretary shall provide for an 
     evaluation of the demonstration program. Such evaluation 
     shall include an analysis of--
       (A) utilization of, and beneficiary satisfaction with, the 
     assistance provided under the program; and
       (B) the cost-effectiveness of providing beneficiary 
     assistance through out-stationing medicare specialists at 
     local social security offices.
       (2) Report.--The Secretary shall submit to Congress a 
     report on such evaluation and shall include in such report 
     recommendations regarding the feasibility of permanently out-
     stationing medical specialists at local social security 
     offices.

[[Page 19774]]



     SEC. 11. POLICY DEVELOPMENT REGARDING EVALUATION AND 
                   MANAGEMENT (E & M) DOCUMENTATION GUIDELINES.

       (a) In General.--The Secretary of Health and Human Services 
     may not implement any documentation guidelines for evaluation 
     and management physician services under the title XVIII of 
     the Social Security Act on or after the date of the enactment 
     of this Act unless the Secretary--
       (1) has developed the guidelines in collaboration with 
     practicing physicians and provided for an assessment of the 
     proposed guidelines by the physician community;
       (2) has established a plan that contains specific goals, 
     including a schedule, for improving the use of such 
     guidelines;
       (3) has conducted appropriate and representative pilot 
     projects under subsection (b) to test modifications to the 
     evaluation and management documentation guidelines; and
       (4) finds that the objectives described in subsection (c) 
     will be met in the implementation of such guidelines.

     The Secretary may make changes to the manner in which 
     existing evaluation and management documentation guidelines 
     are implemented to reduce paperwork burdens on physicians.
       (b) Pilot Projects To Test Evaluation and Management 
     Documentation Guidelines.--
       (1) Length and consultation.--Each pilot project under this 
     subsection shall--
       (A) be of sufficient length to allow for preparatory 
     physician and medicare contractor education, analysis, and 
     use and assessment of potential evaluation and management 
     guidelines; and
       (B) be conducted, in development and throughout the 
     planning and operational stages of the project, in 
     consultation with practicing physicians.
       (2) Range of pilot projects.--Of the pilot projects 
     conducted under this subsection--
       (A) at least one shall focus on a peer review method by 
     physicians (not employed by a medicare contractor) which 
     evaluates medical record information for claims submitted by 
     physicians identified as statistical outliers relative to 
     definitions published in the Current Procedures Terminology 
     (CPT) code book of the American Medical Association;
       (B) at least one shall be conducted for services furnished 
     in a rural area and at least one for services furnished 
     outside such an area; and
       (C) at least one shall be conducted in a setting where 
     physicians bill under physicians services in teaching 
     settings and at one shall be conducted in a setting other 
     than a teaching setting.
       (3) Banning of targeting of pilot project participants.--
     Data collected under this subsection shall not be used as the 
     basis for overpayment demands or post-payment audits.
       (4) Study of impact.--Each pilot project shall examine the 
     effect of the modified evaluation and management 
     documentation guidelines on--
       (A) different types of physician practices, including those 
     with fewer than 10 full-time-equivalent employees (including 
     physicians); and
       (B) the costs of physician compliance, including education, 
     implementation, auditing, and monitoring.
       (c) Objectives for Evaluation and Management Guidelines.--
     The objectives for modified evaluation and management 
     documentation guidelines developed by the Secretary shall be 
     to--
       (1) enhance clinically relevant documentation needed to 
     code accurately and assess coding levels accurately;
       (2) decrease the level of non-clinically pertinent and 
     burdensome documentation time and content in the physician's 
     medical record;
       (3) increase accuracy by reviewers; and
       (4) educate both physicians and reviewers.
       (d) Study of Simpler, Alternative Systems of Documentation 
     for Physician Claims.--
       (1) Study.--The Secretary of Health and Human Services 
     shall carry out a study of the matters described in paragraph 
     (2).
       (2) Matters described.--The matters referred to in 
     paragraph (1) are--
       (A) the development of a simpler, alternative system of 
     requirements for documentation accompanying claims for 
     evaluation and management physician services for which 
     payment is made under title XVIII of the Social Security Act; 
     and
       (B) consideration of systems other than current coding and 
     documentation requirements for payment for such physician 
     services.
       (3) Consultation with practicing physicians.--In designing 
     and carrying out the study under paragraph (1), the Secretary 
     shall consult with practicing physicians, including 
     physicians who are part of group practices.
       (4) Application of hipaa uniform coding requirements.--In 
     developing an alternative system under paragraph (2), the 
     Secretary shall consider requirements of administrative 
     simplification under part C of title XI of the Social 
     Security Act.
       (5) Report to congress.--The Secretary shall submit to 
     Congress a report on the results of the study conducted under 
     paragraph (1).
       (e) Definitions.--In this section--
       (1) the term ``rural area'' has the meaning given that term 
     in section 1886(d)(2)(D) of the Social Security Act, 42 
     U.S.C. 1395ww(d)(2)(D); and
       (2) the term ``teaching settings'' are those settings 
     described in section 415.150 of title 42, Code of Federal 
     Regulations.
                                 ______
                                 
      By Mr. ROBERTS:
  S. 1546. A bill to provide additional funding to combat bioterrorism; 
to the Committee on Agriculture, Nutrition, and Forestry.
  Mr. ROBERTS. Mr. President, I rise today to introduce the Bio-
Security in Agriculture Act of 2001. I refer to the security of 
agriculture, our crops, our livestock production.
  In the wake of September 11, we increased security of the Capitol, 
our government buildings, airports, sports venues, and businesses.
  We should do the same for our agriculture and our nation's food 
supply.
  I served 2 years as chairman of the Armed Services Subcommittee on 
Emerging Threats, and now as ranking member of the subcommittee. I'm 
also on the Intelligence Committee and a member of the Agriculture 
Committee.
  In numerous hearings on terrorism, we repeatedly asked top scientists 
and biowarfare experts to assess the greatest threats to our nation. 
One of their greatest concerns has been the susceptibility of U.S. 
agriculture and the impact an attack on it could have on the 
agriculture economy and the Nation's food supply.
  It would not be difficult to take a disease such as foot-and-mouth so 
prevalent in Europe and introduce it into the U.S. livestock herd. With 
the large number of cattle and livestock operations in close proximity 
to each other in our feedlots and hog facilities it could quickly 
become an epidemic.
  I consider this threat to be real. I know of no specific threat, but 
I can tell you 2 years ago, when we asked the FBI where is the 
probability and where is the risk, the probability was rather low. 
Since the foot-and-mouth disease epidemic overseas and since the events 
of September 11, I can assure my colleagues the probability is rated 
much higher. I am not going to get into classified information, but the 
risk would cause utter chaos in our country.
  Such an attack would be devastating. One estimate for California is a 
loss of $14 billion should foot and mouth disease break out in that 
state.
  We know that the former Soviet Union developed ``tons'' of biowarfare 
agents aimed at North American agriculture. These include FMD, 
glanders, rust diseases for wheat and rice, and Karnal Bunt in wheat. 
There are other diseases that could be introduced as well.
  The threat is real. Yet, our federal facilities to test and do 
research on both containment and prevention of these diseases are 
outdated and in need of repair. We have approximately $700 million in 
the pipeline to upgrade these facilities over the next 6 to 10 years. 
But we cannot wait for 6 to 10 years. We need to make the investment in 
these facilities and the research dollars now.
  Why is protecting agriculture from terrorist attack important? There 
are several reasons: Agriculture is one of the few sectors of the 
economy with a trade surplus; using numbers from 1999; agriculture and 
agribusiness related industries accounted for approximately 22 million 
jobs and 16.4 percent of GDP; The overall contribution to the Nation's 
GDP in 1999 was $1.5 trillion; and the cheap U.S. food supply kept the 
total portion of individual income spent on food to 10.4 percent, or 10 
and one half cents of every dollar, on food in 1999. The lowest percent 
of income spent on food of any country in the world.
  The loss of export markets resulting from the intentional 
introduction of these pathogens would be dramatic. The introduction of 
FMD or Karmal Bunt on a widespread basis could mean the total collapse 
of U.S. export markets.
  This would be devastating for a commodity such as wheat where 32 
percent of total production was exported in 1999 and to agriculture in 
general which is one of the few sectors of the economy that operates in 
a trade surplus. Also,

[[Page 19775]]

when an outbreak of FMD occurs, many of the animals are often killed to 
control the spread of the disease.
  If a massive herd reduction occurred, it could take several years to 
replace the lost numbers. Again the ripple effects are enormous. 
Individual producers will be impacted, feedlots and hog operations 
could be devastated, meat packers and their employees could be put out 
of business due to reduced slaughter numbers, and the grain markets 
would take enormous hits as there would be no where for the excess feed 
usage to go.
  The impact on our Nation of a widespread attack on agriculture could 
dwarf the airline and travel industry's loss from September 11.
  To keep this nightmare scenario from occurring, legislation is 
necessary to complete the facility upgrades needed to deal with this 
threat and to provide funding for the additional research to develop 
risk control methods, first responder response mechanisms, and 
development of vaccines and plant resistant varieties that are immune 
to these threats. The need is real, the timing is crucial, and it needs 
to be done now.
  The legislation I am introducing today will provide approximately 
$3.5 billion to improve and invest on a ``crash course'' to do the 
building upgrades and research we should have been doing for years.
  In fiscal year 2002, the bill calls for $1.1 billion, including: $101 
million to allow USDA to meet the security levels required under 
Presidential Decision Directive, PDD-67, for the animal and plant 
disease facilities at: Plum Island, NY; the National Animal Disease 
Center, Ames, IA; the Southeast Poultry Research Laboratory, Athens, 
GA; the Arthropod-Borne Animal Disease Research Laboratory, Laramie, 
WY; and the Foreign Disease Weed Science Laboratory, Fort Detrick, MD.
  We also provide $722.8 million in fiscal year 2002 to accelerate the 
planning, upgrading, and construction of four of the above named 
facilities, including: $234 million for the Plum Island facility; $129 
million to renovate the existing Biolevel 3 facilities and $105 million 
for planning and construction of a Biosafety level 4 facility; $381 
million for modernization of the facilities in Ames, IA; $78 million 
for the planning and design of the biocontainment laboratory for 
poultry research in Athens, GA; and $29.8 million for the Arthropod-
Born Animal Disease Laboratory, Laramie, WY.
  The bill provides $10 million in fiscal year 2002 for USDA to 
purchase, and distribute to each of the states, rapid diagnostic field 
tests that can give a definitive answer on suspected cases of FMD, 
Karnal bunt, anthrax, etc., in only 45 minutes.
  These test would represent a strengthened line of security replacing 
the current process where the sample is trucked to an airport, flown to 
one of the disease labs, tested, and then results are released anywhere 
from a day to 4 or 5 days later.
  We also make a significant investment in research with $2.71 billion 
provided over the next 10 years to continue work ARS is already doing 
with state universities and private industry, provide competitive 
grants for USDA to award to qualified universities and private 
organizations, and general funding for USDA to use in those areas where 
it determines we have the most pressing need.
  We have worked to keep from tying USDA's hands on this in order to 
allow them to respond to future needs or threats that may arise, but 
generally the research could include: Expanding on-the-spot diagnostic 
capabilities; conducting mapping of microorganisms and pests to 
pinpoint their geographical origins; genetically engineer diseases that 
will be effective against agents of bioterrorism concerns; improve 
plant resistance to potential introduced pathogens; create mass vaccine 
delivery systems for animals, poultry, and fish; conduct research with 
foreign countries to help reduce disease threats at the source and 
remove the natural sources of infectious agents and pests that 
terrorists or nations might easily access to threaten the United 
States; develop counter toxins; and develop economic models to assist 
in risk assessment and prioritization of efforts. Currently, it is 
difficult to determine the exact economic effect of an attack on the 
United States because the proper economic models do not exist.
  Finally, the bill provides $12 million each year for USDA to work in 
collaboration with the Oklahoma City counter-terrorism Institute.
  This is a significant amount of money. But it is an investment that 
requires our immediate attention. I do not want us to ignore this issue 
until it is too late.
  Nearly 2\1/2\ years ago, as chairman of the Emerging Threats 
Subcommittee, I warned at our first hearing that the World Trade Center 
was at risk of terrorist attack because of its symbolism of U.S. 
economic strength and indulgence. At the time, no one wanted to listen 
to the warning.
  I take no please in my prediction and the events of September 11. But 
I do not want us to ignore similar warnings and threats on 
agroterrorism until it is too late. If we do our 10.5 percent of 
disposable income spent on food in this country could well be a thing 
of the past.
  I urge my colleagues to support me in enacting the Biosecurity for 
Agriculture Act of 2001.
                                 ______
                                 
      By Mr. SHELBY:
  S. 1547. A bill amend the Internal Revenue Code of 1986 to extend and 
modify the credit for producing fuel from a nonconventional source, to 
the Committee on Finance.
  Mr. SHELBY. Mr. President, I rise today to introduce the 
Nonconventional Natural Gas Reliability Act. This body has moved 
forcefully and responsibly since the tragic events of September 11 to 
address the most pressing and immediate needs of the country. However, 
action on priorities such as comprehensive energy legislation, has been 
delayed but remains vitally important. As Congress moves forward to 
address this pressing issue, it is my belief that any comprehensive 
energy legislation must include provisions designed to increase access 
to North American natural gas supplies.
  Following the energy crisis of the 1970's, Section 29 of the Internal 
Revenue Code was enacted to provide a tax credit to encourage 
production of oil and gas from unconventional sources such as Coalbed 
Methane, Devonian Shale, Tight Rock Formations, and Tight Gas Sands. 
This credit has helped the industry invest in new technologies that 
allow us to recover large oil and gas deposits locked in various 
formations that are very expensive to develop.
  In 1998, the United States consumed 22 trillion cubic feet of natural 
gas. Over the next fifteen years that number is expected to exceed 31 
trillion cubic feet. Significant growth in consumption will be 
particularly evident in the area of electric generation, where 
environmental issues make natural gas the fuel of choice. The National 
Petroleum Council predicts that natural gas production by conventional 
means will remain relatively constant over the next several years, 
ultimately falling 7 to 9 trillion cubic feet short of what is needed.
  The Gas Technology Institute and the National Petroleum Council 
estimate that economic incentives may allow nonconventional natural gas 
to bridge to gap by providing an annual addition of 7 to 9 trillion 
cubic feet of natural gas to our domestic supply. Section 29 of the 
Internal Revenue code was designed to provide this economic incentive. 
For current production, ``section 29'' benefits expire at the end of 
next year and there are no incentives for new production.
  Today I am introducing ``section 29'' legislation which is designed 
to keep current ``section 29'' wells in production and provide the 
incentive for new wells to be brought on line. Providing a ``clean'' 
alternative to conventional natural gas, and keeping all of our 
existing sources of energy online will continue to be a priority for 
this great nation in the years to come. My legislation would provide 
section 29 credits for qualifying new wells and facilities through 
2009, and for the continuation of benefits to wells and facilities 
currently in production through 2006.

[[Page 19776]]

  Whether it is artificial fracturing of gas bearing formations, 
extensive dewatering, gas clean-up issues, these nonconventional 
resources can be significant more expensive to drill, to maintain, and 
to produce. Thus, it is important to support continued production at 
existing wells and facilities.
  There are few instances where the facts are more compelling and the 
conclusion so clear. Giving section 29 a new lease on life is a wise 
investment of taxpayer dollars that will result in lower natural gas 
prices and greater domestic energy supply. I encourage my colleagues to 
join with me in support of the Nonconventional Natural Gas Reliability 
Act.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1547

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Nonconventional Natural Gas 
     Reliability Act''.

     SEC. 2. EXTENSION AND MODIFICATION OF CREDIT FOR PRODUCING 
                   FUEL FROM A NONCONVENTIONAL SOURCE.

       (a) In General.--Section 29 of the Internal Revenue Code of 
     1986 (relating to credit for producing fuel from a 
     nonconventional source) is amended by adding at the end the 
     following new subsection:
       ``(h) Extension for Other Facilities.--
       ``(1) Extension for oil and certain gas.--In the case of a 
     well for producing qualified fuels described in subparagraph 
     (A) or (B)(i) of subsection (c)(1)--
       ``(A) Application of credit for new wells.--Notwithstanding 
     subsection (f), this section shall apply with respect to such 
     fuels--
       ``(i) which are produced from a well drilled after the date 
     of the enactment of this subsection and before January 1, 
     2007, and
       ``(ii) which are sold not later than the close of the 4-
     year period beginning on the date that such well is drilled, 
     or, if earlier, December 31, 2009.
       ``(B) Extension of credit for old wells.--Subsection (f)(2) 
     shall be applied by substituting `2007' for `2003' with 
     respect to wells described in subsection (f)(1)(A) with 
     respect to such fuels.
       ``(2) Extension period to commence with unadjusted credit 
     amount.--In determining the amount of credit allowable under 
     this section solely by reason of this subsection--
       ``(A) in the case of fuels sold during 2001 and 2002, the 
     dollar amount applicable under subsection (a)(1) shall be $3 
     (without regard to subsection (b)(2)), and
       ``(B) in the case of fuels sold after 2002, subparagraph 
     (B) of subsection (d)(2) shall be applied by substituting 
     `2002' for `1979'.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to fuel sold after the date of the enactment of 
     this Act.
                                 ______
                                 
      By Mr. LIEBERMAN (for himself, Ms. Mikulski, Mr. Bond, Mr. Frist, 
        and Mr. Domenici):
  S. 1549. A bill to provide for increasing the technically trained 
workforce in the United States; to the Committee on Health, Education, 
Labor, and Pensions.
  Mr. LIEBERMAN. Mr. President, I am proud to join Senators Mikulski, 
Bond, Frist, and Domenici in introducing an innovative response to one 
of the greatest challenges to the growth of the Innovation Economy, 
America's widening talent gap.
  Our technological prowess is unequaled in the world today, which is 
why, despite our recent slowdown and the aftershocks of the September 
11 attacks, we still have the strongest, most vibrant economy on the 
planet, and we obviously have no deficit of ingenuity and 
inventiveness.
  But our long-term competitive standing and economic security could 
well be at risk if we do not address a troubling trendline in our 
workforce, the mismatch between the demand and supply of workers with 
science and engineering training.
  The fact is, the number of jobs requiring significant technical 
skills is projected to grow by more than 50 percent in the United 
States over the next ten years. But outside of the life sciences, the 
number of degrees awarded in science and engineering has been flat or 
declining.
  This has helped fuel a well-chronicled shortage of qualified New 
Economy workers. We have tried to temporarily plug this human capital 
hole with a stopgap of foreign workers. But there is a broad consensus 
among high-tech leaders and policymakers that it would be a serious 
mistake to prolong this dependence and essentially put our GDP at the 
mercy of H1B's.
  That may sound like a bit of an overstatement to some. But the 
reality is that technological innovation is now widely understood to be 
the major driver of economic growth, not to mention a critical factor 
in our military superiority. And it is widely understood that we cannot 
expand our economy in the future if we don't take steps now to expand 
our domestic pool of brainpower, the next generation of people who will 
incubate and implement the next generation of ideas.
  Now, most answers to serious economic challenges flow from the 
private sector, which is where growth ultimately occurs. But there are 
things that the federal government can do to help, particularly when it 
comes to educating and training our workforce. We can provide 
leadership, focus, and not least of all resources, and that is the 
purpose of the bill we are introducing today.
  Our plan aims to fix a critical link in this ``tech talent'' gap, 
undergraduate education in science, math, engineering, and technology. 
It would create a new competitive grant program within the National 
Science Foundation that would encourage institutions of higher 
learning, from universities to community colleges, to increase the 
number of graduates in these disciplines.
  This is not another scholarship program, but a targeted, results-
driven initiative that goes straight to the gatekeepers. We're not 
asking them to change their admissions policies, but, in effect, to 
design new ``e-missions'' policies. Come up with effective ideas, and 
we will provide the dollars to make them work.
  For example, institutions could propose to add or strengthen the 
interdisciplinary components of undergraduate science education. Or 
they could establish targeted support programs for women and 
minorities, who are 54 percent of our total workforce, but only 22 
percent of scientists and engineers, to increase enrollment in these 
fields. Or they could partner with local technology companies to 
provide summer industry internships for ongoing research experience.
  The pilot program is authorized at $25 million for Fiscal Year 2002, 
but our bipartisan coalition hopes the level will rise over the next 
several years to approximately $200 million annually, based upon pilot 
program results. With that kind of seed money, we're optimistic 
thousands of promising new scientists and engineers will soon bloom.
  We realize that solving the undergraduate problem is not going to 
singlehandedly close our talent gap. We must also dramatically reform 
our K-12 public education system, through innovative initiatives such 
as Congressman Boehlert's math and science partnerships bill, and 
strengthen our national investment in R&D. But it is a vitally 
important piece of the productivity puzzle.
  For evidence of that, just look at the collection of letters of 
support we have received from industry, academia, and professional 
organizations, including letters from TechNet, a national network of 
CEOs and senior executives from the leading technology and 
biotechnology companies; the National Alliance of Business; and STANCO 
25 Professor of Economics at Stanford University, Paul Romer, a leading 
growth economist, whose pioneering research underscores the long-term 
talent crisis facing our Nation, and who helped us think through this 
bill.
  These industry, academic, and educational leaders recognize as do we, 
that in our knowledge-based economy, we must have people who know what 
they're doing, and that is why they have made this problem and our 
legislation a top priority. We are grateful for their knowledge and 
their support, and we look forward to working with them to better 
harvest the enormous potential of America's workforce.
  I ask unanimous consent that letters of support for the Tech Talent 
bill, from the following organizations and individuals, be printed in 
the Record:

[[Page 19777]]

TechNet, Professor Paul Romer, National Alliance of Business, 
Semiconductor Industry Association, American Astronomical Society, K-12 
Science, Mathematics, Engineering & Technology Coalition, General 
Electric, American Association of State Colleges and Universities, and 
the American Society for Engineering Education.
  There being no objection, the additional material was ordered to be 
printed in the Record, as follows:


                                                      TechNet,

                                   Palo Alto, CA, October 8, 2001.
     Hon. Joseph Lieberman,
     Hon. Bill Frist,
     Hon. Barbara Mikulski,
     Hon. Christopher S. ``Kit'' Bond,
     Hon. Pete Domenici,
     Hon. Sherwood Boehlert,
     Hon. John B. Larson.
       Dear Senators Lieberman, Frist, Mikulski, Bond, and 
     Domenici, and Representatives Boehlert, and Larson: On behalf 
     of TechNet's 250 technology industry executives, we are 
     writing to lend our strong endorsement and support for your 
     legislation to increase the technically trained workforce in 
     the United States: the Tech Talent Bill. TechNet considers 
     the lack of a highly skilled American workforce a serious 
     threat to our nation's future economic and technology growth.
       Recent economic studies have shown that technological 
     progress accounts for more then half of the U.S. economic 
     growth in the post-war period. Correspondingly, a workforce 
     highly trained in science, mathematics, engineering and 
     technology (SMET) is fundamental to our nation's ability to 
     remain competitive. Yet despite predictions that the number 
     of jobs requiring technical skills will grow by 51% over the 
     next decade, from the late 80's to the late 90's the number 
     of earned bachelor's degrees has decreased by 18% in 
     engineering and by 36% in math and computer science.
       We commend you for taking the lead with a bold and 
     innovative approach to reverse this perilous trend. The Tech 
     Talent bill would authorize funding for the National Science 
     Foundation (NSF) to distribute grants to colleges and 
     universities that agree to specific increases in the number 
     of students who are U.S. citizens or permanent residents 
     obtaining degrees in science, math, engineering and 
     technology. The NSF would solicit and competitively award 
     grants, based on a peer-review evaluation, to proposals from 
     colleges and universities with promising and innovative 
     programs to increase the number of graduates in the specified 
     disciplines.
       A well-prepared workforce coupled with a strong emphasis on 
     R&D is the only way to ensure a healthier, economically 
     solid, and technologically advanced future for America. We 
     appreciate your steadfast support of policies toward this 
     end, and we urge you to press forward with this legislation 
     in both chambers. Please let us know how we can best support 
     a swift passage of the Tech Talent bill. Thank you for 
     considering our views on this important issue.
           Best regards,
       Jim Barksdale, Partner, The Barksdale Group.
       John Doerr, Partner, Kleiner, Perkins, Claufield, & Byers.
       Rick White, President & CEO, TechNet.
       Carol Bartz, CEO & Chairman of the Board, Autodesk, Inc.
       Craig Barrett, CEO, Intel Corporation.
       Eric Benhamou, Chairman, 3Com.
       Hale Boggs, Partner, Manatt, Phelps & Phillips, LLP.
       Bob Brisco, CEO, CARSDIRECT.COM.
       Sheryle Bolton, Chairman & CEO, Scientific Learning 
     Corporation.
       Richard M. Burnes, Jr., Partner, Charles River Ventures.
       Daniel H. Case III, Chairman & CEO, JP Morgan H & Q.
       Bruce Claflin, President & CEO, 3Com.
       Ron Conway, Founder and General Partner, Angel Investors, 
     LLP.
       Joe Cullinane, CEO Telum Group, Inc.
       Dean DeBiase, Chairman Autoweb.
       Aart de Geus, CEO and Chairman, Synopsys.
       Paul Deninger, Chairman & CEO, Broadview International LLC.
       Gary Dickerson, Chief Operating Officer, KLA-Tencor 
     Corporation.
       William H. Draper III, General Partner, Draper Richards 
     L.P.
       Thomas J. Engibous, Chairman, President & CEO, Texas 
     Instruments.
       Carl Feldbaum, President, Biotechnology Industry 
     Organization.
       Boris Feldman, Partner, Wilson, Sonsini, Goodrich & Rosati.
       Ken Goldman, CFO, Siebel Systems.
       Christopher Greene, President & CEO, Greene Engineers.
       Michael D. Goldberg, Managing Director, JasperCapital.
       Nancy Heinen, Senior VP, General Counsel, Apple.
       Jeffrey O. Henley, Executive VP & CFO, Oracle Corporation.
       Bob Herbold, Executive Vice President & COO, Microsoft 
     Corporation.
       Casey Hoffman, CEO & Founder, Supportkids.com.
       Guy Hoffman, Venture Partner, TL Ventures.
       Kingdon R. Hughes, President, Rush Network.
       Scott Jones, Chairman & Chief Executive Officer, Escient.
       Nicholas Konidaris, CEO, Advantest America, Inc.
       David Lane, Partner, Diamondhead Venture Management LLC.
       Paul Lippe, CEO, SKOLAR.
       Arthur D. Levinson, PhD, Chairman & CEO, Genetech.
       Ken Levy, Chairman, KLA-Tencor Corporation.
       Lori P. Mirek, President & CEO, Currenex--Global Financial 
     Exchange.
       Henry Samueli, PhD, Co-Chairman & CTO, Broadcom 
     Corporation.
       Douglas G. Scrivner, General Counsel, Accenture.
       Stratton Sclavos, President & CEO, VeriSign Inc.
       Gary Shapiro, President & CEO, Consumer Electronics 
     Association.
       Rohit Shukla, President & CEO, LARTA.
       Gregory W. Slayton, President and CEO, ClickAction.
       Ted Smith, Chairman, FileNET.
       Robert W. Sterns, Principal, Sternhill Partners.
       George Sundheim III, President, Doty, Sundheim & Gilmore.
       John Young, Retired President & CEO, Hewlett Packard.
                                  ____

                                              Stanford University,


                                  Graduate School of Business,

                                   Stanford, CA, October 10, 2001.
     Senator Christopher Bond,
     Senator Pete Domenici,
     Senator William Frist,
     Senator Joseph Lieberman,
     Senator Barbara Mikulski,
                                                      U.S. Senate,
     Washington, DC.
       Dear Senators Bond, Domenici, Frist, Lieberman, and 
     Mikulski: Your Tech Talent bill will reinvigorate one of the 
     most successful policies in the history of our nation--
     government support for broad undergraduate training in 
     science and engineering. Since the end of the 19th century, 
     people trained in these areas have turned scientific 
     opportunity into technological progress. With their help, we 
     harnessed the twin engines of the market and technology. 
     Together, these engines powered the United States into our 
     current position of unchallenged worldwide political and 
     economic leadership.
       Unfortunately, success breeds complacency. In recent 
     decades, our achievements in undergraduate science education 
     have fallen behind those in many other countries.
       In the domain of the market, our government fostered growth 
     by doing less. It stood aside and gave people the freedom to 
     start new ventures, introduce new products, and improve on 
     old ways of doing things. By contrast, in the domain of 
     technology, our government fostered growth by doing more, but 
     in a way that supported market competition. The Morrill Acts 
     of 1862 and 1890 created a new type of university, one 
     committed not to an elite study of art or science for its own 
     sake. Instead, these new institutions emphasized the 
     practical application of knowledge. They offered instruction 
     in the ``agricultural and mechanic arts'' and the various 
     branches of science, with ``special reference to their 
     application in the industries of life.'' The land grant 
     universities created and supported by these acts helped many 
     more farmers and miners, tinkerers and inventors, 
     entrepreneurs and managers, engineers and researchers compete 
     in the market by developing new technologies or applying 
     technologies developed by others.
       Since World War II, the federal government has wisely 
     increased its support for basic research by current 
     university professors and graduate training of future 
     professors. Unfortunately, this support seems to have come at 
     the expense of our early commitment to undergraduate 
     education in science and engineering. At the beginning of the 
     20th century, this commitment put us far ahead of the rest of 
     the world. At the beginning of the 21st century, we lag 
     behind many other countries according to such basic measures 
     as the fraction of all 24-year-olds who receive an 
     undergraduate degree in engineering or the natural sciences.
       Your bill can begin our return to worldwide leadership in 
     undergraduate science and engineering education. It will 
     reward colleges and universities that devote more effort to 
     teaching, that develop innovative instructional materials, 
     that pull students into science instead of ``weeding them 
     out.''
       If we can increase the number of undergraduates who receive 
     science and engineering degrees our companies will have more 
     highly skilled workers. Our schools will have more math and 
     science teachers. Our Ph.D. programs will have more qualified 
     applicants. Our economy will grow faster and our nation will 
     be stronger.
           Sincerely yours,
                                                    Paul M. Romer.

[[Page 19778]]

     
                                  ____
                                                  October 5, 2001.
     Hon. Joseph I. Lieberman,
     U.S. Senate,
     Washington, DC.
       Dear Senator Lieberman: We commend you for your leadership 
     in sponsoring the Technology Talent bill. This bill focuses 
     attention on an important workforce issue for business and 
     for America's growing knowledge-based economy--the need to 
     increase the number of U.S. students graduating with degrees 
     in mathematics, science, engineering, and technology from the 
     nation's universities and community colleges.
       American businesses face a constant challenge to find 
     sufficient numbers of professionals with proficiency in these 
     key disciplines. The number of students graduating with 
     degrees in these fields has both failed to keep pace with an 
     ever-increasing demand, and actually declined. Since 1990, 
     for example the number of bachelor degrees in electrical 
     engineering awarded at U.S. universities has declined 37 
     percent. We must address this need if the United States is to 
     maintain its economic and technological leadership.
       The demonstration grant program established by the Tech 
     Talent bill will provide new incentives for universities, 
     colleges, and community colleges to increase the number of 
     graduates with bachelor and associate degrees in science, 
     mathematics, engineering and technology. The bill also will 
     encourage mentoring, bridge programs from secondary to 
     postsecondary education, and creative approaches for 
     traditionally underrepresented groups to earn degrees in 
     these disciplines.
       We look forward to working with you and your colleagues to 
     secure enactment of this legislation.
           Sincerely,
         3M Company; AeA.; AT&T. Business-Higher Education Forum; 
           Compaq Computer Corporation; IBM Corporation; 
           Information Technology Association of America; Intel 
           Corporation; Minority Business RoundTable; Motorola; 
           National Alliance of Business; National Venture Capital 
           Association; Northern Virginia Technology Council; 
           SchoolTone Alliance; Semiconductor Industry 
           Association; Software and Information Industry 
           Association; TechNet; Texas Instruments; Verizon; and 
           Williams.
                                  ____



                                                          SIA,

                                    San Jose, CA, October 3, 2001.
     Re Tech Talent Act.

     Hon. Joseph Lieberman,
     U.S. Senate, Hart Senate Office Building, Washington, DC.
       Dear Senator Lieberman: The Semiconductor Industry 
     Association applauds your introduction of the Technology 
     Talent Act as an important action to expand the technically 
     trained workforce in the United States.
       Over the next five to fifteen years, the semiconductor 
     manufacturing process that the industry has used for the past 
     thirty years will have reached its physical limits. It will 
     take significant investments to develop the human resources 
     necessary to develop replacement processes and electronic 
     device structures. Absent these investments, the continued 
     productivity gains that our economy has enjoyed from 
     information technology advances will be lost.
       The demonstration program established by the Tech Talent 
     bill will provide incentive for universities, colleges and 
     community colleges to increase the number of graduates with 
     bachelors and associates' degrees in science, mathematics, 
     engineering and technology. We are pleased that the bill 
     encourages mentoring programs, bridge programs and other 
     innovative approaches to helping increase the number of U.S. 
     students graduating with degrees in these disciplines. That 
     should not only help to increase the supply by retaining more 
     of the students who are already enrolled, but also help 
     attract more students from traditionally under-represented 
     groups to pursue careers in our industry and other high tech 
     sectors.
       We look forward to working with you and your colleagues to 
     help ensure the legislation's swift and favorable 
     consideration. Thank you again for your leadership on this 
     issue.
           Sincerely,
                                                   George Scalise,
     President.
                                  ____



                                                          AAS,

                                 Pasadena, CA, September 10, 2001.
     Re Tech Talent Bill.

     Hon. Joseph Lieberman,
     Washington, DC.
       Dear Senator Lieberman: I am writing to thank you and your 
     colleagues for introducing the ``Tech Talent Bill''. I will 
     work to support this legislation as it moves through 
     Congress.
       As you know, the decline in our technical workforce is 
     negatively affecting our national economy and worldwide 
     competitiveness. The American Institute of Physics (AIP) has 
     tracked the number of students earning doctorates from U.S. 
     institutions in the physical sciences since 1962. Today, 
     roughly 1,350 doctorates are awarded each year. In 1970, this 
     number was nearly 1,600. Although this statistic does 
     fluctuate from year to year, it has steadily declined over 
     the last several years, dropping 11% between 1994 and 1998. 
     Additionally, the fraction of foreign students earning 
     doctorates has increased dramatically. According to AIP 
     statistics, 46% of physics doctorates are foreign nationals.
       The Administrator of NASA, Dan Goldin, highlighted this 
     problem in a recent article in the Atlantic magazine 
     (September 2001). In this article, he points out that due to 
     the small number of qualified engineers and physical 
     scientists, design, construction and operation of space 
     probes is becoming difficult. Although not for certain, he 
     suggests that this shortage may have played a role in the 
     recent failures of the Mars Polar Lander and Mars Climate 
     Orbiter. According to Mr. Goldin, nearly as many students 
     earn undergraduate degrees in parks, recreation and leisure 
     as earn degrees in electrical engineering. This is a shocking 
     fact for a Nation built on technology and science.
       By motivating universities to increase the number of 
     students earning physical science degrees, this legislation 
     will have a direct impact on this problem. I strongly support 
     the ``Tech Talent Bill'' and hope to work with you to ensure 
     its passage in this Congressional term.
           Sincerely,
                                                  Anneila Sargent,
     President.
                                  ____

         K-12 Science, Mathematics, Engineering & Technology 
           Education Coalition,
                                                 October 15, 2001.
     Hon. Joseph Lieberman,
     U.S. Senate,
     Washington, DC.
       Dear Senator Lieberman: The K-12 Science, Mathematics, 
     Engineering, and Technology Education Coalition commends you 
     and Senators Frist, Mikulski, and Bond for introducing the 
     ``Tech Talent'' bill, designed to increase the United States' 
     technically trained workforce. It is imperative to develop a 
     highly skilled workforce to maintain our national security 
     and foster future economic growth. We believe that the 
     journey begins before college.
       We are pleased that your legislation encourages 
     universities to partner with community colleges, industry 
     organizations, professional societies and local schools to 
     pave the way for students of all ages and backgrounds to 
     further their interests in science, mathematics, engineering 
     and technology (SMET) coursework and career paths.
       In October of this year, the deans of engineering and the 
     deans of education from 50 universities met in concert to 
     develop strategic collaborations to enhance K-12 teacher 
     preparation in SMET and to invigorate engineering education. 
     Collaborations of this type can and should be replicated by 
     more universities and across all science, mathematics, 
     engineering, and technological disciplines.
       This bill will assist in the development and implementation 
     of innovative approaches to increasing enrollments and 
     graduates in key SMET degrees, which is critical to our 
     economy, our national security, and the future job prospects 
     of our children. Providing incentives and rewards to 
     educational institutions for increasing SMET enrollments and 
     graduates is an excellent approach to jumpstart that process.
       We applaud your dedication and foresight in protecting and 
     enhancing America's future workforce.
       If we can be of further assistance, please contact Patti 
     Burgio at 202.785.7385.
                                  ____

         GE Corporate Research & Development, The General Electric 
           Company,
                                                 October 12, 2001.
     Hon. Joseph Lieberman,
     U.S. Senate,
     Washington, DC.
       Dear Senator Lieberman: The General Electric Company highly 
     commends you, along with Senators Bond, Mikulski, Frist, and 
     Domenici and Representatives Boehlert and Larson, for 
     introducing the ``Tech Talent'' bill. We fully endorse and 
     support the revival of a highly technical workforce in the 
     United States.
       While our company embraces technical expertise from around 
     the globe, we believe it is vital to our nation's long-term 
     economic strength to grow and develop our domestic talent as 
     well. This legislation will create that strength without 
     discriminating against global technical talent.
       We applaud your approach to creating a grant program that 
     itself inspires colleges and universities to take a creative 
     and innovative approach to broadening science, mathematics, 
     engineering and technology enrollment. We believe that this 
     approach will not result in a one-time spike in enrollment, 
     instead it enables a fundamental change in philosophy for a 
     long-term increase in technical education.
       There is no better time for this legislation. Our nation's 
     economy is heavily dependent on a highly skilled workforce, 
     with more than 50 percent of our economic growth stemming 
     from technological progress. We look forward to assisting you 
     in any way possible with this legislation. Thank you for

[[Page 19779]]

     your continued support of technology and innovation 
     initiatives in America.
           Sincerely,
                                                Scott C. Donnelly,
     Senior Vice President.
                                  ____

                                           American Association of


                              State Colleges and Universities,

                                 Washington, DC, October 12, 2001.
     Hon. Joseph Lieberman,
     U.S. Senate,
     Washington, DC.
       Dear Senator Lieberman: On behalf of the American 
     Association of State Colleges and Universities (AASCU) I am 
     writing to express our strong support for the, ``Technology 
     Talent Act of 2001.'' AASCU is comprised of more than 430 
     public colleges, universities and systems of public higher 
     education located throughout the United States and its 
     territories. Our Connecticut members include: Central 
     Connecticut State University, Eastern Connecticut State 
     University, Southern Connecticut State University, Western 
     Connecticut State University and the Connecticut State 
     University System.
       AASCU truly appreciates your leadership in recognizing the 
     need to increase the nation's technically trained workforce, 
     as well as your commitment to address this need by 
     introducing legislation that will, if adequately funded, go a 
     long way towards achieving this goal. AASCU strongly supports 
     the legislation's requirement that at least one principal 
     investigator be in a position of administrative leadership at 
     the institution of higher education. This requirement will 
     ensure that the commitment for increasing the number of 
     bachelor's degrees will be institution wide. Additionally, we 
     believe the legislation's priority to award grants to 
     institutions that draw on previous and existing efforts in 
     improving undergraduate learning and teaching is right on 
     target.
       Again, thank you for your leadership on this issue. We look 
     forward to working with you as the ``Technology Talent Act of 
     2001'' progresses through the legislative process.
           Sincerely,

                                          Edward M. Elmendorf,

                                     Vice President for Government
     Relations and Policy Analysis.
                                  ____

                                              American Society for


                                        Engineering Education,

                                 Washington, DC, October 12, 2001.
     Hon. Joseph Lieberman,
     U.S. Senate,
     Washington, DC.
       Dear Senator Lieberman: On behalf of the members of the 
     Engineering Deans Council (EDC) of the American Society for 
     Engineering Education (ASEE), we are writing to thank you for 
     introducing the Tech Talent bill, which is intended to 
     increase the technically trained workforce of our nation. Now 
     more than ever it is important for Americans to focus on 
     strengthening and increasing the science and technology 
     workforce of the United States.
       Engineering schools have a major role to play in efforts to 
     expand the nation's technical workforce. We are very 
     interested in examining the provisions of the competitive 
     grant program to be established at the National Science 
     Foundation. Those that are intended to increase the number of 
     U.S. citizens or permanent residents obtaining degrees in 
     science, mathematics, engineering or technology (SMET) can be 
     helpful to all of us in engineering education. The incentives 
     to degree-granting institutions to encourage creative ways of 
     recruiting students who may not earlier have felt they could 
     succeed in these fields will insure innovative, aggressive 
     program proposal submissions. We are glad to see that strong 
     emphasis will be placed on an evaluation of methods employed 
     in the grant activities.
       This legislation will provide an opportunity to build on 
     the activities that many of our colleges have underway, 
     including mentoring high school students and engaging them in 
     other activities designed to interest them in enrolling in 
     SMET programs. Earlier this year we held the first 
     Engineering Deans Council panel discussion on opportunities 
     for collaboration between engineering and education schools. 
     At the beginning of October pairs of deans of engineering and 
     deans of education met for the ``Deans Summit'' in Baltimore. 
     The purpose of this conference was to stimulate these deans 
     to develop collaborations, which would result in programs to 
     improve the quality of preparation of students for SMET 
     careers. As participants in the Deans Summit, we can testify 
     that many innovative programs were developed by pairs of 
     deans from the institutions represented. We think this 
     legislation will be very helpful to these collaborations. 
     Many of the institutions will be very eager to develop 
     proposals in response to its provisions. The incentives 
     provided in this bill will certainly attract attention, and 
     we think will achieve the purpose of increasing enrollments 
     as well as improve the quality of preparation.
       The Engineering Deans Council of the American Society for 
     Engineering Education (ASEE) is the leadership organization 
     of the more than 300 deans of engineering in the United 
     States. Founded in 1893, ASEE is a nonprofit association 
     dedicated to the improvement of engineering and engineering 
     technology education.
       We greatly appreciate your strong and continuing interest 
     in and support for the development of our nation's scientific 
     and technical workforce. If we can be of further assistance, 
     please do not hesitate to get in touch with us.
           Sincerely,
     Carl E. Locke, Jr.,
       Dean of Engineering, University of Kansas-Lawrence, Chair, 
     Engineering Deans Council.
     David N. Wormley,
       Dean of Engineering, Pennsylvania State University, Vice 
     Chair, Engineering Deans Council.

  Mr. BOND. Mr. President, I rise to express my strong support for the 
Technology Talent Act of 2001. As an original co-sponsor, I am pleased 
to have joined my Senate colleagues, Senators Joe Lieberman, Barbara 
Mikulski, Bill Frist, and Pete Domenici in introducing an important 
piece of legislation that will help strengthen the long-term economic 
competitiveness and health of our Nation. We are here to sound the 
alarm to the public that our Nation's innovation capabilities are at 
risk of falling behind other industrial nations if we do not 
aggressively increase the number and quality of our technologically-
trained workforce.
  The number of American students receiving degrees in the natural 
sciences and engineering fields has fallen significantly. This decline 
has occurred despite the growth in population and increase in 
undergraduate enrollment. But in other countries, the proportion of 
degrees in the sciences has grown compared to the United States. As a 
result, the demand for scientists and engineers in this country is 
being filled by foreign workers. And with the demand for engineers and 
computer scientists expected to grow by more than 50 percent by 2008, 
the high-tech industry is deeply troubled that it will become 
increasingly difficult to fill this demand and remain competitive in 
the global economy.
  To respond to the shortage of technically-trained workers in this 
country, the Congress has had to raise the cap on H1-B visas for 
immigrant workers. Why was this necessary? In the past decade, growth 
in the number of Asian and European students earning degrees in the 
natural sciences and engineering has gone up on average by 4 percent 
per year. During the same time, the rate for U.S. students declined on 
average by nearly one percent each year. It was startling to learn that 
the Organization of Economic Cooperation and Development, OECD, ranked 
the United States 25 out of 26 industrialized nations surveyed in terms 
of the number of college and university degrees in science. The OECD 
found that South Korea led those nations surveyed and that we are 
behind countries like Finland, Japan, the Czech Republic, and Ireland!
  In my home State of Missouri, I have seen the same sort of disturbing 
trends. The University of Missouri has seen an overall decline in 
science, engineering, and math degrees as a proportion of total 
undergraduate degrees. For example, undergraduate degrees in 
engineering have declined by 16 percent over the past 5 years whereas 
non-science degrees have increased by 14 percent.
  Because of these troubling numbers, I am excited to work with my 
Senate colleagues to come up with a potential solution. I thank Senator 
Lieberman and his staff for taking the initiative in crafting this bill 
and working with me. I also thank Professor Romer of Stanford 
University for his vision and thoughts in developing this bill.
  Through the administration of the National Science Foundation, this 
legislation provides financial incentives to our colleges and 
universities to expand existing successful programs and create new, 
innovative ways that encourage our youth to enter and stay in the 
science and engineering fields. Our bill also encourages schools to 
develop programs that will attract more minorities and women. This is 
critical since there are few minorities and women employed in the high-
tech sector.
  To jumpstart this program, I am pleased to note that we have included

[[Page 19780]]

$20 million in NSF's budget as part of the Senate's fiscal year 2002 
VA, HUD bill. I hope we can maintain this level in conference and later 
increase funding for this program to a level of $200 million if this 
program is successful and our subcommittee receives the necessary 
funding.
  Along with many of my Senate and House colleagues, I have been trying 
to increase support for NSF because we recognize the role NSF plays in 
stimulating our economy and supporting the biomedical work of the 
National Institutes of Health. That is why we believe in doubling NSF's 
budget and as part of this effort, increasing the Nation's 
technologically-trained workforce is a key element. Clearly, we need to 
invest in our students because they will be the booster rocket for the 
future success of our economy and allow this Nation to lead the world 
in this century.
  Mr. FRIST. Mr. President, I am proud to join Senators Lieberman, 
Mikulski, Bond and Domenici in introducing the Tech Talent bill. This 
legislation will build on and compliment legislation I introduced 
earlier this year, the Math and Science Partnership Act.
  Today, we are talking about college math and science majors and their 
role in our economic and scientific future. But, precollege science and 
math instruction has an important relationship to the future supply of 
U.S. scientific and technological personnel as well. For example, 
students who take rigorous mathematics and science courses in high 
school are much more likely to go on to college than those who do not.
  Data from the National Educational Longitudinal Study reveal that 83 
percent of students who took algebra I and geometry, and nearly 89 
percent of students who took chemistry, went on to college, compared to 
only 36 percent of students who did not take algebra and geometry and 
43 percent of students who did not take chemistry. Yet 31 percent of 
our college bound high school seniors did not take four years or more 
of mathematics, and 51 percent of college bound high school seniors did 
not take four years or more of science.
  There is another link between precollege and college math and science 
instruction: before you can major in science or math in college, you 
must have a strong understanding of the basics. Yet, the most recent 
NAEP science assessments showed that only approximately one-third of 
our 4th, 8th and 12th grade students were performing at the basic 
level. And only 3 percent of the students at all three grade levels 
reached the advanced level of scientific proficiency.
  The Math and Science Partnership program, which is now part of the 
education reform bill, authorizes $900 million in 2002 to enhance K-12 
math and science education. It will help more of our children learn the 
basics of math and science and encourage more of them to go to college.
  The Tech Talent Bill will make sure that once they get to college, 
they are encouraged to complete the loop: major in science, engineering 
or computer science so that we can fill the high tech jobs that are 
fundamental to our nation's future prosperity and to our ability to 
remain competitive in an increasingly global marketplace.
  The Tech Talent Bill rewards colleges and universities that increase 
the number of math and science majors that graduate. And the bill lets 
the universities figure out the best way to do so. It will not stifle 
creativity. Our economy needs a workforce highly trained in science, 
mathematics, engineering and technology, and that is why I believe this 
bill is very important, and should be a top priority.
  I am proud to support this bill, and I commend Senator Lieberman for 
his leadership on this issue.
  Mr. DOMENICI. Mr. President, innovation drives a significant part of 
our domestic economy; it's absolutely vital in maintaining our standard 
of living. Estimates are that at least half of our economic growth in 
the post-WWII period was driven by advanced technologies.
  Innovation is especially critical today at a time when our economy 
has shown significant weaknesses. We need to continue to look toward 
our ability to innovate, to bring new products and processes to the 
market place, to help spur recovery.
  Innovation depends on many factors, ranging from the research done in 
our superb universities and laboratories to the flow of capital 
investments into entrepreneurial start-up companies. One of the very 
key factors is the existence of a well qualified workforce, ready to 
support high technology industries. Increasingly, preparation of that 
workforce is at risk in the United States, this should be cause for 
great concern.
  That's why I welcome this opportunity to join with Senators 
Lieberman, Bond, Mikulski, and Frist, as well as with Congressmen 
Boehlert and Larson, to provide my support as an original co-sponsor of 
the Tech Talent Bill. This bill can help to reverse disturbing trends 
in the technical credentials of our future workforce.
  Studies show that the number of jobs requiring technical training 
will increase by 51 percent over the next decade. Six million new 
technical openings are projected to be needed by 2008. But the trend is 
exactly the opposite, our number of bachelor's degrees has dropped 21 
percent in engineering and 32 percent in math and computer science over 
the last decade.
  In the last few years, we've filled many technical positions with 
foreign workers, and we've heard repeated cries from our high tech 
industries about their need for larger visa programs to allow these 
workers to enter the country. In addition, increasing numbers of our 
undergraduate and graduate students are citizens of another country.
  Frequently, both foreign students who have completed technical 
studies in the United States and foreign technical workers admitted 
under special visas return to their native lands. That fuels a 
continuing outflow of technical expertise from our country.
  That's good for other countries, who are striving to build up their 
technical capabilities, but it sure isn't good for the United States. 
The trend is ominous. In 1985, we led most countries in the number of 
research personnel as a percent of our workforce. In 1998, we were well 
behind countries like Japan.
  This trend is even worse if we look at young technical workers, 
because much of our strength is from older workers from past years when 
technical education was more popular here. If we look at the fraction 
of 24 year-old workers with technical training, the U.S. lags behind 
many countries including Japan, Korea, Germany, Ireland, Canada, France 
and the United Kingdom.
  This problem is even more evident if we look at the fraction of 
bachelor-level degrees awarded in science and engineering. In the 
United States, the figure is about one-third. But in China, our one-
third is replaced by their 72 percent, and Japan, Russia and Brazil 
exceed 60 percent. In all of Asia, 47 percent of all degrees are in 
science and engineering. It's even worse if we focus on engineering, 
where 5 percent of our bachelor's degrees are awarded. In China, that 
figure is 46 percent. And that figure is 30 or more percent in 
countries like Germany, Russia, Singapore, and Finland, and over 20 
percent in many countries including Japan, France and Sweden.
  Traditionally, the United States has led the world in patents. But if 
we look at the growth in patenting in the U.S. and elsewhere, the trend 
is serious. Countries like Japan have higher growth rates in patenting 
then we do.
  I already noted the importance of innovation in driving our economic 
growth. We don't compete well in the international marketplace on 
manufacture of low-tech goods. In fact, where a product has been on the 
market for awhile, other countries tend to capture the manufacturing 
market. That's why it's so critical that we maintain a strong flow of 
innovative products it's in the newest, highest technology, products 
that we are most competitive.
  We can't afford to maintain some of the current trends. We were 
graduating about 18,000 students a year with bachelor's degrees in the 
physical sciences in the 1970s, today that figure is around 15,000. As 
another bad example, our

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graduates in mathematics have fallen to about half the 25,000 graduates 
per year in the 1970s.
  We need to reverse these trends. We need to excite more students to 
pursue technical careers. We need to do far better at showing students 
the opportunities that can open for them if they pursue technical paths 
in their education.
  This bill will help in this quest. By providing grants to schools and 
community colleges to increase their production of technical workers, 
we are providing direct motivation to the schools which have a 
significant hand in guiding students into various fields. These grants 
will serve to challenge schools to find better, more convincing, 
approaches to encourage student behavior.
  It was particularly important to me that this bill offer these 
incentives at the community college level. Students are increasingly 
finding that these institutions offer the best match to their 
educational needs. It will be at the community college level that we 
can excite many new students who might have chosen other specialities.
  Reversing the trends I've described won't happen overnight, it will 
take many years. But the future benefits to our your people and to our 
nation are immense. I'm pleased to join the co-sponsors of this 
important bill in seeking to address this very real issue.

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