[House Report 108-74]
[From the U.S. Government Publishing Office]
108th Congress Rept. 108-74
HOUSE OF REPRESENTATIVES
1st Session Part 1
======================================================================
. MEDICARE REGULATORY AND CONTRACTING REFORM ACT OF 2003
_______
April 11, 2003.--Ordered to be printed
_______
Mr. Thomas, from the Committee on Ways and Means, submitted the
following
R E P O R T
together with
DISSENTING VIEWS
[To accompany H.R. 810]
[Including cost estimate of the Congressional Budget Office]
The Committee on Ways and Means, to whom was referred the
bill (H.R. 810) to amend title XVIII of the Social Security Act
to provide regulatory relief and contracting flexibility under
the Medicare Program, having considered the same, report
favorably thereon with an amendment and recommend that the bill
as amended do pass.
CONTENTS
Page
I. Summary and Background..........................................38
A. Purpose and Summary................................. 38
B. Background and Need for Legislation................. 38
C. Legislative History................................. 39
II. Explanation of the Bill.........................................40
A. Regulatory Reform................................... 41
B. Contracting Reform.................................. 43
C. Education and Outreach Improvements................. 50
D. Appeals and Recovery................................ 56
E. Miscellaneous Provisions............................ 69
III. Votes of the Committee..........................................81
IV. Budget Effects of the Bill......................................83
A. Committee Estimate of Budgetary Effects............. 83
B. Statement Regarding New Budgetary Authority and Tax
Expenditures....................................... 83
C. Cost Estimate Prepared by the Congressional Budget
Office............................................. 83
V. Other Matters To Be Discussed Under the Rules of the House......89
VI. Changes in Existing Law Made by the Bill, as Reported...........90
VII. Dissenting Views...............................................144
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
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 2003''.
(b) Amendments to Social Security Act.--Except as otherwise
specifically provided, whenever in this Act an amendment is expressed
in terms of an amendment to or repeal of a section or other provision,
the reference shall be considered to be made to that section or other
provision of the Social Security Act.
(c) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; amendments to Social Security Act; table of
contents.
Sec. 2. Findings and construction.
Sec. 3. Definitions.
TITLE I--REGULATORY REFORM
Sec. 101. Issuance of regulations.
Sec. 102. Compliance with changes in regulations and policies.
Sec. 103. Reports and studies relating to regulatory reform.
TITLE II--CONTRACTING REFORM
Sec. 201. Increased flexibility in medicare administration.
Sec. 202. Requirements for information security for medicare
administrative contractors.
TITLE III--EDUCATION AND OUTREACH
Sec. 301. Provider education and technical assistance.
Sec. 302. Small provider technical assistance demonstration program.
Sec. 303. Medicare Provider Ombudsman; Medicare Beneficiary Ombudsman.
Sec. 304. Beneficiary outreach demonstration program.
Sec. 305. Inclusion of additional information in notices to
beneficiaries about skilled nursing facility benefits.
Sec. 306. Information on medicare-certified skilled nursing facilities
in hospital discharge plans.
TITLE IV--APPEALS AND RECOVERY
Sec. 401. Transfer of responsibility for medicare appeals.
Sec. 402. Process for expedited access to review.
Sec. 403. Revisions to medicare appeals process.
Sec. 404. Prepayment review.
Sec. 405. Recovery of overpayments.
Sec. 406. Provider enrollment process; right of appeal.
Sec. 407. Process for correction of minor errors and omissions without
pursuing appeals process.
Sec. 408. Prior determination process for certain items and services;
advance beneficiary notices.
TITLE V--MISCELLANEOUS PROVISIONS
Sec. 501. Policy development regarding evaluation and management (E &
M) documentation guidelines.
Sec. 502. Improvement in oversight of technology and coverage.
Sec. 503. Treatment of hospitals for certain services under medicare
secondary payor (MSP) provisions.
Sec. 504. EMTALA improvements.
Sec. 505. Emergency Medical Treatment and Active Labor Act (EMTALA)
Technical Advisory Group.
Sec. 506. Authorizing use of arrangements to provide core hospice
services in certain circumstances.
Sec. 507. Application of OSHA bloodborne pathogens standard to certain
hospitals.
Sec. 508. BIPA-related technical amendments and corrections.
Sec. 509. Conforming authority to waive a program exclusion.
Sec. 510. Treatment of certain dental claims.
Sec. 511. Furnishing hospitals with information to compute DSH formula.
Sec. 512. Revisions to reassignment provisions.
Sec. 513. Specialized Medicare+Choice plans for special needs
beneficiaries.
Sec. 514. Temporary suspension of OASIS requirement for collection of
data on non-medicare and non-medicaid patients.
Sec. 515. Miscellaneous reports, studies, and publication requirements.
SEC. 2. FINDINGS AND CONSTRUCTION.
(a) Findings.--Congress finds the following:
(1) The overwhelming majority of providers of services and
suppliers in the United States are law-abiding persons who
provide important health care services to patients each day.
(2) The Secretary of Health and Human Services should work to
streamline paperwork requirements under the medicare program
and communicate clearer instructions to providers of services
and suppliers so that they may spend more time caring for
patients.
(b) Construction.--Nothing in this Act shall be construed--
(1) to compromise or affect existing legal remedies for
addressing fraud or abuse, whether it be criminal prosecution,
civil enforcement, or administrative remedies, including under
sections 3729 through 3733 of title 31, United States Code
(known as the False Claims Act); or
(2) to prevent or impede the Department of Health and Human
Services in any way from its ongoing efforts to eliminate
waste, fraud, and abuse in the medicare program.
Furthermore, the consolidation of medicare administrative contracting
set forth in this Act does not constitute consolidation of the Federal
Hospital Insurance Trust Fund and the Federal Supplementary Medical
Insurance Trust Fund or reflect any position on that issue.
SEC. 3. DEFINITIONS.
(a) Use of Term Supplier in Medicare.--Section 1861 (42 U.S.C. 1395x)
is amended by inserting after subsection (c) the following new
subsection:
``Supplier
``(d) The term `supplier' means, unless the context otherwise
requires, a physician or other practitioner, a facility, or other
entity (other than a provider of services) that furnishes items or
services under this title.''.
(b) Other Terms Used in Act.--In this Act:
(1) BIPA.--The term ``BIPA'' means the Medicare, Medicaid,
and SCHIP Benefits Improvement and Protection Act of 2000, as
enacted into law by section 1(a)(6) of Public Law 106-554.
(2) Secretary.--The term ``Secretary'' means the Secretary of
Health and Human Services.
TITLE I--REGULATORY REFORM
SEC. 101. ISSUANCE OF REGULATIONS.
(a) Limitations on New Matter in Final Regulations.--Section 1871(a)
(42 U.S.C. 1395hh(a)) is amended by adding at the end the following new
paragraph:
``(3) If the Secretary publishes a final regulation that includes a
provision that is not a logical outgrowth of a previously published
notice of proposed rulemaking or interim final rule, such 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.''.
(b) Effective Date.--The amendment made by subsection (a) shall apply
to final regulations published on or after the date of the enactment of
this Act.
SEC. 102. COMPLIANCE WITH CHANGES IN REGULATIONS AND POLICIES.
(a) No Retroactive Application of Substantive Changes.--
(1) In general.--Section 1871 (42 U.S.C. 1395hh), as amended
by section 101(a), is amended by adding at the end the
following new subsection:
``(d)(1)(A) A substantive change in regulations, manual instructions,
interpretative rules, statements of policy, or guidelines of general
applicability under this title shall not be applied (by extrapolation
or otherwise) retroactively to items and services furnished before the
effective date of the change, unless the Secretary determines that--
``(i) such retroactive application is necessary to comply
with statutory requirements; or
``(ii) failure to apply the change retroactively would be
contrary to the public interest.''.
(2) Effective date.--The amendment made by paragraph (1)
shall apply to substantive changes issued on or after the date
of the enactment of this Act.
(b) Timeline for Compliance With Substantive Changes After Notice.--
(1) In general.--Section 1871(d)(1), as added by subsection
(a), is amended by adding at the end the following:
``(B)(i) Except as provided in clause (ii), a substantive change
referred to in subparagraph (A) shall not become effective before the
end of the 30-day period that begins on the date that the Secretary has
issued or published, as the case may be, the substantive change.
``(ii) The Secretary may provide for such a substantive change to
take effect on a date that precedes the end of the 30-day period under
clause (i) if the Secretary finds that waiver of such 30-day period is
necessary to comply with statutory requirements or that the application
of such 30-day period is contrary to the public interest. If the
Secretary provides for an earlier effective date pursuant to this
clause, the Secretary shall include in the issuance or publication of
the substantive change a finding described in the first sentence, and a
brief statement of the reasons for such finding.
``(C) No action shall be taken against a provider of services or
supplier with respect to noncompliance with such a substantive change
for items and services furnished before the effective date of such a
change.''.
(2) Effective date.--The amendment made by paragraph (1)
shall apply to compliance actions undertaken on or after the
date of the enactment of this Act.
(c) Reliance on Guidance.--
(1) In general.--Section 1871(d), as added by subsection (a),
is further amended by adding at the end the following new
paragraph:
``(2)(A) If--
``(i) a provider of services or supplier follows the written
guidance (which may be transmitted electronically) provided by
the Secretary or by a medicare contractor (as defined in
section 1889(g)) acting within the scope of the contractor's
contract authority, with respect to the furnishing of items or
services and submission of a claim for benefits for such items
or services with respect to such provider or supplier;
``(ii) the Secretary determines that the provider of services
or supplier has accurately presented the circumstances relating
to such items, services, and claim to the contractor in
writing; and
``(iii) the guidance was in error;
the provider of services or supplier shall not be subject to any
sanction (including any penalty or requirement for repayment of any
amount) if the provider of services or supplier reasonably relied on
such guidance.
``(B) Subparagraph (A) shall not be construed as preventing the
recoupment or repayment (without any additional penalty) relating to an
overpayment insofar as the overpayment was solely the result of a
clerical or technical operational error.''.
(2) Effective date.--The amendment made by paragraph (1)
shall take effect on the date of the enactment of this Act but
shall not apply to any sanction for which notice was provided
on or before the date of the enactment of this Act.
SEC. 103. REPORTS AND STUDIES RELATING TO REGULATORY REFORM.
(a) GAO Study on Advisory Opinion Authority.--
(1) Study.--The Comptroller General of the United States
shall conduct a study to determine the feasibility and
appropriateness of establishing in the Secretary authority to
provide legally binding advisory opinions on appropriate
interpretation and application of regulations to carry out the
medicare program under title XVIII of the Social Security Act.
Such study shall examine the appropriate timeframe for issuing
such advisory opinions, as well as the need for additional
staff and funding to provide such opinions.
(2) Report.--The Comptroller General shall submit to Congress
a report on the study conducted under paragraph (1) by not
later than one year after the date of the enactment of this
Act.
(b) Report on Legal and Regulatory Inconsistencies.--Section 1871 (42
U.S.C. 1395hh), as amended by section 2(a), is amended by adding at the
end the following new subsection:
``(e)(1) Not later than 2 years after the date of the enactment of
this subsection, and every 2 years thereafter, the Secretary shall
submit to Congress a report with respect to the administration of this
title and areas of inconsistency or conflict among the various
provisions under law and regulation.
``(2) In preparing a report under paragraph (1), the Secretary shall
collect--
``(A) information from individuals entitled to benefits under
part A or enrolled under part B, or both, providers of
services, and suppliers and from the Medicare Beneficiary
Ombudsman and the Medicare Provider Ombudsman with respect to
such areas of inconsistency and conflict; and
``(B) information from medicare contractors that tracks the
nature of written and telephone inquiries.
``(3) A report under paragraph (1) shall include a description of
efforts by the Secretary to reduce such inconsistency or conflicts, and
recommendations for legislation or administrative action that the
Secretary determines appropriate to further reduce such inconsistency
or conflicts.''.
TITLE II--CONTRACTING REFORM
SEC. 201. INCREASED FLEXIBILITY IN MEDICARE ADMINISTRATION.
(a) Consolidation and Flexibility in Medicare Administration.--
(1) In general.--Title XVIII is amended by inserting after
section 1874 the following new section:
``contracts with medicare administrative contractors
``Sec. 1874A. (a) Authority.--
``(1) Authority to enter into contracts.--The Secretary may
enter into contracts with any eligible entity to serve as a
medicare administrative contractor with respect to the
performance of any or all of the functions described in
paragraph (4) or parts of those functions (or, to the extent
provided in a contract, to secure performance thereof by other
entities).
``(2) Eligibility of entities.--An entity is eligible to
enter into a contract with respect to the performance of a
particular function described in paragraph (4) only if--
``(A) the entity has demonstrated capability to carry
out such function;
``(B) the entity complies with such conflict of
interest standards as are generally applicable to
Federal acquisition and procurement;
``(C) the entity has sufficient assets to financially
support the performance of such function; and
``(D) the entity meets such other requirements as the
Secretary may impose.
``(3) Medicare administrative contractor defined.--For
purposes of this title and title XI--
``(A) In general.--The term `medicare administrative
contractor' means an agency, organization, or other
person with a contract under this section.
``(B) Appropriate medicare administrative
contractor.--With respect to the performance of a
particular function in relation to an individual
entitled to benefits under part A or enrolled under
part B, or both, a specific provider of services or
supplier (or class of such providers of services or
suppliers), the `appropriate' medicare administrative
contractor is the medicare administrative contractor
that has a contract under this section with respect to
the performance of that function in relation to that
individual, provider of services or supplier or class
of provider of services or supplier.
``(4) Functions described.--The functions referred to in
paragraphs (1) and (2) are payment functions, provider services
functions, and functions relating to services furnished to
individuals entitled to benefits under part A or enrolled under
part B, or both, as follows:
``(A) Determination of payment amounts.--Determining
(subject to the provisions of section 1878 and to such
review by the Secretary as may be provided for by the
contracts) the amount of the payments required pursuant
to this title to be made to providers of services,
suppliers and individuals.
``(B) Making payments.--Making payments described in
subparagraph (A) (including receipt, disbursement, and
accounting for funds in making such payments).
``(C) Beneficiary education and assistance.--
Providing education and outreach to individuals
entitled to benefits under part A or enrolled under
part B, or both, and providing assistance to those
individuals with specific issues, concerns or problems.
``(D) Provider consultative services.--Providing
consultative services to institutions, agencies, and
other persons to enable them to establish and maintain
fiscal records necessary for purposes of this title and
otherwise to qualify as providers of services or
suppliers.
``(E) Communication with providers.--Communicating to
providers of services and suppliers any information or
instructions furnished to the medicare administrative
contractor by the Secretary, and facilitating
communication between such providers and suppliers and
the Secretary.
``(F) Provider education and technical assistance.--
Performing the functions relating to provider
education, training, and technical assistance.
``(G) Additional functions.--Performing such other
functions as are necessary to carry out the purposes of
this title.
``(5) Relationship to mip contracts.--
``(A) Nonduplication of duties.--In entering into
contracts under this section, the Secretary shall
assure that functions of medicare administrative
contractors in carrying out activities under parts A
and B do not duplicate activities carried out under the
Medicare Integrity Program under section 1893. The
previous sentence shall not apply with respect to the
activity described in section 1893(b)(5) (relating to
prior authorization of certain items of durable medical
equipment under section 1834(a)(15)).
``(B) Construction.--An entity shall not be treated
as a medicare administrative contractor merely by
reason of having entered into a contract with the
Secretary under section 1893.
``(6) Application of federal acquisition regulation.--Except
to the extent inconsistent with a specific requirement of this
title, the Federal Acquisition Regulation applies to contracts
under this title.
``(b) Contracting Requirements.--
``(1) Use of competitive procedures.--
``(A) In general.--Except as provided in laws with
general applicability to Federal acquisition and
procurement or in subparagraph (B), the Secretary shall
use competitive procedures when entering into contracts
with medicare administrative contractors under this
section, taking into account performance quality as
well as price and other factors.
``(B) Renewal of contracts.--The Secretary may renew
a contract with a medicare administrative contractor
under this section from term to term without regard to
section 5 of title 41, United States Code, or any other
provision of law requiring competition, if the medicare
administrative contractor has met or exceeded the
performance requirements applicable with respect to the
contract and contractor, except that the Secretary
shall provide for the application of competitive
procedures under such a contract not less frequently
than once every five years.
``(C) Transfer of functions.--The Secretary may
transfer functions among medicare administrative
contractors consistent with the provisions of this
paragraph. The Secretary shall ensure that performance
quality is considered in such transfers. The Secretary
shall provide public notice (whether in the Federal
Register or otherwise) of any such transfer (including
a description of the functions so transferred, a
description of the providers of services and suppliers
affected by such transfer, and contact information for
the contractors involved).
``(D) Incentives for quality.--The Secretary shall
provide incentives for medicare administrative
contractors to provide quality service and to promote
efficiency.
``(2) Compliance with requirements.--No contract under this
section shall be entered into with any medicare administrative
contractor unless the Secretary finds that such medicare
administrative contractor will perform its obligations under
the contract efficiently and effectively and will meet such
requirements as to financial responsibility, legal authority,
quality of services provided, and other matters as the
Secretary finds pertinent.
``(3) Performance requirements.--
``(A) Development of specific performance
requirements.--In developing contract performance
requirements, the Secretary shall develop performance
requirements applicable to functions described in
subsection (a)(4).
``(B) Consultation.-- In developing such
requirements, the Secretary may consult with providers
of services and suppliers, organizations representing
individuals entitled to benefits under part A or
enrolled under part B, or both, and organizations and
agencies performing functions necessary to carry out
the purposes of this section with respect to such
performance requirements.
``(C) Inclusion in contracts.--All contractor
performance requirements shall be set forth in the
contract between the Secretary and the appropriate
medicare administrative contractor. Such performance
requirements--
``(i) shall reflect the performance
requirements developed under subparagraph (A),
but may include additional performance
requirements;
``(ii) shall be used for evaluating
contractor performance under the contract; and
``(iii) shall be consistent with the written
statement of work provided under the contract.
``(4) Information requirements.--The Secretary shall not
enter into a contract with a medicare administrative contractor
under this section unless the contractor agrees--
``(A) to furnish to the Secretary such timely
information and reports as the Secretary may find
necessary in performing his functions under this title;
and
``(B) to maintain such records and afford such access
thereto as the Secretary finds necessary to assure the
correctness and verification of the information and
reports under subparagraph (A) and otherwise to carry
out the purposes of this title.
``(5) Surety bond.--A contract with a medicare administrative
contractor under this section may require the medicare
administrative contractor, and any of its officers or employees
certifying payments or disbursing funds pursuant to the
contract, or otherwise participating in carrying out the
contract, to give surety bond to the United States in such
amount as the Secretary may deem appropriate.
``(c) Terms and Conditions.--
``(1) In general.--A contract with any medicare
administrative contractor under this section may contain such
terms and conditions as the Secretary finds necessary or
appropriate and may provide for advances of funds to the
medicare administrative contractor for the making of payments
by it under subsection (a)(4)(B).
``(2) Prohibition on mandates for certain data collection.--
The Secretary may not require, as a condition of entering into,
or renewing, a contract under this section, that the medicare
administrative contractor match data obtained other than in its
activities under this title with data used in the
administration of this title for purposes of identifying
situations in which the provisions of section 1862(b) may
apply.
``(d) Limitation on Liability of Medicare Administrative Contractors
and Certain Officers.--
``(1) Certifying officer.--No individual designated pursuant
to a contract under this section as a certifying officer shall,
in the absence of the reckless disregard of the individual's
obligations or the intent by that individual to defraud the
United States, be liable with respect to any payments certified
by the individual under this section.
``(2) Disbursing officer.--No disbursing officer shall, in
the absence of the reckless disregard of the officer's
obligations or the intent by that officer to defraud the United
States, be liable with respect to any payment by such officer
under this section if it was based upon an authorization (which
meets the applicable requirements for such internal controls
established by the Comptroller General) of a certifying officer
designated as provided in paragraph (1) of this subsection.
``(3) Liability of medicare administrative contractor.--
``(A) In general.--No medicare administrative
contractor shall be liable to the United States for a
payment by a certifying or disbursing officer unless,
in connection with such payment, the medicare
administrative contractor acted with reckless disregard
of its obligations under its medicare administrative
contract or with intent to defraud the United States.
``(B) Relationship to false claims act.--Nothing in
this subsection shall be construed to limit liability
for conduct that would constitute a violation of
sections 3729 through 3731 of title 31, United States
Code (commonly known as the `False Claims Act').
``(4) Indemnification by secretary.--
``(A) In general.--Subject to subparagraphs (B) and
(D), in the case of a medicare administrative
contractor (or a person who is a director, officer, or
employee of such a contractor or who is engaged by the
contractor to participate directly in the claims
administration process) who is made a party to any
judicial or administrative proceeding arising from or
relating directly to the claims administration process
under this title, the Secretary may, to the extent the
Secretary determines to be appropriate and as specified
in the contract with the contractor, indemnify the
contractor and such persons.
``(B) Conditions.--The Secretary may not provide
indemnification under subparagraph (A) insofar as the
liability for such costs arises directly from conduct
that is determined by the judicial proceeding or by the
Secretary to be criminal in nature, fraudulent, or
grossly negligent. If indemnification is provided by
the Secretary with respect to a contractor before a
determination that such costs arose directly from such
conduct, the contractor shall reimburse the Secretary
for costs of indemnification.
``(C) Scope of indemnification.--Indemnification by
the Secretary under subparagraph (A) may include
payment of judgments, settlements (subject to
subparagraph (D)), awards, and costs (including
reasonable legal expenses).
``(D) Written approval for settlements.--A contractor
or other person described in subparagraph (A) may not
propose to negotiate a settlement or compromise of a
proceeding described in such subparagraph without the
prior written approval of the Secretary to negotiate
such settlement or compromise. Any indemnification
under subparagraph (A) with respect to amounts paid
under a settlement or compromise of a proceeding
described in such subparagraph are conditioned upon
prior written approval by the Secretary of the final
settlement or compromise.
``(E) Construction.--Nothing in this paragraph shall
be construed--
``(i) to change any common law immunity that
may be available to a medicare administrative
contractor or person described in subparagraph
(A); or
``(ii) to permit the payment of costs not
otherwise allowable, reasonable, or allocable
under the Federal Acquisition Regulations.''.
(2) Consideration of incorporation of current law
standards.--In developing contract performance requirements
under section 1874A(b) of the Social Security Act, as inserted
by paragraph (1), the Secretary shall consider inclusion of the
performance standards described in sections 1816(f)(2) of such
Act (relating to timely processing of reconsiderations and
applications for exemptions) and section 1842(b)(2)(B) of such
Act (relating to timely review of determinations and fair
hearing requests), as such sections were in effect before the
date of the enactment of this Act.
(b) Conforming Amendments to Section 1816 (Relating to Fiscal
Intermediaries).--Section 1816 (42 U.S.C. 1395h) is amended as follows:
(1) The heading is amended to read as follows:
``provisions relating to the administration of part a''.
(2) Subsection (a) is amended to read as follows:
``(a) The administration of this part shall be conducted through
contracts with medicare administrative contractors under section
1874A.''.
(3) Subsection (b) is repealed.
(4) Subsection (c) is amended--
(A) by striking paragraph (1); and
(B) in each of paragraphs (2)(A) and (3)(A), by
striking ``agreement under this section'' and inserting
``contract under section 1874A that provides for making
payments under this part''.
(5) Subsections (d) through (i) are repealed.
(6) Subsections (j) and (k) are each amended--
(A) by striking ``An agreement with an agency or
organization under this section'' and inserting ``A
contract with a medicare administrative contractor
under section 1874A with respect to the administration
of this part''; and
(B) by striking ``such agency or organization'' and
inserting ``such medicare administrative contractor''
each place it appears.
(7) Subsection (l) is repealed.
(c) Conforming Amendments to Section 1842 (Relating to Carriers).--
Section 1842 (42 U.S.C. 1395u) is amended as follows:
(1) The heading is amended to read as follows:
``provisions relating to the administration of part b''.
(2) Subsection (a) is amended to read as follows:
``(a) The administration of this part shall be conducted through
contracts with medicare administrative contractors under section
1874A.''.
(3) Subsection (b) is amended--
(A) by striking paragraph (1);
(B) in paragraph (2)--
(i) by striking subparagraphs (A) and (B);
(ii) in subparagraph (C), by striking
``carriers'' and inserting ``medicare
administrative contractors''; and
(iii) by striking subparagraphs (D) and (E);
(C) in paragraph (3)--
(i) in the matter before subparagraph (A), by
striking ``Each such contract shall provide
that the carrier'' and inserting ``The
Secretary'';
(ii) by striking ``will'' the first place it
appears in each of subparagraphs (A), (B), (F),
(G), (H), and (L) and inserting ``shall'';
(iii) in subparagraph (B), in the matter
before clause (i), by striking ``to the
policyholders and subscribers of the carrier''
and inserting ``to the policyholders and
subscribers of the medicare administrative
contractor'';
(iv) by striking subparagraphs (C), (D), and
(E);
(v) in subparagraph (H)--
(I) by striking ``if it makes
determinations or payments with respect
to physicians' services,'' in the
matter preceding clause (i); and
(II) by striking ``carrier'' and
inserting ``medicare administrative
contractor'' in clause (i);
(vi) by striking subparagraph (I);
(vii) in subparagraph (L), by striking the
semicolon and inserting a period;
(viii) in the first sentence, after
subparagraph (L), by striking ``and shall
contain'' and all that follows through the
period; and
(ix) in the seventh sentence, by inserting
``medicare administrative contractor,'' after
``carrier,''; and
(D) by striking paragraph (5);
(E) in paragraph (6)(D)(iv), by striking ``carrier''
and inserting ``medicare administrative contractor'';
and
(F) in paragraph (7), by striking ``the carrier'' and
inserting ``the Secretary'' each place it appears.
(4) Subsection (c) is amended--
(A) by striking paragraph (1);
(B) in paragraph (2)(A), by striking ``contract under
this section which provides for the disbursement of
funds, as described in subsection (a)(1)(B),'' and
inserting ``contract under section 1874A that provides
for making payments under this part'';
(C) in paragraph (3)(A), by striking ``subsection
(a)(1)(B)'' and inserting ``section 1874A(a)(3)(B)'';
(D) in paragraph (4), in the matter preceding
subparagraph (A), by striking ``carrier'' and inserting
``medicare administrative contractor''; and
(E) by striking paragraphs (5) and (6).
(5) Subsections (d), (e), and (f) are repealed.
(6) Subsection (g) is amended by striking ``carrier or
carriers'' and inserting ``medicare administrative contractor
or contractors''.
(7) Subsection (h) is amended--
(A) in paragraph (2)--
(i) by striking ``Each carrier having an
agreement with the Secretary under subsection
(a)'' and inserting ``The Secretary''; and
(ii) by striking ``Each such carrier'' and
inserting ``The Secretary'';
(B) in paragraph (3)(A)--
(i) by striking ``a carrier having an
agreement with the Secretary under subsection
(a)'' and inserting ``medicare administrative
contractor having a contract under section
1874A that provides for making payments under
this part''; and
(ii) by striking ``such carrier'' and
inserting ``such contractor'';
(C) in paragraph (3)(B)--
(i) by striking ``a carrier'' and inserting
``a medicare administrative contractor'' each
place it appears; and
(ii) by striking ``the carrier'' and
inserting ``the contractor'' each place it
appears; and
(D) in paragraphs (5)(A) and (5)(B)(iii), by striking
``carriers'' and inserting ``medicare administrative
contractors'' each place it appears.
(8) Subsection (l) is amended--
(A) in paragraph (1)(A)(iii), by striking ``carrier''
and inserting ``medicare administrative contractor'';
and
(B) in paragraph (2), by striking ``carrier'' and
inserting ``medicare administrative contractor''.
(9) Subsection (p)(3)(A) is amended by striking ``carrier''
and inserting ``medicare administrative contractor''.
(10) Subsection (q)(1)(A) is amended by striking ``carrier''.
(d) Effective Date; Transition Rule.--
(1) Effective date.--
(A) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall
take effect on October 1, 2005, and the Secretary is
authorized to take such steps before such date as may
be necessary to implement such amendments on a timely
basis.
(B) Construction for current contracts.--Such
amendments shall not apply to contracts in effect
before the date specified under subparagraph (A) that
continue to retain the terms and conditions in effect
on such date (except as otherwise provided under this
Act, other than under this section) until such date as
the contract is let out for competitive bidding under
such amendments.
(C) Deadline for competitive bidding.--The Secretary
shall provide for the letting by competitive bidding of
all contracts for functions of medicare administrative
contractors for annual contract periods that begin on
or after October 1, 2010.
(D) Waiver of provider nomination provisions during
transition.--During the period beginning on the date of
the enactment of this Act and before the date specified
under subparagraph (A), the Secretary may enter into
new agreements under section 1816 of the Social
Security Act (42 U.S.C. 1395h) without regard to any of
the provider nomination provisions of such section.
(2) General transition rules.--The Secretary shall take such
steps, consistent with paragraph (1)(B) and (1)(C), as are
necessary to provide for an appropriate transition from
contracts under section 1816 and section 1842 of the Social
Security Act (42 U.S.C. 1395h, 1395u) to contracts under
section 1874A, as added by subsection (a)(1).
(3) Authorizing continuation of mip functions under current
contracts and agreements and under rollover contracts.--The
provisions contained in the exception in section 1893(d)(2) of
the Social Security Act (42 U.S.C. 1395ddd(d)(2)) shall
continue to apply notwithstanding the amendments made by this
section, and any reference in such provisions to an agreement
or contract shall be deemed to include a contract under section
1874A of such Act, as inserted by subsection (a)(1), that
continues the activities referred to in such provisions.
(e) References.--On and after the effective date provided under
subsection (d)(1), any reference to a fiscal intermediary or carrier
under title XI or XVIII of the Social Security Act (or any regulation,
manual instruction, interpretative rule, statement of policy, or
guideline issued to carry out such titles) shall be deemed a reference
to an appropriate medicare administrative contractor (as provided under
section 1874A of the Social Security Act).
(f) Reports on Implementation.--
(1) Plan for implementation.--By not later than October 1,
2004, the Secretary shall submit a report to Congress and the
Comptroller General of the United States that describes the
plan for implementation of the amendments made by this section.
The Comptroller General shall conduct an evaluation of such
plan and shall submit to Congress, not later than 6 months
after the date the report is received, a report on such
evaluation and shall include in such report such
recommendations as the Comptroller General deems appropriate.
(2) Status of implementation.--The Secretary shall submit a
report to Congress not later than October 1, 2008, that
describes the status of implementation of such amendments and
that includes a description of the following:
(A) The number of contracts that have been
competitively bid as of such date.
(B) The distribution of functions among contracts and
contractors.
(C) A timeline for complete transition to full
competition.
(D) A detailed description of how the Secretary has
modified oversight and management of medicare
contractors to adapt to full competition.
SEC. 202. REQUIREMENTS FOR INFORMATION SECURITY FOR MEDICARE
ADMINISTRATIVE CONTRACTORS.
(a) In General.--Section 1874A, as added by section 201(a)(1), is
amended by adding at the end the following new subsection:
``(e) Requirements for Information Security.--
``(1) Development of information security program.--A
medicare administrative contractor that performs the functions
referred to in subparagraphs (A) and (B) of subsection (a)(4)
(relating to determining and making payments) shall implement a
contractor-wide information security program to provide
information security for the operation and assets of the
contractor with respect to such functions under this title. An
information security program under this paragraph shall meet
the requirements for information security programs imposed on
Federal agencies under paragraphs (1) through (8) of section
3544(b) of title 44, United States Code (other than
requirements under paragraphs (2)(D)(i), (5)(A), and (5)(B) of
such section).
``(2) Independent audits.--
``(A) Performance of annual evaluations.--Each year a
medicare administrative contractor that performs the
functions referred to in subparagraphs (A) and (B) of
subsection (a)(4) (relating to determining and making
payments) shall undergo an evaluation of the
information security of the contractor with respect to
such functions under this title. The evaluation shall--
``(i) be performed by an entity that meets
such requirements for independence as the
Inspector General of the Department of Health
and Human Services may establish; and
``(ii) test the effectiveness of information
security policies, procedures, and practices of
a representative subset of the contractor's
information systems (as defined in section
3502(8) of title 44, United States Code)
relating to such functions under this title and
an assessment of compliance with the
requirements of this subsection and related
information security policies, procedures,
standards and guidelines, including policies
and procedures as may be prescribed by the
Director of the Office of Management and Budget
and applicable information security standards
promulgated under section 11331 of title 40,
United States Code.
``(B) Deadline for initial evaluation.--
``(i) New contractors.--In the case of a
medicare administrative contractor covered by
this subsection that has not previously
performed the functions referred to in
subparagraphs (A) and (B) of subsection (a)(4)
(relating to determining and making payments)
as a fiscal intermediary or carrier under
section 1816 or 1842, the first independent
evaluation conducted pursuant subparagraph (A)
shall be completed prior to commencing such
functions.
``(ii) Other contractors.--In the case of a
medicare administrative contractor covered by
this subsection that is not described in clause
(i), the first independent evaluation conducted
pursuant subparagraph (A) shall be completed
within 1 year after the date the contractor
commences functions referred to in clause (i)
under this section.
``(C) Reports on evaluations.--
``(i) To the department of health and human
services.--The results of independent
evaluations under subparagraph (A) shall be
submitted promptly to the Inspector General of
the Department of Health and Human Services and
to the Secretary.
``(ii) To congress.--The Inspector General of
Department of Health and Human Services shall
submit to Congress annual reports on the
results of such evaluations, including
assessments of the scope and sufficiency of
such evaluations.
``(iii) Agency reporting.--The Secretary
shall address the results of such evaluations
in reports required under section 3544(c) of
title 44, United States Code.''.
(b) Application of Requirements to Fiscal Intermediaries and
Carriers.--
(1) In general.--The provisions of section 1874A(e)(2) of the
Social Security Act (other than subparagraph (B)), as added by
subsection (a), shall apply to each fiscal intermediary under
section 1816 of the Social Security Act (42 U.S.C. 1395h) and
each carrier under section 1842 of such Act (42 U.S.C. 1395u)
in the same manner as they apply to medicare administrative
contractors under such provisions.
(2) Deadline for initial evaluation.--In the case of such a
fiscal intermediary or carrier with an agreement or contract
under such respective section in effect as of the date of the
enactment of this Act, the first evaluation under section
1874A(e)(2)(A) of the Social Security Act (as added by
subsection (a)), pursuant to paragraph (1), shall be completed
(and a report on the evaluation submitted to the Secretary) by
not later than 1 year after such date.
TITLE III--EDUCATION AND OUTREACH
SEC. 301. PROVIDER EDUCATION AND TECHNICAL ASSISTANCE.
(a) Coordination of Education Funding.--
(1) In general.--The Social Security Act is amended by
inserting after section 1888 the following new section:
``provider education and technical assistance
``Sec. 1889. (a) Coordination of Education Funding.--The Secretary
shall coordinate the educational activities provided through medicare
contractors (as defined in subsection (g), including under section
1893) in order to maximize the effectiveness of Federal education
efforts for providers of services and suppliers.''.
(2) Effective date.--The amendment made by paragraph (1)
shall take effect on the date of the enactment of this Act.
(3) Report.--Not later than October 1, 2004, the Secretary
shall submit to Congress a report that includes a description
and evaluation of the steps taken to coordinate the funding of
provider education under section 1889(a) of the Social Security
Act, as added by paragraph (1).
(b) Incentives To Improve Contractor Performance.--
(1) In general.--Section 1874A, as added by section 201(a)(1)
and as amended by section 202(a), is amended by adding at the
end the following new subsection:
``(f) Incentives To Improve Contractor Performance in Provider
Education and Outreach.--The Secretary shall use specific claims
payment error rates or similar methodology of medicare administrative
contractors in the processing or reviewing of medicare claims in order
to give such contractors an incentive to implement effective education
and outreach programs for providers of services and suppliers.''.
(2) Application to fiscal intermediaries and carriers.--The
provisions of section 1874A(f) of the Social Security Act, as
added by paragraph (1), shall apply to each fiscal intermediary
under section 1816 of the Social Security Act (42 U.S.C. 1395h)
and each carrier under section 1842 of such Act (42 U.S.C.
1395u) in the same manner as they apply to medicare
administrative contractors under such provisions.
(3) GAO report on adequacy of methodology.--Not later than
October 1, 2004, the Comptroller General of the United States
shall submit to Congress and to the Secretary a report on the
adequacy of the methodology under section 1874A(f) of the
Social Security Act, as added by paragraph (1), and shall
include in the report such recommendations as the Comptroller
General determines appropriate with respect to the methodology.
(4) Report on use of methodology in assessing contractor
performance.--Not later than October 1, 2004, the Secretary
shall submit to Congress a report that describes how the
Secretary intends to use such methodology in assessing medicare
contractor performance in implementing effective education and
outreach programs, including whether to use such methodology as
a basis for performance bonuses. The report shall include an
analysis of the sources of identified errors and potential
changes in systems of contractors and rules of the Secretary
that could reduce claims error rates.
(c) Provision of Access to and Prompt Responses From Medicare
Administrative Contractors.--
(1) In general.--Section 1874A, as added by section 201(a)(1)
and as amended by section 202(a) and subsection (b), is further
amended by adding at the end the following new subsection:
``(g) Communications With Beneficiaries, Providers of Services and
Suppliers.--
``(1) Communication strategy.--The Secretary shall develop a
strategy for communications with individuals entitled to
benefits under part A or enrolled under part B, or both, and
with providers of services and suppliers under this title.
``(2) Response to written inquiries.--Each medicare
administrative contractor shall, for those providers of
services and suppliers which submit claims to the contractor
for claims processing and for those individuals entitled to
benefits under part A or enrolled under part B, or both, with
respect to whom claims are submitted for claims processing,
provide general written responses (which may be through
electronic transmission) in a clear, concise, and accurate
manner to inquiries of providers of services, suppliers and
individuals entitled to benefits under part A or enrolled under
part B, or both, concerning the programs under this title
within 45 business days of the date of receipt of such
inquiries.
``(3) Response to toll-free lines.--The Secretary shall
ensure that each medicare administrative contractor shall
provide, for those providers of services and suppliers which
submit claims to the contractor for claims processing and for
those individuals entitled to benefits under part A or enrolled
under part B, or both, with respect to whom claims are
submitted for claims processing, a toll-free telephone number
at which such individuals, providers of services and suppliers
may obtain information regarding billing, coding, claims,
coverage, and other appropriate information under this title.
``(4) Monitoring of contractor responses.--
``(A) In general.--Each medicare administrative
contractor shall, consistent with standards developed
by the Secretary under subparagraph (B)--
``(i) maintain a system for identifying who
provides the information referred to in
paragraphs (2) and (3); and
``(ii) monitor the accuracy, consistency, and
timeliness of the information so provided.
``(B) Development of standards.--
``(i) In general.--The Secretary shall
establish and make public standards to monitor
the accuracy, consistency, and timeliness of
the information provided in response to written
and telephone inquiries under this subsection.
Such standards shall be consistent with the
performance requirements established under
subsection (b)(3).
``(ii) Evaluation.--In conducting evaluations
of individual medicare administrative
contractors, the Secretary shall take into
account the results of the monitoring conducted
under subparagraph (A) taking into account as
performance requirements the standards
established under clause (i). The Secretary
shall, in consultation with organizations
representing providers of services, suppliers,
and individuals entitled to benefits under part
A or enrolled under part B, or both, establish
standards relating to the accuracy,
consistency, and timeliness of the information
so provided.
``(C) Direct monitoring.--Nothing in this paragraph
shall be construed as preventing the Secretary from
directly monitoring the accuracy, consistency, and
timeliness of the information so provided.''.
(2) Effective date.--The amendment made by paragraph (1)
shall take effect October 1, 2004.
(3) Application to fiscal intermediaries and carriers.--The
provisions of section 1874A(g) of the Social Security Act, as
added by paragraph (1), shall apply to each fiscal intermediary
under section 1816 of the Social Security Act (42 U.S.C. 1395h)
and each carrier under section 1842 of such Act (42 U.S.C.
1395u) in the same manner as they apply to medicare
administrative contractors under such provisions.
(d) Improved Provider Education and Training.--
(1) In general.--Section 1889, as added by subsection (a), is
amended by adding at the end the following new subsections:
``(b) Enhanced Education and Training.--
``(1) Additional resources.--There are authorized to be
appropriated to the Secretary (in appropriate part from the
Federal Hospital Insurance Trust Fund and the Federal
Supplementary Medical Insurance Trust Fund) $25,000,000 for
each of fiscal years 2005 and 2006 and such sums as may be
necessary for succeeding fiscal years.
``(2) Use.--The funds made available under paragraph (1)
shall be used to increase the conduct by medicare contractors
of education and training of providers of services and
suppliers regarding billing, coding, and other appropriate
items and may also be used to improve the accuracy,
consistency, and timeliness of contractor responses.
``(c) Tailoring Education and Training Activities for Small Providers
or Suppliers.--
``(1) In general.--Insofar as a medicare contractor conducts
education and training activities, it shall tailor such
activities to meet the special needs of small providers of
services or suppliers (as defined in paragraph (2)).
``(2) Small provider of services or supplier.--In this
subsection, the term `small provider of services or supplier'
means--
``(A) a provider of services with fewer than 25 full-
time-equivalent employees; or
``(B) a supplier with fewer than 10 full-time-
equivalent employees.''.
(2) Effective date.--The amendment made by paragraph (1)
shall take effect on October 1, 2004.
(e) Requirement To Maintain Internet Sites.--
(1) In general.--Section 1889, as added by subsection (a) and
as amended by subsection (d), is further amended by adding at
the end the following new subsection:
``(d) Internet Sites; FAQs.--The Secretary, and each medicare
contractor insofar as it provides services (including claims
processing) for providers of services or suppliers, shall maintain an
Internet site which--
``(1) provides answers in an easily accessible format to
frequently asked questions, and
``(2) includes other published materials of the contractor,
that relate to providers of services and suppliers under the programs
under this title (and title XI insofar as it relates to such
programs).''.
(2) Effective date.--The amendment made by paragraph (1)
shall take effect on October 1, 2004.
(f) Additional Provider Education Provisions.--
(1) In general.--Section 1889, as added by subsection (a) and
as amended by subsections (d) and (e), is further amended by
adding at the end the following new subsections:
``(e) Encouragement of Participation in Education Program
Activities.--A medicare contractor may not use a record of attendance
at (or failure to attend) educational activities or other information
gathered during an educational program conducted under this section or
otherwise by the Secretary to select or track providers of services or
suppliers for the purpose of conducting any type of audit or prepayment
review.
``(f) Construction.--Nothing in this section or section 1893(g) shall
be construed as providing for disclosure by a medicare contractor of
information that would compromise pending law enforcement activities or
reveal findings of law enforcement-related audits.
``(g) Definitions.--For purposes of this section, the term `medicare
contractor' includes the following:
``(1) A medicare administrative contractor with a contract
under section 1874A, including a fiscal intermediary with a
contract under section 1816 and a carrier with a contract under
section 1842.
``(2) An eligible entity with a contract under section 1893.
Such term does not include, with respect to activities of a specific
provider of services or supplier an entity that has no authority under
this title or title IX with respect to such activities and such
provider of services or supplier.''.
(2) Effective date.--The amendment made by paragraph (1)
shall take effect on the date of the enactment of this Act.
SEC. 302. SMALL PROVIDER TECHNICAL ASSISTANCE DEMONSTRATION PROGRAM.
(a) Establishment.--
(1) In general.--The Secretary shall establish a
demonstration program (in this section referred to as the
``demonstration program'') under which technical assistance
described in paragraph (2) is made available, upon request and
on a voluntary basis, to small providers of services or
suppliers in order to improve compliance with the applicable
requirements of the programs under medicare program under title
XVIII of the Social Security Act (including provisions of title
XI of such Act insofar as they relate to such title and are not
administered by the Office of the Inspector General of the
Department of Health and Human Services).
(2) Forms of technical assistance.--The technical assistance
described in this paragraph is--
(A) evaluation and recommendations regarding billing
and related systems; and
(B) information and assistance regarding policies and
procedures under the medicare program, including coding
and reimbursement.
(3) Small providers of services or suppliers.--In this
section, the term ``small providers of services or suppliers''
means--
(A) a provider of services with fewer than 25 full-
time-equivalent employees; or
(B) a supplier with fewer than 10 full-time-
equivalent employees.
(b) Qualification of Contractors.--In conducting the demonstration
program, the Secretary shall enter into contracts with qualified
organizations (such as peer review organizations or entities described
in section 1889(g)(2) of the Social Security Act, as inserted by
section 5(f)(1)) with appropriate expertise with billing systems of the
full range of providers of services and suppliers to provide the
technical assistance. In awarding such contracts, the Secretary shall
consider any prior investigations of the entity's work by the Inspector
General of Department of Health and Human Services or the Comptroller
General of the United States.
(c) Description of Technical Assistance.--The technical assistance
provided under the demonstration program shall include a direct and in-
person examination of billing systems and internal controls of small
providers of services or suppliers to determine program compliance and
to suggest more efficient or effective means of achieving such
compliance.
(d) Avoidance of Recovery Actions for Problems Identified as
Corrected.--The Secretary shall provide that, absent evidence of fraud
and notwithstanding any other provision of law, any errors found in a
compliance review for a small provider of services or supplier that
participates in the demonstration program shall not be subject to
recovery action if the technical assistance personnel under the program
determine that--
(1) the problem that is the subject of the compliance review
has been corrected to their satisfaction within 30 days of the
date of the visit by such personnel to the small provider of
services or supplier; and
(2) such problem remains corrected for such period as is
appropriate.
The previous sentence applies only to claims filed as part of the
demonstration program and lasts only for the duration of such program
and only as long as the small provider of services or supplier is a
participant in such program.
(e) GAO Evaluation.--Not later than 2 years after the date of the
date the demonstration program is first implemented, the Comptroller
General, in consultation with the Inspector General of the Department
of Health and Human Services, shall conduct an evaluation of the
demonstration program. The evaluation shall include a determination of
whether claims error rates are reduced for small providers of services
or suppliers who participated in the program and the extent of improper
payments made as a result of the demonstration program. The Comptroller
General shall submit a report to the Secretary and the Congress on such
evaluation and shall include in such report recommendations regarding
the continuation or extension of the demonstration program.
(f) Financial Participation by Providers.--The provision of technical
assistance to a small provider of services or supplier under the
demonstration program is conditioned upon the small provider of
services or supplier paying an amount estimated (and disclosed in
advance of a provider's or supplier's participation in the program) to
be equal to 25 percent of the cost of the technical assistance.
(g) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary (in appropriate part from the Federal
Hospital Insurance Trust Fund and the Federal Supplementary Medical
Insurance Trust Fund) to carry out the demonstration program--
(1) for fiscal year 2005, $1,000,000, and
(2) for fiscal year 2006, $6,000,000.
SEC. 303. MEDICARE PROVIDER OMBUDSMAN; MEDICARE BENEFICIARY OMBUDSMAN.
(a) Medicare Provider Ombudsman.--Section 1868 (42 U.S.C. 1395ee) is
amended--
(1) by adding at the end of the heading the following: ``;
medicare provider ombudsman'';
(2) by inserting ``Practicing Physicians Advisory Council.--
(1)'' after ``(a)'';
(3) in paragraph (1), as so redesignated under paragraph (2),
by striking ``in this section'' and inserting ``in this
subsection'';
(4) by redesignating subsections (b) and (c) as paragraphs
(2) and (3), respectively; and
(5) by adding at the end the following new subsection:
``(b) Medicare Provider Ombudsman.--The Secretary shall appoint
within the Department of Health and Human Services a Medicare Provider
Ombudsman. The Ombudsman shall--
``(1) provide assistance, on a confidential basis, to
providers of services and suppliers with respect to complaints,
grievances, and requests for information concerning the
programs under this title (including provisions of title XI
insofar as they relate to this title and are not administered
by the Office of the Inspector General of the Department of
Health and Human Services) and in the resolution of unclear or
conflicting guidance given by the Secretary and medicare
contractors to such providers of services and suppliers
regarding such programs and provisions and requirements under
this title and such provisions; and
``(2) submit recommendations to the Secretary for improvement
in the administration of this title and such provisions,
including--
``(A) recommendations to respond to recurring
patterns of confusion in this title and such provisions
(including recommendations regarding suspending
imposition of sanctions where there is widespread
confusion in program administration), and
``(B) recommendations to provide for an appropriate
and consistent response (including not providing for
audits) in cases of self-identified overpayments by
providers of services and suppliers.
The Ombudsman shall not serve as an advocate for any increases in
payments or new coverage of services, but may identify issues and
problems in payment or coverage policies.''.
(b) Medicare Beneficiary Ombudsman.--Title XVIII is amended by
inserting after section 1806 the following new section:
``medicare beneficiary ombudsman
``Sec. 1807. (a) In General.--The Secretary shall appoint within the
Department of Health and Human Services a Medicare Beneficiary
Ombudsman who shall have expertise and experience in the fields of
health care and education of (and assistance to) individuals entitled
to benefits under this title.
``(b) Duties.--The Medicare Beneficiary Ombudsman shall--
``(1) receive complaints, grievances, and requests for
information submitted by individuals entitled to benefits under
part A or enrolled under part B, or both, with respect to any
aspect of the medicare program;
``(2) provide assistance with respect to complaints,
grievances, and requests referred to in paragraph (1),
including--
``(A) assistance in collecting relevant information
for such individuals, to seek an appeal of a decision
or determination made by a fiscal intermediary,
carrier, Medicare+Choice organization, or the
Secretary; and
``(B) assistance to such individuals with any
problems arising from disenrollment from a
Medicare+Choice plan under part C; and
``(3) submit annual reports to Congress and the Secretary
that describe the activities of the Office and that include
such recommendations for improvement in the administration of
this title as the Ombudsman determines appropriate.
The Ombudsman shall not serve as an advocate for any increases in
payments or new coverage of services, but may identify issues and
problems in payment or coverage policies.
``(c) Working With Health Insurance Counseling Programs.--To the
extent possible, the Ombudsman shall work with health insurance
counseling programs (receiving funding under section 4360 of Omnibus
Budget Reconciliation Act of 1990) to facilitate the provision of
information to individuals entitled to benefits under part A or
enrolled under part B, or both regarding Medicare+Choice plans and
changes to those plans. Nothing in this subsection shall preclude
further collaboration between the Ombudsman and such programs.''.
(c) Deadline for Appointment.--The Secretary shall appoint the
Medicare Provider Ombudsman and the Medicare Beneficiary Ombudsman,
under the amendments made by subsections (a) and (b), respectively, by
not later than 1 year after the date of the enactment of this Act.
(d) Funding.--There are authorized to be appropriated to the
Secretary (in appropriate part from the Federal Hospital Insurance
Trust Fund and the Federal Supplementary Medical Insurance Trust Fund)
to carry out the provisions of subsection (b) of section 1868 of the
Social Security Act (relating to the Medicare Provider Ombudsman), as
added by subsection (a)(5) and section 1807 of such Act (relating to
the Medicare Beneficiary Ombudsman), as added by subsection (b), such
sums as are necessary for fiscal year 2004 and each succeeding fiscal
year.
(e) Use of Central, Toll-Free Number (1-800-MEDICARE).--
(1) Phone triage system; listing in medicare handbook instead
of other toll-free numbers.--Section 1804(b) (42 U.S.C. 1395b-
2(b)) is amended by adding at the end the following: ``The
Secretary shall provide, through the toll-free number 1-800-
MEDICARE, for a means by which individuals seeking information
about, or assistance with, such programs who phone such toll-
free number are transferred (without charge) to appropriate
entities for the provision of such information or assistance.
Such toll-free number shall be the toll-free number listed for
general information and assistance in the annual notice under
subsection (a) instead of the listing of numbers of individual
contractors.''.
(2) Monitoring accuracy.--
(A) Study.--The Comptroller General of the United
States shall conduct a study to monitor the accuracy
and consistency of information provided to individuals
entitled to benefits under part A or enrolled under
part B, or both, through the toll-free number 1-800-
MEDICARE, including an assessment of whether the
information provided is sufficient to answer questions
of such individuals. In conducting the study, the
Comptroller General shall examine the education and
training of the individuals providing information
through such number.
(B) Report.--Not later than 1 year after the date of
the enactment of this Act, the Comptroller General
shall submit to Congress a report on the study
conducted under subparagraph (A).
SEC. 304. BENEFICIARY OUTREACH DEMONSTRATION PROGRAM.
(a) In General.--The Secretary shall establish a demonstration
program (in this section referred to as the ``demonstration program'')
under which medicare specialists employed by the Department of Health
and Human Services provide advice and assistance to individuals
entitled to benefits under part A of title XVIII of the Social Security
Act, or enrolled under part B of such title, or both, regarding the
medicare program at the location of existing local offices of the
Social Security Administration.
(b) Locations.--
(1) In general.--The demonstration program shall be conducted
in at least 6 offices or areas. Subject to paragraph (2), in
selecting such offices and areas, the Secretary shall provide
preference for offices with a high volume of visits by
individuals referred to in subsection (a).
(2) Assistance for rural beneficiaries.--The Secretary shall
provide for the selection of at least 2 rural areas to
participate in the demonstration program. In conducting the
demonstration program in such rural areas, the Secretary shall
provide for medicare specialists to travel among local offices
in a rural area on a scheduled basis.
(c) Duration.--The demonstration program shall be conducted over a 3-
year period.
(d) Evaluation and Report.--
(1) Evaluation.--The Secretary shall provide for an
evaluation of the demonstration program. Such evaluation shall
include an analysis of--
(A) utilization of, and satisfaction of those
individuals referred to in subsection (a) with, the
assistance provided under the program; and
(B) the cost-effectiveness of providing beneficiary
assistance through out-stationing medicare specialists
at local offices of the Social Security Administration.
(2) Report.--The Secretary shall submit to Congress a report
on such evaluation and shall include in such report
recommendations regarding the feasibility of permanently out-
stationing medicare specialists at local offices of the Social
Security Administration.
SEC. 305. INCLUSION OF ADDITIONAL INFORMATION IN NOTICES TO
BENEFICIARIES ABOUT SKILLED NURSING FACILITY
BENEFITS.
(a) In General.--The Secretary shall provide that in medicare
beneficiary notices provided (under section 1806(a) of the Social
Security Act, 42 U.S.C. 1395b-7(a)) with respect to the provision of
post-hospital extended care services under part A of title XVIII of the
Social Security Act, there shall be included information on the number
of days of coverage of such services remaining under such part for the
medicare beneficiary and spell of illness involved.
(b) Effective Date.--Subsection (a) shall apply to notices provided
during calendar quarters beginning more than 6 months after the date of
the enactment of this Act.
SEC. 306. INFORMATION ON MEDICARE-CERTIFIED SKILLED NURSING FACILITIES
IN HOSPITAL DISCHARGE PLANS.
(a) Availability of Data.--The Secretary shall publicly provide
information that enables hospital discharge planners, medicare
beneficiaries, and the public to identify skilled nursing facilities
that are participating in the medicare program.
(b) Inclusion of Information in Certain Hospital Discharge Plans.--
(1) In general.--Section 1861(ee)(2)(D) (42 U.S.C.
1395x(ee)(2)(D)) is amended--
(A) by striking ``hospice services'' and inserting
``hospice care and post-hospital extended care
services''; and
(B) by inserting before the period at the end the
following: ``and, in the case of individuals who are
likely to need post-hospital extended care services,
the availability of such services through facilities
that participate in the program under this title and
that serve the area in which the patient resides''.
(2) Effective date.--The amendments made by paragraph (1)
shall apply to discharge plans made on or after such date as
the Secretary shall specify, but not later than 6 months after
the date the Secretary provides for availability of information
under subsection (a).
TITLE IV--APPEALS AND RECOVERY
SEC. 401. TRANSFER OF RESPONSIBILITY FOR MEDICARE APPEALS.
(a) Transition Plan.--
(1) In general.--Not later than October 1, 2004, the
Commissioner of Social Security and the Secretary shall develop
and transmit to Congress and the Comptroller General of the
United States a plan under which the functions of
administrative law judges responsible for hearing cases under
title XVIII of the Social Security Act (and related provisions
in title XI of such Act) are transferred from the
responsibility of the Commissioner and the Social Security
Administration to the Secretary and the Department of Health
and Human Services.
(2) GAO evaluation.--The Comptroller General of the United
States shall evaluate the plan and, not later than the date
that is 6 months after the date on which the plan is received
by the Comptroller General, shall submit to Congress a report
on such evaluation.
(b) Transfer of Adjudication Authority.--
(1) In general.--Not earlier than July 1, 2005, and not later
than October 1, 2005, the Commissioner of Social Security and
the Secretary shall implement the transition plan under
subsection (a) and transfer the administrative law judge
functions described in such subsection from the Social Security
Administration to the Secretary.
(2) Assuring independence of judges.--The Secretary shall
assure the independence of administrative law judges performing
the administrative law judge functions transferred under
paragraph (1) from the Centers for Medicare & Medicaid Services
and its contractors. In order to assure such independence, the
Secretary shall place such judges in an administrative office
that is organizationally and functionally separate from such
Centers. Such judges shall report to, and be under the general
supervision of, the Secretary (or, to the extent the Secretary
delegates such authority, the officer next in rank below the
Secretary), but shall not report to, or be subject to
supervision by, any other officer of the Department.
(3) Geographic distribution.--The Secretary shall provide for
an appropriate geographic distribution of administrative law
judges performing the administrative law judge functions
transferred under paragraph (1) throughout the United States to
ensure timely access to such judges.
(4) Hiring authority.--Subject to the amounts provided in
advance in appropriations Act, the Secretary shall have
authority to hire administrative law judges to hear such cases,
giving priority to those judges with prior experience in
handling medicare appeals and in a manner consistent with
paragraph (3), and to hire support staff for such judges.
(5) Financing.--Amounts payable under law to the Commissioner
for administrative law judges performing the administrative law
judge functions transferred under paragraph (1) from the
Federal Hospital Insurance Trust Fund and the Federal
Supplementary Medical Insurance Trust Fund shall become payable
to the Secretary for the functions so transferred.
(6) Shared resources.--The Secretary shall enter into such
arrangements with the Commissioner as may be appropriate with
respect to transferred functions of administrative law judges
to share office space, support staff, and other resources, with
appropriate reimbursement from the Trust Funds described in
paragraph (5).
(c) Increased Financial Support.--In addition to any amounts
otherwise appropriated, to ensure timely action on appeals before
administrative law judges and the Departmental Appeals Board consistent
with section 1869 of the Social Security Act (as amended by section 521
of BIPA, 114 Stat. 2763A-534), there are authorized to be appropriated
(in appropriate part from the Federal Hospital Insurance Trust Fund and
the Federal Supplementary Medical Insurance Trust Fund) to the
Secretary such sums as are necessary for fiscal year 2005 and each
subsequent fiscal year to--
(1) increase the number of administrative law judges (and
their staffs) under subsection (b)(4);
(2) improve education and training opportunities for
administrative law judges (and their staffs); and
(3) increase the staff of the Departmental Appeals Board.
(d) Conforming Amendment.--Section 1869(f)(2)(A)(i) (42 U.S.C.
1395ff(f)(2)(A)(i)), as added by section 522(a) of BIPA (114 Stat.
2763A-543), is amended by striking ``of the Social Security
Administration''.
SEC. 402. PROCESS FOR EXPEDITED ACCESS TO REVIEW.
(a) Expedited Access to Judicial Review.--Section 1869(b) (42 U.S.C.
1395ff(b)) as amended by BIPA, is amended--
(1) in paragraph (1)(A), by inserting ``, subject to
paragraph (2),'' before ``to judicial review of the Secretary's
final decision'';
(2) in paragraph (1)(F)--
(A) by striking clause (ii);
(B) by striking ``proceeding'' and all that follows
through ``determination'' and inserting
``determinations and reconsiderations''; and
(C) by redesignating subclauses (I) and (II) as
clauses (i) and (ii) and by moving the indentation of
such subclauses (and the matter that follows) 2 ems to
the left; and
(3) by adding at the end the following new paragraph:
``(2) Expedited access to judicial review.--
``(A) In general.--The Secretary shall establish a
process under which a provider of services or supplier
that furnishes an item or service or an individual
entitled to benefits under part A or enrolled under
part B, or both, who has filed an appeal under
paragraph (1) may obtain access to judicial review when
a review panel (described in subparagraph (D)), on its
own motion or at the request of the appellant,
determines that no entity in the administrative appeals
process has the authority to decide the question of law
or regulation relevant to the matters in controversy
and that there is no material issue of fact in dispute.
The appellant may make such request only once with
respect to a question of law or regulation in a case of
an appeal.
``(B) Prompt determinations.--If, after or coincident
with appropriately filing a request for an
administrative hearing, the appellant requests a
determination by the appropriate review panel that no
review panel has the authority to decide the question
of law or regulations relevant to the matters in
controversy and that there is no material issue of fact
in dispute and if such request is accompanied by the
documents and materials as the appropriate review panel
shall require for purposes of making such
determination, such review panel shall make a
determination on the request in writing within 60 days
after the date such review panel receives the request
and such accompanying documents and materials. Such a
determination by such review panel shall be considered
a final decision and not subject to review by the
Secretary.
``(C) Access to judicial review.--
``(i) In general.--If the appropriate review
panel--
``(I) determines that there are no
material issues of fact in dispute and
that the only issue is one of law or
regulation that no review panel has the
authority to decide; or
``(II) fails to make such
determination within the period
provided under subparagraph (B);
then the appellant may bring a civil action as
described in this subparagraph.
``(ii) Deadline for filing.--Such action
shall be filed, in the case described in--
``(I) clause (i)(I), within 60 days
of date of the determination described
in such subparagraph; or
``(II) clause (i)(II), within 60 days
of the end of the period provided under
subparagraph (B) for the determination.
``(iii) Venue.--Such action shall be brought
in the district court of the United States for
the judicial district in which the appellant is
located (or, in the case of an action brought
jointly by more than one applicant, the
judicial district in which the greatest number
of applicants are located) or in the district
court for the District of Columbia.
``(iv) Interest on amounts in controversy.--
Where a provider of services or supplier seeks
judicial review pursuant to this paragraph, the
amount in controversy shall be subject to
annual interest beginning on the first day of
the first month beginning after the 60-day
period as determined pursuant to clause (ii)
and equal to the rate of interest on
obligations issued for purchase by the Federal
Hospital Insurance Trust Fund and by the
Federal Supplementary Medical Insurance Trust
Fund for the month in which the civil action
authorized under this paragraph is commenced,
to be awarded by the reviewing court in favor
of the prevailing party. No interest awarded
pursuant to the preceding sentence shall be
deemed income or cost for the purposes of
determining reimbursement due providers of
services or suppliers under this Act.
``(D) Review panels.--For purposes of this
subsection, a `review panel' is a panel consisting of 3
members (who shall be administrative law judges,
members of the Departmental Appeals Board, or qualified
individuals associated with a qualified independent
contractor (as defined in subsection (c)(2)) or with
another independent entity) designated by the Secretary
for purposes of making determinations under this
paragraph.''.
(b) Application to Provider Agreement Determinations.--Section
1866(h)(1) (42 U.S.C. 1395cc(h)(1)) is amended--
(1) by inserting ``(A)'' after ``(h)(1)''; and
(2) by adding at the end the following new subparagraph:
``(B) An institution or agency described in subparagraph (A) that has
filed for a hearing under subparagraph (A) shall have expedited access
to judicial review under this subparagraph in the same manner as
providers of services, suppliers, and individuals entitled to benefits
under part A or enrolled under part B, or both, may obtain expedited
access to judicial review under the process established under section
1869(b)(2). Nothing in this subparagraph shall be construed to affect
the application of any remedy imposed under section 1819 during the
pendency of an appeal under this subparagraph.''.
(c) Effective Date.--The amendments made by this section shall apply
to appeals filed on or after October 1, 2004.
(d) Expedited Review of Certain Provider Agreement Determinations.--
(1) Termination and certain other immediate remedies.--The
Secretary shall develop and implement a process to expedite
proceedings under sections 1866(h) of the Social Security Act
(42 U.S.C. 1395cc(h)) in which the remedy of termination of
participation, or a remedy described in clause (i) or (iii) of
section 1819(h)(2)(B) of such Act (42 U.S.C. 1395i-3(h)(2)(B))
which is applied on an immediate basis, has been imposed. Under
such process priority shall be provided in cases of
termination.
(2) Increased financial support.--In addition to any amounts
otherwise appropriated, to reduce by 50 percent the average
time for administrative determinations on appeals under section
1866(h) of the Social Security Act (42 U.S.C. 1395cc(h)), there
are authorized to be appropriated (in appropriate part from the
Federal Hospital Insurance Trust Fund and the Federal
Supplementary Medical Insurance Trust Fund) to the Secretary
such additional sums for fiscal year 2005 and each subsequent
fiscal year as may be necessary. The purposes for which such
amounts are available include increasing the number of
administrative law judges (and their staffs) and the appellate
level staff at the Departmental Appeals Board of the Department
of Health and Human Services and educating such judges and
staffs on long-term care issues.
(e) Process for Reinstatement of Approval of Certain SNF Training
Programs.--
(1) In general.--In the case of a termination of approval of
a nurse aide training program described in paragraph (2) of a
skilled nursing facility, the Secretary shall develop and
implement a process for the reinstatement of approval of such
program before the end of the mandatory 2 year disapproval
period if the facility and program is certified by the
Secretary, in coordination with the applicable State survey and
certification agency and after public notice, as being in
compliance with applicable requirements and as having remedied
any deficiencies in the facility or program that resulted in
noncompliance.
(2) Termination of approval described.--A termination of
approval of a training program described in this paragraph is a
mandatory 2-year disapproval provided for under section
1819(f)(2)(B)(iii) of the Social Security Act (42 U.S.C. 1395i-
3(f)(2)(B)(iii)) if the only basis for the mandatory
disapproval was the assessment of a civil money penalty of not
less than $5,000.
SEC. 403. REVISIONS TO MEDICARE APPEALS PROCESS.
(a) Requiring Full and Early Presentation of Evidence.--
(1) In general.--Section 1869(b) (42 U.S.C. 1395ff(b)), as
amended by BIPA and as amended by section 402(a), is further
amended by adding at the end the following new paragraph:
``(3) Requiring full and early presentation of evidence by
providers.--A provider of services or supplier may not
introduce evidence in any appeal under this section that was
not presented at the reconsideration conducted by the qualified
independent contractor under subsection (c), unless there is
good cause which precluded the introduction of such evidence at
or before that reconsideration.''.
(2) Effective date.--The amendment made by paragraph (1)
shall take effect on October 1, 2004.
(b) Use of Patients' Medical Records.--Section 1869(c)(3)(B)(i) (42
U.S.C. 1395ff(c)(3)(B)(i)), as amended by BIPA, is amended by inserting
``(including the medical records of the individual involved)'' after
``clinical experience''.
(c) Notice Requirements for Medicare Appeals.--
(1) Initial determinations and redeterminations.--Section
1869(a) (42 U.S.C. 1395ff(a)), as amended by BIPA, is amended
by adding at the end the following new paragraphs:
``(4) Requirements of notice of determinations.--With respect
to an initial determination insofar as it results in a denial
of a claim for benefits--
``(A) the written notice on the determination shall
include--
``(i) the reasons for the determination,
including whether a local medical review policy
or a local coverage determination was used;
``(ii) the procedures for obtaining
additional information concerning the
determination, including the information
described in subparagraph (B); and
``(iii) notification of the right to seek a
redetermination or otherwise appeal the
determination and instructions on how to
initiate such a redetermination under this
section; and
``(B) the person provided such notice may obtain,
upon request, the specific provision of the policy,
manual, or regulation used in making the determination.
``(5) Requirements of notice of redeterminations.--With
respect to a redetermination insofar as it results in a denial
of a claim for benefits--
``(A) the written notice on the redetermination shall
include--
``(i) the specific reasons for the
redetermination;
``(ii) as appropriate, a summary of the
clinical or scientific evidence used in making
the redetermination;
``(iii) a description of the procedures for
obtaining additional information concerning the
redetermination; and
``(iv) notification of the right to appeal
the redetermination and instructions on how to
initiate such an appeal under this section;
``(B) such written notice shall be provided in
printed form and written in a manner calculated to be
understood by the individual entitled to benefits under
part A or enrolled under part B, or both; and
``(C) the person provided such notice may obtain,
upon request, information on the specific provision of
the policy, manual, or regulation used in making the
redetermination.''.
(2) Reconsiderations.--Section 1869(c)(3)(E) (42 U.S.C.
1395ff(c)(3)(E)), as amended by BIPA, is amended--
(A) by inserting ``be written in a manner calculated
to be understood by the individual entitled to benefits
under part A or enrolled under part B, or both, and
shall include (to the extent appropriate)'' after ``in
writing, ''; and
(B) by inserting ``and a notification of the right to
appeal such determination and instructions on how to
initiate such appeal under this section'' after ``such
decision,''.
(3) Appeals.--Section 1869(d) (42 U.S.C. 1395ff(d)), as
amended by BIPA, is amended--
(A) in the heading, by inserting ``; Notice'' after
``Secretary''; and
(B) by adding at the end the following new paragraph:
``(4) Notice.--Notice of the decision of an administrative
law judge shall be in writing in a manner calculated to be
understood by the individual entitled to benefits under part A
or enrolled under part B, or both, and shall include--
``(A) the specific reasons for the determination
(including, to the extent appropriate, a summary of the
clinical or scientific evidence used in making the
determination);
``(B) the procedures for obtaining additional
information concerning the decision; and
``(C) notification of the right to appeal the
decision and instructions on how to initiate such an
appeal under this section.''.
(4) Submission of record for appeal.--Section
1869(c)(3)(J)(i) (42 U.S.C. 1395ff(c)(3)(J)(i)) by striking
``prepare'' and inserting ``submit'' and by striking ``with
respect to'' and all that follows through ``and relevant
policies''.
(d) Qualified Independent Contractors.--
(1) Eligibility requirements of qualified independent
contractors.--Section 1869(c)(3) (42 U.S.C. 1395ff(c)(3)), as
amended by BIPA, is amended--
(A) in subparagraph (A), by striking ``sufficient
training and expertise in medical science and legal
matters'' and inserting ``sufficient medical, legal,
and other expertise (including knowledge of the program
under this title) and sufficient staffing''; and
(B) by adding at the end the following new
subparagraph:
``(K) Independence requirements.--
``(i) In general.--Subject to clause (ii), a
qualified independent contractor shall not
conduct any activities in a case unless the
entity--
``(I) is not a related party (as
defined in subsection (g)(5));
``(II) does not have a material
familial, financial, or professional
relationship with such a party in
relation to such case; and
``(III) does not otherwise have a
conflict of interest with such a party.
``(ii) Exception for reasonable
compensation.--Nothing in clause (i) shall be
construed to prohibit receipt by a qualified
independent contractor of compensation from the
Secretary for the conduct of activities under
this section if the compensation is provided
consistent with clause (iii).
``(iii) Limitations on entity compensation.--
Compensation provided by the Secretary to a
qualified independent contractor in connection
with reviews under this section shall not be
contingent on any decision rendered by the
contractor or by any reviewing professional.''.
(2) Eligibility requirements for reviewers.--Section 1869 (42
U.S.C. 1395ff), as amended by BIPA, is amended--
(A) by amending subsection (c)(3)(D) to read as
follows:
``(D) Qualifications for reviewers.--The requirements
of subsection (g) shall be met (relating to
qualifications of reviewing professionals).''; and
(B) by adding at the end the following new
subsection:
``(g) Qualifications of Reviewers.--
``(1) In general.--In reviewing determinations under this
section, a qualified independent contractor shall assure that--
``(A) each individual conducting a review shall meet
the qualifications of paragraph (2);
``(B) compensation provided by the contractor to each
such reviewer is consistent with paragraph (3); and
``(C) in the case of a review by a panel described in
subsection (c)(3)(B) composed of physicians or other
health care professionals (each in this subsection
referred to as a `reviewing professional'), a reviewing
professional meets the qualifications described in
paragraph (4) and, where a claim is regarding the
furnishing of treatment by a physician (allopathic or
osteopathic) or the provision of items or services by a
physician (allopathic or osteopathic), a reviewing
professional shall be a physician (allopathic or
osteopathic).
``(2) Independence.--
``(A) In general.--Subject to subparagraph (B), each
individual conducting a review in a case shall--
``(i) not be a related party (as defined in
paragraph (5));
``(ii) not have a material familial,
financial, or professional relationship with
such a party in the case under review; and
``(iii) not otherwise have a conflict of
interest with such a party.
``(B) Exception.--Nothing in subparagraph (A) shall
be construed to--
``(i) prohibit an individual, solely on the
basis of a participation agreement with a
fiscal intermediary, carrier, or other
contractor, from serving as a reviewing
professional if--
``(I) the individual is not involved
in the provision of items or services
in the case under review;
``(II) the fact of such an agreement
is disclosed to the Secretary and the
individual entitled to benefits under
part A or enrolled under part B, or
both, (or authorized representative)
and neither party objects; and
``(III) the individual is not an
employee of the intermediary, carrier,
or contractor and does not provide
services exclusively or primarily to or
on behalf of such intermediary,
carrier, or contractor;
``(ii) prohibit an individual who has staff
privileges at the institution where the
treatment involved takes place from serving as
a reviewer merely on the basis of having such
staff privileges if the existence of such
privileges is disclosed to the Secretary and
such individual (or authorized representative),
and neither party objects; or
``(iii) prohibit receipt of compensation by a
reviewing professional from a contractor if the
compensation is provided consistent with
paragraph (3).
For purposes of this paragraph, the term `participation
agreement' means an agreement relating to the provision
of health care services by the individual and does not
include the provision of services as a reviewer under
this subsection.
``(3) Limitations on reviewer compensation.--Compensation
provided by a qualified independent contractor to a reviewer in
connection with a review under this section shall not be
contingent on the decision rendered by the reviewer.
``(4) Licensure and expertise.--Each reviewing professional
shall be--
``(A) a physician (allopathic or osteopathic) who is
appropriately credentialed or licensed in one or more
States to deliver health care services and has medical
expertise in the field of practice that is appropriate
for the items or services at issue; or
``(B) a health care professional who is legally
authorized in one or more States (in accordance with
State law or the State regulatory mechanism provided by
State law) to furnish the health care items or services
at issue and has medical expertise in the field of
practice that is appropriate for such items or
services.
``(5) Related party defined.--For purposes of this section,
the term `related party' means, with respect to a case under
this title involving a specific individual entitled to benefits
under part A or enrolled under part B, or both, any of the
following:
``(A) The Secretary, the medicare administrative
contractor involved, or any fiduciary, officer,
director, or employee of the Department of Health and
Human Services, or of such contractor.
``(B) The individual (or authorized representative).
``(C) The health care professional that provides the
items or services involved in the case.
``(D) The institution at which the items or services
(or treatment) involved in the case are provided.
``(E) The manufacturer of any drug or other item that
is included in the items or services involved in the
case.
``(F) Any other party determined under any
regulations to have a substantial interest in the case
involved.''.
(3) Reducing minimum number of qualified independent
contractors.--Section 1869(c)(4) (42 U.S.C. 1395ff(c)(4)) is
amended by striking ``not fewer than 12 qualified independent
contractors under this subsection'' and inserting ``a
sufficient number of qualified independent contractors (but not
fewer than 4 such contractors) to conduct reconsiderations
consistent with the timeframes applicable under this
subsection''.
(4) Effective date.--The amendments made by paragraphs (1)
and (2) shall be effective as if included in the enactment of
the respective provisions of subtitle C of title V of BIPA,
(114 Stat. 2763A-534).
(5) Transition.--In applying section 1869(g) of the Social
Security Act (as added by paragraph (2)), any reference to a
medicare administrative contractor shall be deemed to include a
reference to a fiscal intermediary under section 1816 of the
Social Security Act (42 U.S.C. 1395h) and a carrier under
section 1842 of such Act (42 U.S.C. 1395u).
SEC. 404. PREPAYMENT REVIEW.
(a) In General.--Section 1874A, as added by section 201(a)(1) and as
amended by sections 202(b), 301(b)(1), and 301(c)(1), is further
amended by adding at the end the following new subsection:
``(h) Conduct of Prepayment Review.--
``(1) Conduct of random prepayment review.--
``(A) In general.--A medicare administrative
contractor may conduct random prepayment review only to
develop a contractor-wide or program-wide claims
payment error rates or under such additional
circumstances as may be provided under regulations,
developed in consultation with providers of services
and suppliers.
``(B) Use of standard protocols when conducting
prepayment reviews.--When a medicare administrative
contractor conducts a random prepayment review, the
contractor may conduct such review only in accordance
with a standard protocol for random prepayment audits
developed by the Secretary.
``(C) Construction.--Nothing in this paragraph shall
be construed as preventing the denial of payments for
claims actually reviewed under a random prepayment
review.
``(D) Random prepayment review.--For purposes of this
subsection, the term `random prepayment review' means a
demand for the production of records or documentation
absent cause with respect to a claim.
``(2) Limitations on non-random prepayment review.--
``(A) Limitations on initiation of non-random
prepayment review.--A medicare administrative
contractor may not initiate non-random prepayment
review of a provider of services or supplier based on
the initial identification by that provider of services
or supplier of an improper billing practice unless
there is a likelihood of sustained or high level of
payment error (as defined in subsection (i)(3)(A)).
``(B) Termination of non-random prepayment review.--
The Secretary shall issue regulations relating to the
termination, including termination dates, of non-random
prepayment review. Such regulations may vary such a
termination date based upon the differences in the
circumstances triggering prepayment review.''.
(b) Effective Date.--
(1) In general.--Except as provided in this subsection, the
amendment made by subsection (a) shall take effect 1 year after
the date of the enactment of this Act.
(2) Deadline for promulgation of certain regulations.--The
Secretary shall first issue regulations under section 1874A(h)
of the Social Security Act, as added by subsection (a), by not
later than 1 year after the date of the enactment of this Act.
(3) Application of standard protocols for random prepayment
review.--Section 1874A(h)(1)(B) of the Social Security Act, as
added by subsection (a), shall apply to random prepayment
reviews conducted on or after such date (not later than 1 year
after the date of the enactment of this Act) as the Secretary
shall specify.
(c) Application to Fiscal Intermediaries and Carriers.--The
provisions of section 1874A(h) of the Social Security Act, as added by
subsection (a), shall apply to each fiscal intermediary under section
1816 of the Social Security Act (42 U.S.C. 1395h) and each carrier
under section 1842 of such Act (42 U.S.C. 1395u) in the same manner as
they apply to medicare administrative contractors under such
provisions.
SEC. 405. RECOVERY OF OVERPAYMENTS.
(a) In General.--Section 1893 (42 U.S.C. 1395ddd) is amended by
adding at the end the following new subsection:
``(f) Recovery of Overpayments.--
``(1) Use of repayment plans.--
``(A) In general.--If the repayment, within 30 days
by a provider of services or supplier, of an
overpayment under this title would constitute a
hardship (as defined in subparagraph (B)), subject to
subparagraph (C), upon request of the provider of
services or supplier the Secretary shall enter into a
plan with the provider of services or supplier for the
repayment (through offset or otherwise) of such
overpayment over a period of at least 6 months but not
longer than 3 years (or not longer than 5 years in the
case of extreme hardship, as determined by the
Secretary). Interest shall accrue on the balance
through the period of repayment. Such plan shall meet
terms and conditions determined to be appropriate by
the Secretary.
``(B) Hardship.--
``(i) In general.--For purposes of
subparagraph (A), the repayment of an
overpayment (or overpayments) within 30 days is
deemed to constitute a hardship if--
``(I) in the case of a provider of
services that files cost reports, the
aggregate amount of the overpayments
exceeds 10 percent of the amount paid
under this title to the provider of
services for the cost reporting period
covered by the most recently submitted
cost report; or
``(II) in the case of another
provider of services or supplier, the
aggregate amount of the overpayments
exceeds 10 percent of the amount paid
under this title to the provider of
services or supplier for the previous
calendar year.
``(ii) Rule of application.--The Secretary
shall establish rules for the application of
this subparagraph in the case of a provider of
services or supplier that was not paid under
this title during the previous year or was paid
under this title only during a portion of that
year.
``(iii) Treatment of previous overpayments.--
If a provider of services or supplier has
entered into a repayment plan under
subparagraph (A) with respect to a specific
overpayment amount, such payment amount under
the repayment plan shall not be taken into
account under clause (i) with respect to
subsequent overpayment amounts.
``(C) Exceptions.--Subparagraph (A) shall not apply
if--
``(i) the Secretary has reason to suspect
that the provider of services or supplier may
file for bankruptcy or otherwise cease to do
business or discontinue participation in the
program under this title; or
``(ii) there is an indication of fraud or
abuse committed against the program.
``(D) Immediate collection if violation of repayment
plan.--If a provider of services or supplier fails to
make a payment in accordance with a repayment plan
under this paragraph, the Secretary may immediately
seek to offset or otherwise recover the total balance
outstanding (including applicable interest) under the
repayment plan.
``(E) Relation to no fault provision.--Nothing in
this paragraph shall be construed as affecting the
application of section 1870(c) (relating to no
adjustment in the cases of certain overpayments).
``(2) Limitation on recoupment.--
``(A) In general.--In the case of a provider of
services or supplier that is determined to have
received an overpayment under this title and that seeks
a reconsideration by a qualified independent contractor
on such determination under section 1869(b)(1), the
Secretary may not take any action (or authorize any
other person, including any medicare contractor, as
defined in subparagraph (C)) to recoup the overpayment
until the date the decision on the reconsideration has
been rendered. If the provisions of section 1869(b)(1)
(providing for such a reconsideration by a qualified
independent contractor) are not in effect, in applying
the previous sentence any reference to such a
reconsideration shall be treated as a reference to a
redetermination by the fiscal intermediary or carrier
involved.
``(B) Collection with interest.--Insofar as the
determination on such appeal is against the provider of
services or supplier, interest on the overpayment shall
accrue on and after the date of the original notice of
overpayment. Insofar as such determination against the
provider of services or supplier is later reversed, the
Secretary shall provide for repayment of the amount
recouped plus interest at the same rate as would apply
under the previous sentence for the period in which the
amount was recouped.
``(C) Medicare contractor defined.--For purposes of
this subsection, the term `medicare contractor' has the
meaning given such term in section 1889(g).
``(3) Limitation on use of extrapolation.--A medicare
contractor may not use extrapolation to determine overpayment
amounts to be recovered by recoupment, offset, or otherwise
unless--
``(A) there is a sustained or high level of payment
error (as defined by the Secretary by regulation); or
``(B) documented educational intervention has failed
to correct the payment error (as determined by the
Secretary).
``(4) Provision of supporting documentation.--In the case of
a provider of services or supplier with respect to which
amounts were previously overpaid, a medicare contractor may
request the periodic production of records or supporting
documentation for a limited sample of submitted claims to
ensure that the previous practice is not continuing.
``(5) Consent settlement reforms.--
``(A) In general.--The Secretary may use a consent
settlement (as defined in subparagraph (D)) to settle a
projected overpayment.
``(B) Opportunity to submit additional information
before consent settlement offer.--Before offering a
provider of services or supplier a consent settlement,
the Secretary shall--
``(i) communicate to the provider of services
or supplier--
``(I) that, based on a review of the
medical records requested by the
Secretary, a preliminary evaluation of
those records indicates that there
would be an overpayment;
``(II) the nature of the problems
identified in such evaluation; and
``(III) the steps that the provider
of services or supplier should take to
address the problems; and
``(ii) provide for a 45-day period during
which the provider of services or supplier may
furnish additional information concerning the
medical records for the claims that had been
reviewed.
``(C) Consent settlement offer.--The Secretary shall
review any additional information furnished by the
provider of services or supplier under subparagraph
(B)(ii). Taking into consideration such information,
the Secretary shall determine if there still appears to
be an overpayment. If so, the Secretary--
``(i) shall provide notice of such
determination to the provider of services or
supplier, including an explanation of the
reason for such determination; and
``(ii) in order to resolve the overpayment,
may offer the provider of services or
supplier--
``(I) the opportunity for a
statistically valid random sample; or
``(II) a consent settlement.
The opportunity provided under clause (ii)(I) does not
waive any appeal rights with respect to the alleged
overpayment involved.
``(D) Consent settlement defined.--For purposes of
this paragraph, the term `consent settlement' means an
agreement between the Secretary and a provider of
services or supplier whereby both parties agree to
settle a projected overpayment based on less than a
statistically valid sample of claims and the provider
of services or supplier agrees not to appeal the claims
involved.
``(6) Notice of over-utilization of codes.--The Secretary
shall establish, in consultation with organizations
representing the classes of providers of services and
suppliers, a process under which the Secretary provides for
notice to classes of providers of services and suppliers served
by the contractor in cases in which the contractor has
identified that particular billing codes may be overutilized by
that class of providers of services or suppliers under the
programs under this title (or provisions of title XI insofar as
they relate to such programs).
``(7) Payment audits.--
``(A) Written notice for post-payment audits.--
Subject to subparagraph (C), if a medicare contractor
decides to conduct a post-payment audit of a provider
of services or supplier under this title, the
contractor shall provide the provider of services or
supplier with written notice (which may be in
electronic form) of the intent to conduct such an
audit.
``(B) Explanation of findings for all audits.--
Subject to subparagraph (C), if a medicare contractor
audits a provider of services or supplier under this
title, the contractor shall--
``(i) give the provider of services or
supplier a full review and explanation of the
findings of the audit in a manner that is
understandable to the provider of services or
supplier and permits the development of an
appropriate corrective action plan;
``(ii) inform the provider of services or
supplier of the appeal rights under this title
as well as consent settlement options (which
are at the discretion of the Secretary);
``(iii) give the provider of services or
supplier an opportunity to provide additional
information to the contractor; and
``(iv) take into account information
provided, on a timely basis, by the provider of
services or supplier under clause (iii).
``(C) Exception.--Subparagraphs (A) and (B) shall not
apply if the provision of notice or findings would
compromise pending law enforcement activities, whether
civil or criminal, or reveal findings of law
enforcement-related audits.
``(8) Standard methodology for probe sampling.--The Secretary
shall establish a standard methodology for medicare contractors
to use in selecting a sample of claims for review in the case
of an abnormal billing pattern.''.
(b) Effective Dates and Deadlines.--
(1) Use of repayment plans.--Section 1893(f)(1) of the Social
Security Act, as added by subsection (a), shall apply to
requests for repayment plans made after the date of the
enactment of this Act.
(2) Limitation on recoupment.--Section 1893(f)(2) of the
Social Security Act, as added by subsection (a), shall apply to
actions taken after the date of the enactment of this Act.
(3) Use of extrapolation.--Section 1893(f)(3) of the Social
Security Act, as added by subsection (a), shall apply to
statistically valid random samples initiated after the date
that is 1 year after the date of the enactment of this Act.
(4) Provision of supporting documentation.--Section
1893(f)(4) of the Social Security Act, as added by subsection
(a), shall take effect on the date of the enactment of this
Act.
(5) Consent settlement.--Section 1893(f)(5) of the Social
Security Act, as added by subsection (a), shall apply to
consent settlements entered into after the date of the
enactment of this Act.
(6) Notice of overutilization.--Not later than 1 year after
the date of the enactment of this Act, the Secretary shall
first establish the process for notice of overutilization of
billing codes under section 1893A(f)(6) of the Social Security
Act, as added by subsection (a).
(7) Payment audits.--Section 1893A(f)(7) of the Social
Security Act, as added by subsection (a), shall apply to audits
initiated after the date of the enactment of this Act.
(8) Standard for abnormal billing patterns.--Not later than 1
year after the date of the enactment of this Act, the Secretary
shall first establish a standard methodology for selection of
sample claims for abnormal billing patterns under section
1893(f)(8) of the Social Security Act, as added by subsection
(a).
SEC. 406. PROVIDER ENROLLMENT PROCESS; RIGHT OF APPEAL.
(a) In General.--Section 1866 (42 U.S.C. 1395cc) is amended--
(1) by adding at the end of the heading the following: ``;
enrollment processes''; and
(2) by adding at the end the following new subsection:
``(j) Enrollment Process for Providers of Services and Suppliers.--
``(1) Enrollment process.--
``(A) In general.--The Secretary shall establish by
regulation a process for the enrollment of providers of
services and suppliers under this title.
``(B) Deadlines.--The Secretary shall establish by
regulation procedures under which there are deadlines
for actions on applications for enrollment (and, if
applicable, renewal of enrollment). The Secretary shall
monitor the performance of medicare administrative
contractors in meeting the deadlines established under
this subparagraph.
``(C) Consultation before changing provider
enrollment forms.--The Secretary shall consult with
providers of services and suppliers before making
changes in the provider enrollment forms required of
such providers and suppliers to be eligible to submit
claims for which payment may be made under this title.
``(2) Hearing rights in cases of denial or non-renewal.--A
provider of services or supplier whose application to enroll
(or, if applicable, to renew enrollment) under this title is
denied may have a hearing and judicial review of such denial
under the procedures that apply under subsection (h)(1)(A) to a
provider of services that is dissatisfied with a determination
by the Secretary.''.
(b) Effective Dates.--
(1) Enrollment process.--The Secretary shall provide for the
establishment of the enrollment process under section
1866(j)(1) of the Social Security Act, as added by subsection
(a)(2), within 6 months after the date of the enactment of this
Act.
(2) Consultation.--Section 1866(j)(1)(C) of the Social
Security Act, as added by subsection (a)(2), shall apply with
respect to changes in provider enrollment forms made on or
after January 1, 2004.
(3) Hearing rights.--Section 1866(j)(2) of the Social
Security Act, as added by subsection (a)(2), shall apply to
denials occurring on or after such date (not later than 1 year
after the date of the enactment of this Act) as the Secretary
specifies.
SEC. 407. PROCESS FOR CORRECTION OF MINOR ERRORS AND OMISSIONS WITHOUT
PURSUING APPEALS PROCESS.
(a) Claims.--The Secretary shall develop, in consultation with
appropriate medicare contractors (as defined in section 1889(g) of the
Social Security Act, as inserted by section 301(a)(1)) and
representatives of providers of services and suppliers, a process
whereby, in the case of minor errors or omissions (as defined by the
Secretary) that are detected in the submission of claims under the
programs under title XVIII of such Act, a provider of services or
supplier is given an opportunity to correct such an error or omission
without the need to initiate an appeal. Such process shall include the
ability to resubmit corrected claims.
(b) Permitting Use of Corrected and Supplementary Data.--
(1) In general.--Section 1886(d)(10)(D)(vi) (42 U.S.C.
1395ww(d)(10)(D)(vi)) is amended by adding after subclause (II)
at the end the following:
``Notwithstanding subclause (I), a hospital may submit, and the
Secretary may accept upon verification, data that corrects or
supplements the data described in such subclause without regard to
whether the corrected or supplementary data relate to a cost report
that has been settled.''.
(2) Effective date.--The amendment made by paragraph (1)
shall apply to fiscal years beginning with fiscal year 2004.
(3) Submittal and resubmittal of applications permitted for
fiscal year 2004.--
(A) In general.--Notwithstanding any other provision
of law, a hospital may submit (or resubmit) an
application for a change described in section
1886(d)(10)(C)(i)(II) of the Social Security Act for
fiscal year 2004 if the hospital demonstrates on a
timely basis to the satisfaction of the Secretary that
the use of corrected or supplementary data under the
amendment made by paragraph (1) would materially affect
the approval of such an application.
(B) Application of budget neutrality.--If one or more
hospital's applications are approved as a result of
paragraph (1) and subparagraph (A) for fiscal year
2004, the Secretary shall make a proportional
adjustment in the standardized amounts determined under
section 1886(d)(3) of the Social Security Act (42
U.S.C. 1395ww(d)(3)) for fiscal year 2004 to assure
that approval of such applications does not result in
aggregate payments under section 1886(d) of such Act
that are greater or less than those that would
otherwise be made if paragraph (1) and subparagraph (A)
did not apply.
SEC. 408. PRIOR DETERMINATION PROCESS FOR CERTAIN ITEMS AND SERVICES;
ADVANCE BENEFICIARY NOTICES.
(a) In General.--Section 1869 (42 U.S.C. 1395ff(b)), as amended by
sections 521 and 522 of BIPA and section 403(d)(2)(B), is further
amended by adding at the end the following new subsection:
``(h) Prior Determination Process for Certain Items and Services.--
``(1) Establishment of process.--
``(A) In general.--With respect to a medicare
administrative contractor that has a contract under
section 1874A that provides for making payments under
this title with respect to eligible items and services
described in subparagraph (C), the Secretary shall
establish a prior determination process that meets the
requirements of this subsection and that shall be
applied by such contractor in the case of eligible
requesters.
``(B) Eligible requester.--For purposes of this
subsection, each of the following shall be an eligible
requester:
``(i) A physician, but only with respect to
eligible items and services for which the
physician may be paid directly.
``(ii) An individual entitled to benefits
under this title, but only with respect to an
item or service for which the individual
receives, from the physician who may be paid
directly for the item or service, an advance
beneficiary notice under section 1879(a) that
payment may not be made (or may no longer be
made) for the item or service under this title.
``(C) Eligible items and services.--For purposes of
this subsection and subject to paragraph (2), eligible
items and services are items and services which are
physicians' services (as defined in paragraph (4)(A) of
section 1848(f) for purposes of calculating the
sustainable growth rate under such section).
``(2) Secretarial flexibility.--The Secretary shall establish
by regulation reasonable limits on the categories of eligible
items and services for which a prior determination of coverage
may be requested under this subsection. In establishing such
limits, the Secretary may consider the dollar amount involved
with respect to the item or service, administrative costs and
burdens, and other relevant factors.
``(3) Request for prior determination.--
``(A) In general.--Subject to paragraph (2), under
the process established under this subsection an
eligible requester may submit to the contractor a
request for a determination, before the furnishing of
an eligible item or service involved as to whether the
item or service is covered under this title consistent
with the applicable requirements of section
1862(a)(1)(A) (relating to medical necessity).
``(B) Accompanying documentation.--The Secretary may
require that the request be accompanied by a
description of the item or service, supporting
documentation relating to the medical necessity for the
item or service, and any other appropriate
documentation. In the case of a request submitted by an
eligible requester who is described in paragraph
(1)(B)(ii), the Secretary may require that the request
also be accompanied by a copy of the advance
beneficiary notice involved.
``(4) Response to request.--
``(A) In general.--Under such process, the contractor
shall provide the eligible requester with written
notice of a determination as to whether--
``(i) the item or service is so covered;
``(ii) the item or service is not so covered;
or
``(iii) the contractor lacks sufficient
information to make a coverage determination.
If the contractor makes the determination described in
clause (iii), the contractor shall include in the
notice a description of the additional information
required to make the coverage determination.
``(B) Deadline to respond.--Such notice shall be
provided within the same time period as the time period
applicable to the contractor providing notice of
initial determinations on a claim for benefits under
subsection (a)(2)(A).
``(C) Informing beneficiary in case of physician
request.--In the case of a request in which an eligible
requester is not the individual described in paragraph
(1)(B)(ii), the process shall provide that the
individual to whom the item or service is proposed to
be furnished shall be informed of any determination
described in clause (ii) (relating to a determination
of non-coverage) and the right (referred to in
paragraph (6)(B)) to obtain the item or service and
have a claim submitted for the item or service.
``(5) Effect of determinations.--
``(A) Binding nature of positive determination.--If
the contractor makes the determination described in
paragraph (4)(A)(i), such determination shall be
binding on the contractor in the absence of fraud or
evidence of misrepresentation of facts presented to the
contractor.
``(B) Notice and right to redetermination in case of
a denial.--
``(i) In general.--If the contractor makes
the determination described in paragraph
(4)(A)(ii)--
``(I) the eligible requester has the
right to a redetermination by the
contractor on the determination that
the item or service is not so covered;
and
``(II) the contractor shall include
in notice under paragraph (4)(A) a
brief explanation of the basis for the
determination, including on what
national or local coverage or
noncoverage determination (if any) the
determination is based, and the right
to such a redetermination.
``(ii) Deadline for redeterminations.--The
contractor shall complete and provide notice of
such redetermination within the same time
period as the time period applicable to the
contractor providing notice of redeterminations
relating to a claim for benefits under
subsection (a)(3)(C)(ii).
``(6) Limitation on further review.--
``(A) In general.--Contractor determinations
described in paragraph (4)(A)(ii) or (4)(A)(iii) (and
redeterminations made under paragraph (5)(B)), relating
to pre-service claims are not subject to further
administrative appeal or judicial review under this
section or otherwise.
``(B) Decision not to seek prior determination or
negative determination does not impact right to obtain
services, seek reimbursement, or appeal rights.--
Nothing in this subsection shall be construed as
affecting the right of an individual who--
``(i) decides not to seek a prior
determination under this subsection with
respect to items or services; or
``(ii) seeks such a determination and has
received a determination described in paragraph
(4)(A)(ii),
from receiving (and submitting a claim for) such items
services and from obtaining administrative or judicial
review respecting such claim under the other applicable
provisions of this section. Failure to seek a prior
determination under this subsection with respect to
items and services shall not be taken into account in
such administrative or judicial review.
``(C) No prior determination after receipt of
services.--Once an individual is provided items and
services, there shall be no prior determination under
this subsection with respect to such items or
services.''.
(b) Effective Date; Transition.--
(1) Effective date.--The Secretary shall establish the prior
determination process under the amendment made by subsection
(a) in such a manner as to provide for the acceptance of
requests for determinations under such process filed not later
than 18 months after the date of the enactment of this Act.
(2) Transition.--During the period in which the amendment
made by subsection (a) has become effective but contracts are
not provided under section 1874A of the Social Security Act
with medicare administrative contractors, any reference in
section 1869(g) of such Act (as added by such amendment) to
such a contractor is deemed a reference to a fiscal
intermediary or carrier with an agreement under section 1816,
or contract under section 1842, respectively, of such Act.
(3) Limitation on application to sgr.--For purposes of
applying section 1848(f)(2)(D) of the Social Security Act (42
U.S.C. 1395w-4(f)(2)(D)), the amendment made by subsection (a)
shall not be considered to be a change in law or regulation.
(c) Provisions Relating to Advance Beneficiary Notices; Report on
Prior Determination Process.--
(1) Data collection.--The Secretary shall establish a process
for the collection of information on the instances in which an
advance beneficiary notice (as defined in paragraph (4)) has
been provided and on instances in which a beneficiary indicates
on such a notice that the beneficiary does not intend to seek
to have the item or service that is the subject of the notice
furnished.
(2) Outreach and education.--The Secretary shall establish a
program of outreach and education for beneficiaries and
providers of services and other persons on the appropriate use
of advance beneficiary notices and coverage policies under the
medicare program.
(3) GAO report report on use of advance beneficiary
notices.--Not later than 18 months after the date on which
section 1869(g) of the Social Security Act (as added by
subsection (a)) takes effect, the Comptroller General of the
United States shall submit to Congress a report on the use of
advance beneficiary notices under title XVIII of such Act. Such
report shall include information concerning the providers of
services and other persons that have provided such notices and
the response of beneficiaries to such notices.
(4) GAO report on use of prior determination process.--Not
later than 18 months after the date on which section 1869(g) of
the Social Security Act (as added by subsection (a)) takes
effect, the Comptroller General of the United States shall
submit to Congress a report on the use of the prior
determination process under such section. Such report shall
include--
(A) information concerning the types of procedures
for which a prior determination has been sought,
determinations made under the process, and changes in
receipt of services resulting from the application of
such process; and
(B) an evaluation of whether the process was useful
for physicians (and other suppliers) and beneficiaries,
whether it was timely, and whether the amount of
information required was burdensome to physicians and
beneficiaries.
(5) Advance beneficiary notice defined.--In this subsection,
the term ``advance beneficiary notice'' means a written notice
provided under section 1879(a) of the Social Security Act (42
U.S.C. 1395pp(a)) to an individual entitled to benefits under
part A or B of title XVIII of such Act before items or services
are furnished under such part in cases where a provider of
services or other person that would furnish the item or service
believes that payment will not be made for some or all of such
items or services under such title.
TITLE V--MISCELLANEOUS PROVISIONS
SEC. 501. POLICY DEVELOPMENT REGARDING EVALUATION AND MANAGEMENT (E &
M) DOCUMENTATION GUIDELINES.
(a) In General.--The Secretary may not implement any new
documentation guidelines for, or clinical examples of, evaluation and
management physician services under the title XVIII of the Social
Security Act on or after the date of the enactment of this Act unless
the Secretary--
(1) has developed the guidelines in collaboration with
practicing physicians (including both generalists and
specialists) and provided for an assessment of the proposed
guidelines by the physician community;
(2) has established a plan that contains specific goals,
including a schedule, for improving the use of such guidelines;
(3) has conducted appropriate and representative pilot
projects under subsection (b) to test modifications to the
evaluation and management documentation guidelines;
(4) finds that the objectives described in subsection (c)
will be met in the implementation of such guidelines; and
(5) has established, and is implementing, a program to
educate physicians on the use of such guidelines and that
includes appropriate outreach.
The Secretary shall make changes to the manner in which existing
evaluation and management documentation guidelines are implemented to
reduce paperwork burdens on physicians.
(b) Pilot Projects To Test Evaluation and Management Documentation
Guidelines.--
(1) In general.--The Secretary shall conduct under this
subsection appropriate and representative pilot projects to
test new evaluation and management documentation guidelines
referred to in subsection (a).
(2) Length and consultation.--Each pilot project under this
subsection shall--
(A) be voluntary;
(B) be of sufficient length as determined by the
Secretary to allow for preparatory physician and
medicare contractor education, analysis, and use and
assessment of potential evaluation and management
guidelines; and
(C) be conducted, in development and throughout the
planning and operational stages of the project, in
consultation with practicing physicians (including both
generalists and specialists).
(3) Range of pilot projects.--Of the pilot projects conducted
under this subsection--
(A) at least one shall focus on a peer review method
by physicians (not employed by a medicare contractor)
which evaluates medical record information for claims
submitted by physicians identified as statistical
outliers relative to definitions published in the
Current Procedures Terminology (CPT) code book of the
American Medical Association;
(B) at least one shall focus on an alternative method
to detailed guidelines based on physician documentation
of face to face encounter time with a patient;
(C) at least one shall be conducted for services
furnished in a rural area and at least one for services
furnished outside such an area; and
(D) at least one shall be conducted in a setting
where physicians bill under physicians' services in
teaching settings and at least one shall be conducted
in a setting other than a teaching setting.
(4) Banning of targeting of pilot project participants.--Data
collected under this subsection shall not be used as the basis
for overpayment demands or post-payment audits. Such limitation
applies only to claims filed as part of the pilot project and
lasts only for the duration of the pilot project and only as
long as the provider is a participant in the pilot project.
(5) Study of impact.--Each pilot project shall examine the
effect of the new evaluation and management documentation
guidelines on--
(A) different types of physician practices, including
those with fewer than 10 full-time-equivalent employees
(including physicians); and
(B) the costs of physician compliance, including
education, implementation, auditing, and monitoring.
(6) Periodic reports.--The Secretary shall submit to Congress
periodic reports on the pilot projects under this subsection.
(c) Objectives for Evaluation and Management Guidelines.--The
objectives for modified evaluation and management documentation
guidelines developed by the Secretary shall be to--
(1) identify clinically relevant documentation needed to code
accurately and assess coding levels accurately;
(2) decrease the level of non-clinically pertinent and
burdensome documentation time and content in the physician's
medical record;
(3) increase accuracy by reviewers; and
(4) educate both physicians and reviewers.
(d) Study of Simpler, Alternative Systems of Documentation for
Physician Claims.--
(1) Study.--The Secretary shall carry out a study of the
matters described in paragraph (2).
(2) Matters described.--The matters referred to in paragraph
(1) are--
(A) the development of a simpler, alternative system
of requirements for documentation accompanying claims
for evaluation and management physician services for
which payment is made under title XVIII of the Social
Security Act; and
(B) consideration of systems other than current
coding and documentation requirements for payment for
such physician services.
(3) Consultation with practicing physicians.--In designing
and carrying out the study under paragraph (1), the Secretary
shall consult with practicing physicians, including physicians
who are part of group practices and including both generalists
and specialists.
(4) Application of hipaa uniform coding requirements.--In
developing an alternative system under paragraph (2), the
Secretary shall consider requirements of administrative
simplification under part C of title XI of the Social Security
Act.
(5) Report to congress.--(A) Not later than October 1, 2005,
the Secretary shall submit to Congress a report on the results
of the study conducted under paragraph (1).
(B) The Medicare Payment Advisory Commission shall conduct an
analysis of the results of the study included in the report
under subparagraph (A) and shall submit a report on such
analysis to Congress.
(e) Study on Appropriate Coding of Certain Extended Office Visits.--
The Secretary shall conduct a study of the appropriateness of coding in
cases of extended office visits in which there is no diagnosis made.
Not later than October 1, 2005, the Secretary shall submit a report to
Congress on such study and shall include recommendations on how to code
appropriately for such visits in a manner that takes into account the
amount of time the physician spent with the patient.
(f) Definitions.--In this section--
(1) the term ``rural area'' has the meaning given that term
in section 1886(d)(2)(D) of the Social Security Act, 42 U.S.C.
1395ww(d)(2)(D); and
(2) the term ``teaching settings'' are those settings
described in section 415.150 of title 42, Code of Federal
Regulations.
SEC. 502. IMPROVEMENT IN OVERSIGHT OF TECHNOLOGY AND COVERAGE.
(a) Council for Technology and Innovation.--Section 1868 (42 U.S.C.
1395ee), as amended by section 301(a), is amended by adding at the end
the following new subsection:
``(c) Council for Technology and Innovation.--
``(1) Establishment.--The Secretary shall establish a Council
for Technology and Innovation within the Centers for Medicare &
Medicaid Services (in this section referred to as `CMS').
``(2) Composition.--The Council shall be composed of senior
CMS staff and clinicians and shall be chaired by the Executive
Coordinator for Technology and Innovation (appointed or
designated under paragraph (4)).
``(3) Duties.--The Council shall coordinate the activities of
coverage, coding, and payment processes under this title with
respect to new technologies and procedures, including new drug
therapies, and shall coordinate the exchange of information on
new technologies between CMS and other entities that make
similar decisions.
``(4) Executive coordinator for technology and innovation.--
The Secretary shall appoint (or designate) a noncareer
appointee (as defined in section 3132(a)(7) of title 5, United
States Code) who shall serve as the Executive Coordinator for
Technology and Innovation. Such executive coordinator shall
report to the Administrator of CMS, shall chair the Council,
shall oversee the execution of its duties, and shall serve as a
single point of contact for outside groups and entities
regarding the coverage, coding, and payment processes under
this title.''.
(b) Methods for Determining Payment Basis for New Lab Tests.--Section
1833(h) (42 U.S.C. 1395l(h)) is amended by adding at the end the
following:
``(8)(A) The Secretary shall establish by regulation procedures for
determining the basis for, and amount of, payment under this subsection
for any clinical diagnostic laboratory test with respect to which a new
or substantially revised HCPCS code is assigned on or after January 1,
2005 (in this paragraph referred to as `new tests').
``(B) Determinations under subparagraph (A) shall be made only after
the Secretary--
``(i) makes available to the public (through an Internet site
and other appropriate mechanisms) a list that includes any such
test for which establishment of a payment amount under this
subsection is being considered for a year;
``(ii) on the same day such list is made available, causes to
have published in the Federal Register notice of a meeting to
receive comments and recommendations (and data on which
recommendations are based) from the public on the appropriate
basis under this subsection for establishing payment amounts
for the tests on such list;
``(iii) not less than 30 days after publication of such
notice convenes a meeting, that includes representatives of
officials of the Centers for Medicare & Medicaid Services
involved in determining payment amounts, to receive such
comments and recommendations (and data on which the
recommendations are based);
``(iv) taking into account the comments and recommendations
(and accompanying data) received at such meeting, develops and
makes available to the public (through an Internet site and
other appropriate mechanisms) a list of proposed determinations
with respect to the appropriate basis for establishing a
payment amount under this subsection for each such code,
together with an explanation of the reasons for each such
determination, the data on which the determinations are based,
and a request for public written comments on the proposed
determination; and
``(v) taking into account the comments received during the
public comment period, develops and makes available to the
public (through an Internet site and other appropriate
mechanisms) a list of final determinations of the payment
amounts for such tests under this subsection, together with the
rationale for each such determination, the data on which the
determinations are based, and responses to comments and
suggestions received from the public.
``(C) Under the procedures established pursuant to subparagraph (A),
the Secretary shall--
``(i) set forth the criteria for making determinations under
subparagraph (A); and
``(ii) make available to the public the data (other than
proprietary data) considered in making such determinations.
``(D) The Secretary may convene such further public meetings to
receive public comments on payment amounts for new tests under this
subsection as the Secretary deems appropriate.
``(E) For purposes of this paragraph:
``(i) The term `HCPCS' refers to the Health Care Procedure
Coding System.
``(ii) A code shall be considered to be `substantially
revised' if there is a substantive change to the definition of
the test or procedure to which the code applies (such as a new
analyte or a new methodology for measuring an existing analyte-
specific test).''.
(c) GAO Study on Improvements in External Data Collection for Use in
the Medicare Inpatient Payment System.--
(1) Study.--The Comptroller General of the United States
shall conduct a study that analyzes which external data can be
collected in a shorter time frame by the Centers for Medicare &
Medicaid Services for use in computing payments for inpatient
hospital services. The study may include an evaluation of the
feasibility and appropriateness of using of quarterly samples
or special surveys or any other methods. The study shall
include an analysis of whether other executive agencies, such
as the Bureau of Labor Statistics in the Department of
Commerce, are best suited to collect this information.
(2) Report.--By not later than October 1, 2004, the
Comptroller General shall submit a report to Congress on the
study under paragraph (1).
(d) Process for Adoption of ICD Codes as Data Standard.--Section
1172(f) (42 U.S.C. 1320d-1(f)) is amended by inserting after the first
sentence the following: ``Notwithstanding the preceding sentence, if
the National Committee on Vital and Health Statistics has not made a
recommendation to the Secretary before the date of the enactment of
this sentence, with respect to the adoption of the International
Classification of Diseases, 10th Revision, Procedure Coding System
(`ICD-10-PCS') and the International Classification of Diseases, 10th
Revision, Clinical Modification (`ICD-10-CM') as a standard under this
part for the reporting of services, the Secretary may adopt ICD-10-PCS
and ICD-10-CM as such a standard on or after such date without
receiving such a recommendation.''.
SEC. 503. TREATMENT OF HOSPITALS FOR CERTAIN SERVICES UNDER MEDICARE
SECONDARY PAYOR (MSP) PROVISIONS.
(a) In General.--The Secretary shall not require a hospital
(including a critical access hospital) to ask questions (or obtain
information) relating to the application of section 1862(b) of the
Social Security Act (relating to medicare secondary payor provisions)
in the case of reference laboratory services described in subsection
(b), if the Secretary does not impose such requirement in the case of
such services furnished by an independent laboratory.
(b) Reference Laboratory Services Described.--Reference laboratory
services described in this subsection are clinical laboratory
diagnostic tests (or the interpretation of such tests, or both)
furnished without a face-to-face encounter between the individual
entitled to benefits under part A or enrolled under part B, or both,
and the hospital involved and in which the hospital submits a claim
only for such test or interpretation.
SEC. 504. EMTALA IMPROVEMENTS.
(a) Payment for EMTALA-Mandated Screening and Stabilization
Services.--
(1) In general.--Section 1862 (42 U.S.C. 1395y) is amended by
inserting after subsection (c) the following new subsection:
``(d) For purposes of subsection (a)(1)(A), in the case of any item
or service that is required to be provided pursuant to section 1867 to
an individual who is entitled to benefits under this title,
determinations as to whether the item or service is reasonable and
necessary shall be made on the basis of the information available to
the treating physician or practitioner (including the patient's
presenting symptoms or complaint) at the time the item or service was
ordered or furnished by the physician or practitioner (and not on the
patient's principal diagnosis). When making such determinations with
respect to such an item or service, the Secretary shall not consider
the frequency with which the item or service was provided to the
patient before or after the time of the admission or visit.''.
(2) Effective date.--The amendment made by paragraph (1)
shall apply to items and services furnished on or after January
1, 2004.
(b) Notification of Providers When EMTALA Investigation Closed.--
Section 1867(d) (42 U.S.C. 42 U.S.C. 1395dd(d)) is amended by adding at
the end the following new paragraph:
``(4) Notice upon closing an investigation.--The Secretary
shall establish a procedure to notify hospitals and physicians
when an investigation under this section is closed.''.
(c) Prior Review by Peer Review Organizations in EMTALA Cases
Involving Termination of Participation.--
(1) In general.--Section 1867(d)(3) (42 U.S.C. 1395dd(d)(3))
is amended--
(A) in the first sentence, by inserting ``or in
terminating a hospital's participation under this
title'' after ``in imposing sanctions under paragraph
(1)''; and
(B) by adding at the end the following new sentences:
``Except in the case in which a delay would jeopardize
the health or safety of individuals, the Secretary
shall also request such a review before making a
compliance determination as part of the process of
terminating a hospital's participation under this title
for violations related to the appropriateness of a
medical screening examination, stabilizing treatment,
or an appropriate transfer as required by this section,
and shall provide a period of 5 days for such review.
The Secretary shall provide a copy of the
organization's report to the hospital or physician
consistent with confidentiality requirements imposed on
the organization under such part B.''.
(2) Effective date.--The amendments made by paragraph (1)
shall apply to terminations of participation initiated on or
after the date of the enactment of this Act.
SEC. 505. EMERGENCY MEDICAL TREATMENT AND ACTIVE LABOR ACT (EMTALA)
TECHNICAL ADVISORY GROUP.
(a) Establishment.--The Secretary shall establish a Technical
Advisory Group (in this section referred to as the ``Advisory Group'')
to review issues related to the Emergency Medical Treatment and Labor
Act (EMTALA) and its implementation. In this section, the term
``EMTALA'' refers to the provisions of section 1867 of the Social
Security Act (42 U.S.C. 1395dd).
(b) Membership.--The Advisory Group shall be composed of 19 members,
including the Administrator of the Centers for Medicare & Medicaid
Services and the Inspector General of the Department of Health and
Human Services and of which--
(1) 4 shall be representatives of hospitals, including at
least one public hospital, that have experience with the
application of EMTALA and at least 2 of which have not been
cited for EMTALA violations;
(2) 7 shall be practicing physicians drawn from the fields of
emergency medicine, cardiology or cardiothoracic surgery,
orthopedic surgery, neurosurgery, pediatrics or a pediatric
subspecialty, obstetrics-gynecology, and psychiatry, with not
more than one physician from any particular field;
(3) 2 shall represent patients;
(4) 2 shall be staff involved in EMTALA investigations from
different regional offices of the Centers for Medicare &
Medicaid Services; and
(5) 1 shall be from a State survey office involved in EMTALA
investigations and 1 shall be from a peer review organization,
both of whom shall be from areas other than the regions
represented under paragraph (4).
In selecting members described in paragraphs (1) through (3), the
Secretary shall consider qualified individuals nominated by
organizations representing providers and patients.
(c) General Responsibilities.--The Advisory Group--
(1) shall review EMTALA regulations;
(2) may provide advice and recommendations to the Secretary
with respect to those regulations and their application to
hospitals and physicians;
(3) shall solicit comments and recommendations from
hospitals, physicians, and the public regarding the
implementation of such regulations; and
(4) may disseminate information on the application of such
regulations to hospitals, physicians, and the public.
(d) Administrative Matters.--
(1) Chairperson.--The members of the Advisory Group shall
elect a member to serve as chairperson of the Advisory Group
for the life of the Advisory Group.
(2) Meetings.--The Advisory Group shall first meet at the
direction of the Secretary. The Advisory Group shall then meet
twice per year and at such other times as the Advisory Group
may provide.
(e) Termination.--The Advisory Group shall terminate 30 months after
the date of its first meeting.
(f) Waiver of Administrative Limitation.--The Secretary shall
establish the Advisory Group notwithstanding any limitation that may
apply to the number of advisory committees that may be established
(within the Department of Health and Human Services or otherwise).
SEC. 506. AUTHORIZING USE OF ARRANGEMENTS TO PROVIDE CORE HOSPICE
SERVICES IN CERTAIN CIRCUMSTANCES.
(a) In General.--Section 1861(dd)(5) (42 U.S.C. 1395x(dd)(5)) is
amended by adding at the end the following:
``(D) In extraordinary, exigent, or other non-routine circumstances,
such as unanticipated periods of high patient loads, staffing shortages
due to illness or other events, or temporary travel of a patient
outside a hospice program's service area, a hospice program may enter
into arrangements with another hospice program for the provision by
that other program of services described in paragraph (2)(A)(ii)(I).
The provisions of paragraph (2)(A)(ii)(II) shall apply with respect to
the services provided under such arrangements.
``(E) A hospice program may provide services described in paragraph
(1)(A) other than directly by the program if the services are highly
specialized services of a registered professional nurse and are
provided non-routinely and so infrequently so that the provision of
such services directly would be impracticable and prohibitively
expensive.''.
(b) Conforming Payment Provision.--Section 1814(i) (42 U.S.C.
1395f(i)) is amended by adding at the end the following new paragraph:
``(4) In the case of hospice care provided by a hospice program under
arrangements under section 1861(dd)(5)(D) made by another hospice
program, the hospice program that made the arrangements shall bill and
be paid for the hospice care.''.
(c) Effective Date.--The amendments made by this section shall apply
to hospice care provided on or after the date of the enactment of this
Act.
SEC. 507. APPLICATION OF OSHA BLOODBORNE PATHOGENS STANDARD TO CERTAIN
HOSPITALS.
(a) In General.--Section 1866 (42 U.S.C. 1395cc) is amended--
(1) in subsection (a)(1)--
(A) in subparagraph (R), by striking ``and'' at the
end;
(B) in subparagraph (S), by striking the period at
the end and inserting ``, and''; and
(C) by inserting after subparagraph (S) the following
new subparagraph:
``(T) in the case of hospitals that are not otherwise subject
to the Occupational Safety and Health Act of 1970 or a State
occupational safety and health plan that is approved under
section 18(b) of such Act, to comply with the Bloodborne
Pathogens standard under section 1910.1030 of title 29 of the
Code of Federal Regulations (or as subsequently
redesignated).''; and
(2) by adding at the end of subsection (b) the following new
paragraph:
``(4)(A) A hospital that fails to comply with the requirement of
subsection (a)(1)(T) (relating to the Bloodborne Pathogens standard) is
subject to a civil money penalty in an amount described in subparagraph
(B), but is not subject to termination of an agreement under this
section.
``(B) The amount referred to in subparagraph (A) is an amount that is
similar to the amount of civil penalties that may be imposed under
section 17 of the Occupational Safety and Health Act of 1970 for a
violation of the Bloodborne Pathogens standard referred to in
subsection (a)(1)(T) by a hospital that is subject to the provisions of
such Act.
``(C) A civil money penalty under this paragraph shall be imposed and
collected in the same manner as civil money penalties under subsection
(a) of section 1128A are imposed and collected under that section.''.
(b) Effective Date.--The amendments made by this subsection (a) shall
apply to hospitals as of July 1, 2004.
SEC. 508. BIPA-RELATED TECHNICAL AMENDMENTS AND CORRECTIONS.
(a) Technical Amendments Relating to Advisory Committee Under BIPA
Section 522.--(1) Subsection (i) of section 1114 (42 U.S.C. 1314)--
(A) is transferred to section 1862 and added at the end of
such section; and
(B) is redesignated as subsection (j).
(2) Section 1862 (42 U.S.C. 1395y) is amended--
(A) in the last sentence of subsection (a), by striking
``established under section 1114(f)''; and
(B) in subsection (j), as so transferred and redesignated--
(i) by striking ``under subsection (f)''; and
(ii) by striking ``section 1862(a)(1)'' and inserting
``subsection (a)(1)''.
(b) Terminology Corrections.--(1) Section 1869(c)(3)(I)(ii) (42
U.S.C. 1395ff(c)(3)(I)(ii)), as amended by section 521 of BIPA, is
amended--
(A) in subclause (III), by striking ``policy'' and inserting
``determination''; and
(B) in subclause (IV), by striking ``medical review
policies'' and inserting ``coverage determinations''.
(2) Section 1852(a)(2)(C) (42 U.S.C. 1395w-22(a)(2)(C)) is amended by
striking ``policy'' and ``policy'' and inserting ``determination'' each
place it appears and ``determination'', respectively.
(c) Reference Corrections.--Section 1869(f)(4) (42 U.S.C.
1395ff(f)(4)), as added by section 522 of BIPA, is amended--
(1) in subparagraph (A)(iv), by striking ``subclause (I),
(II), or (III)'' and inserting ``clause (i), (ii), or (iii)'';
(2) in subparagraph (B), by striking ``clause (i)(IV)'' and
``clause (i)(III)'' and inserting ``subparagraph (A)(iv)'' and
``subparagraph (A)(iii)'', respectively; and
(3) in subparagraph (C), by striking ``clause (i)'',
``subclause (IV)'' and ``subparagraph (A)'' and inserting
``subparagraph (A)'', ``clause (iv)'' and ``paragraph (1)(A)'',
respectively each place it appears.
(d) Other Corrections.--Effective as if included in the enactment of
section 521(c) of BIPA, section 1154(e) (42 U.S.C. 1320c-3(e)) is
amended by striking paragraph (5).
(e) Effective Date.--Except as otherwise provided, the amendments
made by this section shall be effective as if included in the enactment
of BIPA.
SEC. 509. CONFORMING AUTHORITY TO WAIVE A PROGRAM EXCLUSION.
The first sentence of section 1128(c)(3)(B) (42 U.S.C. 1320a-
7(c)(3)(B)) is amended to read as follows: ``Subject to subparagraph
(G), in the case of an exclusion under subsection (a), the minimum
period of exclusion shall be not less than five years, except that,
upon the request of the administrator of a Federal health care program
(as defined in section 1128B(f)) who determines that the exclusion
would impose a hardship on individuals entitled to benefits under part
A of title XVIII or enrolled under part B of such title, or both, the
Secretary may waive the exclusion under subsection (a)(1), (a)(3), or
(a)(4) with respect to that program in the case of an individual or
entity that is the sole community physician or sole source of essential
specialized services in a community.''.
SEC. 510. TREATMENT OF CERTAIN DENTAL CLAIMS.
(a) In General.--Section 1862 (42 U.S.C. 1395y), as amended by
section 508(a)(1), is amended by adding at the end the following new
subsection:
``(k)(1) Subject to paragraph (2), a group health plan (as defined in
subsection (a)(1)(A)(v)) providing supplemental or secondary coverage
to individuals also entitled to services under this title shall not
require a medicare claims determination under this title for dental
benefits specifically excluded under subsection (a)(12) as a condition
of making a claims determination for such benefits under the group
health plan.
``(2) A group health plan may require a claims determination under
this title in cases involving or appearing to involve inpatient dental
hospital services or dental services expressly covered under this title
pursuant to actions taken by the Secretary.''.
(b) Effective Date.--The amendment made by subsection (a) shall take
effect on the date that is 60 days after the date of the enactment of
this Act.
SEC. 511. FURNISHING HOSPITALS WITH INFORMATION TO COMPUTE DSH FORMULA.
Beginning not later than 1 year after the date of the enactment of
this Act, the Secretary shall furnish to subsection (d) hospitals (as
defined in section 1886(d)(1)(B) of the Social Security Act, 42 U.S.C.
1395ww(d)(1)(B)) the data necessary for such hospitals to compute the
number of patient days described in subclause (II) of section
1886(d)(5)(F)(vi) of the Social Security Act (42 U.S.C.
1395ww(d)(5)(F)(vi)) used in computing the disproportionate patient
percentage under such section for that hospital. Such data shall also
be furnished to other hospitals which would qualify for additional
payments under part A of title XVIII of the Social Security Act on the
basis of such data.
SEC. 512. REVISIONS TO REASSIGNMENT PROVISIONS.
(a) In General.--Section 1842(b)(6)(A)(ii) (42 U.S.C.
1395u(b)(6)(A)(ii)) is amended to read as follows: ``(ii) where the
service was provided under a contractual arrangement between such
physician or other person and a qualified entity (as defined by the
Secretary) or other person, to the entity or other person if under such
arrangement such entity or individual submits the bill for such service
and such arrangement (I) includes joint and several liability for
overpayment by such physician or other person and such entity or other
person, and (II) meets such other program integrity and other
safeguards as the Secretary may determine to be appropriate,''.
(b) Conforming Amendment.--The second sentence of section 1842(b)(6)
(42 U.S.C. 1395u(b)(6)) is amended by striking ``except to an employer
or facility as described in clause (A)'' and inserting ``except to an
employer, entity, or other person as described in subparagraph (A)''.
(c) Effective Date.--The amendments made by this section shall apply
to payments made on or after one year after the date of the enactment
of this Act.
SEC. 513. SPECIALIZED MEDICARE+CHOICE PLANS FOR SPECIAL NEEDS
BENEFICIARIES.
(a) Treatment as Coordinated Care Plan.--Section 1851(a)(2)(A) (42
U.S.C. 1395w-21(a)(2)(A)) is amended by adding at the end the following
new sentence: ``Specialized Medicare+Choice plans for special needs
beneficiaries (as defined in section 1859(b)(4)) may be any type of
coordinated care plan.''.
(b) Specialized Medicare+Choice Plan for Special Needs Beneficiaries
Defined.--Section 1859(b) (42 U.S.C. 1395w-29(b)) is amended by adding
at the end the following new paragraph:
``(4) Specialized medicare+choice plans for special needs
beneficiaries.--
``(A) In general.--The term `specialized
Medicare+Choice plan for special needs beneficiaries'
means a Medicare+Choice plan that exclusively serves
special needs beneficiaries (as defined in subparagraph
(B)).
``(B) Special needs beneficiary.--The term `special
needs beneficiary' means a Medicare+Choice eligible
individual who--
``(i) is institutionalized (as defined by the
Secretary);
``(ii) is entitled to medical assistance
under a State plan under title XIX; or
``(iii) meets such requirements as the
Secretary may determine would benefit from
enrollment in such a specialized
Medicare+Choice plan described in subparagraph
(A) for individuals with severe or disabling
chronic conditions.''.
(c) Restriction on Enrollment Permitted.--Section 1859 (42 U.S.C.
1395w-29) is amended by adding at the end the following new subsection:
``(f) Restriction on Enrollment for Specialized Medicare+Choice Plans
for Special Needs Beneficiaries.--In the case of a specialized
Medicare+Choice plan (as defined in subsection (b)(4)), notwithstanding
any other provision of this part and in accordance with regulations of
the Secretary and for periods before January 1, 2008, the plan may
restrict the enrollment of individuals under the plan to individuals
who are within one or more classes of special needs beneficiaries.''.
(d) Report to Congress.--Not later than December 31, 2006, the
Secretary shall submit to Congress a report that assesses the impact of
specialized Medicare+Choice plans for special needs beneficiaries on
the cost and quality of services provided to enrollees. Such report
shall include an assessment of the costs and savings to the medicare
program as a result of amendments made by subsections (a), (b), and
(c).
(e) Effective Dates.--
(1) In general.--The amendments made by subsections (a), (b),
and (c) shall take effect upon the date of the enactment of
this Act.
(2) Deadline for issuance of requirements for special needs
beneficiaries; transition.--No later than 6 months after the
date of the enactment of this Act, the Secretary shall issue
final regulations to establish requirements for special needs
beneficiaries under section 1859(b)(4)(B)(iii) of the Social
Security Act, as added by subsection (b).
SEC. 514. TEMPORARY SUSPENSION OF OASIS REQUIREMENT FOR COLLECTION OF
DATA ON NON-MEDICARE AND NON-MEDICAID PATIENTS.
(a) In General.--During the period described in subsection (b), the
Secretary may not require, under section 4602(e) of the Balanced Budget
Act of 1997 or otherwise under OASIS, a home health agency to gather or
submit information that relates to an individual who is not eligible
for benefits under either title XVIII or title XIX of the Social
Security Act (such information in this section referred to as ``non-
medicare/medicaid OASIS information'').
(b) Period of Suspension.--The period described in this subsection--
(1) begins on the date of the enactment of this Act; and
(2) ends on the last day of the 2nd month beginning after the
date as of which the Secretary has published final regulations
regarding the collection and use by the Centers for Medicare &
Medicaid Services of non-medicare/medicaid OASIS information
following the submission of the report required under
subsection (c).
(c) Report.--
(1) Study.--The Secretary shall conduct a study on how non-
medicare/medicaid OASIS information is and can be used by large
home health agencies. Such study shall examine--
(A) whether there are unique benefits from the
analysis of such information that cannot be derived
from other information available to, or collected by,
such agencies; and
(B) the value of collecting such information by small
home health agencies compared to the administrative
burden related to such collection.
In conducting the study the Secretary shall obtain
recommendations from quality assessment experts in the use of
such information and the necessity of small, as well as large,
home health agencies collecting such information.
(2) Report.--The Secretary shall submit to Congress a report
on the study conducted under paragraph (1) by not later than 18
months after the date of the enactment of this Act.
(d) Construction.--Nothing in this section shall be construed as
preventing home health agencies from collecting non-medicare/medicaid
OASIS information for their own use.
SEC. 515. MISCELLANEOUS REPORTS, STUDIES, AND PUBLICATION REQUIREMENTS.
(a) GAO Reports on the Physician Compensation.--
(1) Sustainable growth rate and updates.--Not later than 6
months after the date of the enactment of this Act, the
Comptroller General of the United States shall submit to
Congress a report on the appropriateness of the updates in the
conversion factor under subsection (d)(3) of section 1848 of
the Social Security Act (42 U.S.C. 1395w-4), including the
appropriateness of the sustainable growth rate formula under
subsection (f) of such section for 2002 and succeeding years.
Such report shall examine the stability and predictability of
such updates and rate and alternatives for the use of such rate
in the updates.
(2) Physician compensation generally.--Not later than 12
months after the date of the enactment of this Act, the
Comptroller General shall submit to Congress a report on all
aspects of physician compensation for services furnished under
title XVIII of the Social Security Act, and how those aspects
interact and the effect on appropriate compensation for
physician services. Such report shall review alternatives for
the physician fee schedule under section 1848 of such title (42
U.S.C. 1395w-4).
(b) Annual Publication of List of National Coverage Determinations.--
The Secretary shall provide, in an appropriate annual publication
available to the public, a list of national coverage determinations
made under title XVIII of the Social Security Act in the previous year
and information on how to get more information with respect to such
determinations.
(c) GAO Report on Flexibility in Applying Home Health Conditions of
Participation to Patients Who Are Not Medicare Beneficiaries.--Not
later than 6 months after the date of the enactment of this Act, the
Comptroller General of the United States shall submit to Congress a
report on the implications if there were flexibility in the application
of the medicare conditions of participation for home health agencies
with respect to groups or types of patients who are not medicare
beneficiaries. The report shall include an analysis of the potential
impact of such flexible application on clinical operations and the
recipients of such services and an analysis of methods for monitoring
the quality of care provided to such recipients.
(d) OIG Report on Notices Relating to Use of Hospital Lifetime
Reserve Days.--Not later than 1 year after the date of the enactment of
this Act, the Inspector General of the Department of Health and Human
Services shall submit a report to Congress on--
(1) the extent to which hospitals provide notice to medicare
beneficiaries in accordance with applicable requirements before
they use the 60 lifetime reserve days described in section
1812(a)(1) of the Social Security Act (42 U.S.C. 1395d(a)(1));
and
(2) the appropriateness and feasibility of hospitals
providing a notice to such beneficiaries before they completely
exhaust such lifetime reserve days.
I. SUMMARY AND BACKGROUND
A. Purpose and Summary
There are currently over 130,000 pages of regulations for
the Medicare program. These regulations are often confusing,
overly burdensome and can take away from providers' time with
patients. They are also needed to assure payment for services
rendered and to monitor compliance with the conditions of
participation and other quality of care requirements.
The purpose of H.R. 810 is to streamline paperwork
requirements under the Medicare program and communicate clearer
instructions to providers of services and suppliers so that
they may spend more time caring for patients. At the same time,
the bill does not prevent or impede the ability of the existing
legal authorities to combat waste, fraud and abuse. It is also
intended to reform the Medicare contracting process to make it
more open by requiring competition.
B. Background and Need for Legislation
Regulatory Reform.--This bill would provide protections for
beneficiaries and providers by requiring new matter introduced
in a final rule that is not a logical outgrowth of previously
published material to be treated as a proposed regulation until
there is public comment. It also prohibits retroactive
application of regulations and policies. Finally, providers
that rely on written, but erroneous guidance from the Secretary
or its contractors shall not be subject to sanctions if they
reasonably relied on such guidance.
Contracting Reform.--This bill would reform Medicare's
contracting system for administrative functions by
consolidating contracting functions for Part A and Part B,
requiring competition among contractors, and providing for more
flexibility for contractors.
Education and Outreach.--This bill would improve
beneficiary and provider education and outreach by: requiring
coordination of educational activities: providing incentives to
improve contractor performance, requiring written responses
within 45 days; providing a toll-free telephone number for
questions about the program and outreach programs for
beneficiaries and small providers. It also establishes
ombudsmen for beneficiaries and providers and a demonstration
program to place Medicare staff in selected Social Security
offices.
Appeals.--This bill would transfer responsibility for
Medicare appeals from Social Security to the Department of
Health and Human Services. The Administrative Law Judges would
maintain their independence from the Centers for Medicare and
Medicaid Services. It also establishes requirements for
independence of the Qualified Independent Contractors by
ensuring no conflicts of interest. Finally, beneficiaries would
be provided with more information on the disposition of their
cases.
Overpayment.--This bill establishes standards for
prepayment review, audits and consent settlements; allows for
hardship in the case of repayment of overpayments; and limits
recoupments by the program until the first independent level of
appeal--qualified independent contractors--is determined. It
also allows for beneficiaries and physicians to ask for prior
authorization for physician office services.
Miscellaneous and Technical Provisions.--This bill contains
a number of provisions that would facilitate the introduction
of new technology into the system. It also limits some
information requests to providers or otherwise requires the
Secretary to provide the information. It provides flexibility
to hospice organizations in extraordinary circumstances.
C. Legislative History
SUBCOMMITTEE ACTION
During the 107th Congress, the Subcommittee held two
hearings on regulatory and contracting reform: March 15, 2001
and September 25th, 2001. After Subcommittee Chairman Johnson
and Representative Stark introduced the ``Medicare Regulatory
Contracting Reform Act of 2001'' (HR 2768) on August 2, the
Committee favorably reported that bill October 4, 2001 on a
voice vote. After conferring with the Energy and Commerce
Committee, a revised version (HR 3391) was introduced and
passed the House 408-0 on December 4, 2001. Most of the
provisions in this bill were incorporated into the Medicare
Modernization and Prescription Drug Act (HR 4954), which passed
the House in June, 2002.
Action commenced on regulatory and contracting reform in
the 108th Congress with the introduction of the Medicare
Regulatory and Contracting Reform Act (HR 810) of 2003 by
Chairman Johnson and Representative Stark on February 12. This
bill is nearly identical to HR 3391 that passed the House in
the 107th Congress. The Subcommittee on Health held a hearing
on HR 810 on February 13th 2003, and heard testimony from CMS
Administrator Tom Scully, Dr. Douglas Wood, Chairman of the
Secretary's Advisory Committee on Regulatory Reform, and
provider and beneficiary representatives.
On March 19, 2003, the Subcommittee on Health favorably
reported on a voice vote to the full Committee H.R. 810 the
``Medicare Regulatory and Contracting Reform Act of 2003.'' The
major changes made in the Chairman's amendment in the nature of
a substitute were to conform the liability for contractors to
language negotiated by the Department of Justice, Office of
Inspector General, CMS and contractors, and to delete obsolete
provisions, which CMS is already undertaking administratively.
FULL COMMITTEE ACTION
On April 2, 2003, the Committee reported 19-13 on H.R. 810
the ``Medicare Regulatory and Contracting Reform Act of 2003.''
The major changes made in the Chairman's amendment in the
nature of a substitute were: adding a process to facilitate the
adoption of updated diagnoses and procedure codes called ICD-
10; allowing certain staffing companies to enroll in Medicare;
and for specialized Medicare+Choice plans to exclusively serve
special needs beneficiaries.
Two additional amendments were approved by the Committee.
The first was to suspend the collection of unused home health
data on privately-insured patients until CMS analyses how this
data can be used and moves through the regulatory and public
comment process. The second amendment would provide for an
exception process where the Secretary can, under certain
limited conditions, reinstate the nurse aide training programs
of a skilled nursing facility. The Secretary (in conjunction
with the State survey agencies and allowing for public notice
from patients and their families and patient advocacy groups)
must certify that the homes are fully in compliance with any
Federal or State regulations on quality of care.
II. EXPLANATION OF THE BILL
Section 1. Short Title; Amendments to Social Security Act; Table of
Contents
Current Law. No provision.
Explanation of Provision. Except as otherwise specified,
the provisions would amend or repeal a section or other
provisions of the Social Security Act.
Effective Date. Upon enactment.
Section 2. Findings and Construction
Current Law. No provision.
Explanation of Provision. Congress finds that the
overwhelming numbers of providers are law-abiding and directs
the Secretary to streamline Medicare's paperwork requirements
so that time spent on patient care can increase.
None of the provisions shall be construed to (1) compromise
or affect the existing legal authorities, procedures or
remedies for addressing Medicare fraud or abuse whether it be
criminal investigation and prosecution, civil enforcement, or
administrative remedies, including those established by the
False Claims Act or (2) prevent any existing legal authorities
from eliminating waste, fraud, and abuse in Medicare. Also,
consolidation of Medicare's administrative contracting
functions (as provided for in this bill) would not consolidate
the Federal Hospital Insurance Trust Fund, which pays for Part
A services and the Federal Supplementary Medical Insurance
Trust fund, which pays for Part B services. The bill notes that
this administrative consolidation of contracting functions does
not reflect any position on that issue.
Effective Date. Upon enactment.
Reason for Change. The Committee is committed to extending
needed regulatory relief to providers and suppliers while at
the same time protecting taxpayers from waste, fraud and abuse.
Section 3. Definitions
Current Law. No provision.
Explanation of Provision. The term, ``supplier,'' means a
physician, practitioner, facility or other nonprovider entity
that furnishes Medicare items or services unless otherwise
indicated. BIPA means the Medicare Medicaid and SCHIP Benefits
Improvement and Protection Act of 2000 and Secretary means the
Secretary of Health and Human Services (HHS).
Effective Date. Upon enactment.
A. Title I--Regulatory Reform
Section 101. Issuance of Regulations
(a) Limitation on New Matter in Final Regulations
Current Law. No provision.
Explanation of Provision. A provision in a final regulation
that is not a logical outgrowth of a previously published
notice or proposed rulemaking or interim final rule would be
treated as a proposed regulation and would not take effect
without a separate public comment period followed by its
publication as a final regulation.
Effective Date. Final regulations published on or after
enactment.
Reason for Change. The provision ensures that interested
parties will be given an opportunity to comment on issues
addressed in regulations before they take effect. The Committee
recognizes that proposed regulations for annual payment updates
for providers and suppliers include proposed overall payment
updates, and that specific payment amounts for specific codes
or specific payment areas are not typically included until
final rules. The Committee does not intend to change the
requirements or application of the Administrative Procedures
Act. It is the Committee's intent that if the Secretary
publishes a final rulemaking document which includes a
provision that is not a logical outgrowth of a previously
published notice of proposed rulemaking, such provision will
not take effect until there is further opportunity for public
comment and a publication of the provision again as a final
regulation.
Section 102. Compliance With Changes in Regulations and Policies
(a) No Retroactive Application of Substantive Changes
Current Law. No provision.
Explanation of Provision. A substantive change in a
regulatory or a subregulatory issuance would not be applied
retroactively to items or services, unless the Secretary
determines that retroactive application (1) would be necessary
to comply with statutory requirements; or (2) would be
beneficial to the public interest.
Effective Date. For substantive changes issued on or after
enactment.
Reason for Change. This provision will ensure that
Medicare's rules are not generally applied retroactively.
(b) Timeline for Compliance With Substantive Changes After Notice
Current Law. No provision.
Explanation of Provision. A substantive change would not
become effective before 30 days after the date the change is
issued or published. The Secretary would be able to waive the
30-day period to comply with statutory requirements or if such
waiver is in the public interest. If an earlier date is
established, the Secretary would be required to include a brief
explanation of such finding in the issuance or publication of
the substantive change. No compliance action would be permitted
against a provider or supplier for goods and services furnished
before the effective date of the substantive change.
Effective Date. For compliance actions undertaken on or
after enactment.
Reason for Change. This provision will ensure providers and
suppliers have sufficient time to make any changes to systems
needed to comply with changes in regulations.
(c) Reliance on Guidance
Current Law. No provision.
Explanation of Provision. A provider or supplier who
reasonably relied on erroneous guidance would not be subject to
any sanction or penalties, including repayment, provided the
following conditions were met: (1) The provider or supplier
follows written guidance (which may be transmitted
electronically) provided by the Secretary or a Medicare
contractor when furnishing an item or service and submitting a
claim; (2) the Secretary finds that the circumstances relating
to the furnished items and services have been accurately
presented in writing to the contractor; and (3) the guidance is
inaccurate. This provision would not prevent recoupment or
repayment (without additional penalty) if the overpayment were
solely the result of a clerical or technical operational error.
Effective Date. Upon enactment, but would not apply to
sanctions where notice was provided on or before enactment.
Reason for Change. This provision will ensure that
providers and suppliers who, in good faith based on the
information received from contractors will not be vulnerable to
recovery if it turns out that the contractor was in error.
Providers should be able to rely on the directions or guidance
provided by their Medicare contractors.
Section 103. Reports and Studies Relating to Regulatory Reform
Current Law. No provision.
Explanation of Provision. The legislation has two studies
in this area. First, the Comptroller General of the United
States (GAO) would be required to conduct a study to determine
the appropriateness and feasibility of providing the authority
to the Secretary to issue legally binding advisory opinions on
the interpretation and application of Medicare regulations. The
study would examine the appropriate time frame for issuing the
decisions as well as the need for additional staff and funding.
GAO would submit the study not later than one year after
enactment.
Second, the Secretary would be required to report to
Congress on the administration of the Medicare program and
inconsistencies among existing Medicare statutory or regulatory
provisions. The report would include (1) information from
beneficiaries, providers, suppliers, Medicare Beneficiary and
Provider Ombudsmen (established in Section 303 of this
legislation), and Medicare contractors; (2) descriptions of
efforts to reduce inconsistencies; and (3) recommendations from
the Secretary for appropriate legislation or administrative
actions. The report would be due no later than two years after
enactment and every two years thereafter.
Effective Date. Upon enactment.
Reason for Change. The Committee is interested in receiving
additional information regarding both advisory opinions and
inconsistencies in Medicare regulations.
B. Title II--Contracting Reform
Section 201. Increased Flexibility in Medicare Administration
(a) Consolidation and Flexibility in Medicare Administration
Current Law. Section 1816 of the Social Security Act
authorizes the Secretary to establish agreements with fiscal
intermediaries nominated by different provider associations to
make Medicare payments for health care services furnished by
institutional providers. Section 1842 of the Act authorizes the
Secretary to enter into contracts with health insurers (or
carriers) to make Medicare payments to physicians,
practitioners and other health care suppliers. Section
1834(a)(12) of the Act authorizes separate regional carriers
for the payment of durable medical equipment (DME) claims.
Section 1893 authorizes the Secretary to contract for certain
program safeguard activities under the Medicare Integrity
Program (MIP).
Certain terms and conditions of the contracting agreements
for fiscal intermediaries and carriers are specified in the
Medicare statute. Medicare regulations coupled with long-
standing agency practices have further limited the way that
contracts for claims administration services can be
established. Specifically, the contracts are awarded without
full and open competition; generally must cover the range of
claims processing and related activities; cannot be terminated
without cause and without the opportunity for a public hearing;
and incorporate cost-based, not performance-based,
reimbursement methods with no incentive bonuses.
Certain functions and responsibilities of the fiscal
intermediaries and carriers are specified in the statute as
well. The Secretary may not require that carriers or
intermediaries match data obtained in its other activities with
Medicare data in order to identify beneficiaries who have other
insurance coverage as part of the Medicare Secondary Payer
(MSP) program. With the exception of prior authorization of DME
claims, an entity may not perform activities (or receive
related payments) under a claims processing contract to the
extent that the activities are carried out pursuant to a MIP
contract. Performance standards with respect to the timeliness
of reviews, fair hearings, reconsiderations and exemption
decisions are established as well.
A Medicare contract with an intermediary or carrier may
require any of its employees certifying or making payments
provide a surety bond to the United States in an amount
established by the Secretary. Neither the contractor nor the
contractor's employee who certifies the amount of Medicare
payments is liable for erroneous payments in the absence of
gross negligence or intent to defraud the United States.
Neither the contractor nor the contractor's employee who
disburses payments is liable for erroneous payments in the
absence of gross negligence or intent to defraud the United
States, if such payments are based upon a voucher signed by the
certifying employee.
Explanation of Provision. The legislation would add Section
1874A to the Social Security Act to permit the Secretary to
enter into contracts with any entity to serve as a Medicare
administrative contractor. These contractors would perform or
secure the performance (through subcontracting) of some or all
of the following tasks: determine payment amounts; make
payments; educate and assist beneficiaries; provide
consultative services; communicate with providers and
suppliers; educate and offer technical assistance to providers;
and perform additional functions as necessary. An entity
eligible to enter into a contract with respect to the
performance of a particular function as an entity would (1)
have demonstrated capability to carry out such function; (2)
comply with conflict of interest standards that are generally
applicable under Federal acquisition and procurement; (3) have
sufficient assets to financially support the performance of
such functions and (4) meet other requirements imposed by the
Secretary. The claims processing jurisdiction of Medicare
administrative contractor would be determined by the scope of
the contract awarded to the entity. Specifically, the Medicare
administrative contractor that would perform a particular
function is the entity that has the contract to perform that
function for any given beneficiary, any given provider or
supplier, or class of same.
The Federal Acquisition Rules (FAR) would apply to Medicare
administrative contracts except to the extent they are
inconsistent with a specific Medicare requirement. The
Secretary would be required to use competitive procedures when
entering into a Medicare administrative contract and would take
into account performance quality, price, and other factors. The
Secretary would be able to renew a contract for up to five
years without regard to statutory requirements concerning
competitive contracting if the entity has met or exceeded
specified performance standards. The Secretary would be able to
transfer functions among contractors consistent with these
provisions. The Secretary would be required to (1) ensure that
performance quality is considered in such transfers and (2)
provide notice of such transfer (in the Federal Register or
otherwise) including a description of the transferred
functions, the affected providers and suppliers, and includes
contractor contact information.
The Secretary would be required to (1) provide incentives
for the Medicare administrative contractors to provide
efficient, high-quality services; and (2) develop performance
standards with respect to each of the payment, provider
service, and beneficiary service functions required of the
contractors. In developing the performance standards, the
Secretary would be able to consult with providers and
suppliers, organizations representing Medicare beneficiaries,
and Medicare contractors. In developing the performance
requirements for Medicare administrative contractors, the
Secretary may include satisfaction of beneficiaries as a
standard for measuring performance. The Secretary would be
required to contract only with those entities that will (1)
perform efficiently and effectively; (2) meet standards for
financial responsibility, legal authority and service quality
among other pertinent matters; (3) agree to furnish timely and
necessary data; and (4) maintain and provide access to
necessary records and data.
The performance requirements would be (1) set forth in the
contract between the Secretary and the appropriate Medicare
contractor; (2) used to evaluate contractor performance; and
(3) consistent with the contract's written statement of work.
The statement of work and contract are public documents. A
Medicare administrative contract would contain provisions
deemed necessary by the Secretary and may provide for advances
of Medicare funds for the purposes of making payments to
providers and suppliers. In developing contract performance
requirements for Medicare administrative contractors, the
Secretary would be required to consider the inclusion of the
existing standards in effect for timeliness of reviews,
reconsiderations and exemption decisions.
The existing MSP provision would apply: the Secretary would
not be able to require contractors to match their data with
Medicare data for the purposes of the identifying beneficiaries
with other insurance coverage. The Secretary would assure that
the activities of the Medicare administrative contractors do
not duplicate the Medicare Integrity Program (MIP) functions
except with respect to the prior authorization of durable
medical equipment. An entity with a MIP contract would not be
treated as a Medicare administrative contractor simply because
it has a MIP contract.
A Medicare administrative contractor and any of its
employees certifying or disbursing payments may be required to
provide a surety bond to the United States in an amount
established by the Secretary. It is the intent of Congress that
the definition of a surety bond in this instance includes
fidelity bonds and the Secretary has the authority to request
fidelity bonds.
A Medicare administrative contractor, certifying officer,
or disbursing officer shall not be liable for erroneous
payments in the absence of reckless disregard or intent to
defraud the United States. While Medicare administrative
contractors are not liable for inadvertent billing errors, as
in the past, they are liable for all penalties and damages
resulting from reckless disregard of their obligations under
their Medicare administrative contracts or intent to defraud
the United States. The ``reckless disregard'' standard is the
same as that under the False Claims Act which has been used
effectively by whistleblowers and the Department of Justice to
uncover and penalize fraud against the Medicare program by some
fiscal intermediaries and carriers. This ``reckless disregard''
standard, which does not require proof of specific intent to
defraud, is designed to balance the practical need to shelter
Medicare Administrative Contractors from frivolous civil
litigation by disgruntled providers or beneficiaries with the
Medicare program's interest in protecting itself from
contractor fraud. This section makes it clear that the False
Claims Act continues, as in the past, to remain available as a
remedy for fraud against Medicare by contractors, and that, as
in the past, the damages and penalties which the Medicare
program is entitled to recover from fraudulent contractors
include not just administrative payments but also the affected
payments from the Medicare trust funds.
The Secretary would be able to indemnify a Medicare
administrative contractor, subcontractor, or employee who is
made a party to any judicial or administrative proceeding
arising from the claims administration process to an
appropriate extent as determined by the Secretary and specified
in the contract. Indemnification in this case may include
payment of judgments, certain settlements, awards and costs
(including reasonable legal expenses). Settlement proposals
would not be negotiated or compromised without prior written
approval by the Secretary. The Secretary would not be able to
provide any indemnification if the liability arises directly
from conduct that is determined in the proceeding or by the
Secretary to be criminal in nature or fraudulent. If
indemnification is provided before such determination is made
that such costs arose directly from such conduct, the
contractor would reimburse the Secretary for these costs. The
provisions would not change common law immunity available to
the Medicare contractor or other party, or permit the payment
of costs not otherwise allowable, reasonable or allocable under
the Federal Acquisition Regulation.
Effective Date. See subsection (d).
Reason for Change. Medicare's current contracting
represents an antiquated, inefficient, and closed system based
on cozy relationships between the government, contractors and
providers.
Medicare contracting is antiquated because contractors may
not provide service for the entire Medicare program, or
particular functions within the program; rather Fiscal
Intermediaries administer claims for facilities and carriers
administer claims for all other providers. It has failed to
keep pace with integrated claims administration practices in
the private sector.
Medicare contracting is inefficient because Medicare does
not award contracts for Fiscal Intermediaries through
competitive procedures, but rather on provider nomination.
Medicare contracting is a closed system. All but one of the
contractors today have been with Medicare since the program's
inception 38 years ago, and only insurers can provide
contracting services under current law.
This provision permits greater flexibility in contracting
for administrative services between the Secretary and the
Medicare contractors (entities that process claims under Part A
and Part B of the Medicare program), including the flexibility
to separately contract for all or parts of the contractor
functions. The Secretary also may contract with a wider range
of entities, so that the most efficient and effective
contractor can be selected.
These amendments require the Secretary to contract
competitively at least once every five years for the
administration of benefits under Parts A and B. In conjunction
with the elimination of cost contracts, it is intended to
create incentives for improved service to beneficiaries and to
providers of services and suppliers.
(b) Conforming Amendments to Section 1816 (Relating to Fiscal
Intermediaries)
Current Law. Section 1816 of the Social Security Act
establishes the provider nomination process, the contracting
specifications, and performance standards for fiscal
intermediaries that currently contract with Medicare to process
claims and perform other related administrative activities for
institutional providers.
Explanation of Provision. The provisions establish that the
activities of fiscal intermediaries in administering Medicare
would be conducted through contracts with Medicare
administrative contractors as set forth in subsection (a). The
provider nomination process and contracting specifications
would be repealed. Certain performance standards with respect
to the processing of clean claims would be retained. Certain
annual reporting requirements concerning the contractor's
overpayment recovery efforts would be retained.
Effective Date. See subsection (d).
Reason for Change. These amendments provide a basis for a
unified contracting system for the administration of Parts A
and B, identical to the recent Congressionally mandated
structure of the Medicare Integrity Program contractors.
Consolidation of contracting duties as set forth in this
legislation does not constitute consolidation of the Hospital
Insurance and Medical Supplementary Insurance Trust Funds, or
reflect any position on that issue. In addition, the
elimination of provider nomination, which hospitals have rarely
been allowed to exercise in recent years, is essential for
bringing full and open competition into the contracting
functions of the Medicare program.
(c) Conforming Amendments to Section 1842 (Relating to Carriers)
Current Law. Section 1842 of the Social Security Act
establishes that carriers will be used to administer certain
Medicare benefits as well as the contracting requirements and
certain performance standards for those activities.
Explanation of Provision. The provisions would establish
that the activities of carriers administering Medicare would be
conducted through contracts with Medicare administrative
contractors as set forth in subsection (a). Certain
instructions including those pertaining to nursing facilities
payments, claims assignment, physician participation,
overpayment recoveries and billing by suppliers would be
retained. Certain performance standards with respect to the
processing of clean claims would be retained. Contracting
specifications and other conforming changes would be
established. The Secretary, not the contractor, would be
responsible for taking necessary actions to assure that
reasonable payments are made, for those made on both a cost and
charge basis. The Secretary, not the contractor, would be
responsible for maintaining a toll-free telephone number for
beneficiaries to obtain information on participating suppliers.
Since the Carrier fair hearing requirement were eliminated in
BIPA, the requirements for the hearing are eliminated to
conform with existing law. Certain annual reporting
requirements concerning the contractor's overpayment recovery
efforts would be retained.
The Committee directs the Secretary's attention to the
provision of the Balanced Budget Act of 1997 requiring CMS to
designate no more than five regional carriers to process
laboratory claims. This provision was passed in order to
streamline the processing of laboratory claims and was to be
implemented by July 1, 1999, but CMS has taken no action to
date. In consultation with the clinical laboratory industry,
CMS may consider other potential solutions, including the
designation of a single contractor to process all claims of
laboratory entities operating in more than one state. CMS is
directed to report back to the Committee on Ways and Means and
the Committee on Energy and Commerce within three months
detailing the action it has taken to implement this directive.
Effective Date. See subsection (d).
Reason for Change. The provision establishes a basis for a
unified contracting system, identical to the structure
implemented for the Medicare Integrity Program (MIP)
contractors. It is important to note, however, that
consolidation of contracting duties as set forth in this
legislation does not constitute consolidation of the Hospital
Insurance and Medical Supplementary Insurance Trust Funds, or
reflect any position on that issue. In addition, the Secretary
would have the flexibility to choose the best contractor(s) to
provide telephone information on suppliers which is intended to
reduce administrative costs and improve quality. Since the
carrier fair hearing requirement was eliminated in previous
legislation, the requirements for the hearing are eliminated in
order to conform with existing law.
(d) Effective Date; Transition Rule
Current Law. No provision.
Explanation of Provision. Except as otherwise provided in
this subsection, the provisions in this section would be
effective October 1, 2005. The Secretary would be authorized to
take necessary actions prior to that date in order to implement
these amendments on a timely basis to transition from the
contracts established under sections 1816 and 1842 of the
Social Security Act to those established under the new section
1874A created by this legislation. The transition would be
consistent with the requirement that the administrative
contracts be competitively bid by October 1, 2010. The
requirement that MIP contracts be awarded on a competitive
basis would continue to apply and would not be affected by the
provisions in this section. The MIP contracting exception that
allows agreements according to current law would be deemed to
be a contract established under the new authority of 1874A and
would continue existing activities. The Secretary has the
authority to recognize the appropriate termination costs of the
current contractors during the transition from cost contracts
to competitively bid contracts.
(e) References
Current Law. No provision.
Explanation of Provision. After this section becomes
effective, any reference to fiscal intermediary or carrier
would be considered a reference to the appropriate Medicare
administrative contractor.
(f) Reports on Implementation
Current Law. No provision.
Explanation of Provision. The Secretary would submit an
implementation plan to Congress and GAO no later than October
1, 2004. GAO would evaluate the plan and include appropriate
recommendations no later than six months after the plan is
received. No later than October 1, 2008, the Secretary would be
required to submit a status report to Congress including (1)
the number of contracts that have been competitively bid; (2)
the distribution of functions among contracts and contractors;
(3) a timeline for complete transition to full competition; and
(4) a detailed description of changes to contractor oversight
and management.
Effective Dates. Upon enactment.
Section 202. Requirements for Information Security
Current Law. No provision.
Explanation of Provision. Medicare administrative
contractors that determine and make payments would be required
to implement a contractor-wide information security program
that meets the requirements imposed on Federal agencies to
ensure the security, integrity, confidentiality, authenticity,
and availability of operational data and systems supporting
operations. An annual audit of the information security at each
Medicare administrative contractor: (1) would be performed by
an independent entity that meets the independence requirements
specified by the Office of the Inspector General (OIG) in HHS;
and (2) would test the effectiveness of the information
security techniques for an appropriate subset of the
contractor's systems. An audit of new contractors (those that
have not been fiscal intermediaries or carriers) would be
required prior to the start of their performing Medicare
payment functions. An audit of existing contractors (those that
are now fiscal intermediaries and carriers) would be required
to be completed within one year from enactment. The results of
the audits would be reported promptly to the OIG which will
submit a report annually to Congress. These provisions would be
equally applicable to fiscal intermediaries and carriers as to
Medicare administrative contractors.
Effective Date. Upon enactment.
Reason for Change. The increased reliance by the Federal
government on the Internet and related telecommunications
technologies has resulted in enhanced inter-connectivity and
interdependencies associated with Federal computer systems and
between federal and private computer systems. Over the past
several years, this inter-connectivity or ``networking'' has
resulted in increased security vulnerabilities that have put at
greater risk computer systems and data that are critical to
ensuring national and economic security and public health and
welfare, including sensitive, non-public information that is
collected and maintained by CMS and its business partners.
Investigations have revealed significant security
weaknesses, which the agency has been working to address. Some
of the computer security concerns identified include weak
password management, inadequate access controls, excessive user
privileges, improper network configurations, and inadequate
testing of critical systems. In addition, the OIG conducted
assessments of financial controls--including electronic data
processing controls--at CMS and its major Medicare contractors,
and, in every year since 1997, the OIG has identified computer
security controls to be a material weakness at both CMS and the
Medicare contractors reviewed.
Section 202 is intended to assist CMS in identifying and
working with contractors to address potential security
deficiencies in order to ensure that sensitive, non-public
information related to the processing of Medicare claims is
adequately secure from unauthorized access, misuse, or
destruction.
C. Title III--Education and Outreach Improvements
Section 301. Provider Education and Technical Assistance
(a) Coordination of Education Funding
Current Law. Medicare's provider education activities are
funded through the program management appropriation and through
the Education and Training component of the Medicare Integrity
Program (MIP). Both claims processing contractors (fiscal
intermediaries and carriers) and MIP contractors may undertake
provider education activities.
Explanation of Provision. The provision would add Section
1889 to the Social Security Act which would require the
Secretary to (1) coordinate the educational activities provided
through the Medicare administrative and MIP contractors and (2)
to submit an evaluation to Congress, no later than October 1,
2002, on actions taken to coordinate the funding of provider
education.
Effective Date. Upon enactment.
Reason for Change. This provision is intended to ensure
that federal spending on provider education is coordinated and
used as efficiently as possible to maximize the value obtained
from the investment. It is not intended to change the
proportion of Medicare Integrity Program funds spent on
provider education.
(b) Incentives to Improve Contractor Performance
Current Law. No specific statutory provision. Since FY1996,
as part of the audit required by the Chief Financial Officers
Act, an estimate of improper payments in Medicare fee-for-
service has been established annually. As a recent initiative,
CMS is implementing a comprehensive error rate testing program
to produce national, contractor specific, benefit category
specific and provider specific paid claim error rates.
Explanation of Provision. The Secretary would be required
to use the specific claims payment error rates or similar
methodology at each Medicare administrative contractor to
provide incentives for such contractors to effectively educate
providers on proper claims procedures. This methodology would
apply to existing fiscal intermediaries and carriers in the
same manner as it applies to Medicare administrative
contractors. No later than October 1, 2004, GAO would submit to
Congress and to the Secretary a report on the adequacy of the
methodology, including recommendations as appropriate. No later
than October 1, 2004, the Secretary would be required to report
to Congress on (1) the use of the claims error rate methodology
in assessing the effectiveness of contractors' provider
education and outreach programs and (2) whether methodology
should be used as a basis to pay contractors' performance
bonuses.
Effective Date. As specified.
Reason for Change. This provision would ensure that the
Department monitors contractor performance for claims payment
error rates, and it would identify best practices for provider
education--all with the goal of reducing payment errors and
helping providers and suppliers better comply with program
requirements. It is the Committee's intent that, in
consultation with representatives of providers and suppliers,
the Secretary shall identify and encourage best practices
developed by contractors for educating providers and suppliers.
(c) Provision of Access to and Prompt Responses From Medicare
Administrative Contractors
Current Law. No specific statutory provision. Statutory
provisions generally instruct carriers to assist providers and
others who furnish services in developing procedures relating
to utilization practices and to serve as a channel of
communication relating information on program administration.
Fiscal intermediaries are generally instructed to (1) provide
consultative services to institutions and other agencies to
enable them to establish and maintain fiscal records necessary
for program participation and payment and (2) serve as a center
for any information as well as a channel for communication with
providers.
Explanation of Provision. The Secretary would be required
to develop a communication strategy with beneficiaries,
providers and suppliers. Each Medicare administrative
contractor would be required to (1) provide general written
responses (which may be through electronic transmission) in a
clear, concise and accurate manner to written inquiries from
beneficiaries, providers and suppliers within 45 business days;
(2) provide a toll-free telephone number where these interested
parties may obtain billing, coding, claims, coverage and other
appropriate Medicare information; (3) maintain a system for
identifying which employee provided both the written and oral
information; and (4) monitor the accuracy, consistency, and
timeliness of the information provided. The Secretary would be
required to establish and make public the standards used to
monitor the accuracy, consistency, and timeliness of
information provided in response to written and telephone
inquiries. The standards would be developed in consultation
with provider, supplier, and beneficiary organizations and
would be consistent with the contractors' performance
requirements. The Secretary would be able to directly monitor
the quality of the information so provided. These provisions
would also apply to existing fiscal intermediaries and
carriers. The Medicare administrative contractor is required to
record the subject matter and content of any advice, in part,
to facilitate tracking the accuracy of the advice.
Effective Date. By October 1, 2004.
Reason for Change. This provision is intended to improve
contractor accountability to make contractors more responsive
to providers and suppliers, and to increase the accuracy,
timeliness and reliability of the information provided in
response to the questions received.
(d) Improved Provider Education and Training
Current Law. In FY2000, $54.8 million was spent on provider
education and training activities: about $43 million came from
the program management appropriation and about $12 million came
from the Provider Education and Training component of MIP. In
FY2001, about $57.3 million was budgeted for these activities.
Explanation of Provision. The provisions would authorize
$25 million in Medicare appropriations in FY2005 and FY2006 and
such funds as necessary in subsequent years to increase
provider education and training and to improve the accuracy and
quality of contractor responses. The Committee intends for this
amount to be provided in addition to current funding levels.
Starting on October 1, 2004, the contractors' training
activities would accommodate the special needs of small
providers and suppliers. The provisions define a small provider
as an institution with fewer than 25 full-time equivalents
(FTEs) and a non-facility based provider or supplier with fewer
than 10 FTEs.
Effective Date. Upon enactment and as specified.
Reason for Change. This provision acknowledges that
contractors are being instructed to significantly improve their
provider education and training efforts, and accordingly
authorizes new funds to be available for those purposes.
(e) Requirement To Maintain Internet Sites
Current Law. No provision.
Explanation of Provision. The Secretary and each contractor
would be required to maintain an Internet site that provides
answers to frequently asked questions in an easily accessible
format as well as other materials published by the contractor.
Effective Date. By October 1, 2004.
Reason for Change. This provision will facilitate greater
ease of provider and supplier access to information provided by
Medicare's contractors.
(f) Additional Provider Education Provisions
Current Law. No provision.
Explanation of Provision. A Medicare contractor would not
be able to use attendance records at educational programs or
information gathered during these programs to select or track
candidates for audit or prepayment review. Nothing in the
proposed legislation would require Medicare administrative
contractors to disclose information that would compromise
pending law enforcement activities or reveal findings of law
enforcement-related audits.
Effective Date. Upon enactment.
Reason for Change. This provision addresses a concern
raised by providers and suppliers that their participation in
educational forums has been used to trigger audits.
Participation in educational forums should be encouraged not
discouraged.
Nothing in this section or section 1893(g) shall be
construed as preventing the disclosure by a Medicare contractor
of information on attendance at education activities for law
enforcement purposes. Nothing in this section or section
1893(g) shall be construed as providing for the disclosure by a
Medicare contractor of the claims processing screens or
computer edits used for identifying claims that will be subject
to review.
Section 302. Small Provider Technical Assistance Demonstration Program
Current Law. No provision.
Explanation of Provision. The Secretary would be required
to establish a demonstration program and contract with
qualified entities to offer technical assistance, when
requested and on a voluntary basis, to small providers or
suppliers. Small providers and suppliers would be those
institutional providers with less than 25 full-time equivalents
(FTEs) or suppliers with less than 10 FTEs. Technical
assistance would include direct, in-person examination of
billing systems and internal controls by qualified entities
such as peer review organizations or other entities. In
awarding these contracts, the Secretary would be required to
consider any prior investigations of the entity's work by the
Office of the Inspector General (OIG) in HHS or the GAO.
Participating providers and suppliers would be required to pay
an amount estimated and disclosed in advance that would equal
25 percent of the cost of the technical assistance they
received. Absent indications of fraud, errors found in the
review would not be subject to recovery if the problem is
corrected within 30 days of the on-site visit and remains
corrected for an appropriate period. However, this protection
would only apply to claims filed as part of the demonstration
project, would last only for the duration of the project and
only as long as the provider or supplier was participating in
the project. GAO, in consultation with the OIG, would be
required to evaluate and provide recommendations on the
continuation of the demonstration project no later than two
years after its implementation. The evaluation would include a
determination of whether claims error rates were reduced for
providers and suppliers who participated in the program. The
provision would authorize $1 million in FY2005 and $6 million
in FY2006 of appropriations from the Medicare Trust Funds to
carry out demonstration project.
Effective Date. Upon enactment.
Reason for Change. Many large providers and suppliers have
contracts with private consulting firms to help them navigate
their interactions with the Medicare program. This type of
assistance can be prohibitively expensive for small providers
and suppliers--but they are also required to comply with
complex program rules and regulations. This provision creates a
new demonstration program to facilitate small provider and
supplier access to expert technical assistance. The
demonstration will also test whether encouraging technical
assistance on the front end to help providers and suppliers
play by the rules can save the program money in the long term
by promoting greater program compliance.
Section 303. Medicare Provider Ombudsman; Medicare Beneficiary
Ombudsman
(a) Medicare Provider Ombudsman
Current Law. No provision.
Explanation of Provision. The Secretary would be required
to appoint a Medicare Provider Ombudsman within HHS to (1) to
resolve unclear guidance and provide confidential assistance to
providers and suppliers regarding complaints or questions about
the Medicare program including peer review and administrative
requirements; and (2) recommend changes to improve program
administration. The Ombudsman would not advocate any increases
in payments or expanded coverage, but would identify issues and
problems in current payment and coverage policies.
Effective Date. One year after enactment.
Reason for Change. Providers are currently confronted with
a morass of bureaucracy and regulation, with no clear
individual to assist them. The new ombudsman will help
providers navigate Medicare's complicated rules and
regulations.
The Medicare Provider Ombudsman shall make recommendations
to the Secretary concerning how to respond to recurring
patterns of confusion in the Medicare program. Such a
recommendation may include calling for the suspension of the
imposition of provider sanctions (except those sanctions
relating to the quality of care) where there is widespread
confusion in program administration. Nothing in this section
shall be construed as allowing for the suspension of provider
sanctions relating to the quality of care, regardless of
whether widespread confusion in the Medicare program exists.
(b) Medicare Beneficiary Ombudsman
Current Law. No provision.
Explanation of Provision. The Secretary would be required
to appoint a Medicare Beneficiary Ombudsman within HHS from
individuals with health care expertise, advocacy, and education
of Medicare beneficiaries. The ombudsman would (1) receive
complaints, grievances, and requests for information from
Medicare beneficiaries; (2) provide assistance with respect to
those complaints, grievances and requests, including assistance
to beneficiaries who appeal claims determinations or those
affected by the decisions of Medicare+Choice organizations to
leave Medicare; and (3) submit an annual report to Congress and
the Secretary describing activities and recommending changes to
improve program administration. The Ombudsman would not
advocate any increases in payments or expanded coverage, but
would identify issues and problems in current payment and
coverage policies.
To the extent possible, the Beneficiary Ombudsman would
work with the Health Insurance and Assistance Counseling
Programs authorized under Section 4360 of OBRA 1990, to
facilitate the provision of information to Medicare
beneficiaries regarding Medicare+Choice plans and any changes
related to those plans. In addition, nothing in this section
would preclude further collaboration, as appropriate, between
the Beneficiary Ombudsman and these programs.
Effective Date. One year after enactment.
Reason for Change. Beneficiaries confront a morass of
bureaucracy and regulation, with no clear individual to assist
them. This new ombudsman will help beneficiaries navigate
Medicare's complicated rules and regulations.
(c) Funding
Current Law. No provision
Explanation of Provision. The provision would authorize
appropriations of necessary sums in FY2004 and subsequently
from the appropriate Medicare Trust Funds for the Ombudsman
programs.
Effective Date. Upon enactment.
Reason for Change. The Committee acknowledges that
implementing these new functions will have a cost and
accordingly authorize necessary appropriations.
(d) Use of Central Toll Free Number (1-800-MEDICARE)
Current Law. The Secretary is required to prepare and
distribute an annual notice explaining Medicare benefits and
limitations to coverage to Medicare beneficiaries. The
Secretary is also required to provide information via a toll-
free telephone number.
Explanation of Provision. The Secretary would be required
to establish a toll-free number (1-800-MEDICARE) which will
transfer individuals with questions or seeking help to the
appropriate entities. The transfer would occur with no charge.
This toll-free number would be the general information and
assistance number listed on the annual notice provided to
beneficiaries. GAO would be required to (1) monitor the
adequacy, accuracy, and consistency of the information provided
to Medicare beneficiaries through the toll-free 1-800-MEDICARE
number and (2) examine the education and training of those
providing the information through the toll-free number. GAO
would be required to submit a report to Congress no later than
one year from enactment. This toll-free number is intended to
supplement, not replace, information and assistance available
through non-federal sources. For example, contact information
for the State Health Insurance Assistance Programs (SHIPs)
should still be listed in the beneficiary handbook.
Effective Date. Upon enactment.
Reason for Change. The beneficiary handbook currently
provides many pages of phone numbers, which can be very
confusing for beneficiaries, rather than a single number that
then can triage and transfer beneficiaries to the appropriate
person or entity. This provision will promote better access to
information for beneficiaries.
Section 304. Beneficiary Outreach Demonstration Program
Current Law. No provision.
Explanation of Provision. The Secretary would be required
to establish a 3-year demonstration project where Medicare
specialists who are HHS employees are placed in at least six
SSA offices to advise and assist Medicare beneficiaries. The
SSA offices would be those with a high-volume of visits by
Medicare beneficiaries; at least two of which would be in rural
areas. In the rural SSA offices, the Secretary would provide
for the Medicare specialists to travel among local offices on a
scheduled basis. The Secretary would be required to (1)
evaluate the project with respect to beneficiary utilization,
beneficiary satisfaction, and cost-effectiveness and (2)
recommend whether the demonstration should be expanded and made
permanent.
Effective Date. Upon enactment.
Reason for Change. This provision makes Medicare experts
available in six Social Security Administration offices to
assist beneficiaries and answer their questions. The
demonstration will test whether such outsourced Medicare
specialists improve beneficiary understanding of the program
and beneficiary satisfaction.
Section 305. Notification About Skilled Nursing Facility Benefits
Current Law. No provision.
Explanation of Provision. The Secretary would be required
to provide beneficiaries with information about the remaining
number of days of skilled nursing facility coverage.
Effective Date. For notices provided during calendar
quarters beginning more than six months after enactment.
Reason for Change. Beneficiaries are not always aware that
their Medicare coverage is running out, and may need time to
arrange alternate financing for continued skilled nursing
facility care. This provision will provide beneficiaries with
advance notice of the expiration of their skilled nursing
benefit so that they have time to make arrangements without
disruptions in care.
Section 306. Information on Medicare-Certified Skilled Nursing
Facilities in Hospital Discharge Plans
Current Law. No provision.
Explanation of Provision. The Secretary would make publicly
available information that enables hospital discharge planners,
Medicare beneficiaries, and the public to identify skilled
nursing facilities that are participating in Medicare.
Hospital discharge plans would be required to identify, for
individuals who are likely to need post-hospital extended care
services, the availability of Medicare-certified skilled
nursing facilities that serve the area in which the patient
resides.
Effective Date. Not later than 6 months after the Secretary
provides for the availability of information needed for
discharge plans.
Reason for Change. The Committee has received reports of
beneficiaries being discharged to non-Medicare skilled nursing
facilities or beds. This provision is intended to assure that
beneficiaries are given information during discharge planning
about Medicare participating facilities. Thus, this provision
would ensure that beneficiaries who need post acute care are
notified about the availability of Medicare participating
skilled nursing facilities in the area.
D. Title IV--Appeals and Recovery
Section 401. Transfer of Responsibility for Medicare Appeals
Current Law. Medicare beneficiaries and, in certain
circumstances, providers and suppliers of health care services
may appeal claims that are denied or payments that are reduced.
Section 1869 of the Social Security Act, which covers the
Medicare claims appeals process, was amended by BIPA in its
entirety, but the BIPA provisions are not yet effective.
Generally, parties who have been denied coverage of an item or
service have the right to appeal that decision through a series
of administrative appeals and then into federal district court
if the amounts of disputed claims in question meet certain
thresholds at each step of the appeals process. A hearing by an
administrative law judge (ALJ) in the Social Security
Administration (SSA) with review by the Department Appeals
Board (DAB) is a component of the administrative appeals
process.
Explanation of Provision. By October 1, 2004, the
Commissioner of SSA and the Secretary would develop a plan to
transfer the functions of the administrative law judges (ALJs)
who are responsible for hearing Medicare and Medicare related
cases from SSA to HHS. The plan would be transmitted to
Congress and GAO no later than October 1, 2004. The GAO would
evaluate the plan and submit a report to Congress within six
months. The Secretary and the Commissioner of SSA would
implement the transition plan and transfer the ALJ functions no
earlier than July 1, 2005 and no later than October 1, 2005.
The Secretary would (1) assure the ALJ's independence from the
Centers of Medicare and Medicaid Services (CMS) by placing the
ALJs in an administrative office that is organizationally and
functionally separate from CMS; and (2) locate the ALJs with an
appropriate geographic distribution to ensure access. Subject
to appropriations, the Secretary would be permitted to hire
ALJs and support staff with priority given to ALJs with
experience in handling Medicare appeals. Amounts previously
paid to SSA for the ALJs performing the ALJ functions would be
payable to the Secretary for the transferred functions. The
Secretary would be permitted to enter into arrangements with
SSA to share office space, support staff, and other resources
with appropriate reimbursement from the Medicare trust funds.
Increased appropriations would be permitted to increase the
number of ALJs and support staff; improve education and
training for ALJs and their staff; and increase DAB staff.
Effective Date. Upon enactment.
Reason for Change. The Office of Inspector General has
identified moving the functions of the Medicare Administrative
Law Judges to the Department of Health and Human Services as an
important priority in improving the appeals system. This
provision makes that transition and increases the emphasis on
providing training Administrative Law Judges and their staffs
to increase their expertise in Medicare's rules and
regulations. The SSA Commissioner and the Secretary are
instructed to work together on the transition plans in order to
assure that the transition does not adversely affect the SSA
ALJ appeals system. The Committee objects to recent proposals
to locate the ALJs in CMS.
The transition plan shall include information on the
following:
Workload--The number of such administrative
law judges and support staff required now and in the
future to hear and decide such cases in a timely
manner, taking into account the current and anticipated
claims volume, appeals, number of beneficiaries, and
statutory changes;
Cost Projections--Funding levels required
for fiscal year 2004 and subsequent fiscal years under
this subsection to hear such cases in a timely manner;
Transition Timetable--A timetable for the
transition;
Regulations--The establishment of specific
regulations to govern the appeals process;
Case Tracking--The development of a unified
case tracking system that will facilitate the
maintenance and transfer of case specific data across
both the fee-for-service and managed care components of
the Medicare program;
Feasibility of Precedential Authority--The
feasibility of developing a process to give binding,
precedential authority to decisions of the Departmental
Appeals Board in the Department of Health and Human
Services that address broad legal issues; and
Access to Administrative Law Judges--The
feasibility of filing appeals with administrative law
judges electronically, and the feasibility of
conducting hearings using tele- or video-conference
technologies.
Section 402. Process for Expedited Access to Judicial Review
(a) In General
Current Law. Section 521 of BIPA (which is not yet
implemented) amends Section 1869 to establish deadlines for
filing appeals and for making decisions in the Medicare appeals
process. Generally, an initial determination is to be completed
no later than 45 days from the date a claim for benefits is
received; an individual dissatisfied with an initial
determination is entitled to a redetermination by a carrier or
fiscal intermediary if requested within 120 days of the
determination date. The redetermination is to be completed no
later than 30 days from the request date. The Secretary may
reopen or revise any initial determination or reconsidered
determination under guidelines established by regulation.
An individual dissatisfied with the redetermination is
entitled to reconsideration by a qualified independent
contractor (QIC) if the request is initiated within 180 days of
the notice of the adverse redetermination. With certain
exceptions, a QIC reconsideration decision is to be completed
within 30 days from the date a timely request has been filed.
After a QIC's reconsideration, if the remaining contested
amount is greater than $100, an individual is entitled to a
hearing by an administrative law judge and then a review by the
DAB. Both the ALJ hearing and the DAB review are to be
completed within 90 days of a timely filed request for such an
action.
If the dispute is not satisfactorily resolved and the
contested amounts are greater than $1,000, the individual is
entitled to judicial review of the decision. Under certain
circumstances, a beneficiary is entitled to an expedited
determination with accelerated deadlines. BIPA also provides
for an expedited hearing under Section 1869, where the moving
party alleges that no material issues of fact are in dispute;
the Secretary makes an expedited determination as to whether
any such facts are in dispute and, if not, renders a decision
expeditiously.
Explanation of Provision. The Secretary would establish an
appeals process for a provider, supplier, or beneficiary that
permits access to judicial review when a review panel
determines that no entity in the administrative appeals process
has authority to decide the question of law or regulation in
controversy and where material facts are not in dispute. The
appellant would be able to make such request only once with
respect to a question of law or regulation for a specific
dispute. If the appellant requests this determination and
submits appropriate supporting documentation, the review panel
would make this determination in writing no later than 60 days
after receiving the request. A review panel would consist of a
panel of three members who are ALJs, members of the DAB, or
qualified individuals associated with a QIC or other
independent entity designated by the Secretary to make these
determinations. The determination by the review panel would be
considered a final decision and not subject to review by the
Secretary. Given such a determination or a failure to make the
determination within the 60-day deadline, the appellant would
be able to request judicial review before a civil court. The
filing deadline for this civil action would be within 60 days
of the determination or within 60 days of the end of the
deadline to make such determination. The venue for judicial
review would be the U.S. District Court where the appellant is
located, or where the greatest number of appellants are
located, or in the district court for the District of Columbia.
The amount in controversy would be subject to annual interest
beginning on the first day of the first month beginning after
the 60-day deadline for filing. Interest would be equal to the
rate of interest on obligations issued for purchase by the
Medicare trust funds effective for the month that the civil
action is authorized to commence. The interest payments would
not be deemed to be Medicare reimbursement.
Effective Date. See section (c).
(b) Application to Provider Agreement Determinations
Current Law. Section 1866(h) of the Social Security Act
provides for a hearing and for judicial review of that hearing
for any institution or agency dissatisfied with a determination
that it is not a provider (or that it can no longer be a
provider).
Explanation of Provision. An agency or institution's appeal
concerning program participation under Section 1866 would have
access to expedited judicial review under Section 1869
provisions. This provision would not be construed to affect
remedies applied to assure quality of care in skilled nursing
facilities (under Section 1819) while such appeals are pending.
(c) Effective Date
Explanation of Provision. Amendments in the section would
apply to appeals filed on or after October 1, 2004.
Reason for Change. The provisions in 402 (a-c) on expedited
access to judicial review ensure that if a review board
certifies that there are no material facts in dispute and that
the appeals process does not have authority to resolve the
question at issue, the provider, supplier, or beneficiary may
take their case to court in an expedited manner. This will
facilitate more prompt resolution of challenges to the
underlying validity of CMS regulations and determinations. To
the extent that any part of an appeal poses a factual dispute
that is being adjudicated before an administrative tribunal,
this provision would not authorize the severance of the legal
issues from the underlying factual dispute.
(d) Expedited Review of Certain Provider Agreement Determinations
Current Law. No provision.
Explanation of Provision. The Secretary would develop and
implement a process under 1866(h) to expedite provider
agreement determinations including those instances where
participation is terminated or other sanctions (including
denials of new admissions or appointment of temporary
management) against skilled nursing facilities have been
imposed. Priority would be given to termination of provider
agreements. Increased appropriations from the Medicare trust
funds in FY2005 and subsequently would be authorized in order
to (1) reduce the average time for administrative
determinations on provider participation appeals by 50 percent;
(2) increase the number of ALJs and their staff; and (3)
educate the ALJs and their staff on long term care issues.
Effective Date. Upon enactment.
Reason for Change. Given the disruption to beneficiaries if
a facility is closed, this provides for an expedited appeal
concerning a termination from Medicare.
(e) Process for Reinstatement of Approval of Certain Skilled Nursing
Programs
Current Law. Civil Monetary Penalties (CMPs) can be applied
when a nursing home is out of compliance with the standards of
care. The facility is out of compliance when it has one or more
deficiencies that subject a resident to at least the potential
for more than minimal harm. The CMPs can also be applied
retroactively to the date of initial non-compliance. The CMPs
can also be applied when a facility is currently in compliance
but was not in compliance at one point in the past. The GAO
stated in March of 1999 that Congress established the CMPs to
create a strong incentive for facilities to maintain compliance
with federal standards.
Nurse aides render most of the daily care furnished to a
nursing home resident and about 60 percent of all nursing care.
Nurse aides must have 75 hours of training with 16 hours in
clinical training. Nursing homes that wish to sponsor a
training program must obtain state approval. All states
periodically review and recertify the approved nurse aide
training programs. According to the Office of the Inspector
General, inadequate levels of staffing are one of the major
problems with nursing homes. In particular, more nurse aide
staffing can address problems, such as poor hygiene.
The law requires suspension of the nurse aide training
program if the facility has been assessed a civil monetary
penalty of not less than $5,000. The suspension of the training
program is also secondary to the CMPs, to the extent that
during an appeal of the CMPs, the nurse aide training program
can continue over the 2 to 3 years required to complete the
appeal.
Explanation of Provision. The Secretary is required to
develop a process for the reinstatement of the nurse aide
program before the end of the mandatory 2-year suspension for
those facilities that have corrected any deficiencies. The
Secretary must certify, in coordination with the state and
after public notice and comment by beneficiaries and their
advocacy groups, that the facility is in compliance and has
remedied any deficiencies. An exception already exists for
facilities in rural areas without any nearby nursing
facilities, which allows them to have their aides trained in
the facility by outside nurses.
Effective Date. Upon enactment.
Reason for Change. This penalty is applied automatically in
conjunction with CMPs with no Secretarial discretion. This
provision provides much needed Secretarial discretion so that
the Secretary can impose CMPs but permit nurse training to
resume if deficiencies have been corrected and the facility is
back in compliance. Under the current law, the suspension can
be wholly unrelated to any quality problems or any problems
with the training program. The link between any actual problem
and the suspension of the training program is weak because this
penalty is suspended during the 2 to 3 year process of the
appeal of a CMP. There appears to be no direct evidence from
OIG or GAO studies that this penalty is critical to enforcement
rather it is the CMPs that are the key. Indeed, this penalty is
so severe that it may deter the use of CMPs. While immediate
correction of any deficiencies is required by CMS after a
survey, the review process will encourage continued compliance,
which has been a significant problem with nursing homes.
Section 403. Revisions to Medicare Appeals Process
(a) Requiring Full and Early Presentation of Evidence
Current Law. No provision.
Explanation of Provision. A provider or supplier would not
be able to introduce evidence that was not presented at
reconsideration conducted by the QIC unless a good cause
precluded its introduction at or before that reconsideration.
Effective Date. On or before October 1, 2004.
Reason for Change. The Office of Inspector General
identified this change as a priority to promote more
expeditious resolution of appeals of denied claims. This
provision requires prompt introduction of evidence relevant to
a provider appeal. When deciding whether there is good cause to
introduce new evidence, the adjudicator should ensure, after
consideration of the totality of the circumstances, that
disallowing the introduction of such new evidence would
unfairly prejudice the case. The totality of the circumstances
may include, but is not limited to, the following: evidence is
not yet available; the appellant was not represented at a lower
level of appeal; the appellant was not aware of her rights; or
the appellant did not understand the proceeding.
(b) Use of Patients' Medical Records
Current Law. BIPA established QIC reconsiderations as part
of the Medicare's administrative review process. To reconsider
whether a service is reasonable and necessary, a QIC will
employ panel of physicians or other appropriate health care
professionals to review the facts and the circumstances of the
initial determination. The QIC reconsideration is to be based
on applicable information, including clinical experience, and
medical, technical, and scientific evidence.
Explanation of Provision. Medical records of the individual
involved in the appeal would be included as part of the
applicable information used by QICs in their reconsideration
process.
Effective Date. Upon enactment.
Reason for Change. In the determination of whether an item
or service is reasonable and necessary for an individual, a
beneficiary's medical records should be considered with other
relevant information.
(c) Notice Requirements for Medicare Appeals
Current Law. Section 521 of BIPA (which is not yet
implemented) amends Section 1869 appeals process in its
entirety, but did not establish specific notice requirements
for each part of the Medicare appeals process.
Explanation of Provision. The provisions would establish
that a written notice of an initial determination associated
with a claims denial be provided. The notice would include: (1)
the reason for the denial and, upon request, the specific
policy, manual or regulation used to make the decision; (2) the
procedures for obtaining additional information concerning the
determination; and (3) notification of appeal rights and
associated instructions.
The provisions would amend the existing requirement that a
reconsideration decision be written and establish that the
decision would have to be provided in printed form and written
in a manner that could be understood by the beneficiary; the
notice would include: as appropriate, a summary of the clinical
or scientific evidence used to make the decision; upon request,
the policy manual or regulation used to make the decision; and
a detailed explanation of the decision to the extent
appropriate. The requirement that the reconsideration decision
include a notice of appeal rights and relevant instructions
would also be established.
Comparable requirements would be extended to ALJ decisions.
These decisions would have to be written in an understandable
manner and include the specific reasons for the decision, an
appropriate summary of the evidence, the procedures for
obtaining additional information about the decision, and a
notification of appeal rights and instructions.
The current requirements that a QIC prepare documentation
and an explanation of the issues for an appeal to an ALJ would
be modified: a QIC would be required to submit the information
required in an appeal of a Medicare contractor's decision to
the ALJ.
Effective Date. Upon enactment.
Reason for Change. Currently, Medicare only provides
beneficiaries with a brief statement about the initial
determination of her claim on the Medicare Summary Notice. This
provision provides additional information to beneficiaries (or
providers who appeal on their behalf) about Medicare's denial
of their claim for benefits; the reasons for the denial, and
the rights to further appeal so that beneficiaries can have a
clear and concise understanding of decisions affecting their
medical care.
(d) Qualified Independent Contractors
Current Law. BIPA established Qualified Independent
Contractor (QIC) reconsiderations as part of Medicare's
administrative review process. A QIC is an entity or
organization that is independent of any organization under
contract with the Secretary that makes initial determinations
and that meets the established requirements for sufficient
training and expertise in medical science and legal matters to
make such reconsiderations. QIC reviews include consideration
of the facts and circumstances by a panel of physicians or
appropriate health professionals. No physician or health care
professional employed by a QIC may review determinations
regarding services provided to a patient, if directly
responsible for furnishing the services to that patient. Review
of home health care services is also prohibited by physicians
and other professionals who have a significant direct or
indirect financial interest in the agency or institution
providing the care. This prohibition extends to physicians and
professionals who have family members with such significant
financial interests.
Explanation of Provision. To qualify as a QIC, an entity
would be required to have sufficient medical, legal and other
expertise, including knowledge of the Medicare program as well
as sufficient professional qualifications, independence and
staffing to make reconsideration decisions. A QIC would be
required to assure that reviewers meet qualification and
compensation requirements. If a reconsideration request
indicates that a physician furnished the item or service, a
reviewing professional should be a physician. Entities and
their professional reviewers would have to meet independence
requirements and may not: (1) be a related party; (2) have a
material familial, financial, or professional relationships
with a related party; or (3) have a conflict of interest with
respect to a related party. QIC's compensation would not be
contingent on any decision by the QIC or by any reviewing
professional. A reviewer's compensation would not be contingent
on any decision rendered by the reviewer. In this context, a
related party to a Medicare case involving an individual
beneficiary is (1) the Secretary, the Medicare administrative
contractor involved, any fiduciary, officer, director or
employee of HHS or such Medicare contractor; (2) the individual
or authorized representative; (3) the health professional,
institution or entity that provides or manufactures the item or
service involved in the case; and (4) any other party with
substantial interest in the case, as defined by regulation.
Individuals affiliated with a fiscal intermediary, carrier
or other contractor would be able to act as a QIC reviewer if
(1) a individual is not involved with the provision of the item
or service of the case; (2) individual is not an employee of
the Medicare contractor and does not provide services
exclusively or primarily to or on behalf of the contractor; and
(3) the fact of the relationship is disclosed to the Secretary
and the Medicare beneficiary or authorized representative who
do not object. Individuals with staff privileges at the
institution where treatment occurs would be able to serve as a
reviewer if the affiliation is disclosed and there is no
objection. Each reviewing professional shall be a allopathic or
osteopathic physician or health care professional who is
legally authorized to furnish items and services that are the
subject of review in one or more states; and has medical
expertise in the appropriate field for the case.
The provision would reduce the minimum number of QICs from
twelve to a sufficient number, not fewer than four, to conduct
reconsiderations consistent with established time frames for
appeals.
Effective Date. As if included in BIPA.
Reason for Change. The BIPA 2000 law laid out broad
provisions for revision of the Medicare appeals process. These
provisions strengthen the appeals process by enhancing the
criteria related to the independence and expertise of the
reviewers and review entities.
Section 404. Prepayment Review
Current Law. No provision.
Explanation of Provision. Medicare administrative
contractors would be able to conduct random prepayment reviews
in order to develop contractor-wide or program-wide claims
payment error rates or under additional circumstances as
established by regulations that are developed in consultation
with providers and suppliers. Medicare administrative
contractors would be permitted to conduct random prepayment
reviews in accordance with a standard protocol developed by the
Secretary. The Secretary would not be able to initiate non-
random prepayment review based on the initial identification by
a provider or supplier of an improper billing practice unless
there is a likelihood of sustained or high level of payment
error. The Secretary would be required to 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 reviews. No provision would
prevent the denial of payment for claims actually reviewed
under random prepayment review. These provisions would be
applied to fiscal intermediaries and carriers.
Effective Date. No later than one year from enactment. The
Secretary would be required to issue regulations before that
deadline; the random prepayment review protocols would apply to
reviews after a date specified by the Secretary (but no later
than one year from enactment.)
Reason for Change. These provisions build greater
consistency and predictability into Medicare's rules for
prepayment review, while protecting program integrity.
Section 405. Recovery of Overpayments
Current Law. No provision with respect to repayment plans.
Section 1833(j) of the Social Security Act provides that
interest accrues on underpayments or overpayments starting
within 30 days of the date of the final determination of the
accurate payment amount.
Explanation of Provision. Subject to certain
qualifications, in circumstances where refund of an overpayment
within 30 days would constitute a hardship, providers and
suppliers on request would be allowed to repay the overpayment
amount (by offset or otherwise) over a period of at least six
months up to three years when their obligation exceeds a ten
percent threshold of their annual payments from Medicare. The
Secretary would be able to establish a repayment period of up
to five years in cases of extreme hardship. Interest would
accrue on the balance through the repayment period. The
Secretary would be required to establish a process under which
newly-participating providers and suppliers could qualify for a
repayment plan under this hardship provision. Previous
overpayment amounts already included in an ongoing repayment
plans would not be included in the calculation of the hardship
threshold. The Secretary would be allowed to seek immediate
collection if payments are not made as scheduled. Exceptions to
this provision would be permitted in cases where the Secretary
has reason to suspect that bankruptcy may be declared or that
the provider or supplier may otherwise cease to do business or
discontinue participating in the Medicare program. This
subparagraph shall not apply if the Secretary has reason to
suspect that false claims, fraud or abuse have been committed
against the program. This provision would not affect the
application of existing no-fault provisions which preclude
recovery under certain circumstances where incorrect payment
has been made to an individual who is without fault or where
the recovery would decrease payments to another person who is
without fault.
Upon enactment, the Secretary would not be able to initiate
any recovery action if the provider or supplier has sought a
reconsideration of the Medicare overpayment by a qualified
independent contractor (QIC) until the date of the
reconsideration decision. If QIC's are not yet in place, the
recovery would not be initiated until the date of a
redetermination decision by a fiscal intermediary or a carrier.
If monies have been offset or repaid, the Secretary would
return those amounts plus applicable interest if the original
overpayment determination is reversed. If such an overpayment
determination is upheld, interest would accrue beginning on the
date of the original overpayment notice; the interest amount
would be the rate otherwise applicable for Medicare
overpayments.
Not later than one year after enactment, a Medicare
contractor would not be able to use extrapolation to make
overpayment determinations initiated after the date of
enactment, unless, as determined by the Secretary, a sustained
or high level of payment error exists or a documented
educational intervention did not correct the payment error.
Where providers and suppliers have previously been
overpaid, Medicare contractors would be able to require
periodic production of records or supporting documentation for
a limited sample of submitted claims to ensure that a previous
practice has been discontinued.
The Secretary would be able to use a consent settlement to
resolve a projected overpayment. Before entering into any
consent settlements after the date of enactment, the Secretary
would be required to communicate to a provider or supplier that
based on a preliminary evaluation of a medical records review,
an overpayment may exist; the nature of the identified
problems; and the necessary steps to address the problem. The
Secretary would provide 45-days where additional information
may be submitted concerning the claims for which the medical
records have been reviewed. After considering the additional
information, the Secretary would provide notice and explanation
of any remaining overpayment determination and would offer the
opportunity for a statistically valid random sample (which
would not waive appeal rights) or a consent settlement (based
on a smaller sample with a waiver of appeal rights) to resolve
the overpayment amounts.
Not later than one year after enactment, the Secretary
would be required to establish, in consultation with health
care associations, a process where classes of providers and
suppliers are notified that their Medicare contractor has
identified specific billing codes that may be over-utilized.
For audits initiated after enactment, Medicare contractors
would be required to provide a written notice (which may be in
electronic form) of the intent to conduct a post-payment audit
to those selected as audit candidates. Medicare contractors
would be required to provide those who have been audited a full
review and understandable explanation of the findings that: (1)
permits the development of an appropriate corrective action
plan; (2) provides information on appeal rights as well as
consent settlements (which are at the discretion of the
Secretary); and (3) provides for an opportunity to supply
additional information to the contractor. Medicare contractors
would be required to take into account the information provided
on a timely basis. The provisions requiring notice of audit and
findings would not apply if pending law enforcement activities
would be compromised or findings of law enforcement-related
audits would be revealed.
Not later than one year after enactment, the Secretary
would be required to establish a standard methodology for
Medicare contractors to use in selecting a claims sample for a
review of abnormal billing patterns.
These provisions would apply to Medicare administrative
contractors including fiscal intermediaries and carriers as
well as those eligible entities with MIP contracts. These
provisions do not apply to actions taken by the Department of
Justice.
Effective Date. Upon enactment.
Reason for Change. These provisions build greater
consistency and predictability into Medicare's rules for
recovery of overpayments, while protecting program integrity.
Section 406. Provider Enrollment Process; Right of Appeal
Current Law. Providers and, to some extent suppliers, have
access to certain appeal mechanisms if their application to
participate in Medicare is denied or terminated. Section
1866(h) of the Social Security Act provides for a hearing and
for judicial review of that hearing for any institution or
agency dissatisfied with a determination that it is not a
provider (or that it can no longer be a provider). There is no
statutory provision extending such judicial appeal rights to
suppliers. Sections 1128(a) and (b) of the Act provide for the
exclusion of certain individuals or entities because of the
conviction of crimes related to their participation in
Medicare; Section 1128(f) provides for hearing and judicial
review for exclusions. In 1999, the Health Care Financing
Administration (HCFA--now the Centers for Medicare and Medicaid
Services or CMS) published a proposed regulation that would
revise existing Medicare Part B administrative appeals
procedures and extend them to all suppliers not currently
covered.
Explanation of Provision. The Secretary would be required
to (1) establish by regulation an enrollment process for
providers and suppliers which would include deadlines for
actions on enrollment applications within six months of
enactment; (2) monitor the performance of Medicare
administrative contractors in meeting the deadlines: (3)
consult with providers and suppliers in making changes to the
enrollment forms made on or after January 1, 2004. In
establishing an enrollment process for providers and suppliers,
the Secretary would build upon existing Medicare practice.
Providers and suppliers whose application to enroll or
reenroll has been denied and who are dissatisfied with the
determination would be entitled to a hearing and judicial
review of the determination under the procedures that currently
apply to providers. This provision would apply to denials after
a date specified by the Secretary which could not be later than
one year from enactment.
Effective Date. Upon enactment.
Reason for Change. This provision gives providers and
suppliers an opportunity to appeal denials of their
applications to participate in the Medicare program.
Section 407. Process for Correction of Minor Errors and Omissions
Without Pursuing Appeals Process
Current Law. No provision.
Explanation of Provision. The Secretary would be required
to develop, in consultation with appropriate Medicare
contractors and health care associations, a process where minor
claims errors and omissions can be corrected and resubmitted
without appealing the claims denial. In addition, a hospital
may submit corrected or supplemented data for applications
under 1886(d)(10)(C)(i)(II).
Effective Date. Upon enactment.
Reason for Change. Many of the providers and suppliers who
testified before the Subcommittee or contacted members directly
emphasized the need to create a process in which they could
correct claims or other forms that were denied because they
were incomplete or contained minor errors without having to
pursue a formal appeal. This provision instructs the Secretary
to create such a process, which will alleviate pressure on the
appeals system. The Committee would be concerned, however, if
this process were to become an incentive for providers to
knowingly or negligently submit incomplete information.
The Committee intends that the process for correction of
minor errors and omissions on claims cover both the submission
of prepayment and post-payment review claims. For example, if
in the case of a home health claim, the physician has signed
the plan of care and/or physician's order but has not dated it,
the claim shall be returned to the home health agency and may
be resubmitted by the home health agency with any incomplete or
missing information without having to appeal the claim. At the
same time, past errors and omission in the data as part of
applications under 1886(d)(10)(C)(i)(II) should not prevent a
reexamination of the data in the normal application process
given the significant financial consequences for any individual
hospital.
Section 408. Prior Determination Process for Certain Items and
Services; Advance Beneficiary Notices
Current Law. Medicare law prohibits payment for items and
services that are not medically reasonable and necessary for
the diagnosis or treatment of an illness or an injury. Under
certain circumstances, however, Medicare will pay for non-
covered services that have been provided if both the
beneficiary and the provider of the services did not know and
could not have reasonably been expected to know that Medicare
payment would not be made for these services.
However, in most circumstances either the beneficiary or
the provider will be liable in the event that Medicare does not
cover an item or service. There are detailed rules on
beneficiary and provider liability in the statute. A provider
may be held liable for providing uncovered services, if, for
example, specific requirements are published by the Medicare
contractor or the provider has received a denial or reduction
of payment on the same or similar service. In cases where the
provider believes that the service may not be covered as
reasonable and necessary, the provider may limit his liability
by providing an acceptable advance notice of Medicare's
possible denial of payment to the patient. The notice must be
given in writing, in advance of providing the service; include
the patient's name, date and description of service as well as
reasons why the service would not be covered; and must be
signed and dated by the patient to indicate that the
beneficiary will assume financial liability for the service if
Medicare payment is denied or reduced. Currently, when there is
a question about coverage, there is no way for a beneficiary or
provider to find out in advance whether or not Medicare will
cover that item or service for that particular beneficiary.
Explanation of Provision. The Secretary would be required
to establish a process through regulation where physicians and
beneficiaries can establish whether Medicare covers certain
items and services before such services are provided. An
eligible requestor would be either a physician or a Medicare
beneficiary who receives an advance beneficiary notice (ABN)
from a physician. Eligible items and services for review are
those physicians' services under 1848(f)(4)(A) for which a
physician may be paid directly. The provisions would establish:
(1) such prior determinations would be binding on the Medicare
contractor, absent fraud or misrepresentation of facts; (2) the
right to redetermination in the case of a denial; (3) the
applicability of existing deadlines with respect to those
redeterminations; (4) contractors' prior determinations (and
redeterminations) are not subject to further administrative or
judicial review; and (5) an individual retains all rights to
usual administrative or judicial review after receiving the
service or receiving a determination that a service would not
be covered. This section also requires that whenever a
physician requests a pre-service determination (or
redetermination), beneficiaries must still receive notices that
include information explaining the beneficiary's right to
receive the service and request access to the appeals process
under section 1869. The calculation of the sustainable growth
rate for physician updates is modified so that the increase in
utilization from this provision is included. These provisions
would not affect a Medicare beneficiary's rights in any future
appeal or judicial action. The Secretary must establish the
process to allow for the processing of such requests beginning
18 months after enactment. The Secretary would be required to
collect data on the advance determinations and to establish a
beneficiary and provider outreach and education program. GAO is
required to report on the use of the advance beneficiary notice
and prior determination process within 18 months of its
implementation.
Effective Date. Upon enactment.
Reason for Change. The Committee believes that when there
is a question of whether Medicare will cover certain care for a
beneficiary, the beneficiary should have the right to find out
what will be covered before getting the service and risking
financial liability. Doctors also should be able to make such a
request on behalf of a particular patient. This provision is
particularly important for seniors and disabled individuals who
tend to be risk adverse and live on fixed incomes.
E. Title V--Miscellaneous Provisions
Section 501. Policy Development Regarding Evaluation and Management
(E&M) Documentation Guidelines
Current Law. No provision.
Explanation of Provision. The Secretary would not be
permitted to implement any new documentation guidelines on or
after enactment for evaluation and management (E&M) physician
services unless the guidelines (1) are developed in
collaboration with practicing physicians (both generalists and
specialists) after assessment by the physician community; (2)
based on a plan with deadlines for improving use of E&M codes;
(3) are developed after completion of the pilot projects to
test modifications to the codes; (4) are found to meet the
desired objectives; and (5) are preceded the establishment of
an appropriate outreach and education of the physician
community. The Secretary would make changes to existing E&M
guidelines to reduce paperwork burdens on physicians. The
Secretary would be required to modify E&M guidelines to: (1)
identify clinically relevant documentation; (2) decrease non-
clinically pertinent documentation; (3) increase the reviewers'
accuracy; and (4) educate the physicians and the reviewers.
The provisions would establish different pilot projects in
specified settings that would be: (1) conducted on a voluntary
basis in consultation with practicing physicians (both
generalists and specialists); (2) be of sufficient length to
educate physicians and contractors on E&M guidelines and (3)
allow for an assessment of E&M guidelines and their use. A
range of different projects would be established and include at
least one project that (1) uses a physician peer review method;
(2) uses an alternative method based on face-to-face encounter
time with the patient; (3) is in a rural area; (4) is outside a
rural area; and (5) involves physicians billing in a teaching
setting and nonteaching setting. The projects would examine the
effect of modified E&M guidelines on different types of
physician practices in terms of the cost of compliance. Data
collected under these projects would not be the basis for
overpayment demands or post-payment audits. This protection
would apply to claims filed as part of the project, would last
the duration of the project, and would last for as long as the
provider participated in the project. The Secretary, in
consultation with practicing physicians including those in
groups practices as well as generalists and specialists, would
be required to evaluate the development of alternative E&M
documentation systems with respect to administrative
simplification requirements and report results of the study to
Congress by October 1, 2005. The Medicare Payment Advisory
Commission would conduct an analysis of the results of this
study and submit a report to Congress.
The Secretary would be required to conduct a study of the
appropriate coding of extended office visits where no diagnosis
is made and submit a report with recommendations to Congress no
later than October 1, 2005.
Effective Date. Upon enactment.
Reason for Change. This provision is designed to promote
greater consultation with practicing physicians with regard to
the complicated evaluation and management and coding
requirements governing Medicare payment for physician services.
Section 502. Improvement in Oversight of Technology and Coverage
(a) Council for Technology and Innovation
Current Law. No provision.
Explanation of Provision. The Secretary is required to
establish a Council for Technology and Innovation within the
Centers for Medicare and Medicaid Services (CMS). The council
would be composed of senior CMS staff with an Executive
Coordinator, who is designated or appointed by the Secretary
and reports to the CMS administrator. The Chairperson would
serve as a single point of contact for outside groups and
entities regarding Medicare coverage, coding, and payment
processes. The Council would coordinate Medicare's coverage,
coding, and payment processes as well as information exchange
with other entities with respect to new technologies and
procedures, including drug therapies.
Effective Date. Upon enactment.
Reason for Change. CMS personnel responsible for coverage,
coding and payment of medical innovation are often not well
coordinated. This provision creates a focal point for
technology and innovation within the Centers for Medicare and
Medicaid Services by creating a Council to coordinate across
the different Centers and Offices with responsibilities in this
area. The Executive Coordinator also provides a single point of
contact for outside groups, similar to recent initiatives
launched by the Secretary for specific issues and types of
providers.
(b) Methods for Determining Payment Basis for New Lab Tests
Current Law. Outpatient clinical diagnostic laboratory
tests are paid on the basis of area wide fee schedules. The law
establishes cap on the payment amounts that is currently set at
74 percent of the median for all fee schedules for that test.
The cap is set at 100 percent of the median for tests performed
after January 1, 2001 that the Secretary determines are new
tests for which no limitation amount has previously been
established.
Explanation of Provision. The Secretary would be required
to establish procedures (by regulation) for determining the
basis and amount of payments for new clinical diagnostic
laboratory tests. New laboratory tests would be defined as
those assigned a new Health Care Procedure Coding System
(HCPCS) code on or after January 1, 2005. The Secretary, as
part of this procedure, would be required to: (1) provide a
list (on an Internet site or other appropriate venue) of tests
for which payments are being established in that year; (2)
publish a notice of a meeting in the Federal Register on the
day the list becomes available; (3) hold the public meeting no
earlier than 30 days after the notice to receive public
comments and recommendations; (4) take into account the
comments, recommendations and accompanying data in both
proposed and final payment determinations. The Secretary would
set forth the criteria for making these determinations; make
public the available data considered in making such
determinations; and could convene other public meetings as
necessary.
Effective Date. Upon enactment.
Reason for Change. The Secretary of Health and Human
Services is required to establish by regulation an open process
for any clinical diagnostic laboratory test. Under the
regulations, the Secretary shall develop criteria for use in
determining whether a laboratory test should be established
through gap-filling or cross-walking to an existing code. When
existing services are not sufficient and gap filling must be
used, the criteria shall explain the basis of the data, the
collection of the data, and the methodology for computing the
rate. It is the view of the Committee that, in these cases, it
is not appropriate for carriers or the agency to substitute the
payment amount of an alternative test for the gap-fill amount.
The intent of Congress is to open the process to allow CMS
to have access to information from beneficiaries, physicians,
health care experts and laboratories. Using the information it
receives through this new process, CMS shall develop and make
available to the public the information used to arrive at a
final determination. The information will include the rationale
for each such determination, the data on which the
determination is based, and responses to public comments.
(c) Report on Improvements in External Data Collection for Use in the
Medicare Inpatient System
Current Law. No provision.
Explanation of Provision. No later than October 1, 2004,
the Comptroller would submit to Congress a study that analyzes
the collection of external data for in computing data for
inpatient hospital services. This should include a survey of
data sources such as the Department of Labor, or U.S. or
foreign sales information.
Effective Date. Upon enactment.
Reason for Change. The Committee is soliciting expert
review from GAO on implications of flexible application of the
Medicare conditions of participation for home health agencies.
(d) Process for Adoption of ICD Codes as Data Standard
Current Law. No provision.
Explanation of Provision. The provision permits the
Secretary to adopt the updated version of the ICD-10 procedure
and classification codes if the National Committee on Vital and
Health Statistics (NCVHS) has not made a recommendation to the
Secretary with respect to the adoption of these codes.
Effective Date. Upon enactment.
Reason for Change. ICD-10 is more clinically accurate and
specific than ICD-9 and has been adopted by every developed
country in the world. The International Classification of
Disease (ICD-9) coding system was adopted in 1979 and remains
in effect for procedure and diagnosis coding in the hospital
inpatient setting and for reporting diagnosis codes in the
hospital outpatient departments and physician offices. The
NCVHS began investigating adoption of an updated coding
system--ICD-10--in 1990. As part of HIPAA in 1996, Congress
required NCVHS to make a recommendation on adoption prior to
Secretarial approval. To date, NCVHS still has not issued a
recommendation.
The current ICD-9 code system has run out of codes. As a
result there are several distinct procedures performed in
different parts of the body that have widely different resource
utilization that are grouped together under the same procedure
code. For example, code 99.29, Injection or infusion of other
therapeutic or prophylactic substance, has been used to report
a wide variety of procedures such as: an injection of
epinephrine to cauterize a rectal ulcer, infusion of a narcotic
into a pump for pain relief, insertion of an implant in the eye
for slow release of an antiviral drug, and injection into the
uterine artery to treat a fibroid. Such vagueness in coding
hampers the program in detecting fraud and from knowing what
services are being delivered to Medicare beneficiaries. Last
year, CMS did find 100 unused codes under the eye and ear
section of ICD-9, which is an imperfect albeit necessary
solution given the lack of clinical coherence and potential
confusion for coders. The timing of moving to ICD-10 is
critical given that less than 75 codes remain and installation
of the new procedure and diagnosis codes by hospitals will take
at least 2 years. In the meantime, new initiatives for public
health as well as bioterrorism are severely compromised by the
lack of codes. For example, no code was available for the
anthrax attack in 2001. Finally, the continued use of
inappropriate and ill-defined codes in ICD-9 makes the program
vulnerable to fraud and abuse. The specificity of ICD-10 will
make it easier for coders to avoid mistakes and for the program
to check for fraud.
Section 503. Treatment of Hospitals for Certain Services Under the
Medicare Secondary Payor (MSP) Provisions
Current Law. In certain instances when a beneficiary has
other insurance coverage, Medicare becomes the secondary
insurance. Medicare Secondary Payor is the Medicare program's
coordination of benefits with other insurers. Section
1862(b)(6) of the Social Security Act requires an entity
furnishing a Part B service to obtain information from the
beneficiary on whether other insurance coverage is available.
Explanation of Provision. The Secretary would not require a
hospital or a critical access hospital to ask questions or
obtain information relating to the Medicare secondary payor
provisions in the case of reference laboratory services if the
same requirements are not imposed upon those provided by an
independent laboratory. Reference laboratory services would be
those clinical laboratory diagnostic tests and interpretations
of same that are furnished without a face-to-face encounter
between the beneficiary and the hospital where the hospital
submits a claim for the services.
Effective Date. Upon enactment.
Reason for Change. Hospitals would not have to directly
contact each beneficiary on their retirement date, black lung
status and other insurance information for reference laboratory
services. While current law provisions for a claim containing
valid insurance information are maintained, this provision is
intended to reduce the amount of paperwork and regulatory
burden related to the provision of these reference laboratory
services by hospital-based entities.
Section 504. EMTALA Improvements
Current Law. Medicare requires participating hospitals that
operate an emergency room to provide necessary screening and
stabilization services to a patient in order to determine
whether an emergency medical situation exist prior to asking
about insurance status of the patient.
Hospitals that are found to be in violation of EMTALA
requirements may face civil monetary penalties and termination
of their provider agreement. After a state investigation of an
EMTALA complaint, the CMS Regional Office may ask their local
peer review organization (PRO) to perform a 5-day review to
obtain additional medical expertise. This review is
discretionary. However, prior to imposing a civil monetary
penalty, the Secretary is required to request that a PRO assess
whether the involved beneficiary had an emergency condition
that had not been stabilized and provide a report on its
findings. Except in the case where a delay would jeopardize the
health or safety of individuals, the Secretary provides 60-day
period for the requested PRO review.
Explanation of Provision. Emergency room services provided
to screen and stabilize a Medicare beneficiary furnished after
January 1, 2004, would be evaluated as reasonable and necessary
on the basis of the information available to the treating
physician or practitioner at the time the services were
ordered; this would include the patient's presenting symptoms
or complaint and not the patient's principal diagnosis. The
Secretary would not be able to consider the frequency with
which the item or service was provided to the patient before
the time of admission or visit. The Secretary shall also not
count the provision of the item or service during such an
admission or visit when considering the frequency with which
the item or service is furnished on subsequent occasions.
The Secretary would be required to establish a procedure to
notify hospitals and physicians when an EMTALA investigation is
closed.
Except in the case where a delay would jeopardize the
health and safety of individuals, the Secretary would be
required to request a PRO review before making a compliance
determination that would terminate a hospital's Medicare
participation because of EMTALA violation. The current period
of review for the discretionary review--5 business days--would
apply for such review. The Secretary shall provide a copy of
the report on its findings to the hospital or physician,
consistent with existing confidentiality requirements. This
provision would apply to terminations initiated on or after
enactment.
Effective Date. Upon enactment.
Reason for Change. Providers have reported that some
Medicare contractors are looking at final diagnoses (not
presenting symptoms) in applying local medical review policies
(LMRPs) that match particular tests to particular diagnoses--if
a test does not match a listed diagnosis, payment is denied.
Other claims are reportedly being denied based on LMRPs that
set frequency limits for certain tests--if the test's use in
the emergency room exceeds a frequency limit, payment is
denied. In its January 2001 report entitled ``The Emergency
Medical Treatment and Labor Act: The Enforcement Process,'' the
OIG recommended that CMS ensure that peer review occurs before
a provider is terminated from the Medicare program for an
EMTALA violation. This section implements that recommendation,
making the current discretionary PRO review process mandatory
in cases that involve a question of medical judgement.
Section 505. Emergency Medical Treatment and Active Labor (EMTALA)
Technical Advisory Group
Current Law. No provision.
Explanation of Provision. The Secretary would be required
to establish a 19-member technical advisory group under
specified requirements to review issues related to the
Emergency Medical Treatment and Labor Act (EMTALA). The
advisory group would include: the CMS Administrator; the OIG;
four hospital representatives who have EMTALA experience,
(including one person from a public hospital and two of whom
have not experienced EMTALA violations) seven practicing
physicians with EMTALA experience; two patient representatives;
two regional CMS staff involved in EMTALA investigations; one
representative from a State survey organization and one
representative from a PRO. The Secretary would select qualified
individuals who are nominated by organizations representing
providers and patients.
The advisory group would be required to: (1) elect a member
to as chairperson; (2) schedule its first meeting at the
direction of the Secretary and meet at least twice a year
subsequently; and (3) terminate 30 months after the date of its
first meeting. The advisory group would review EMTALA
regulations; provide advice and recommendations to the
Secretary; solicit public comments from interested parties; and
disseminate information on the application of the EMTALA
regulations.
Effective Date. Upon enactment.
Reason for Change. In its January 2001 report entitled
``The Emergency Medical Treatment and Labor Act: The
Enforcement Process,'' the OIG recommended that CMS establish
an EMTALA technical advisory group that includes all EMTALA
stakeholders to help the agency resolve any emerging issues
related to implementation of the law. Some of these current
issues include specialists who refuse to service on call panels
and inconsistencies between State and Federal law governing
emergency medical services. In its June 2001 report entitled
``Emergency Care: EMTALA Implementations and Enforcement
Issues,'' the GAO also concluded that the establishment of a
technical advisory group could help CMS work with hospitals and
physicians to achieve the goals of EMTALA and avoid creating
unnecessary burdens for providers. This section implements the
OIG recommendation, establishing a 19-member technical advisory
group within HHS.
Section 506. Authorizing Use of Arrangements To Provide Core Hospice
Services in Certain Circumstances
Current Law. Hospice programs are not permitted to use
services provided under arrangement to deliver core hospice
services. Under arrangement services are permitted for
providers delivering Part A and Part B hospital services as
well for skilled nursing services. However, the originating
hospital or skilled nursing facility is required to bill for
the service and be responsible for the quality of care
delivered by the subcontractor.
Explanation of Provision. Hospice programs may enter into
arrangements with another certified hospice program to provide
services. The provision for under arrangement services is
limited to extraordinary or non-routine circumstances, such as
unanticipated periods of staffing shortages. The originating
hospice program continues to bear the legal responsibility for
billing and maintaining quality of care.
In addition, hospice programs may make arrangements for
highly specialized services of a registered professional nurse
for non-routine and infrequent services that would be
impracticable and prohibitively expensive to provide directly.
Effective Date. For hospice care provided after enactment.
Reason for Change. Hospice programs would be allowed to use
personnel from other hospice programs to provide services to
hospice patients. The program is given the flexibility so that
a hospice program could continue to serve a patient if he or
she was temporarily out of the area due to travel. Otherwise,
the provision of the care to the patient might be delayed by
the paperwork and requirements in starting up a new service at
another agency. The program is also given the flexibility to
arrange for highly specialized services of a registered
professional nurse for non-routine and infrequent services that
the hospice cannot reasonably provide directly. It is the
intent of Congress that the originating hospice maintains
control over the billing and quality of care.
Section 507. Application of OSHA Bloodborne Pathogens Standards to
Certain Hospitals
Current Law. Section 1866 establishes certain conditions of
participation that providers must meet in order to participate
in Medicare.
Explanation of Provision. Public hospitals that are not
otherwise subject to the Occupational Safety and Health Act of
1970 would be required to comply with the Bloodborne Pathogens
standard under section 1910.1030 of title 29 of the Code of
Federal Regulations. A hospital that fails to comply with the
requirement would be subject to a civil monetary penalty, but
would not be terminated from participating in Medicare.
Effective Date. Applies to hospitals as of July 1, 2004.
Reason for Change. Last year, Congress enacted legislation
that requires hospitals to utilize safe needles. However, that
legislation only applies to non-government hospitals. Twenty-
four states have similar requirements on public hospitals. This
provision would protect the health and safety of health care
workers in those facilities by requiring public hospitals in
the other 26 states and the District of Columbia to comply with
this important standard.
Section 508. BIPA-Related Technical Amendments and Corrections
Current Law. BIPA established an advisory process for
national coverage determinations where panels of experts formed
by advisory committees could forward their recommendations
directly to the Secretary without prior approval of the
advisory committee or the Executive Committee.
Explanation of Provision. This provision makes technical
corrections related to the Medicare Coverage Advisory Committee
by transferring the provisions from Title 11 to Title 18 and by
removing incorrect cross references to the establishment
authority.
Effective Date. As if included in BIPA.
Section 509. Conforming Authority To Waive Program Exclusion
Current Law. The Secretary is required to exclude
individuals and entities from participation in Federal Health
Programs who are (1) convicted of a criminal offense related to
health care delivery under Medicare or under State health
programs; (2) convicted of a criminal offense related to
patient abuse or neglect under Federal or State law; (3)
convicted of a felony relating to fraud, theft, or financial
misconduct relating to a health care program financed or
operated by the Federal, State or local government; or (4)
convicted of a felony related to a controlled substance. At the
request of a state, the Secretary is permitted to waive a
program exclusion with respect to Medicare or Medicaid, but
only for exclusions described in (1) above.
Explanation of Provision. The Administrator of a Federal
health program would be permitted to request a waiver of a
program exclusion if the exclusion of a sole community
physician or source of specialized services in a community
would impose a hardship. This conforming change would extend
the same waiver authority currently in Medicare and Medicaid to
federal health programs. In addition, waivers could be
requested for Medicare, Medicaid, and federal health programs
with respect to all exclusions except those related to patient
abuse or neglect.
Effective Date. Upon enactment.
Reason for Change. This technical correction was requested
by the Office of Inspector General.
Section 510. Treatment of Certain Dental Claims
Current Law. Under current law, providers of services and
suppliers submitting claims to Medicare must be enrolled in the
Medicare program. However, certain services are specifically
excluded from coverage under Medicare. Under current law, no
payment may be made under part A or part B of the Medicare
program for any services in connection with the care,
treatment, filling, removal, or replacement of teeth or
structures directly supporting teeth, except in the case of
inpatient hospital services associated with the provision of
these dental services if the individual's underlying medical
condition and clinical status or the severity of the dental
service require hospitalization.
Explanation of Provision. This provision would prohibit
group health plans from requiring a Medicare claims
determination for dental benefits that are specifically
excluded from Medicare coverage as a condition of making a
determination for coverage under the group health plan. In so
doing, this provision would ensure that dentists would not have
to submit claims to the Medicare program (and thus enroll in
the Medicare program) when the services they are providing are
clearly those that are categorically excluded from coverage. In
those cases that involve or appear to involve inpatient
hospital services or dental services expressly covered by
Medicare, a group health plan may require the claim to be first
submitted to the Medicare program.
Effective Date. Sixty days after enactment.
Reason for Change. The Committee is concerned about private
insurers requiring dentists to submit claims to Medicare for
non-covered services before making a determination for coverage
under the group health plan. Because of this requirement,
dentists have been forced to enroll in the Medicare program to
submit claims for services that are categorically excluded from
Medicare coverage. Dentists view Medicare's enrollment
application process as overly burdensome, particularly in light
of the fact that most dental services are not covered by
Medicare. This provision would alleviate the enrollment burden
placed on dentists providing services clearly excluded from
Medicare coverage, consistent with the overarching goal of this
legislation to reduce regulatory burdens.
Section 511. Furnishing Hospitals With Information To Compute DSH
Formula
Current Law. No provision.
Explanation of Provision. The Secretary should furnish to
hospitals the data necessary to compute the Medicaid days
percentage on the Medicare cost report for the purposes of
computing Medicare disproportionate share payments. It is the
sense of this Committee that the Secretary has the flexibility
to explore different models of dissemination of the data. For
instance, in Arizona, the hospitals submit the data to the
states for verification and the states forward it to the fiscal
intermediaries.
Effective Date. 1 year after enactment.
Reason for Change. Hospitals have reported that it is
difficult and expensive to verify their Medicaid days for use
for Medicare inpatient payments. The Medicare program has
experienced problems with improper payments being made due to
the poor quality of the data.
Section 512. Revisions to Reassignment Provisions
Current Law. Medicare does not permit staffing companies
that use independent contractors to enroll in Medicare and
receive direct Medicare reimbursement for health care services
rendered by independent contractor physicians. Physician
staffing companies set up complicated payment arrangements to
work around this limitation.
Explanation of Provision. This provision would allow
entities, such as staffing companies, to enroll in Medicare and
to submit bills for services provided by a physician or other
person, when the entity has an arrangement with the physician
or other person that includes joint and several liability for
overpayment, and meets other program integrity safeguards as
the Secretary determines appropriate.
Effective Date. Applies to payments made on or after one
year after enactment.
Reason for Change. In a March 2003 report, GAO recommended
that Congress enact legislation permitting the reassignment of
benefits to staffing companies that retain contractor
physicians, and requiring these companies to seek enrollment in
Medicare. GAO argued that this change would enhance program
integrity by allowing claims monitoring.
Section 513. Specialized Medicare+Choice Plans for Special Needs
Beneficiaries
Current Law. Under current law, Medicare+Choice (M+C)
programs are required to enroll all beneficiaries, regardless
of their health status, and cannot exclusively enroll or
specialize in care for frail elderly beneficiaries. Such
requirements are intended to prevent health plans from
enrolling only the healthy and avoiding the sick. Specialized
plans are designed to provide coverage to the frailest
beneficiaries, and are not designed to provide coverage to the
entire Medicare population. One model for providing a
specialized Medicare+Choice plan, Evercare, operates as a
demonstration program, which is set to expire in December 2003.
Explanation of Provision. This provision would allow
specialized plans for special needs beneficiaries (such as the
Evercare demonstration) to become any type of M+C coordinated
care plan and to limit enrollment to special needs
beneficiaries. Special needs beneficiaries would be defined as
those M+C eligible individuals who are institutionalized,
entitled to Medicaid, or meet requirements determined by the
Secretary. Enrollment in specialized M+C plans could be limited
to special needs beneficiaries until January 1, 2008. The
Secretary would be required to report to Congress by December
31, 2006 providing an assessment of the impact of these plans.
The Secretary would be required to issue final regulations
establishing requirements for special needs beneficiaries
within 6 months after enactment of this legislation.
Effective Date. Upon enactment.
Reason for Change. This provision is needed to allow
specialized plans for special needs beneficiaries to continue
to operate under the Medicare program after a demonstration
ends, by allowing these plans to limit enrollment to
beneficiaries with special needs. This model of care is based
on resource-intensive hands-on care coordination that is best
suited for frail elderly beneficiaries. Allowing specialized
plans to become any type of M+C coordinated care plan would
enhance plan and beneficiary flexibility.
Section 514. Temporary Suspension of OASIS for Non-Medicare and Non-
Medicaid Patients During Study and Regulatory Period
Current Law. The Conditions of Participation require
collection of OASIS data for all patients but the data for non-
Medicare and Non-Medicaid patients are not transmitted for use
in any Federal data analysis. Medicare and Medicaid data are
currently used by CMS as part of the quality measurement
program.
Explanation of Provision. CMS would be required to analyze
how these data could be used in quality measurement or for
other assessments. After the report, CMS must go through
rulemaking to propose and finalize how these data for
individuals who are not insured through a public program are to
be used. The collection of the data by home health agencies on
other than a voluntary basis (except where it conflicts with
state law) is suspended until 60 days after publication of the
final rule.
Effective Date. Upon enactment.
Reason for Change. Requiring home health agencies to
collect data on private pay patients imposes a significant
paperwork burden upon agencies. This requirement has nothing to
do with quality or documentation of Medicare or Medicare
patients. More troubling, these data are not collected or used
for any national assessment process. Moreover, the privately
insured population differs substantially from the Medicare/
Medicaid population and may use different kinds of services.
The Committee believes that CMS need to analyze how these data
can best be used. Moreover, the OASIS data contain very
specific information on the patient, their finances and their
living situation. To ensure the privacy of these individuals,
Congress believes that CMS should proceed through rule-making
to demonstrate to the public that confidentiality can be
maintained and allow for public comments.
Section 515. Miscellaneous Reports, Studies and Publication
Requirements
(a) GAO Reports on Physician Compensation
Current Law. No provision.
Explanation of Provision. No later than 6 months from
enactment, GAO would be required to report to Congress on the
appropriateness of the updates in the conversion factor
including the appropriateness of the sustainable growth rate
(SGR) formula for 2002 and subsequent years. The report would
examine the stability and predictability of the updates and
rate as well as the alternatives for use of the SGR in the
updates. No later than 12 months from enactment, GAO would be
required to report to Congress on all aspects of physician
compensation for Medicare services. The report would review
alternative physician payment structures, and provide
recommendations to make the current system more stable and less
complex.
Effective Date. Upon enactment.
Reason for Change. The Committee is soliciting expert
feedback from GAO on ways to improve Medicare's complicated
system of physician payment.
(b) Annual Publication of List on National Coverage Determinations
Current Law. No provision.
Explanation of Provision. The Secretary would be required
to provide, in an annual report that will be publicly
available, a list of Medicare's national coverage
determinations made in the previous year and include
information on how to learn more about such determinations.
Effective Date. Upon enactment.
(c) Report on Applying Home Health Conditions of Participation
Current Law. No provision.
Explanation of Provision. No later than 6 months from
enactment, GAO would be required to report to Congress on the
implications if there were flexibility in the application of
Medicare conditions of participation for home health agencies
with respect to groups or types of patients who are not
Medicare beneficiaries. The report would include an analysis of
the potential impact of flexible application on clinical
operations and recipients of home health services, and analysis
of methods for monitoring quality of care provided to patients.
Effective Date. Upon enactment.
Reason for Change. The Committee is soliciting expert
review from GAO on implications of flexible application of the
Medicare conditions of participation for home health agencies.
(d) Report on Notices Relating to Use of Hospital Lifetime Reserve Days
Current Law. No provision.
Explanation of Provision. No later than 1 year from
enactment, the Inspector General would be required to submit a
report to Congress on the extent to which hospitals provide
notice to beneficiaries before they use their 60 lifetime
reserve days, and the appropriateness of providing a notice to
beneficiaries before they completely exhaust their lifetime
reserve days.
Effective date. Upon enactment.
Reason for Change. The Committee is soliciting oversight on
hospital compliance with requirements to notify beneficiaries
about use of their 60 lifetime reserve days, and expert opinion
on the appropriateness of a new notification requirement to
inform beneficiaries before they exhaust their lifetime reserve
days.
(e) Clarifications and Instructions to the Secretary
First, the Committee is pleased that the Secretary has
published a notice of proposed rulemaking to provide Medicare
payment for clinical psychology internship training programs
that would not qualify under Medicare's existing provider-
operated criteria. The Committee notes that Congress has
consistently urged the Secretary to initiate payment for the
training of clinical psychologists since 1997. Supportive
language has been included in conference reports accompanying
Medicare legislation in 1999 (Report 106-479), and in 2000
(Senate Report 106-293).
The Committee is concerned, however, that a delay in the
rule may mean that hospitals and institutions will reduce or
eliminate psychology training programs and urges implementation
of the rule as soon as possible. The Committee notes that
clinical psychologists provide valuable and unique services to
Medicare beneficiaries during their training. Regarding their
training, clinical psychologists are distinguishable from other
health care professionals in that they are the only doctoral
level mental health professionals fully participating in
Medicare whose clinical training is not currently reimbursed.
In addition, their clinical internship training is entirely
controlled, administered, supervised, evaluated, and certified
by the hospital or institution, separately accredited, and
distinct from any university training they receive. Clinical
psychologists are hospital-based in the final stages of their
training functioning in a parallel status to medical interns
and residents, not medical nursing or health professional
students. Where a clinical psychologist has clearly finished
their educational curriculum and is training solely in the
hospital setting, it is the intention of Congress that the
hospital be reimbursed if that training is hospital-based.
Second, Congresses original intent on BIPA section
422(a)(2) on the dialysis composite rate has not been correctly
interpreted by CMS. The intent was not to bar end stage renal
disease (ESRD) composite rate exception relief for facilities
that are not presently being paid under an exception to the
composite rate. It is the Committee's expectation that CMS will
evaluate ESRD composite rate exception requests submitted in
2002 and subsequent years by new renal dialysis facilities and
existing facilities that do not have an exception.
III. VOTES OF THE COMMITTEE
In compliance with clause 3(b) of rule XIII of the Rules of
the House of Representatives, the following statements are made
concerning the votes of the Committee on Ways and Means in its
consideration of the bill, H.R. 810.
MOTION TO REPORT THE BILL
The bill, H.R. 810, as amended, was ordered favorably
reported by a roll call vote of 19 yeas to 13 nays (with a
quorum being present). The vote was as follows:
----------------------------------------------------------------------------------------------------------------
Representatives Yea Nay Present Representative Yea Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Thomas..................... X ........ ......... Mr. Rangel....... ........ X .........
Mr. Crane...................... X ........ ......... Mr. Stark........ ........ X .........
Mr. Shaw....................... X ........ ......... Mr. Matsui....... ........ ........ .........
Mrs. Johnson................... X ........ ......... Mr. Levin........ ........ X .........
Mr. Houghton................... ........ ........ ......... Mr. Cardin....... ........ ........ .........
Mr. Herger..................... X ........ ......... Mr. McDermott.... ........ X .........
Mr. McCrery.................... X ........ ......... Mr. Kleczka...... ........ X .........
Mr. Camp....................... X ........ ......... Mr. Lewis (GA)... ........ ........ .........
Mr. Ramstad.................... X ........ ......... Mr. Neal......... ........ X .........
Mr. Nussle..................... ........ ........ ......... Mr. McNulty...... ........ ........ .........
Mr. Johnson.................... X ........ ......... Mr. Jefferson.... ........ X .........
Ms. Dunn....................... X ........ ......... Mr. Tanner....... ........ X .........
Mr. Collins.................... X ........ ......... Mr. Becerra...... ........ X .........
Mr. Portman.................... X ........ ......... Mr. Doggett...... ........ X .........
Mr. English.................... X ........ ......... Mr. Pomeroy...... ........ X .........
Mr. Hayworth................... X ........ ......... Mr. Sandlin...... ........ X .........
Mr. Weller..................... ........ ........ ......... Ms. Tubbs Jones.. ........ X .........
Mr. Hulshof.................... X ........
Mr. McInnis.................... ........
Mr. Lewis (KY)................. X ........
Mr. Foley...................... X ........
Mr. Brady...................... X ........
Mr. Ryan....................... X ........
Mr. Cantor..................... ........
----------------------------------------------------------------------------------------------------------------
VOTES ON AMENDMENTS
An amendment in the nature of a substitute by Chairman
Thomas, was agreed to by a rollcall vote of 19 yeas to 13 nays.
The vote was as follows:
----------------------------------------------------------------------------------------------------------------
Representatives Yea Nay Present Representative Yea Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Thomas..................... X ........ ......... Mr. Rangel....... ........ X .........
Mr. Crane...................... X ........ ......... Mr. Stark........ ........ X .........
Mr. Shaw....................... X ........ ......... Mr. Matsui....... ........
Mrs. Johnson................... X ........ ......... Mr. Levin........ ........ X .........
Mr. Houghton................... ........ ........ ......... Mr. Cardin....... ........
Mr. Herger..................... X ........ ......... Mr. McDermott.... ........ X .........
Mr. McCrery.................... X ........ ......... Mr. Kleczka...... ........ X .........
Mr. Camp....................... X ........ ......... Mr. Lewis (GA)... ........
Mr. Ramstad.................... X ........ ......... Mr. Neal......... ........ X .........
Mr. Nussle..................... ........ ........ ......... Mr. McNulty...... ........
Mr. Johnson.................... X ........ ......... Mr. Jefferson.... ........ X .........
Ms. Dunn....................... X ........ ......... Mr. Tanner....... ........ X .........
Mr. Collins.................... X ........ ......... Mr. Becerra...... ........ X .........
Mr. Portman.................... X ........ ......... Mr. Doggett...... ........ X .........
Mr. English.................... X ........ ......... Mr. Pomeroy...... ........ X .........
Mr. Hayworth................... X ........ ......... Mr. Sandlin...... ........ X .........
Mr. Weller..................... ........ ........ ......... Ms. Tubbs Jones.. ........ X .........
Mr. Hulshof.................... X ........
Mr. McInnis.................... ........
Mr. Lewis (KY)................. X ........
Mr. Foley...................... X ........
Mr. Brady...................... X ........
Mr. Ryan....................... X ........
Mr. Cantor..................... ........
----------------------------------------------------------------------------------------------------------------
A rollcall vote was conducted on the following amendments
to the Chairman's amendment in the nature of a substitute.
An amendment by Mrs. Johnson to require the Center for
Medicare and Medicaid Services (CMS) to evaluate within 18
months the value of collection data on non-Medicare and non-
Medicaid patients, suspend the collection of OASIS data on non-
Medicare and non-Medicaid patients until CMS has finalized
regulations on the collection and use of such data, and would
not prevent home health agencies from continuing to collect
OASIA data on non-Medicare and non-Medicaid patients if they so
desire, was agreed to by a roll call vote of 21 yeas to 13
nays. The vote was as follows:
----------------------------------------------------------------------------------------------------------------
Representatives Yea Nay Present Representative Yea Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Thomas..................... X ........ ......... Mr. Rangel....... ........ X .........
Mr. Crane...................... X ........ ......... Mr. Stark........ ........ X .........
Mr. Shaw....................... X ........ ......... Mr. Matsui....... ........ ........ .........
Mrs. Johnson................... X ........ ......... Mr. Levin........ ........ X .........
Mr. Houghton................... ........ ........ ......... Mr. Cardin....... ........ X .........
Mr. Herger..................... ........ X ......... Mr. McDermott.... ........ X .........
Mr. McCrery.................... ........ X ......... Mr. Kleczka...... ........ X .........
Mr. Camp....................... ........ X ......... Mr. Lewis (GA)... ........ ........ .........
Mr. Ramstad.................... ........ X ......... Mr. Neal......... ........ X .........
Mr. Nussle..................... ........ X ......... Mr. McNulty...... ........ X .........
Mr. Johnson.................... ........ X ......... Mr. Jefferson.... ........ ........ .........
Ms. Dunn....................... ........ X ......... Mr. Tanner....... ........ X .........
Mr. Collins.................... ........ X ......... Mr. Becerra...... ........ X .........
Mr. Portman.................... ........ X ......... Mr. Doggett...... ........ X .........
Mr. English.................... ........ X ......... Mr. Pomeroy...... ........ X .........
Mr. Hayworth................... ........ X ......... Mr. Sandlin...... ........ ........ .........
Mr. Weller..................... ........ X ......... Ms. Tubbs Jones.. ........ X .........
Mr. Hulshof.................... ........ ........ ......... ................. ........ ........ .........
Mr. McInnis.................... ........ ........ ......... ................. ........ ........ .........
Mr. Lewis (KY)................. ........ X ......... ................. ........ ........ .........
Mr. Foley...................... ........ X ......... ................. ........ ........ .........
Mr. Brady...................... ........ X ......... ................. ........ ........ .........
Mr. Ryan....................... ........ X ......... ................. ........ ........ .........
Mr. Cantor..................... ........ X ......... ................. ........ ........ .........
----------------------------------------------------------------------------------------------------------------
An amendment by Mr. Camp, which would require the Secretary
to develop a process for the reinstatement of the nurse aid
program before the mandatory 2-year disapproval program, and
require that the facility and program must be certified by the
Secretary as being in compliance and having remedied any
deficiencies, was agreed by a roll call vote of 19 yeas to 13
nays. The vote was as follows:
----------------------------------------------------------------------------------------------------------------
Representatives Yea Nay Present Representative Yea Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Thomas..................... X ........ ......... Mr. Rangel....... ........ X .........
Mr. Crane...................... X ........ ......... Mr. Stark........ ........ X .........
Mr. Shaw....................... X ........ ......... Mr. Matsui....... ........ ........ .........
Mrs. Johnson................... X ........ ......... Mr. Levin........ ........ X .........
Mr. Houghton................... ........ ........ ......... Mr. Cardin....... ........ ........ .........
Mr. Herger..................... X ........ ......... Mr. McDermott.... ........ X .........
Mr. McCrery.................... X ........ ......... Mr. Kleczka...... ........ X .........
Mr. Camp....................... X ........ ......... Mr. Lewis (GA)... ........ ........ .........
Mr. Ramstad.................... X ........ ......... Mr. Neal......... ........ X .........
Mr. Nussle..................... ........ ........ ......... Mr. McNulty...... ........ ........ .........
Mr. Johnson.................... X ........ ......... Mr. Jefferson.... ........ X .........
Ms. Dunn....................... X ........ ......... Mr. Tanner....... ........ X .........
Mr. Collins.................... X ........ ......... Mr. Becerra...... ........ X .........
Mr. Portman.................... X ........ ......... Mr. Doggett...... ........ X .........
Mr. English.................... X ........ ......... Mr. Pomeroy...... ........ X .........
Mr. Hayworth................... X ........ ......... Mr. Sandlin...... ........ X .........
Mr. Weller..................... ........ ........ ......... Ms. Tubbs Jones.. ........ X .........
Mr. Hulshof.................... X ........ .........
Mr. McInnis.................... ........ ........ .........
Mr. Lewis (KY)................. X ........ .........
Mr. Foley...................... X ........ .........
Mr. Brady...................... X ........ .........
Mr. Ryan....................... X ........ .........
Mr. Cantor..................... ........ ........ .........
----------------------------------------------------------------------------------------------------------------
IV. BUDGET EFFECTS OF THE BILL
A. Committee Estimate of Budgetary Effects
In compliance with clause 3(d)(2) of rule XIII of the Rules
of the House of Representatives, the following statement is
made:
The Committee agrees with the zero budgetary estimate
prepared by the Congressional Budget Office (CBO), which is
included below. However, it does believe that some of the
administrative costs to the agency are overstated because CMS
has indicated that it is already performing some of the
provisions.
B. Statement Regarding New Budget Authority and Tax Expenditures
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee states that the
Committee bill would result in no increase in federal direct
spending.
C. Cost Estimate Prepared by the Congressional Budget Office
In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives requiring a cost estimate
prepared by the Congressional Budget Office (CBO), the
following report prepared by the CBO is provided.
U.S. Congress,
Congressional Budget Office,
Washington, DC, April 8, 2003.
Hon. William ``Bill'' M. Thomas,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 810, the Medicare
Regulatory and Contracting Reform Act of 2003.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Alexis
Ahlstrom.
Sincerely,
Barry B. Anderson
(For Douglas Holtz-Eakin, Director).
Enclosure.
H.R. 810-Medicare Regulatory and Contracting Reform Act of 2003
Summary: The Medicare Regulatory and Contracting Reform Act
of 2003 would require the Centers for Medicare and Medicaid
Services (CMS) to modify how Medicare regulations and policies
are developed and enforced, and would modify the procedures
used to resolve disputes involving payment for services covered
by Medicare. The bill would transfer certain administrative law
judges from the Social Security Administration (SSA) to the
Department of Health and Human Services (HHS). It would change
the procedures by which Medicare makes contracts with entities
to process and pay claims, and it would place new requirements
on those contractors. It would require the Secretary of HHS to
conduct several demonstrations, to initiate new outreach and
education programs, and to complete several studies and
reports. CBO estimates that implementing H.R. 810 would cost
$61 million in 2004 and $1.6 billion over the 2004-2008 period,
assuming appropriation of the necessary funds.
The procedural changes required by H.R. 810 would affect
spending for services covered by Medicare, which is direct
spending. However, many of the bill's requirements codify
existing practices, while the other requirements would cause
minor increases or decreases in spending for covered services.
These changes could have significant impacts on direct spending
in any given year, however, CBO estimates that the net change
in direct spending would be insignificant over the 2004-2013
period.
H.R. 810 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
The requirement for public hospitals participating in the
Medicare program to comply with the bloodborne pathogens
standard promulgated by the Occupational Safety and Health
Administration (OSHA) would have cost implications for state
and local governments. However, that requirement would be a
condition of participating in a voluntary federal program and
thus would not be an intergovernmental mandate as defined in
UMRA.
Estimated cost to the Federal Government: The following
table shows the estimated authorization levels and outlays for
Medicare administrative expenses under current law and under
H.R. 810. Assuming appropriation of the estimated amounts, CBO
estimates that implementing H.R. 810 would cost $61 million in
2004 and $1.6 billion over the 2004-2008 period. The costs of
this legislation fall within budget function 570 (Medicare).
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-----------------------------------------------
2003 2004 2005 2006 2007 2008
----------------------------------------------------------------------------------------------------------------
SPENDING SUBJECT TO APPROPRIATION \1\
Spending for Medicare administrative costs under current law:
Estimated authorization level \2\........................... 3,798 3,931 4,078 4,236 4,418 4,626
Estimated outlays........................................... 3,797 3,925 4,064 4,209 4,377 4,579
Proposed changes:
Estimated authorization level............................... 0 68 486 396 312 328
Estimated outlays........................................... 0 61 444 405 321 327
Spending for Medicare administrative costs under H.R. 810:
Estimated authorization level............................... 3,798 3,999 4,564 4,632 4,730 4,954
Estimated outlays........................................... 3,797 3,986 4,508 4,614 4,698 4,906
----------------------------------------------------------------------------------------------------------------
\1\ Enacting H.R. 810 also would affect direct spending, but CBO estimates there would be no significant net
impact over the 2004-2013 period.
\2\ The 2003 level is the amount appropriated for that year. The 2004-2008 levels are baseline projections,
which assume annual adjustments for anticipated inflation.
Basis of estimate
For this estimate, CBO assumes that the legislation will be
enacted July 1, 2003 and that the necessary amounts will be
appropriated each year, beginning in fiscal year 2004.
Spending subject to appropriation
Implementing H.R. 810 would require increased
appropriations for the administration of Medicare. In
particular, the bill would increase the costs to CMS for
contracting, for adjudicating appeals, for education and
outreach to providers and beneficiaries, and for other
activities.
Contracting Reform. Under current law, CMS contracts with
fiscal intermediaries and carriers to process and pay claims,
to educate providers regarding Medicare billing policy, and for
other purposes. This bill would change the activities required
of contractors and the methods by which CMS enters into
contracts and oversees the activities or contractors. CBO
estimates that these provisions would increase the cost of
administering contracts and the total amount CMS spends on
contracts by $37 million in 2004 and $1.3 billion over the
2004-2008 period.
Contracting Changes. H.R. 810 would direct CMS to provide
incentives to contractors who meet or exceed certain
performance standards. Based on information furnished by CMS,
we estimate that the incentive payments would total 3 percent
of operating payments to contractors, or about $250 million
over the 2004-2008 period.
H.R. 810 would require CMS to competitively bid contracts
with fiscal intermediaries and carriers at least every five
years. CBO expects that an additional 3-to-5 full-time-
equivalent employees (FTEs) at the GS-12 level would be needed
throughout the period to write new competitively bid contracts.
The estimate assumes that about one-quarter of the contracts
would be awarded to a nonincumbent bidder, and that it would
cost about $2 million to transition between contractors. CBO
estimates that implementing this provision would cost about $66
million over the 2004-2008 period. CBO expects that the
competitive bidding of contracts would yield savings to CMS
over the long run, but that savings over the 2004-2008 period
would probably not be significant.
New Contractor Activities. The bill would require
contractors to respond to written requests for guidance within
45 days of receipt, and would make the response binding on the
Medicare program. We expect that contractors would receive 50
percent more written requests under H.R. 810 than they would
under current law, with each request costing $16 to process in
2004. This, plus the requirement that contractors respond to
those requests within 45 days, would require contractors to
hire additional employees. CBO estimates that implementing
these provisions would cost $11 million in 2004 and $81 million
over the 2004-2008 period.
The bill also would require contractors to monitor the
accuracy of information given to providers and the timeliness
of contractors' processing of providers' enrollment
applications. CBO estimates that complying with these
provisions would cost about $16 million over the 2004-2008
period.
Beginning in January 2005, the bill would require
contractors, upon request of a beneficiary or provider, to make
a determination about whether Medicare will cover a particular
service or item before that service is furnished. The
contractor would be required to conduct a medical review and to
make the coverage decision within 45 days. CBO estimates that
contractors would make about 100,000 determinations a year at
an average cost of about $125 per determination (at 2005
prices). We estimate the cost of administering this program
would total $44 million over the 2005-2008 period.
The bill would require contractors to create a system by
which providers may resubmit claims originally submitted with
errors or omissions without having to pursue payment via the
appeals process. CBO estimates the cost of developing and
operating systems to process these resubmitted claims would
total $5 million in 2004 and $56 million over the 2004-2008
period.
The bill also would require contractors to give providers
or beneficiaries, upon request, a summary of the clinical and
scientific evidence used in making a determination and in
making a redetermination, in the case of an appeal. CBO
estimates the cost of making available scientific and clinical
evidence on determinations and redeterminations would total
$706 million over the 2004-2008 period.
Appeals Reform. H.R. 810 would change the processes by
which Medicare adjudicates appeals by providers of payment
denials and conducts compliance actions against providers. The
bill would delay the date by which CMS is required to implement
certain provisions of the Beneficiary Improvement and
Protection Act and modify other provisions. CBO estimates that
implementing these provisions would cost $9 million in 2004 and
$94 million over the 2004-2008 period.
Administrative Law Judge Transfer. The bill would transfer
certain law judges (ALJs) from the Social Security
Administration to the Department of Health and Human Services
and would permit the Secretary to hire more ALJs. CBO estimates
that the costs of planning and implementing the transfer,
adding ALJs, and providing the ALJs with additional training on
Medicare issues would be $1 million in 2004 and would total $45
million over the 2004-2008 period.
Standardization of Compliance and Appeals Actions. The bill
would also standardize existing policies regarding the use of
random and non-random prepayment review, the use of
extrapolation in the case of overpayments, and the offering of
repayment plans in the case of overpayment. In addition, H.R.
810 would create procedures by which appellants may petition
for expedited access to judicial review in federal district
court in certain circumstances. The bill also would require
that judgments by administrative law judges contain the
scientific evidence used in their decision, similar to the
bill's requirements of contractors. CBO estimates that
implementing those provisions would cost $46 million over the
2004-2008 period. These provisions would require CMS to make
changes to current appeals and compliance systems but would not
change the conditions under which Medicare would make payments
to providers. Therefore, CBO estimates that these provisions
would have no effect on direct spending.
Provider and Beneficiary Program. H.R. 810 would direct CMS
to expand its programs to educate beneficiaries and providers.
CBO estimates that implementing these provisions would cost $10
million in 2004 and $171 million during the 2004-2008 period.
The bill would authorize the appropriation of $25 million
in 2005 and in 2006, and such sums as necessary in subsequent
years, for the education of providers on Medicare billing and
coding practices. H.R. 810 would direct the Secretary to
conduct a demonstration with small providers and suppliers in
which they can get specific help with Medicare policies,
including coding and reimbursement. CBO estimates that
implementing these provisions would cost $108 million over the
2004-2008 period.
H.R. 810 would require CMS to designate two ombudsmen to
act as liaisons between providers and Medicare, and between
beneficiaries and Medicare. CBO assumes that, in order to
respond to providers' and beneficiaries' needs and complaints,
the ombudsmen would require the aid of several staff members.
CBO estimates the cost of implementing these provisions would
be $59 million over the 2004-2008 period.
The bill would direct CMS to implement a three-year
outreach demonstration in at least six locations throughout the
United States. The program would involve the deployment of
Medicare specialists to local Social Security Administration
offices to provide beneficiaries assistance and advice
regarding the Medicare program. CBO estimates that the costs of
the demonstration, which would include the rental of office
space, salaries for Medicare specialists, and travel, moving,
and administrative expenses, would total $4 million over the
2004-2008 period.
Miscellaneous provisions. H.R. 810 contains several
provisions, that CBO estimates would require additional
resources to implement. These provisions would:
Require the Secretary, the Comptroller General,
and the Office of the Inspector General to conduct several
studies, produce reports, and conduct evaluations.
Require the Secretary to establish two groups, a
technical group to review issues relating to the Emergency
Medical Treatment and Active Labor Act and a council for
technology and innovation to coordinate activities with respect
to new medical technologies.
Restrict CMS from implementing new documentation
guidelines for evaluation and management services until several
conditions had been met.
Allow hospitals to submit corrected and
supplementary data in order to change the geographic adjustment
factor used in the calculation of payments to that hospital for
Medicare services. CMS would have to reprocess that data and
would have to recalculate the geographic adjustment factors for
other hospitals.
Require CMS to provide data to hospitals for the
calculation of additional payments for the care of low-income
patients.
CBO estimates that conducting these activities would cost
$35 million over the 2004-2008 period.
Direct spending
H.R. 810 would change the conditions under which Medicare
would pay for services, would create a process to establish
whether an item or service is covered prior to a beneficiary
receiving the service, and would reallocate payments between
hospitals. CBO estimates that enacting these provisions would
have no significant effect on direct spending.
In general, if a provider is not certain whether Medicare
will pay for a service or item in a particular case, there is
no process under current law that enables the provider or
beneficiary to find out in advance whether Medicare will pay
for that service or item. In such cases, the provider may
request that the beneficiary sign an advanced beneficiary
notice (ABN) by which the beneficiary accepts responsibility
for paying for the service if Medicare denies payment. (The
provider is prohibited from charging the beneficiary if the
beneficiary does not sign an ABN and Medicare subsequently
denies payment.
The bill would authorize the Secretary to specify services
for which the provider or beneficiary may request a coverage
determination before a service is furnished. Upon receipt of
such a request, the bill would require the contractor to
conduct a medical review and issue a decision within 45 days.
The bill would make a positive determination by a contractor
binding, but it would limit the number of appeals a provider
could make in the event of a negative determination by a
contractor.
H.R. 810 directs the Secretary to exclude this provision as
a change in law or regulation in the calculation of the
sustainable growth rate (SGR) used in the calculation of
physician payments under Medicare. (In general, changes in law
and regulation are incorporated into the calculation of the
SGR). The SGR is a self-correcting mechanism: any additional
services paid for under this provision would be offset by lower
physician payments in subsequent years. CBO therefore estimates
that enacting this provision could affect direct spending in
each year, but would not have a significant impact over the
2004-2013 period.
H.R. 810 also would allow hospitals to submit corrected
wage data to qualify for higher Medicare payment rates. The
increase in payments to qualifying hospitals would be offset by
reductions in payment rates for all other hospitals. Therefore,
CBO estimates that enacting this provision would have no effect
on direct spending or receipts.
Estimated impact on state, local, and tribal governments:
H.R. 810 contains no intergovernmental mandates as defined in
UMRA. The requirement for public hospitals participating in the
Medicare program to comply with OSHA's bloodborne pathogens
standard would have cost implications for state and local
governments. The current OSHA standard applies to all private-
sector employers with one or more employees, as well as to
federal civilian employees. This bill would extend the
requirement to all hospitals participating in the Medicare
program, including state and local public hospitals. About half
of the states currently have bloodborne pathogen standards that
apply to these hospitals that are at least as stringent as the
federal standard, and many hospitals in other states have
voluntarily established comparable standards. Consequently, CBO
does not expect the costs of the requirement to be significant.
Any such costs would result from participating in Medicare, a
voluntary federal program, and thus would not be costs of an
intergovernmental mandate as defined in UMRA.
Estimated impact on the private sector: H.R. 810 contains
no private-sector mandates as defined in UMRA.
Previous estimate: On April 8, 2003, CBO transmitted a cost
estimate for H.R. 810 as ordered reported by the House
Committee on Energy and Commerce on March 26, 2003. This
version of H.R. 810 does not include a provision that would
require CMS to make all interim final regulations final,
whereas the version reported by the Energy and Commerce
Committee does. CBO estimated implementing that provision would
cost $19 million over the 2004-2018 period. However, this
version of H.R. 810 includes two provisions that the Energy and
Commerce version does not: one that allows hospitals to
resubmit data relevant to their geographic adjustment payments,
and one that requires CMS to provide hospitals with data used
to calculate additional payments for the provision of services
to low-income patients. CBO estimates these provisions would
cost $6 million over the 2004-2008 period to implement. The
costs of these provisions are included above in the
``Miscellaneous Provisions'' cost subtotal of $35 million over
the five-year period.
Estimate prepared by: Federal costs: Alexis Ahlstrom;
impact on state, local, and tribal governments: Leo Lex; impact
on the private sector: Robert Nguyen.
Estimate approved by: Peter H. Fontaine, Deputy Assistant
Director for Budget Analysis.
V. OTHER MATTERS REQUIRED TO BE DISCUSSED UNDER THE RULES OF THE HOUSE
A. Committee Oversight Findings and Recommendations
In compliance with clause 3(c)(1) of rule XIII of the Rules
of the House of Representatives, the Committee reports that the
need for this legislation was confirmed by the oversight
hearings of the Subcommittee on Health. The hearings were as
follows:
The Subcommittee on Health held a series of hearings on
Medicare Reform during the 107th and the 108th Congress to
examine the implications of regulatory burden on seniors and
providers. A list of these hearings may be found in this report
in Section I. Introduction, Part C. Legislative History (Page
3).
B. Summary of General Performance Goals and Objectives
In compliance with clause 3(c)(4) of rule XIII of the Rules
of the House of Representatives, the Committee states that the
primary purpose of H.R. 4954 is to create a prescription drug
benefit into the Medicare program while modernizing other
aspects of the program.
C. Constitutional Authority Statement
In compliance with clause 3(d)(1) of rule XIII of the Rules
of the House of Representatives, relating to constitutional
Authority, the Committee states that the Committee's action in
reporting the bill is derived from Article I of the
Constitution, Section 8 (``The Congress shall have power to lay
and collect taxes, duties, imposts, and excises, to pay the
debts and to provide for * * * the General Welfare of the
United States * * *'').
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
SOCIAL SECURITY ACT
* * * * * * *
TITLE XI--GENERAL PROVISIONS, PEER REVIEW, AND ADMINISTRATIVE
SIMPLIFICATION
* * * * * * *
Part A--General Provisions
* * * * * * *
APPOINTMENT OF ADVISORY COUNCIL AND OTHER ADVISORY GROUPS
Sec. 1114. (a) * * *
* * * * * * *
[(i)(1) Any advisory committee appointed under subsection (f
) to advise the Secretary on matters relating to the
interpretation, application, or implementation of section
1862(a)(1) shall assure the full participation of a nonvoting
member in the deliberations of the advisory committee, and
shall provide such nonvoting member access to all information
and data made available to voting members of the advisory
committee, other than information that--
[(A) is exempt from disclosure pursuant to subsection
(a) of section 552 of title 5, United States Code, by
reason of subsection (b)(4) of such section (relating
to trade secrets); or
[(B) the Secretary determines would present a
conflict of interest relating to such nonvoting member.
[(2) If an advisory committee described in paragraph (1)
organizes into panels of experts according to types of items or
services considered by the advisory committee, any such panel
of experts may report any recommendation with respect to such
items or services directly to the Secretary without the prior
approval of the advisory committee or an executive committee
thereof.]
* * * * * * *
EXCLUSION OF CERTAIN INDIVIDUALS AND ENTITIES FROM PARTICIPATION IN
MEDICARE AND STATE HEALTH CARE PROGRAMS
Sec. 1128. (a) * * *
* * * * * * *
(c) Notice, Effective Date, and Period of Exclusion.--(1) * *
*
* * * * * * *
(3)(A) * * *
(B) [Subject to subparagraph (G), in the case of an exclusion
under subsection (a), the minimum period of exclusion shall be
not less than five years, except that, upon the request of a
State, the Secretary may waive the exclusion under subsection
(a)(1) in the case of an individual or entity that is the sole
community physician or sole source of essential specialized
services in a community.] Subject to subparagraph (G), in the
case of an exclusion under subsection (a), the minimum period
of exclusion shall be not less than five years, except that,
upon the request of the administrator of a Federal health care
program (as defined in section 1128B(f)) who determines that
the exclusion would impose a hardship on individuals entitled
to benefits under part A of title XVIII or enrolled under part
B of such title, or both, the Secretary may waive the exclusion
under subsection (a)(1), (a)(3), or (a)(4) with respect to that
program in the case of an individual or entity that is the sole
community physician or sole source of essential specialized
services in a community. The Secretary's decision whether to
waive the exclusion shall not be reviewable.
* * * * * * *
Part B--Peer Review of the Utilization and Quality of Health Care
Services
* * * * * * *
FUNCTIONS OF PEER REVIEW ORGANIZATIONS
Sec. 1154. (a) * * *
* * * * * * *
(e)(1) * * *
* * * * * * *
[(5) In any review conducted under paragraph (2) or (3), the
organization shall solicit the views of the patient involved
(or the patient's representative).]
* * * * * * *
Part C--Administrative Simplification
* * * * * * *
GENERAL REQUIREMENTS FOR ADOPTION OF STANDARDS
Sec. 1172. (a) * * *
* * * * * * *
(f) Assistance to the Secretary.--In complying with the
requirements of this part, the Secretary shall rely on the
recommendations of the National Committee on Vital and Health
Statistics established under section 306(k) of the Public
Health Service Act (42 U.S.C. 242k(k)), and shall consult with
appropriate Federal and State agencies and private
organizations. Notwithstanding the preceding sentence, if the
National Committee on Vital and Health Statistics has not made
a recommendation to the Secretary before the date of the
enactment of this sentence, with respect to the adoption of the
International Classification of Diseases, 10th Revision,
Procedure Coding System (``ICD-10-PCS'') and the International
Classification of Diseases, 10th Revision, Clinical
Modification (``ICD-10-CM'') as a standard under this part for
the reporting of services, the Secretary may adopt ICD-10-PCS
and ICD-10-CM as such a standard on or after such date without
receiving such a recommendation. The Secretary shall publish in
the Federal Register any recommendation of the National
Committee on Vital and Health Statistics regarding the adoption
of a standard under this part.
* * * * * * *
TITLE XVIII--HEALTH INSURANCE FOR THE AGED AND DISABLED
* * * * * * *
NOTICE OF MEDICARE BENEFITS; MEDICARE AND MEDIGAP INFORMATION
Sec. 1804. (a) * * *
(b) The Secretary shall provide information via a toll-free
telephone number on the programs under this title. The
Secretary shall provide, through the toll-free number 1-800-
MEDICARE, for a means by which individuals seeking information
about, or assistance with, such programs who phone such toll-
free number are transferred (without charge) to appropriate
entities for the provision of such information or assistance.
Such toll-free number shall be the toll-free number listed for
general information and assistance in the annual notice under
subsection (a) instead of the listing of numbers of individual
contractors.
* * * * * * *
MEDICARE BENEFICIARY OMBUDSMAN
Sec. 1807. (a) In General.--The Secretary shall appoint
within the Department of Health and Human Services a Medicare
Beneficiary Ombudsman who shall have expertise and experience
in the fields of health care and education of (and assistance
to) individuals entitled to benefits under this title.
(b) Duties.--The Medicare Beneficiary Ombudsman shall--
(1) receive complaints, grievances, and requests for
information submitted by individuals entitled to
benefits under part A or enrolled under part B, or
both, with respect to any aspect of the medicare
program;
(2) provide assistance with respect to complaints,
grievances, and requests referred to in paragraph (1),
including--
(A) assistance in collecting relevant
information for such individuals, to seek an
appeal of a decision or determination made by a
fiscal intermediary, carrier, Medicare+Choice
organization, or the Secretary; and
(B) assistance to such individuals with any
problems arising from disenrollment from a
Medicare+Choice plan under part C; and
(3) submit annual reports to Congress and the
Secretary that describe the activities of the Office
and that include such recommendations for improvement
in the administration of this title as the Ombudsman
determines appropriate.
The Ombudsman shall not serve as an advocate for any increases
in payments or new coverage of services, but may identify
issues and problems in payment or coverage policies.
(c) Working With Health Insurance Counseling Programs.--To
the extent possible, the Ombudsman shall work with health
insurance counseling programs (receiving funding under section
4360 of Omnibus Budget Reconciliation Act of 1990) to
facilitate the provision of information to individuals entitled
to benefits under part A or enrolled under part B, or both
regarding Medicare+Choice plans and changes to those plans.
Nothing in this subsection shall preclude further collaboration
between the Ombudsman and such programs.
* * * * * * *
Part A--Hospital Insurance Benefits for the Aged and Disabled
* * * * * * *
CONDITIONS OF AND LIMITATIONS ON PAYMENT FOR SERVICES
Requirement of Requests and Certifications
Sec. 1814. (a) * * *
* * * * * * *
Payment for Hospice Care
(i)(1) * * *
* * * * * * *
(4) In the case of hospice care provided by a hospice program
under arrangements under section 1861(dd)(5)(D) made by another
hospice program, the hospice program that made the arrangements
shall bill and be paid for the hospice care.
* * * * * * *
[USE OF PUBLIC AGENCIES OR PRIVATE ORGANIZATIONS TO FACILITATE PAYMENT
TO PROVIDERS OF SERVICES]
PROVISIONS RELATING TO THE ADMINISTRATION OF PART A
Sec. 1816. [(a) If any group or association of providers of
services wishes to have payments under this part to such
providers made through a national, State, or other public or
private agency or organization and nominates such agency or
organization for this purpose, the Secretary is authorized to
enter into an agreement with such agency or organization
providing for the determination by such agency or organization
(subject to the provisions of section 1878 and to such review
by the Secretary as may be provided for by the agreement) of
the amount of the payments required pursuant to this part to be
made to such providers (and to providers assigned to such
agency or organization under subsection (e)), and for the
making of such payments by such agency or organization to such
providers (and to providers assigned to such agency or
organization under subsection (e)). Such agreement may also
include provision for the agency or organization to do all or
any part of the following: (1) to provide consultative services
to institutions or agencies to enable them to establish and
maintain fiscal records necessary for purposes of this part and
otherwise to qualify as hospitals, extended care facilities, or
home health agencies, and (2) with respect to the providers of
services which are to receive payments through it (A) to serve
as a center for, and communicate to providers, any information
or instructions furnished to it by the Secretary, and serve as
a channel of communication from providers to the Secretary; (B)
to make such audits of the records of providers as may be
necessary to insure that proper payments are made under this
part; and (C) to perform such other functions as are necessary
to carry out this subsection. As used in this title and part B
of title XI, the term ``fiscal intermediary'' means an agency
or organization with a contract under this section.
[(b) The Secretary shall not enter into or renew an agreement
with any agency or organization under this section unless--
[(1) he finds--
[(A) after applying the standards, criteria,
and procedures developed under subsection (f),
that to do so is consistent with the effective
and efficient administration of this part, and
[(B) that such agency or organization is
willing and able to assist the providers to
which payments are made through it under this
part in the application of safeguards against
unnecessary utilization of services furnished
by them to individuals entitled to hospital
insurance benefits under section 226, and the
agreement provides for such assistance; and
[(2) such agency or organization agrees--
[(A) to furnish to the Secretary such of the
information acquired by it in carrying out its
agreement under this section, and
[(B) to provide the Secretary with access to
all such data, information, and claims
processing operations,
as the Secretary may find necessary in performing his
functions under this part.]
(a) The administration of this part shall be conducted
through contracts with medicare administrative contractors
under section 1874A.
(c)[(1) An agreement with any agency or organization under
this section may contain such terms and conditions as the
Secretary finds necessary or appropriate, may provide for
advances of funds to the agency or organization for the making
of payments by it under subsection (a), and shall provide for
payment of so much of the cost of administration of the agency
or organization as is determined by the Secretary to be
necessary and proper for carrying out the functions covered by
the agreement. The Secretary shall provide that in determining
the necessary and proper cost of administration, the Secretary
shall, with respect to each agreement, take into account the
amount that is reasonable and adequate to meet the costs which
must be incurred by an efficiently and economically operated
agency or organization in carrying out the terms of its
agreement. The Secretary shall cause to have published in the
Federal Register, by not later than September 1 before each
fiscal year, data, standards, and methodology to be used to
establish budgets for fiscal intermediaries under this section
for that fiscal year, and shall cause to be published in the
Federal Register for public comment, at least 90 days before
such data, standards, and methodology are published, the data,
standards, and methodology proposed to be used. The Secretary
may not require, as a condition of entering into or renewing an
agreement under this section or under section 1871, that a
fiscal intermediary match data obtained other than in its
activities under this part with data used in the administration
of this part for purposes of identifying situations in which
the provisions of section 1862(b) may apply.]
(2)(A) Each [agreement under this section] contract under
section 1874A that provides for making payments under this part
shall provide that payment shall be issued, mailed, or
otherwise transmitted with respect to not less than 95 percent
of all claims submitted under this title--
(i) * * *
* * * * * * *
(3)(A) Each [agreement under this section] contract under
section 1874A that provides for making payments under this part
shall provide that no payment shall be issued, mailed, or
otherwise transmitted with respect to any claim submitted under
this title within the applicable number of calendar days after
the date on which the claim is received.
* * * * * * *
[(d) If the nomination of an agency or organization as
provided in this section is made by a group or association of
providers of services, it shall not be binding on members of
the group or association which notify the Secretary of their
election to that effect. Any provider may, upon such notice as
may be specified in the agreement under this section with an
agency or organization, withdraw its nomination to receive
payments through such agency or organization. Any provider
which has withdrawn its nomination, and any provider which has
not made a nomination, may elect to receive payments from any
agency or organization which has entered into an agreement with
the Secretary under this section if the Secretary and such
agency or organization agree to it.
[(e)(1) Notwithstanding subsections (a) and (d), the
Secretary, after taking into consideration any preferences of
providers of services, may assign or reassign any provider of
services to any agency or organization which has entered into
an agreement with him under this section, if he determines,
after applying the standards, criteria, and procedures
developed under subsection (f), that such assignment or
reassignment would result in the more effective and efficient
administration of this part.
[(2) Notwithstanding subsections (a) and (d), the Secretary
may (subject to the provisions of paragraph (4)) designate a
national or regional agency or organization which has entered
into an agreement with him under this section to perform
functions under the agreement with respect to a class of
providers of services in the Nation or region (as the case may
be), if he determines, after applying the standards, criteria,
and procedures developed under subsection (f), that such
designation would result in more effective and efficient
administration of this part.
[(3)(A) Before the Secretary makes an assignment or
reassignment under paragraph (1) of a provider of services to
other than the agency or organization nominated by the
provider, he shall furnish (i) the provider and such agency or
organization with a full explanation of the reasons for his
determination as to the efficiency and effectiveness of the
agency or organization to perform the functions required under
this part with respect to the provider, and (ii) such agency or
organization with opportunity for a hearing, and such
determination shall be subject to judicial review in accordance
with chapter 7 of title 5, United States Code.
[(B) Before the Secretary makes a designation under paragraph
(2) with respect to a class of providers of services, he shall
furnish (i) such providers and the agencies and organizations
adversely affected by such designation with a full explanation
of the reasons for his determination as to the efficiency and
effectiveness of such agencies and organizations to perform the
functions required under this part with respect to such
providers, and (ii) the agencies and organizations adversely
affected by such designation with opportunity for a hearing,
and such determination shall be subject to judicial review in
accordance with chapter 7 of title 5, United States Code.
[(4) Notwithstanding subsections (a) and (d) and paragraphs
(1), (2), and (3) of this subsection, the Secretary shall
designate regional agencies or organizations which have entered
into an agreement with him under this section to perform
functions under such agreement with respect to home health
agencies (as defined in section 1861(o)) in the region, except
that in assigning such agencies to such designated regional
agencies or organizations the Secretary shall assign a home
health agency which is a subdivision of a hospital (and such
agency and hospital are affiliated or under common control)
only if, after applying such criteria relating to
administrative efficiency and effectiveness as he shall
promulgate, he determines that such assignment would result in
the more effective and efficient administration of this title.
By not later than July 1, 1987, the Secretary shall limit the
number of such regional agencies or organizations to not more
than ten.
[(5) Notwithstanding any other provision of this title, the
Secretary shall designate the agency or organization which has
entered into an agreement under this section to perform
functions under such an agreement with respect to each hospice
program, except that with respect to a hospice program which is
a subdivision of a provider of services (and such hospice
program and provider of services are under common control) due
regard shall be given to the agency or organization which
performs the functions under this section for the provider of
services.
[(f)(1) In order to determine whether the Secretary should
enter into, renew, or terminate an agreement under this section
with an agency or organization, whether the Secretary should
assign or reassign a provider of services to an agency or
organization, and whether the Secretary should designate an
agency or organization to perform services with respect to a
class of providers of services, the Secretary shall develop
standards, criteria, and procedures to evaluate such agency's
or organization's (A) overall performance of claims processing
(including the agency's or organization's success in recovering
payments made under this title for services for which payment
has been or could be made under a primary plan (as defined in
section 1862(b)(2)(A))) and other related functions required to
be performed by such an agency or organization under an
agreement entered into under this section, and (B) performance
of such functions with respect to specific providers of
services, and the Secretary shall establish standards and
criteria with respect to the efficient and effective
administration of this part. No agency or organization shall be
found under such standards and criteria not to be efficient or
effective or to be less efficient or effective solely on the
ground that the agency or organization serves only providers
located in a single State.
[(2) The standards and criteria established under paragraph
(1) shall include--
[(A) with respect to claims for services furnished
under this part by any provider of services other than
a hospital--
[(i) whether such agency or organization is
able to process 75 percent of reconsiderations
within 60 days (except in the case of fiscal
year 1989, 66 percent of reconsiderations) and
90 percent of reconsiderations within 90 days,
and
[(ii) the extent to which such agency's or
organization's determinations are reversed on
appeal; and
[(B) with respect to applications for an exemption
from or exception or adjustment to the target amount
applicable under section 1886(b) to a hospital that is
not a subsection (d) hospital (as defined in section
1886(d)(1)(B))--
[(i) if such agency or organization receives
a completed application, whether such agency or
organization is able to process such
application not later than 75 days after the
application is filed, and
[(ii) if such agency or organization receives
an incomplete application, whether such agency
or organization is able to return the
application with instructions on how to
complete the application not later than 60 days
after the application is filed.
[(g) An agreement with the Secretary under this section may
be terminated--
[(1) by the agency or organization which entered into
such agreement at such time and upon such notice to the
Secretary, to the public, and to the providers as may
be provided in regulations, or
[(2) by the Secretary at such time and upon such
notice to the agency or organization, to the providers
which have nominated it for purposes of this section,
and to the public, as may be provided in regulations,
but only if he finds, after applying the standards,
criteria, and procedures developed under subsection (f)
and after reasonable notice and opportunity for hearing
to the agency or organization, that (A) the agency or
organization has failed substantially to carry out the
agreement, or (B) the continuation of some or all of
the functions provided for in the agreement with the
agency or organization is disadvantageous or is
inconsistent with the efficient administration of this
part.
[(h) An agreement with an agency or organization under this
section may require any of its officers or employees certifying
payments or disbursing funds pursuant to the agreement, or
otherwise participating in carrying out the agreement, to give
surety bond to the United States in such amount as the
Secretary may deem appropriate.
[(i)(1) No individual designated pursuant to an agreement
under this section as a certifying officer shall, in the
absence of gross negligence or intent to defraud the United
States, be liable with respect to any payments certified by him
under this section.
[(2) No disbursing officer shall, in the absence of gross
negligence or intent to defraud the United States, be liable
with respect to any payment by him under this section if it was
based upon a voucher signed by a certifying officer designated
as provided in paragraph (1) of this subsection.
[(3) No such agency or organization shall be liable to the
United States for any payments referred to in paragraph (1) or
(2).]
(j) [An agreement with an agency or organization under this
section] A contract with a medicare administrative contractor
under section 1874A with respect to the administration of this
part shall require that, with respect to a claim for home
health services, extended care services, or post-hospital
extended care services submitted by a provider to [such agency
or organization] such medicare administrative contractor that
is denied, [such agency or organization] such medicare
administrative contractor--
(1) * * *
* * * * * * *
(k) [An agreement with an agency or organization under this
section] A contract with a medicare administrative contractor
under section 1874A with respect to the administration of this
part shall require that [such agency or organization] such
medicare administrative contractor submit an annual report to
the Secretary describing the steps taken to recover payments
made for items or services for which payment has been or could
be made under a primary plan (as defined in section
1862(b)(2)(A)).
[(l) No agency or organization may carry out (or receive
payment for carrying out) any activity pursuant to an agreement
under this section to the extent that the activity is carried
out pursuant to a contract under the Medicare Integrity Program
under section 1893.]
* * * * * * *
Part B--Supplementary Medical Insurance Benefits for the Aged and
Disabled
* * * * * * *
PAYMENT OF BENEFITS
Sec. 1833. (a) * * *
* * * * * * *
(h)(1) * * *
* * * * * * *
(8)(A) The Secretary shall establish by regulation procedures
for determining the basis for, and amount of, payment under
this subsection for any clinical diagnostic laboratory test
with respect to which a new or substantially revised HCPCS code
is assigned on or after January 1, 2005 (in this paragraph
referred to as ``new tests'').
(B) Determinations under subparagraph (A) shall be made only
after the Secretary--
(i) makes available to the public (through an
Internet site and other appropriate mechanisms) a list
that includes any such test for which establishment of
a payment amount under this subsection is being
considered for a year;
(ii) on the same day such list is made available,
causes to have published in the Federal Register notice
of a meeting to receive comments and recommendations
(and data on which recommendations are based) from the
public on the appropriate basis under this subsection
for establishing payment amounts for the tests on such
list;
(iii) not less than 30 days after publication of such
notice convenes a meeting, that includes
representatives of officials of the Centers for
Medicare & Medicaid Services involved in determining
payment amounts, to receive such comments and
recommendations (and data on which the recommendations
are based);
(iv) taking into account the comments and
recommendations (and accompanying data) received at
such meeting, develops and makes available to the
public (through an Internet site and other appropriate
mechanisms) a list of proposed determinations with
respect to the appropriate basis for establishing a
payment amount under this subsection for each such
code, together with an explanation of the reasons for
each such determination, the data on which the
determinations are based, and a request for public
written comments on the proposed determination; and
(v) taking into account the comments received during
the public comment period, develops and makes available
to the public (through an Internet site and other
appropriate mechanisms) a list of final determinations
of the payment amounts for such tests under this
subsection, together with the rationale for each such
determination, the data on which the determinations are
based, and responses to comments and suggestions
received from the public.
(C) Under the procedures established pursuant to subparagraph
(A), the Secretary shall--
(i) set forth the criteria for making determinations
under subparagraph (A); and
(ii) make available to the public the data (other
than proprietary data) considered in making such
determinations.
(D) The Secretary may convene such further public meetings to
receive public comments on payment amounts for new tests under
this subsection as the Secretary deems appropriate.
(E) For purposes of this paragraph:
(i) The term ``HCPCS'' refers to the Health Care
Procedure Coding System.
(ii) A code shall be considered to be ``substantially
revised'' if there is a substantive change to the
definition of the test or procedure to which the code
applies (such as a new analyte or a new methodology for
measuring an existing analyte-specific test).
* * * * * * *
[USE OF CARRIERS FOR ADMINISTRATION OF BENEFITS]
PROVISIONS RELATING TO THE ADMINISTRATION OF PART B
Sec. 1842. [(a) In order to provide for the administration of
the benefits under this part with maximum efficiency and
convenience for individuals entitled to benefits under this
part and for providers of services and other persons furnishing
services to such individuals, and with a view to furthering
coordination of the administration of the benefits under part A
and under this part, the Secretary is authorized to enter into
contracts with carriers, including carriers with which
agreements under section 1816 are in effect, which will perform
some or all of the following functions (or, to the extent
provided in such contracts, will secure performance thereof by
other organizations); and, with respect to any of the following
functions which involve payments for physicians' services on a
reasonable charge basis, the Secretary shall to the extent
possible enter into such contracts:
[(1)(A) make determinations of the rates and amounts
of payments required pursuant to this part to be made
to providers of services and other persons on a
reasonable cost or reasonable charge basis (as may be
applicable);
[(B) receive, disburse, and account for funds in
making such payments; and
[(C) make such audits of the records of providers of
services as may be necessary to assure that proper
payments are made under this part;
[(2)(A) determine compliance with the requirements of
section 1861(k) as to utilization review; and
[(B) assist providers of services and other persons
who furnish services for which payment may be made
under this part in the development of procedures
relating to utilization practices, make studies of the
effectiveness of such procedures and methods for their
improvement, assist in the application of safeguards
against unnecessary utilization of services furnished
by providers of services and other persons to
individuals entitled to benefits under this part, and
provide procedures for and assist in arranging, where
necessary, the establishment of groups outside
hospitals (meeting the requirements of section
1861(k)(2)) to make reviews of utilization;
[(3) serve as a channel of communication of
information relating to the administration of this
part; and
[(4) otherwise assist, in such manner as the contract
may provide, in discharging administrative duties
necessary to carry out the purposes of this part.]
(a) The administration of this part shall be conducted
through contracts with medicare administrative contractors
under section 1874A.
(b)[(1) Contracts with carriers under subsection (a) may be
entered into without regard to section 3709 of the Revised
Statutes or any other provision of law requiring competitive
bidding.]
(2)[(A) No such contract shall be entered into with any
carrier unless the Secretary finds that such carrier 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 he finds
pertinent. The Secretary shall publish in the Federal Register
standards and criteria for the efficient and effective
performance of contract obligations under this section, and
opportunity shall be provided for public comment prior to
implementation. In establishing such standards and criteria,
the Secretary shall provide a system to measure a carrier's
performance of responsibilities described in paragraph (3)(H),
subsection (h), and section 1845(e)(2). The Secretary may not
require, as a condition of entering into or renewing a contract
under this section or under section 1871, that a carrier match
data obtained other than in its activities under this part with
data used in the administration of this part for purposes of
identifying situations in which section 1862(b) may apply.
[(B) The Secretary shall establish standards for evaluating
carriers' performance of reviews of initial carrier
determinations and of fair hearings under paragraph (3)(C),
under which a carrier is expected--
[(i) to complete such reviews, within 45 days after
the date of a request by an individual enrolled under
this part for such a review, in 95 percent of such
requests, and
[(ii) to make a final determination, within 120 days
after the date of receipt of a request by an individual
enrolled under this part for a fair hearing under
paragraph (3)(C), in 90 percent of such cases.]
(C) In the case of residents of nursing facilities who
receive services described in clause (i) or (ii) of section
1861(s)(2)(K) performed by a member of a team, the Secretary
shall instruct [carriers] medicare administrative contractors
to develop mechanisms which permit routine payment under this
part for up to 1.5 visits per month per resident. In the
previous sentence, the term ``team'' refers to a physician and
includes a physician assistant acting under the supervision of
the physician or a nurse practitioner working in collaboration
with that physician, or both.
[(D) In addition to any other standards and criteria
established by the Secretary for evaluating carrier performance
under this paragraph relating to avoiding erroneous payments,
the carrier shall be subject to standards and criteria relating
to the carrier's success in recovering payments made under this
part for items or services for which payment has been or could
be made under a primary plan (as defined in section
1862(b)(2)(A)).
[(E) With respect to the payment of claims for home health
services under this part that, but for the amendments made by
section 4611 of the Balanced Budget Act of 1997, would be
payable under part A instead of under this part, the Secretary
shall continue administration of such claims through fiscal
intermediaries under section 1816.]
(3) [Each such contract shall provide that the carrier] The
Secretary--
(A) [will] shall take such action as may be necessary
to assure that, where payment under this part for a
service is on a cost basis, the cost is reasonable cost
(as determined under section 1861(v));
(B) [will] shall take such action as may be necessary
to assure that, where payment under this part for a
service is on a charge basis, such charge will be
reasonable and not higher than the charge applicable,
for a comparable service and under comparable
circumstances, [to the policyholders and subscribers of
the carrier] to the policyholders and subscribers of
the medicare administrative contractor, and such
payment will (except as otherwise provided in section
1870(f)) be made--
(i) * * *
* * * * * * *
[(C) will establish and maintain procedures pursuant
to which an individual enrolled under this part will be
granted an opportunity for a fair hearing by the
carrier, in any case where the amount in controversy is
at least $100, but less than $500, when requests for
payment under this part with respect to services
furnished him are denied or are not acted upon with
reasonable promptness or when the amount of such
payment is in controversy;
[(D) will furnish to the Secretary such timely
information and reports as he may find necessary in
performing his functions under this part;
[(E) will 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 (D) and
otherwise to carry out the purposes of this part;]
(F) [will] shall take such action as may be necessary
to assure that where payment under this part for a
service rendered is on a charge basis, such payment
shall be determined on the basis of the charge that is
determined in accordance with this section on the basis
of customary and prevailing charge levels in effect at
the time the service was rendered or, in the case of
services rendered more than 12 months before the year
in which the bill is submitted or request for payment
is made, on the basis of such levels in effect for the
12-month period preceding such year;
(G) [will] shall, for a service that is furnished
with respect to an individual enrolled under this part,
that is not paid on an assignment-related basis, and
that is subject to a limiting charge under section
1848(g)--
(i) * * *
* * * * * * *
(H) [if it makes determinations or payments with
respect to physicians' services, will] shall
implement--
(i) programs to recruit and retain physicians
as participating physicians in the area served
by the [carrier] medicare administrative
contractor, including educational and outreach
activities and the use of professional
relations personnel to handle billing and other
problems relating to payment of claims of
participating physicians; and
* * * * * * *
[(I) will submit annual reports to the Secretary
describing the steps taken to recover payments made
under this part for items or services for which payment
has been or could be made under a primary plan (as
defined in section 1862(b)(2)(A)); and]
(L) [will] shall monitor and profile physicians'
billing patterns within each area or locality and
provide comparative data to physicians whose
utilization patterns vary significantly from other
physicians in the same payment area or locality[;].
[and shall contain such other terms and conditions not
inconsistent with this section as the Secretary may find
necessary or appropriate.] In determining the reasonable charge
for services for purposes of this paragraph, there shall be
taken into consideration the customary charges for similar
services generally made by the physician or other person
furnishing such services, as well as the prevailing charges in
the locality for similar services. No charge may be determined
to be reasonable in the case of bills submitted or requests for
payment made under this part after December 31, 1970, if it
exceeds the higher of (i) the prevailing charge recognized by
the carrier and found acceptable by the Secretary for similar
services in the same locality in administering this part on
December 31, 1970, or (ii) the prevailing charge level that, on
the basis of statistical data and methodology acceptable to the
Secretary, would cover 75 percent of the customary charges made
for similar services in the same locality during the 12-month
period ending on the June 30 last preceding the start of the
calendar year in which the service is rendered. In the case of
physicians' services the prevailing charge level determined for
purposes of clause (ii) of the preceding sentence for any
twelve-month period (beginning after June 30, 1973) specified
in clause (ii) of such sentence may not exceed (in the
aggregate) the level determined under such clause for the
fiscal year ending June 30, 1973, or (with respect to
physicians' services furnished in a year after 1987) the level
determined under this sentence (or under any other provision of
law affecting the prevailing charge level) for the previous
year except to the extent that the Secretary finds, on the
basis of appropriate economic index data, that such higher
level is justified by year-to-year economic changes. With
respect to power-operated wheelchairs for which payment may be
made in accordance with section 1861(s)(6), charges determined
to be reasonable may not exceed the lowest charge at which
power-operated wheelchairs are available in the locality. In
the case of medical services, supplies, and equipment
(including equipment servicing) that, in the judgment of the
Secretary, do not generally vary significantly in quality from
one supplier to another, the charges incurred after December
31, 1972, determined to be reasonable may not exceed the lowest
charge levels at which such services, supplies, and equipment
are widely and consistently available in a locality except to
the extent and under the circumstances specified by the
Secretary. The requirement in subparagraph (B) that a bill be
submitted or request for payment be made by the close of the
following calendar year shall not apply if (I) failure to
submit the bill or request the payment by the close of such
year is due to the error or misrepresentation of an officer,
employee, fiscal intermediary, carrier, medicare administrative
contractor, or agent of the Department of Health and Human
Services performing functions under this title and acting
within the scope of his or its authority, and (II) the bill is
submitted or the payment is requested promptly after such error
or misrepresentation is eliminated or corrected.
Notwithstanding the provisions of the third and fourth
sentences preceding this sentence, the prevailing charge level
in the case of a physician service in a particular locality
determined pursuant to such third and fourth sentences for any
calendar year after 1974 shall, if lower than the prevailing
charge level for the fiscal year ending June 30, 1975, in the
case of a similar physician service in the same locality by
reason of the application of economic index data, be raised to
such prevailing charge level for the fiscal year ending June
30, 1975, and shall remain at such prevailing charge level
until the prevailing charge for a year (as adjusted by economic
index data) equals or exceeds such prevailing charge level. The
amount of any charges for outpatient services which shall be
considered reasonable shall be subject to the limitations
established by regulations issued by the Secretary pursuant to
section 1861(v)(1)(K), and in determining the reasonable charge
for such services, the Secretary may limit such reasonable
charge to a percentage of the amount of the prevailing charge
for similar services furnished in a physician's office, taking
into account the extent to which overhead costs associated with
such outpatient services have been included in the reasonable
cost or charge of the facility.
* * * * * * *
[(5) Each contract under this section shall be for a term of
at least one year, and may be made automatically renewable from
term to term in the absence of notice by either party of
intention to terminate at the end of the current term; except
that the Secretary may terminate any such contract at any time
(after such reasonable notice and opportunity for hearing to
the carrier involved as he may provide in regulations) if he
finds that the carrier has failed substantially to carry out
the contract or is carrying out the contract in a manner
inconsistent with the efficient and effective administration of
the insurance program established by this part.]
(6) No payment under this part for a service provided to any
individual shall (except as provided in section 1870) be made
to anyone other than such individual or (pursuant to an
assignment described in subparagraph (B)(ii) of paragraph (3))
the physician or other person who provided the service, except
that (A) payment may be made (i) to the employer of such
physician or other person if such physician or other person is
required as a condition of his employment to turn over his fee
for such service to his employer, or [(ii) (where the service
was provided in a hospital, critical access hospital, clinic,
or other facility) to the facility in which the service was
provided if there is a contractual arrangement between such
physician or other person and such facility under which such
facility submits the bill for such service, (B) payment may be
made to an entity (i) which provides coverage of the services
under a health benefits plan, but only to the extent that
payment is not made under this part, (ii) which has paid the
person who provided the service an amount (including the amount
payable under this part) which that person has accepted as
payment in full for the service, and] (ii) where the service
was provided under a contractual arrangement between such
physician or other person and a qualified entity (as defined by
the Secretary) or other person, to the entity or other person
if under such arrangement such entity or individual submits the
bill for such service and such arrangement (I) includes joint
and several liability for overpayment by such physician or
other person and such entity or other person, and (II) meets
such other program integrity and other safeguards as the
Secretary may determine to be appropriate, (iii) to which the
individual has agreed in writing that payment may be made under
this part, (C) in the case of services described in clause (i)
of section 1861(s)(2)(K), payment shall be made to either (i)
the employer of the physician assistant involved, or (ii) with
respect to a physician assistant who was the owner of a rural
health clinic (as described in section 1861(aa)(2)) for a
continuous period beginning prior to the date of the enactment
of the Balanced Budget Act of 1997 and ending on the date that
the Secretary determines such rural health clinic no longer
meets the requirements of section 1861(aa)(2), payment may be
made directly to the physician assistant, (D) payment may be
made to a physician for physicians' services (and services
furnished incident to such services) furnished by a second
physician to patients of the first physician if (i) the first
physician is unavailable to provide the services; (ii) the
services are furnished pursuant to an arrangement between the
two physicians that (I) is informal and reciprocal, or (II)
involves per diem or other fee-for-time compensation for such
services; (iii) the services are not provided by the second
physician over a continuous period of more than 60 days; and
(iv) the claim form submitted to the carrier for such services
includes the second physician's unique identifier (provided
under the system established under subsection (r)) and
indicates that the claim meets the requirements of this
subparagraph for payment to the first physician, (E) in the
case of an item or service (other than services described in
section 1888(e)(2)(A)(ii)) furnished by, or under arrangements
made by, a skilled nursing facility to an individual who (at
the time the item or service is furnished) is a resident of a
skilled nursing facility, payment shall be made to the
facility, (F) in the case of home health services (including
medical supplies described in section 1861(m)(5), but excluding
durable medical equipment to the extent provided for in such
section) furnished to an individual who (at the time the item
or service is furnished) is under a plan of care of a home
health agency, payment shall be made to the agency (without
regard to whether or not the item or service was furnished by
the agency, by others under arrangement with them made by the
agency, or when any other contracting or consulting
arrangement, or otherwise), and (G) in the case of services in
a hospital or clinic to which section 1880(e) applies, payment
shall be made to such hospital or clinic. No payment which
under the preceding sentence may be made directly to the
physician or other person providing the service involved
(pursuant to an assignment described in subparagraph (B)(ii) of
paragraph (3)) shall be made to anyone else under a
reassignment or power of attorney ([except to an employer or
facility as described in clause (A)] except to an employer,
entity, or other person as described in subparagraph (A) of
such sentence); but nothing in this subsection shall be
construed (i) to prevent the making of such a payment in
accordance with an assignment from the individual to whom the
service was provided or a reassignment from the physician or
other person providing such service if such assignment or
reassignment is made to a governmental agency or entity or is
established by or pursuant to the order of a court of competent
jurisdiction, or (ii) to preclude an agent of the physician or
other person providing the service from receiving any such
payment if (but only if) such agent does so pursuant to an
agency agreement under which the compensation to be paid to the
agent for his services for or in connection with the billing or
collection of payments due such physician or other person under
this title is unrelated (directly or indirectly) to the amount
of such payments or the billings therefor, and is not dependent
upon the actual collection of any such payment. For purposes of
subparagraph (C) of the first sentence of this paragraph, an
employment relationship may include any independent contractor
arrangement, and employer status shall be determined in
accordance with the law of the State in which the services
described in such clause are performed.
(7)(A) In the case of physicians' services furnished to a
patient in a hospital with a teaching program approved as
specified in section 1861(b)(6) but which does not meet the
conditions described in section 1861(b)(7), [the carrier] the
Secretary shall not provide (except on the basis described in
subparagraph (C)) for payment for such services under this
part--
(i) * * *
* * * * * * *
(B) The customary charge for such services in a hospital
shall be determined in accordance with regulations issued by
the Secretary and taking into account the following factors:
(i) In the case of a physician who is not a teaching
physician (as defined by the Secretary), [the carrier]
the Secretary shall take into account the amounts the
physician charges for similar services in the
physician's practice outside the teaching setting.
(ii) In the case of a teaching physician, if the
hospital, its physicians, or other appropriate billing
entity has established one or more schedules of charges
which are collected for medical and surgical services,
[the carrier] the Secretary shall base payment under
this title on the greatest of--
(I) * * *
* * * * * * *
(C) In the case of physicians' services furnished to a
patient in a hospital with a teaching program approved as
specified in section 1861(b)(6) but which does not meet the
conditions described in section 1861(b)(7), if the conditions
described in subclauses (I) and (II) of subparagraph (A)(i) are
met and if the physician elects payment to be determined under
this subparagraph, [the carrier] the Secretary shall provide
for payment for such services under this part on the basis of
regulations of the Secretary governing reimbursement for the
services of hospital-based physicians (and not on any other
basis).
* * * * * * *
(c)[(1) Any contract entered into with a carrier under this
section shall provide for advances of funds to the carrier for
the making of payments by it under this part, and shall provide
for payment of the cost of administration of the carrier, as
determined by the Secretary to be necessary and proper for
carrying out the functions covered by the contract. The
Secretary shall provide that in determining a carrier's
necessary and proper cost of administration, the Secretary
shall, with respect to each contract, take into account the
amount that is reasonable and adequate to meet the costs which
must be incurred by an efficiently and economically operated
carrier in carrying out the terms of its contract. The
Secretary shall cause to have published in the Federal
Register, by not later than September 1 before each fiscal
year, data, standards, and methodology to be used to establish
budgets for carriers under this section for that fiscal year,
and shall cause to be published in the Federal Register for
public comment, at least 90 days before such data, standards,
and methodology are published, the data, standards, and
methodology proposed to be used.]
(2)(A) Each [contract under this section which provides for
the disbursement of funds, as described in subsection
(a)(1)(B),] contract under section 1874A that provides for
making payments under this part shall provide that payment
shall be issued, mailed, or otherwise transmitted with respect
to not less than 95 percent of all claims submitted under this
part--
(i) * * *
* * * * * * *
(3)(A) Each contract under this section which provides for
the disbursement of funds, as described in [subsection
(a)(1)(B)] section 1874A(a)(3)(B), shall provide that no
payment shall be issued, mailed, or otherwise transmitted with
respect to any claim submitted under this title within the
applicable number of calendar days after the date on which the
claim is received.
(4) Neither a [carrier] medicare administrative contractor
nor the Secretary may impose a fee under this title--
(A) * * *
* * * * * * *
[(5) Each contract under this section which provides for the
disbursement of funds, as described in subsection (a)(1)(B),
shall require the carrier to meet criteria developed by the
Secretary to measure the timeliness of carrier responses to
requests for payment of items described in section
1834(a)(15)(C).
[(6) No carrier may carry out (or receive payment for
carrying out) any activity pursuant to a contract under this
subsection to the extent that the activity is carried out
pursuant to a contract 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)).
[(d) Any contract with a carrier under this section may
require such carrier or 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.
[(e)(1) No individual designated pursuant to a contract under
this section as a certifying officer shall, in the absence of
gross negligence or intent to defraud the United States, be
liable with respect to any payments certified by him under this
section.
[(2) No disbursing officer shall, in the absence of gross
negligence or intent to defraud the United States, be liable
with respect to any payment by him under this section if it was
based upon a voucher signed by a certifying officer designated
as provided in paragraph (1) of this subsection.
[(3) No such carrier shall be liable to the United States for
any payments referred to in paragraph (1) or (2).
[(f) For purposes of this part, the term ``carrier'' means--
[(1) with respect to providers of services and other
persons, a voluntary association, corporation,
partnership, or other nongovernmental organization
which is lawfully engaged in providing, paying for, or
reimbursing the cost of, health services under group
insurance policies or contracts, medical or hospital
service agreements, membership or subscription
contracts, or similar group arrangements, in
consideration of premiums or other periodic charges
payable to the carrier, including a health benefits
plan duly sponsored or underwritten by an employee
organization; and
[(2) with respect to providers of services only, any
agency or organization (not described in paragraph (1))
with which an agreement is in effect under section
1816.]
(g) The Railroad Retirement Board shall, in accordance with
such regulations as the Secretary may prescribe, contract with
a [carrier or carriers] medicare administrative contractor or
contractors to perform the functions set out in this section
with respect to individuals entitled to benefits as qualified
railroad retirement beneficiaries pursuant to section 226(a) of
this Act and section 7(d) of the Railroad Retirement Act of
1974.
(h)(1) * * *
(2) [Each carrier having an agreement with the Secretary
under subsection (a)] The Secretary shall maintain a toll-free
telephone number or numbers at which individuals enrolled under
this part may obtain the names, addresses, specialty, and
telephone numbers of participating physicians and suppliers and
may request a copy of an appropriate directory published under
paragraph (4). [Each such carrier] The Secretary shall, without
charge, mail a copy of such directory upon such a request.
(3)(A) In any case in which [a carrier having an agreement
with the Secretary under subsection (a)] medicare
administrative contractor having a contract under section 1874A
that provides for making payments under this part is able to
develop a system for the electronic transmission to [such
carrier] such contractor of bills for services, such carrier
shall establish direct lines for the electronic receipt of
claims from participating physicians and suppliers.
(B) The Secretary shall establish a procedure whereby an
individual enrolled under this part may assign, in an
appropriate manner on the form claiming a benefit under this
part for an item or service furnished by a participating
physician or supplier, the individual's rights of payment under
a medicare supplemental policy (described in section
1882(g)(1)) in which the individual is enrolled. In the case
such an assignment is properly executed and a payment
determination is made by [a carrier] a medicare administrative
contractor with a contract under this section, [the carrier]
the contractor shall transmit to the private entity issuing the
medicare supplemental policy notice of such fact and shall
include an explanation of benefits and any additional
information that the Secretary may determine to be appropriate
in order to enable the entity to decide whether (and the amount
of) any payment is due under the policy. The Secretary may
enter into agreements for the transmittal of such information
to entities electronically. The Secretary shall impose user
fees for the transmittal of information under this subparagraph
by [a carrier] a medicare administrative contractor, whether
electronically or otherwise, and such user fees shall be
collected and retained by [the carrier] the contractor.
* * * * * * *
(5)(A) The Secretary shall promptly notify individuals
enrolled under this part through an annual mailing of the
participation program under this subsection and the publication
and availability of the directories and shall make the
appropriate area directory or directories available in each
district and branch office of the Social Security
Administration, in the offices of [carriers] medicare
administrative contractors, and to senior citizen
organizations.
(B) The annual notice provided under subparagraph (A) shall
include--
(i) * * *
(iii) an explanation of the assistance offered by
[carriers] medicare administrative contractors in
obtaining the names of participating physicians and
suppliers, and
* * * * * * *
(l)(1)(A) Subject to subparagraph (C), if--
(i) * * *
* * * * * * *
(iii)(I) a [carrier] medicare administrative
contractor determines under this part or a peer review
organization determines under part B of title XI that
payment may not be made by reason of section 1862(a)(1)
because a service otherwise covered under this title is
not reasonable and necessary under the standards
described in that section or (II) payment under this
title for such services is denied under section
1154(a)(2) by reason of a determination under section
1154(a)(1)(B), and
* * * * * * *
(2) Each [carrier] medicare administrative contractor with a
contract in effect under this section with respect to
physicians and each peer review organization with a contract
under part B of title XI shall send any notice of denial of
payment for physicians' services based on section 1862(a)(1)
and for which payment is not requested on an assignment-related
basis to the physician and the individual involved.
* * * * * * *
(p)(1) * * *
* * * * * * *
(3) In the case of a request for payment for an item or
service furnished by a physician not submitted on an
assignment-related basis and which does not include the code
(or codes) required under paragraph (1)--
(A) if the physician knowingly and willfully fails to
provide the code (or codes) promptly upon request of
the Secretary or a [carrier] medicare administrative
contractor, the physician may be subject to a civil
money penalty in an amount not to exceed $2,000, and
* * * * * * *
(q)(1)(A) The Secretary, in consultation with groups
representing physicians who furnish anesthesia services, shall
establish by regulation a relative value guide for use in all
[carrier] localities in making payment for physician anesthesia
services furnished under this part. Such guide shall be
designed so as to result in expenditures under this title for
such services in an amount that would not exceed the amount of
such expenditures which would otherwise occur.
* * * * * * *
Part C--Medicare+Choice Program
ELIGIBILITY, ELECTION, AND ENROLLMENT
Sec. 1851. (a) Choice of Medicare Benefits Through
Medicare+Choice Plans.--
(1) * * *
(2) Types of medicare+choice plans that may be
available.--A Medicare+Choice plan may be any of the
following types of plans of health insurance:
(A) Coordinated care plans.--Coordinated care
plans which provide health care services,
including but not limited to health maintenance
organization plans (with or without point of
service options), plans offered by provider-
sponsored organizations (as defined in section
1855(d)), and preferred provider organization
plans. Specialized Medicare+Choice plans for
special needs beneficiaries (as defined in
section 1859(b)(4)) may be any type of
coordinated care plan.
* * * * * * *
BENEFITS AND BENEFICIARY PROTECTIONS
Sec. 1852. (a) Basic Benefits.--
(1) * * *
(2) Satisfaction of requirement.--
(A) * * *
* * * * * * *
(C) Election of uniform coverage [policy]
determination.--In the case of a
Medicare+Choice organization that offers a
Medicare+Choice plan in an area in which more
than one local coverage [policy] determination
is applied with respect to different parts of
the area, the organization may elect to have
the local coverage [policy] determination for
the part of the area that is most beneficial to
Medicare+Choice enrollees (as identified by the
Secretary) apply with respect to all
Medicare+Choice enrollees enrolled in the plan.
* * * * * * *
DEFINITIONS; MISCELLANEOUS PROVISIONS
Sec. 1859. (a) * * *
(b) Definitions Relating to Medicare+Choice Plans.--
(1) * * *
* * * * * * *
(4) Specialized medicare+choice plans for special
needs beneficiaries.--
(A) In general.--The term ``specialized
Medicare+Choice plan for special needs
beneficiaries'' means a Medicare+Choice plan
that exclusively serves special needs
beneficiaries (as defined in subparagraph (B)).
(B) Special needs beneficiary.--The term
``special needs beneficiary'' means a
Medicare+Choice eligible individual who--
(i) is institutionalized (as defined
by the Secretary);
(ii) is entitled to medical
assistance under a State plan under
title XIX; or
(iii) meets such requirements as the
Secretary may determine would benefit
from enrollment in such a specialized
Medicare+Choice plan described in
subparagraph (A) for individuals with
severe or disabling chronic conditions.
* * * * * * *
(f) Restriction on Enrollment for Specialized Medicare+Choice
Plans for Special Needs Beneficiaries.--In the case of a
specialized Medicare+Choice plan (as defined in subsection
(b)(4)), notwithstanding any other provision of this part and
in accordance with regulations of the Secretary and for periods
before January 1, 2008, the plan may restrict the enrollment of
individuals under the plan to individuals who are within one or
more classes of special needs beneficiaries.
* * * * * * *
Part D--Miscellaneous Provisions
DEFINITIONS OF SERVICES, INSTITUTIONS, ETC.
Sec. 1861. For purposes of this title--
Spell of Illness
(a) * * *
* * * * * * *
Supplier
(d) The term ``supplier'' means, unless the context otherwise
requires, a physician or other practitioner, a facility, or
other entity (other than a provider of services) that furnishes
items or services under this title.
* * * * * * *
Hospice Care; Hospice Program
(dd)(1) * * *
* * * * * * *
(5)(A) * * *
* * * * * * *
(D) In extraordinary, exigent, or other non-routine
circumstances, such as unanticipated periods of high patient
loads, staffing shortages due to illness or other events, or
temporary travel of a patient outside a hospice program's
service area, a hospice program may enter into arrangements
with another hospice program for the provision by that other
program of services described in paragraph (2)(A)(ii)(I). The
provisions of paragraph (2)(A)(ii)(II) shall apply with respect
to the services provided under such arrangements.
(E) A hospice program may provide services described in
paragraph (1)(A) other than directly by the program if the
services are highly specialized services of a registered
professional nurse and are provided non-routinely and so
infrequently so that the provision of such services directly
would be impracticable and prohibitively expensive.
* * * * * * *
Discharge Planning Process
(ee)(1) * * *
(2) The Secretary shall develop guidelines and standards for
the discharge planning process in order to ensure a timely and
smooth transition to the most appropriate type of and setting
for post-hospital or rehabilitative care. The guidelines and
standards shall include the following:
(A) * * *
* * * * * * *
(D) A discharge planning evaluation must include an
evaluation of a patient's likely need for appropriate
post-hospital services, including [hospice services]
hospice care and post-hospital extended care services,
and the availability of those services, including the
availability of home health services through
individuals and entities that participate in the
program under this title and that serve the area in
which the patient resides and that request to be listed
by the hospital as available and, in the case of
individuals who are likely to need post-hospital
extended care services, the availability of such
services through facilities that participate in the
program under this title and that serve the area in
which the patient resides.
* * * * * * *
EXCLUSIONS FROM COVERAGE AND MEDICARE AS SECONDARY PAYER
Sec. 1862. (a) Notwithstanding any other provision of this
title, no payment may be made under part A or part B for any
expenses incurred for items or services--
(1) * * *
* * * * * * *
Paragraph (7) shall not apply to Federally qualified health
center services described in section 1861(aa)(3)(B). In making
a national coverage determination (as defined in paragraph
(1)(B) of section 1869(f )) the Secretary shall ensure that the
public is afforded notice and opportunity to comment prior to
implementation by the Secretary of the determination; meetings
of advisory committees [established under section 1114(f )]
with respect to the determination are made on the record; in
making the determination, the Secretary has considered
applicable information (including clinical experience and
medical, technical, and scientific evidence) with respect to
the subject matter of the determination; and in the
determination, provide a clear statement of the basis for the
determination (including responses to comments received from
the public), the assumptions underlying that basis, and make
available to the public the data (other than proprietary data)
considered in making the determination.
* * * * * * *
(d) For purposes of subsection (a)(1)(A), in the case of any
item or service that is required to be provided pursuant to
section 1867 to an individual who is entitled to benefits under
this title, determinations as to whether the item or service is
reasonable and necessary shall be made on the basis of the
information available to the treating physician or practitioner
(including the patient's presenting symptoms or complaint) at
the time the item or service was ordered or furnished by the
physician or practitioner (and not on the patient's principal
diagnosis). When making such determinations with respect to
such an item or service, the Secretary shall not consider the
frequency with which the item or service was provided to the
patient before or after the time of the admission or visit.
* * * * * * *
[(i)] (j)(1) Any advisory committee appointed [under
subsection (f )] to advise the Secretary on matters relating to
the interpretation, application, or implementation of [section
1862(a)(1)] subsection (a)(1) shall assure the full
participation of a nonvoting member in the deliberations of the
advisory committee, and shall provide such nonvoting member
access to all information and data made available to voting
members of the advisory committee, other than information
that--
(A) is exempt from disclosure pursuant to subsection
(a) of section 552 of title 5, United States Code, by
reason of subsection (b)(4) of such section (relating
to trade secrets); or
(B) the Secretary determines would present a conflict
of interest relating to such nonvoting member.
(2) If an advisory committee described in paragraph (1)
organizes into panels of experts according to types of items or
services considered by the advisory committee, any such panel
of experts may report any recommendation with respect to such
items or services directly to the Secretary without the prior
approval of the advisory committee or an executive committee
thereof.
(k)(1) Subject to paragraph (2), a group health plan (as
defined in subsection (a)(1)(A)(v)) providing supplemental or
secondary coverage to individuals also entitled to services
under this title shall not require a medicare claims
determination under this title for dental benefits specifically
excluded under subsection (a)(12) as a condition of making a
claims determination for such benefits under the group health
plan.
(2) A group health plan may require a claims determination
under this title in cases involving or appearing to involve
inpatient dental hospital services or dental services expressly
covered under this title pursuant to actions taken by the
Secretary.
* * * * * * *
[AGREEMENTS WITH PROVIDERS OF SERVICES]
AGREEMENTS WITH PROVIDERS OF SERVICES; ENROLLMENT PROCESSES
Sec. 1866. (a)(1) Any provider of services (except a fund
designated for purposes of section 1814(g) and section 1835(e))
shall be qualified to participate under this title and shall be
eligible for payments under this title if it files with the
Secretary an agreement--
(A) * * *
* * * * * * *
(R) to contract only with a health care clearinghouse
(as defined in section 1171) that meets each standard
and implementation specification adopted or established
under part C of title XI on or after the date on which
the health care clearinghouse is required to comply
with the standard or specification, [and]
(S) in the case of a hospital that has a financial
interest (as specified by the Secretary in regulations)
in an entity to which individuals are referred as
described in section 1861(ee)(2)(H)(ii), or in which
such an entity has such a financial interest, or in
which another entity has such a financial interest
(directly or indirectly) with such hospital and such an
entity, to maintain and disclose to the Secretary (in a
form and manner specified by the Secretary) information
on--
(i) * * *
* * * * * * *
(iii) the percentage of such individuals who
received such services from such provider (or
another such provider)[.], and
(T) in the case of hospitals that are not otherwise
subject to the Occupational Safety and Health Act of
1970 or a State occupational safety and health plan
that is approved under section 18(b) of such Act, to
comply with the Bloodborne Pathogens standard under
section 1910.1030 of title 29 of the Code of Federal
Regulations (or as subsequently redesignated).
* * * * * * *
(b)(1) * * *
* * * * * * *
(4)(A) A hospital that fails to comply with the requirement
of subsection (a)(1)(T) (relating to the Bloodborne Pathogens
standard) is subject to a civil money penalty in an amount
described in subparagraph (B), but is not subject to
termination of an agreement under this section.
(B) The amount referred to in subparagraph (A) is an amount
that is similar to the amount of civil penalties that may be
imposed under section 17 of the Occupational Safety and Health
Act of 1970 for a violation of the Bloodborne Pathogens
standard referred to in subsection (a)(1)(T) by a hospital that
is subject to the provisions of such Act.
(C) A civil money penalty under this paragraph shall be
imposed and collected in the same manner as civil money
penalties under subsection (a) of section 1128A are imposed and
collected under that section.
* * * * * * *
(h)(1)(A) Except as provided in paragraph (2), an institution
or agency dissatisfied with a determination by the Secretary
that it is not a provider of services or with a determination
described in subsection (b)(2) shall be entitled to a hearing
thereon by the Secretary (after reasonable notice) to the same
extent as is provided in section 205(b), and to judicial review
of the Secretary's final decision after such hearing as is
provided in section 205(g), except that, in so applying such
sections and in applying section 205(l) thereto, any reference
therein to the Commissioner of Social Security or the Social
Security Administration shall be considered a reference to the
Secretary or the Department of Health and Human Services,
respectively.
(B) An institution or agency described in subparagraph (A)
that has filed for a hearing under subparagraph (A) shall have
expedited access to judicial review under this subparagraph in
the same manner as providers of services, suppliers, and
individuals entitled to benefits under part A or enrolled under
part B, or both, may obtain expedited access to judicial review
under the process established under section 1869(b)(2). Nothing
in this subparagraph shall be construed to affect the
application of any remedy imposed under section 1819 during the
pendency of an appeal under this subparagraph.
* * * * * * *
(j) Enrollment Process for Providers of Services and
Suppliers.--
(1) Enrollment process.--
(A) In general.--The Secretary shall
establish by regulation a process for the
enrollment of providers of services and
suppliers under this title.
(B) Deadlines.--The Secretary shall establish
by regulation procedures under which there are
deadlines for actions on applications for
enrollment (and, if applicable, renewal of
enrollment). The Secretary shall monitor the
performance of medicare administrative
contractors in meeting the deadlines
established under this subparagraph.
(C) Consultation before changing provider
enrollment forms.--The Secretary shall consult
with providers of services and suppliers before
making changes in the provider enrollment forms
required of such providers and suppliers to be
eligible to submit claims for which payment may
be made under this title.
(2) Hearing rights in cases of denial or non-
renewal.--A provider of services or supplier whose
application to enroll (or, if applicable, to renew
enrollment) under this title is denied may have a
hearing and judicial review of such denial under the
procedures that apply under subsection (h)(1)(A) to a
provider of services that is dissatisfied with a
determination by the Secretary.
* * * * * * *
EXAMINATION AND TREATMENT FOR EMERGENCY MEDICAL CONDITIONS AND WOMEN IN
LABOR
Sec. 1867. (a) * * *
* * * * * * *
(d) Enforcement.--
(1) * * *
* * * * * * *
(3) Consultation with peer review organizations.--In
considering allegations of violations of the
requirements of this section in imposing sanctions
under paragraph (1) or in terminating a hospital's
participation under this title, the Secretary shall
request the appropriate utilization and quality control
peer review organization (with a contract under part B
of title XI) to assess whether the individual involved
had an emergency medical condition which had not been
stabilized, and provide a report on its findings.
Except in the case in which a delay would jeopardize
the health or safety of individuals, the Secretary
shall request such a review before effecting a sanction
under paragraph (1) and shall provide a period of at
least 60 days for such review. Except in the case in
which a delay would jeopardize the health or safety of
individuals, the Secretary shall also request such a
review before making a compliance determination as part
of the process of terminating a hospital's
participation under this title for violations related
to the appropriateness of a medical screening
examination, stabilizing treatment, or an appropriate
transfer as required by this section, and shall provide
a period of 5 days for such review. The Secretary shall
provide a copy of the organization's report to the
hospital or physician consistent with confidentiality
requirements imposed on the organization under such
part B.
(4) Notice upon closing an investigation.--The
Secretary shall establish a procedure to notify
hospitals and physicians when an investigation under
this section is closed.
* * * * * * *
[PRACTICING PHYSICIANS ADVISORY COUNCIL]
PRACTICING PHYSICIANS ADVISORY COUNCIL; MEDICARE PROVIDER OMBUDSMAN
Sec. 1868. (a) Practicing Physicians Advisory Council.--(1)
The Secretary shall appoint, based upon nominations submitted
by medical organizations representing physicians, a Practicing
Physicians Advisory Council (in this [section] subsection
referred to as the ``Council'') to be composed of 15
physicians, each of whom has submitted at least 250 claims for
physicians' services under this title in the previous year. At
least 11 of the members of the Council shall be physicians
described in section 1861(r)(1) and the members of the Council
shall include both participating and nonparticipating
physicians and physicians practicing in rural areas and
underserved urban areas.
[(b)] (2) The Council shall meet once during each calendar
quarter to discuss certain proposed changes in regulations and
carrier manual instructions related to physician services
identified by the Secretary. To the extent feasible and
consistent with statutory deadlines, such consultation shall
occur before the publication of such proposed changes.
[(c)] (3) Members of the Council shall be entitled to receive
reimbursement of expenses and per diem in lieu of subsistence
in the same manner as other members of advisory councils
appointed by the Secretary are provided such reimbursement and
per diem under this title.
(b) Medicare Provider Ombudsman.--The Secretary shall appoint
within the Department of Health and Human Services a Medicare
Provider Ombudsman. The Ombudsman shall--
(1) provide assistance, on a confidential basis, to
providers of services and suppliers with respect to
complaints, grievances, and requests for information
concerning the programs under this title (including
provisions of title XI insofar as they relate to this
title and are not administered by the Office of the
Inspector General of the Department of Health and Human
Services) and in the resolution of unclear or
conflicting guidance given by the Secretary and
medicare contractors to such providers of services and
suppliers regarding such programs and provisions and
requirements under this title and such provisions; and
(2) submit recommendations to the Secretary for
improvement in the administration of this title and
such provisions, including--
(A) recommendations to respond to recurring
patterns of confusion in this title and such
provisions (including recommendations regarding
suspending imposition of sanctions where there
is widespread confusion in program
administration), and
(B) recommendations to provide for an
appropriate and consistent response (including
not providing for audits) in cases of self-
identified overpayments by providers of
services and suppliers.
The Ombudsman shall not serve as an advocate for any increases
in payments or new coverage of services, but may identify
issues and problems in payment or coverage policies.
(c) Council for Technology and Innovation.--
(1) Establishment.--The Secretary shall establish a
Council for Technology and Innovation within the
Centers for Medicare & Medicaid Services (in this
section referred to as ``CMS'').
(2) Composition.--The Council shall be composed of
senior CMS staff and clinicians and shall be chaired by
the Executive Coordinator for Technology and Innovation
(appointed or designated under paragraph (4)).
(3) Duties.--The Council shall coordinate the
activities of coverage, coding, and payment processes
under this title with respect to new technologies and
procedures, including new drug therapies, and shall
coordinate the exchange of information on new
technologies between CMS and other entities that make
similar decisions.
(4) Executive coordinator for technology and
innovation.--The Secretary shall appoint (or designate)
a noncareer appointee (as defined in section 3132(a)(7)
of title 5, United States Code) who shall serve as the
Executive Coordinator for Technology and Innovation.
Such executive coordinator shall report to the
Administrator of CMS, shall chair the Council, shall
oversee the execution of its duties, and shall serve as
a single point of contact for outside groups and
entities regarding the coverage, coding, and payment
processes under this title.
DETERMINATIONS; APPEALS
Sec. 1869. (a) Initial Determinations.--
(1) * * *
* * * * * * *
(4) Requirements of notice of determinations.--With
respect to an initial determination insofar as it
results in a denial of a claim for benefits--
(A) the written notice on the determination
shall include--
(i) the reasons for the
determination, including whether a
local medical review policy or a local
coverage determination was used;
(ii) the procedures for obtaining
additional information concerning the
determination, including the
information described in subparagraph
(B); and
(iii) notification of the right to
seek a redetermination or otherwise
appeal the determination and
instructions on how to initiate such a
redetermination under this section; and
(B) the person provided such notice may
obtain, upon request, the specific provision of
the policy, manual, or regulation used in
making the determination.
(5) Requirements of notice of redeterminations.--With
respect to a redetermination insofar as it results in a
denial of a claim for benefits--
(A) the written notice on the redetermination
shall include--
(i) the specific reasons for the
redetermination;
(ii) as appropriate, a summary of the
clinical or scientific evidence used in
making the redetermination;
(iii) a description of the procedures
for obtaining additional information
concerning the redetermination; and
(iv) notification of the right to
appeal the redetermination and
instructions on how to initiate such an
appeal under this section;
(B) such written notice shall be provided in
printed form and written in a manner calculated
to be understood by the individual entitled to
benefits under part A or enrolled under part B,
or both; and
(C) the person provided such notice may
obtain, upon request, information on the
specific provision of the policy, manual, or
regulation used in making the redetermination.
(b) Appeal Rights.--
(1) In general.--
(A) Reconsideration of initial
determination.--Subject to subparagraph (D),
any individual dissatisfied with any initial
determination under subsection (a)(1) shall be
entitled to reconsideration of the
determination, and, subject to subparagraphs
(D) and (E), a hearing thereon by the Secretary
to the same extent as is provided in section
205(b) and, subject to paragraph (2), to
judicial review of the Secretary's final
decision after such hearing as is provided in
section 205(g). For purposes of the preceding
sentence, any reference to the ``Commissioner
of Social Security'' or the ``Social Security
Administration'' in subsection (g) or (l) of
section 205 shall be considered a reference to
the ``Secretary'' or the ``Department of Health
and Human Services'', respectively.
* * * * * * *
(F) Expedited [proceedings.--
[(i) Expedited determination]
determinations and reconsiderations.--
In the case of an individual who has
received notice from a provider of
services that such provider plans--
[(I)] (i) to terminate services
provided to an individual and a
physician certifies that failure to
continue the provision of such services
is likely to place the individual's
health at significant risk, or
[(II)] (ii) to discharge the
individual from the provider of
services,
the individual may request, in writing
or orally, an expedited determination
or an expedited reconsideration of an
initial determination made under
subsection (a)(1), as the case may be,
and the Secretary shall provide such
expedited determination or expedited
reconsideration.
[(ii) Expedited hearing.--In a
hearing by the Secretary under this
section, in which the moving party
alleges that no material issues of fact
are in dispute, the Secretary shall
make an expedited determination as to
whether any such facts are in dispute
and, if not, shall render a decision
expeditiously.]
* * * * * * *
(2) Expedited access to judicial review.--
(A) In general.--The Secretary shall
establish a process under which a provider of
services or supplier that furnishes an item or
service or an individual entitled to benefits
under part A or enrolled under part B, or both,
who has filed an appeal under paragraph (1) may
obtain access to judicial review when a review
panel (described in subparagraph (D)), on its
own motion or at the request of the appellant,
determines that no entity in the administrative
appeals process has the authority to decide the
question of law or regulation relevant to the
matters in controversy and that there is no
material issue of fact in dispute. The
appellant may make such request only once with
respect to a question of law or regulation in a
case of an appeal.
(B) Prompt determinations.--If, after or
coincident with appropriately filing a request
for an administrative hearing, the appellant
requests a determination by the appropriate
review panel that no review panel has the
authority to decide the question of law or
regulations relevant to the matters in
controversy and that there is no material issue
of fact in dispute and if such request is
accompanied by the documents and materials as
the appropriate review panel shall require for
purposes of making such determination, such
review panel shall make a determination on the
request in writing within 60 days after the
date such review panel receives the request and
such accompanying documents and materials. Such
a determination by such review panel shall be
considered a final decision and not subject to
review by the Secretary.
(C) Access to judicial review.--
(i) In general.--If the appropriate
review panel--
(I) determines that there are
no material issues of fact in
dispute and that the only issue
is one of law or regulation
that no review panel has the
authority to decide; or
(II) fails to make such
determination within the period
provided under subparagraph
(B);
then the appellant may bring a civil
action as described in this
subparagraph.
(ii) Deadline for filing.--Such
action shall be filed, in the case
described in--
(I) clause (i)(I), within 60
days of date of the
determination described in such
subparagraph; or
(II) clause (i)(II), within
60 days of the end of the
period provided under
subparagraph (B) for the
determination.
(iii) Venue.--Such action shall be
brought in the district court of the
United States for the judicial district
in which the appellant is located (or,
in the case of an action brought
jointly by more than one applicant, the
judicial district in which the greatest
number of applicants are located) or in
the district court for the District of
Columbia.
(iv) Interest on amounts in
controversy.--Where a provider of
services or supplier seeks judicial
review pursuant to this paragraph, the
amount in controversy shall be subject
to annual interest beginning on the
first day of the first month beginning
after the 60-day period as determined
pursuant to clause (ii) and equal to
the rate of interest on obligations
issued for purchase by the Federal
Hospital Insurance Trust Fund and by
the Federal Supplementary Medical
Insurance Trust Fund for the month in
which the civil action authorized under
this paragraph is commenced, to be
awarded by the reviewing court in favor
of the prevailing party. No interest
awarded pursuant to the preceding
sentence shall be deemed income or cost
for the purposes of determining
reimbursement due providers of services
or suppliers under this Act.
(D) Review panels.--For purposes of this
subsection, a ``review panel'' is a panel
consisting of 3 members (who shall be
administrative law judges, members of the
Departmental Appeals Board, or qualified
individuals associated with a qualified
independent contractor (as defined in
subsection (c)(2)) or with another independent
entity) designated by the Secretary for
purposes of making determinations under this
paragraph.
(3) Requiring full and early presentation of evidence
by providers.--A provider of services or supplier may
not introduce evidence in any appeal under this section
that was not presented at the reconsideration conducted
by the qualified independent contractor under
subsection (c), unless there is good cause which
precluded the introduction of such evidence at or
before that reconsideration.
* * * * * * *
(c) Conduct of Reconsiderations by Independent Contractors.--
(1) * * *
* * * * * * *
(3) Requirements.--Any qualified independent
contractor entering into a contract with the Secretary
under this subsection shall meet all of the following
requirements:
(A) In general.--The qualified independent
contractor shall perform such duties and
functions and assume such responsibilities as
may be required by the Secretary to carry out
the provisions of this subsection, and shall
have [sufficient training and expertise in
medical science and legal matters] sufficient
medical, legal, and other expertise (including
knowledge of the program under this title) and
sufficient staffing to make reconsiderations
under this subsection.
(B) Reconsiderations.--
(i) In general.--The qualified
independent contractor shall review
initial determinations. Where an
initial determination is made with
respect to whether an item or service
is reasonable and necessary for the
diagnosis or treatment of illness or
injury (under section 1862(a)(1)(A)),
such review shall include consideration
of the facts and circumstances of the
initial determination by a panel of
physicians or other appropriate health
care professionals and any decisions
with respect to the reconsideration
shall be based on applicable
information, including clinical
experience (including the medical
records of the individual involved) and
medical, technical, and scientific
evidence.
* * * * * * *
[(D) Limitation on individual reviewing
determinations.--
[(i) Physicians and health care
professional.--No physician or health
care professional under the employ of a
qualified independent contractor may
review--
[(I) determinations regarding
health care services furnished
to a patient if the physician
or health care professional was
directly responsible for
furnishing such services; or
[(II) determinations
regarding health care services
provided in or by an
institution, organization, or
agency, if the physician or any
member of the family of the
physician or health care
professional has, directly or
indirectly, a significant
financial interest in such
institution, organization, or
agency.
[(ii) Family described.--For purposes
of this paragraph, the family of a
physician or health care professional
includes the spouse (other than a
spouse who is legally separated from
the physician or health care
professional under a decree of divorce
or separate maintenance), children
(including stepchildren and legally
adopted children), grandchildren,
parents, and grandparents of the
physician or health care professional.]
(D) Qualifications for reviewers.--The
requirements of subsection (g) shall be met
(relating to qualifications of reviewing
professionals).
(E) Explanation of decision.--Any decision
with respect to a reconsideration of a
qualified independent contractor shall be in
writing, be written in a manner calculated to
be understood by the individual entitled to
benefits under part A or enrolled under part B,
or both, and shall include (to the extent
appropriate) and shall include a detailed
explanation of the decision as well as a
discussion of the pertinent facts and
applicable regulations applied in making such
decision, and a notification of the right to
appeal such determination and instructions on
how to initiate such appeal under this section
and in the case of a determination of whether
an item or service is reasonable and necessary
for the diagnosis or treatment of illness or
injury (under section 1862(a)(1)(A)) an
explanation of the medical and scientific
rationale for the decision.
* * * * * * *
(I) Data collection.--
(i) * * *
(ii) Type of data collected.--Each
qualified independent contractor shall
keep accurate records of each decision
made, consistent with standards
established by the Secretary for such
purpose. Such records shall be
maintained in an electronic database in
a manner that provides for
identification of the following:
(I) * * *
* * * * * * *
(III) Situations suggesting
the need for changes in
national or local coverage
[policy] determination.
(IV) Situations suggesting
the need for changes in local
[medical review policies]
coverage determinations.
* * * * * * *
(J) Hearings by the secretary.--The qualified
independent contractor shall (i) [prepare]
submit such information as is required for an
appeal of a decision of the contractor [with
respect to a reconsideration to the Secretary
for a hearing, including as necessary,
explanations of issues involved in the decision
and relevant policies], and (ii) participate in
such hearings as required by the Secretary.
(K) Independence requirements.--
(i) In general.--Subject to clause
(ii), a qualified independent
contractor shall not conduct any
activities in a case unless the
entity--
(I) is not a related party
(as defined in subsection
(g)(5));
(II) does not have a material
familial, financial, or
professional relationship with
such a party in relation to
such case; and
(III) does not otherwise have
a conflict of interest with
such a party.
(ii) Exception for reasonable
compensation.--Nothing in clause (i)
shall be construed to prohibit receipt
by a qualified independent contractor
of compensation from the Secretary for
the conduct of activities under this
section if the compensation is provided
consistent with clause (iii).
(iii) Limitations on entity
compensation.--Compensation provided by
the Secretary to a qualified
independent contractor in connection
with reviews under this section shall
not be contingent on any decision
rendered by the contractor or by any
reviewing professional.
(4) Number of qualified independent contractors.--The
Secretary shall enter into contracts with [not fewer
than 12 qualified independent contractors under this
subsection] a sufficient number of qualified
independent contractors (but not fewer than 4 such
contractors) to conduct reconsiderations consistent
with the timeframes applicable under this subsection.
* * * * * * *
(d) Deadlines for Hearings by the Secretary; Notice.--
(1) * * *
* * * * * * *
(4) Notice.--Notice of the decision of an
administrative law judge shall be in writing in a
manner calculated to be understood by the individual
entitled to benefits under part A or enrolled under
part B, or both, and shall include--
(A) the specific reasons for the
determination (including, to the extent
appropriate, a summary of the clinical or
scientific evidence used in making the
determination);
(B) the procedures for obtaining additional
information concerning the decision; and
(C) notification of the right to appeal the
decision and instructions on how to initiate
such an appeal under this section.
* * * * * * *
(f ) Review of Coverage Determinations.--
(1) * * *
(2) Local coverage determination.--
(A) In general.--Review of any local coverage
determination shall be subject to the following
limitations:
(i) Upon the filing of a complaint by
an aggrieved party, such a
determination shall be reviewed by an
administrative law judge [of the Social
Security Administration]. The
administrative law judge--
(I) * * *
* * * * * * *
(4) Pending national coverage determinations.--
(A) In general.--In the event the Secretary
has not issued a national coverage or
noncoverage determination with respect to a
particular type or class of items or services,
an aggrieved person (as described in paragraph
(5)) may submit to the Secretary a request to
make such a determination with respect to such
items or services. By not later than the end of
the 90-day period beginning on the date the
Secretary receives such a request
(notwithstanding the receipt by the Secretary
of new evidence (if any) during such 90-day
period), the Secretary shall take one of the
following actions:
(i) * * *
* * * * * * *
(iv) Issue a notice that states that
the Secretary has not completed a
review of the request for a national
coverage determination and that
includes an identification of the
remaining steps in the Secretary's
review process and a deadline by which
the Secretary will complete the review
and take an action described in
[subclause (I), (II), or (III)] clause
(i), (ii), or (iii).
(B) Deemed action by the secretary.--In the
case of an action described in [clause (i)(IV)]
subparagraph (A)(iv), if the Secretary fails to
take an action referred to in such clause by
the deadline specified by the Secretary under
such clause, then the Secretary is deemed to
have taken an action described in [clause
(i)(III)] subparagraph (A)(iii) as of the
deadline.
(C) Explanation of determination.--When
issuing a determination under [clause (i)]
subparagraph (A), the Secretary shall include
an explanation of the basis for the
determination. An action taken under clause (i)
(other than [subclause (IV)] clause (iv)) is
deemed to be a national coverage determination
for purposes of review under [subparagraph (A)]
paragraph (1)(A).
* * * * * * *
(g) Qualifications of Reviewers.--
(1) In general.--In reviewing determinations under
this section, a qualified independent contractor shall
assure that--
(A) each individual conducting a review shall
meet the qualifications of paragraph (2);
(B) compensation provided by the contractor
to each such reviewer is consistent with
paragraph (3); and
(C) in the case of a review by a panel
described in subsection (c)(3)(B) composed of
physicians or other health care professionals
(each in this subsection referred to as a
``reviewing professional''), a reviewing
professional meets the qualifications described
in paragraph (4) and, where a claim is
regarding the furnishing of treatment by a
physician (allopathic or osteopathic) or the
provision of items or services by a physician
(allopathic or osteopathic), a reviewing
professional shall be a physician (allopathic
or osteopathic).
(2) Independence.--
(A) In general.--Subject to subparagraph (B),
each individual conducting a review in a case
shall--
(i) not be a related party (as
defined in paragraph (5));
(ii) not have a material familial,
financial, or professional relationship
with such a party in the case under
review; and
(iii) not otherwise have a conflict
of interest with such a party.
(B) Exception.--Nothing in subparagraph (A)
shall be construed to--
(i) prohibit an individual, solely on
the basis of a participation agreement
with a fiscal intermediary, carrier, or
other contractor, from serving as a
reviewing professional if--
(I) the individual is not
involved in the provision of
items or services in the case
under review;
(II) the fact of such an
agreement is disclosed to the
Secretary and the individual
entitled to benefits under part
A or enrolled under part B, or
both, (or authorized
representative) and neither
party objects; and
(III) the individual is not
an employee of the
intermediary, carrier, or
contractor and does not provide
services exclusively or
primarily to or on behalf of
such intermediary, carrier, or
contractor;
(ii) prohibit an individual who has
staff privileges at the institution
where the treatment involved takes
place from serving as a reviewer merely
on the basis of having such staff
privileges if the existence of such
privileges is disclosed to the
Secretary and such individual (or
authorized representative), and neither
party objects; or
(iii) prohibit receipt of
compensation by a reviewing
professional from a contractor if the
compensation is provided consistent
with paragraph (3).
For purposes of this paragraph, the term
``participation agreement'' means an agreement
relating to the provision of health care
services by the individual and does not include
the provision of services as a reviewer under
this subsection.
(3) Limitations on reviewer compensation.--
Compensation provided by a qualified independent
contractor to a reviewer in connection with a review
under this section shall not be contingent on the
decision rendered by the reviewer.
(4) Licensure and expertise.--Each reviewing
professional shall be--
(A) a physician (allopathic or osteopathic)
who is appropriately credentialed or licensed
in one or more States to deliver health care
services and has medical expertise in the field
of practice that is appropriate for the items
or services at issue; or
(B) a health care professional who is legally
authorized in one or more States (in accordance
with State law or the State regulatory
mechanism provided by State law) to furnish the
health care items or services at issue and has
medical expertise in the field of practice that
is appropriate for such items or services.
(5) Related party defined.--For purposes of this
section, the term ``related party'' means, with respect
to a case under this title involving a specific
individual entitled to benefits under part A or
enrolled under part B, or both, any of the following:
(A) The Secretary, the medicare
administrative contractor involved, or any
fiduciary, officer, director, or employee of
the Department of Health and Human Services, or
of such contractor.
(B) The individual (or authorized
representative).
(C) The health care professional that
provides the items or services involved in the
case.
(D) The institution at which the items or
services (or treatment) involved in the case
are provided.
(E) The manufacturer of any drug or other
item that is included in the items or services
involved in the case.
(F) Any other party determined under any
regulations to have a substantial interest in
the case involved.
(h) Prior Determination Process for Certain Items and
Services.--
(1) Establishment of process.--
(A) In general.--With respect to a medicare
administrative contractor that has a contract
under section 1874A that provides for making
payments under this title with respect to
eligible items and services described in
subparagraph (C), the Secretary shall establish
a prior determination process that meets the
requirements of this subsection and that shall
be applied by such contractor in the case of
eligible requesters.
(B) Eligible requester.--For purposes of this
subsection, each of the following shall be an
eligible requester:
(i) A physician, but only with
respect to eligible items and services
for which the physician may be paid
directly.
(ii) An individual entitled to
benefits under this title, but only
with respect to an item or service for
which the individual receives, from the
physician who may be paid directly for
the item or service, an advance
beneficiary notice under section
1879(a) that payment may not be made
(or may no longer be made) for the item
or service under this title.
(C) Eligible items and services.--For
purposes of this subsection and subject to
paragraph (2), eligible items and services are
items and services which are physicians'
services (as defined in paragraph (4)(A) of
section 1848(f) for purposes of calculating the
sustainable growth rate under such section).
(2) Secretarial flexibility.--The Secretary shall
establish by regulation reasonable limits on the
categories of eligible items and services for which a
prior determination of coverage may be requested under
this subsection. In establishing such limits, the
Secretary may consider the dollar amount involved with
respect to the item or service, administrative costs
and burdens, and other relevant factors.
(3) Request for prior determination.--
(A) In general.--Subject to paragraph (2),
under the process established under this
subsection an eligible requester may submit to
the contractor a request for a determination,
before the furnishing of an eligible item or
service involved as to whether the item or
service is covered under this title consistent
with the applicable requirements of section
1862(a)(1)(A) (relating to medical necessity).
(B) Accompanying documentation.--The
Secretary may require that the request be
accompanied by a description of the item or
service, supporting documentation relating to
the medical necessity for the item or service,
and any other appropriate documentation. In the
case of a request submitted by an eligible
requester who is described in paragraph
(1)(B)(ii), the Secretary may require that the
request also be accompanied by a copy of the
advance beneficiary notice involved.
(4) Response to request.--
(A) In general.--Under such process, the
contractor shall provide the eligible requester
with written notice of a determination as to
whether--
(i) the item or service is so
covered;
(ii) the item or service is not so
covered; or
(iii) the contractor lacks sufficient
information to make a coverage
determination.
If the contractor makes the determination
described in clause (iii), the contractor shall
include in the notice a description of the
additional information required to make the
coverage determination.
(B) Deadline to respond.--Such notice shall
be provided within the same time period as the
time period applicable to the contractor
providing notice of initial determinations on a
claim for benefits under subsection (a)(2)(A).
(C) Informing beneficiary in case of
physician request.--In the case of a request in
which an eligible requester is not the
individual described in paragraph (1)(B)(ii),
the process shall provide that the individual
to whom the item or service is proposed to be
furnished shall be informed of any
determination described in clause (ii)
(relating to a determination of non-coverage)
and the right (referred to in paragraph (6)(B))
to obtain the item or service and have a claim
submitted for the item or service.
(5) Effect of determinations.--
(A) Binding nature of positive
determination.--If the contractor makes the
determination described in paragraph (4)(A)(i),
such determination shall be binding on the
contractor in the absence of fraud or evidence
of misrepresentation of facts presented to the
contractor.
(B) Notice and right to redetermination in
case of a denial.--
(i) In general.--If the contractor
makes the determination described in
paragraph (4)(A)(ii)--
(I) the eligible requester
has the right to a
redetermination by the
contractor on the determination
that the item or service is not
so covered; and
(II) the contractor shall
include in notice under
paragraph (4)(A) a brief
explanation of the basis for
the determination, including on
what national or local coverage
or noncoverage determination
(if any) the determination is
based, and the right to such a
redetermination.
(ii) Deadline for redeterminations.--
The contractor shall complete and
provide notice of such redetermination
within the same time period as the time
period applicable to the contractor
providing notice of redeterminations
relating to a claim for benefits under
subsection (a)(3)(C)(ii).
(6) Limitation on further review.--
(A) In general.--Contractor determinations
described in paragraph (4)(A)(ii) or
(4)(A)(iii) (and redeterminations made under
paragraph (5)(B)), relating to pre-service
claims are not subject to further
administrative appeal or judicial review under
this section or otherwise.
(B) Decision not to seek prior determination
or negative determination does not impact right
to obtain services, seek reimbursement, or
appeal rights.--Nothing in this subsection
shall be construed as affecting the right of an
individual who--
(i) decides not to seek a prior
determination under this subsection
with respect to items or services; or
(ii) seeks such a determination and
has received a determination described
in paragraph (4)(A)(ii),
from receiving (and submitting a claim for)
such items services and from obtaining
administrative or judicial review respecting
such claim under the other applicable
provisions of this section. Failure to seek a
prior determination under this subsection with
respect to items and services shall not be
taken into account in such administrative or
judicial review.
(C) No prior determination after receipt of
services.--Once an individual is provided items
and services, there shall be no prior
determination under this subsection with
respect to such items or services.
* * * * * * *
REGULATIONS
Sec. 1871. (a)(1) * * *
* * * * * * *
(3) If the Secretary publishes a final regulation that
includes a provision that is not a logical outgrowth of a
previously published notice of proposed rulemaking or interim
final rule, such 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.
* * * * * * *
(d)(1)(A) A substantive change in regulations, manual
instructions, interpretative rules, statements of policy, or
guidelines of general applicability under this title shall not
be applied (by extrapolation or otherwise) retroactively to
items and services furnished before the effective date of the
change, unless the Secretary determines that--
(i) such retroactive application is necessary to
comply with statutory requirements; or
(ii) failure to apply the change retroactively would
be contrary to the public interest.
(B)(i) Except as provided in clause (ii), a substantive
change referred to in subparagraph (A) shall not become
effective before the end of the 30-day period that begins on
the date that the Secretary has issued or published, as the
case may be, the substantive change.
(ii) The Secretary may provide for such a substantive change
to take effect on a date that precedes the end of the 30-day
period under clause (i) if the Secretary finds that waiver of
such 30-day period is necessary to comply with statutory
requirements or that the application of such 30-day period is
contrary to the public interest. If the Secretary provides for
an earlier effective date pursuant to this clause, the
Secretary shall include in the issuance or publication of the
substantive change a finding described in the first sentence,
and a brief statement of the reasons for such finding.
(C) No action shall be taken against a provider of services
or supplier with respect to noncompliance with such a
substantive change for items and services furnished before the
effective date of such a change.
(2)(A) If--
(i) a provider of services or supplier follows the
written guidance (which may be transmitted
electronically) provided by the Secretary or by a
medicare contractor (as defined in section 1889(g))
acting within the scope of the contractor's contract
authority, with respect to the furnishing of items or
services and submission of a claim for benefits for
such items or services with respect to such provider or
supplier;
(ii) the Secretary determines that the provider of
services or supplier has accurately presented the
circumstances relating to such items, services, and
claim to the contractor in writing; and
(iii) the guidance was in error;
the provider of services or supplier shall not be subject to
any sanction (including any penalty or requirement for
repayment of any amount) if the provider of services or
supplier reasonably relied on such guidance.
(B) Subparagraph (A) shall not be construed as preventing the
recoupment or repayment (without any additional penalty)
relating to an overpayment insofar as the overpayment was
solely the result of a clerical or technical operational error.
(e)(1) Not later than 2 years after the date of the enactment
of this subsection, and every 2 years thereafter, the Secretary
shall submit to Congress a report with respect to the
administration of this title and areas of inconsistency or
conflict among the various provisions under law and regulation.
(2) In preparing a report under paragraph (1), the Secretary
shall collect--
(A) information from individuals entitled to benefits
under part A or enrolled under part B, or both,
providers of services, and suppliers and from the
Medicare Beneficiary Ombudsman and the Medicare
Provider Ombudsman with respect to such areas of
inconsistency and conflict; and
(B) information from medicare contractors that tracks
the nature of written and telephone inquiries.
(3) A report under paragraph (1) shall include a description
of efforts by the Secretary to reduce such inconsistency or
conflicts, and recommendations for legislation or
administrative action that the Secretary determines appropriate
to further reduce such inconsistency or conflicts.
* * * * * * *
CONTRACTS WITH MEDICARE ADMINISTRATIVE CONTRACTORS
Sec. 1874A. (a) Authority.--
(1) Authority to enter into contracts.--The Secretary
may enter into contracts with any eligible entity to
serve as a medicare administrative contractor with
respect to the performance of any or all of the
functions described in paragraph (4) or parts of those
functions (or, to the extent provided in a contract, to
secure performance thereof by other entities).
(2) Eligibility of entities.--An entity is eligible
to enter into a contract with respect to the
performance of a particular function described in
paragraph (4) only if--
(A) the entity has demonstrated capability to
carry out such function;
(B) the entity complies with such conflict of
interest standards as are generally applicable
to Federal acquisition and procurement;
(C) the entity has sufficient assets to
financially support the performance of such
function; and
(D) the entity meets such other requirements
as the Secretary may impose.
(3) Medicare administrative contractor defined.--For
purposes of this title and title XI--
(A) In general.--The term ``medicare
administrative contractor'' means an agency,
organization, or other person with a contract
under this section.
(B) Appropriate medicare administrative
contractor.--With respect to the performance of
a particular function in relation to an
individual entitled to benefits under part A or
enrolled under part B, or both, a specific
provider of services or supplier (or class of
such providers of services or suppliers), the
``appropriate'' medicare administrative
contractor is the medicare administrative
contractor that has a contract under this
section with respect to the performance of that
function in relation to that individual,
provider of services or supplier or class of
provider of services or supplier.
(4) Functions described.--The functions referred to
in paragraphs (1) and (2) are payment functions,
provider services functions, and functions relating to
services furnished to individuals entitled to benefits
under part A or enrolled under part B, or both, as
follows:
(A) Determination of payment amounts.--
Determining (subject to the provisions of
section 1878 and to such review by the
Secretary as may be provided for by the
contracts) the amount of the payments required
pursuant to this title to be made to providers
of services, suppliers and individuals.
(B) Making payments.--Making payments
described in subparagraph (A) (including
receipt, disbursement, and accounting for funds
in making such payments).
(C) Beneficiary education and assistance.--
Providing education and outreach to individuals
entitled to benefits under part A or enrolled
under part B, or both, and providing assistance
to those individuals with specific issues,
concerns or problems.
(D) Provider consultative services.--
Providing consultative services to
institutions, agencies, and other persons to
enable them to establish and maintain fiscal
records necessary for purposes of this title
and otherwise to qualify as providers of
services or suppliers.
(E) Communication with providers.--
Communicating to providers of services and
suppliers any information or instructions
furnished to the medicare administrative
contractor by the Secretary, and facilitating
communication between such providers and
suppliers and the Secretary.
(F) Provider education and technical
assistance.--Performing the functions relating
to provider education, training, and technical
assistance.
(G) Additional functions.--Performing such
other functions as are necessary to carry out
the purposes of this title.
(5) Relationship to mip contracts.--
(A) Nonduplication of duties.--In entering
into contracts under this section, the
Secretary shall assure that functions of
medicare administrative contractors in carrying
out activities under parts A and B do not
duplicate activities carried out under the
Medicare Integrity Program under section 1893.
The previous sentence shall not apply with
respect to the activity described in section
1893(b)(5) (relating to prior authorization of
certain items of durable medical equipment
under section 1834(a)(15)).
(B) Construction.--An entity shall not be
treated as a medicare administrative contractor
merely by reason of having entered into a
contract with the Secretary under section 1893.
(6) Application of federal acquisition regulation.--
Except to the extent inconsistent with a specific
requirement of this title, the Federal Acquisition
Regulation applies to contracts under this title.
(b) Contracting Requirements.--
(1) Use of competitive procedures.--
(A) In general.--Except as provided in laws
with general applicability to Federal
acquisition and procurement or in subparagraph
(B), the Secretary shall use competitive
procedures when entering into contracts with
medicare administrative contractors under this
section, taking into account performance
quality as well as price and other factors.
(B) Renewal of contracts.--The Secretary may
renew a contract with a medicare administrative
contractor under this section from term to term
without regard to section 5 of title 41, United
States Code, or any other provision of law
requiring competition, if the medicare
administrative contractor has met or exceeded
the performance requirements applicable with
respect to the contract and contractor, except
that the Secretary shall provide for the
application of competitive procedures under
such a contract not less frequently than once
every five years.
(C) Transfer of functions.--The Secretary may
transfer functions among medicare
administrative contractors consistent with the
provisions of this paragraph. The Secretary
shall ensure that performance quality is
considered in such transfers. The Secretary
shall provide public notice (whether in the
Federal Register or otherwise) of any such
transfer (including a description of the
functions so transferred, a description of the
providers of services and suppliers affected by
such transfer, and contact information for the
contractors involved).
(D) Incentives for quality.--The Secretary
shall provide incentives for medicare
administrative contractors to provide quality
service and to promote efficiency.
(2) Compliance with requirements.--No contract under
this section shall be entered into with any medicare
administrative contractor unless the Secretary finds
that such medicare administrative contractor will
perform its obligations under the contract efficiently
and effectively and will meet such requirements as to
financial responsibility, legal authority, quality of
services provided, and other matters as the Secretary
finds pertinent.
(3) Performance requirements.--
(A) Development of specific performance
requirements.--In developing contract
performance requirements, the Secretary shall
develop performance requirements applicable to
functions described in subsection (a)(4).
(B) Consultation.-- In developing such
requirements, the Secretary may consult with
providers of services and suppliers,
organizations representing individuals entitled
to benefits under part A or enrolled under part
B, or both, and organizations and agencies
performing functions necessary to carry out the
purposes of this section with respect to such
performance requirements.
(C) Inclusion in contracts.--All contractor
performance requirements shall be set forth in
the contract between the Secretary and the
appropriate medicare administrative contractor.
Such performance requirements--
(i) shall reflect the performance
requirements developed under
subparagraph (A), but may include
additional performance requirements;
(ii) shall be used for evaluating
contractor performance under the
contract; and
(iii) shall be consistent with the
written statement of work provided
under the contract.
(4) Information requirements.--The Secretary shall
not enter into a contract with a medicare
administrative contractor under this section unless the
contractor agrees--
(A) to furnish to the Secretary such timely
information and reports as the Secretary may
find necessary in performing his functions
under this title; and
(B) to maintain such records and afford such
access thereto as the Secretary finds necessary
to assure the correctness and verification of
the information and reports under subparagraph
(A) and otherwise to carry out the purposes of
this title.
(5) Surety bond.--A contract with a medicare
administrative contractor under this section may
require the medicare administrative contractor, and any
of its officers or employees certifying payments or
disbursing funds pursuant to the contract, or otherwise
participating in carrying out the contract, to give
surety bond to the United States in such amount as the
Secretary may deem appropriate.
(c) Terms and Conditions.--
(1) In general.--A contract with any medicare
administrative contractor under this section may
contain such terms and conditions as the Secretary
finds necessary or appropriate and may provide for
advances of funds to the medicare administrative
contractor for the making of payments by it under
subsection (a)(4)(B).
(2) Prohibition on mandates for certain data
collection.--The Secretary may not require, as a
condition of entering into, or renewing, a contract
under this section, that the medicare administrative
contractor match data obtained other than in its
activities under this title with data used in the
administration of this title for purposes of
identifying situations in which the provisions of
section 1862(b) may apply.
(d) Limitation on Liability of Medicare Administrative
Contractors and Certain Officers.--
(1) Certifying officer.--No individual designated
pursuant to a contract under this section as a
certifying officer shall, in the absence of the
reckless disregard of the individual's obligations or
the intent by that individual to defraud the United
States, be liable with respect to any payments
certified by the individual under this section.
(2) Disbursing officer.--No disbursing officer shall,
in the absence of the reckless disregard of the
officer's obligations or the intent by that officer to
defraud the United States, be liable with respect to
any payment by such officer under this section if it
was based upon an authorization (which meets the
applicable requirements for such internal controls
established by the Comptroller General) of a certifying
officer designated as provided in paragraph (1) of this
subsection.
(3) Liability of medicare administrative
contractor.--
(A) In general.--No medicare administrative
contractor shall be liable to the United States for a
payment by a certifying or disbursing officer unless,
in connection with such payment, the medicare
administrative contractor acted with reckless disregard
of its obligations under its medicare administrative
contract or with intent to defraud the United States.
(B) Relationship to false claims act.--Nothing in
this subsection shall be construed to limit liability
for conduct that would constitute a violation of
sections 3729 through 3731 of title 31, United States
Code (commonly known as the ``False Claims Act'').
(4) Indemnification by secretary.--
(A) In general.--Subject to subparagraphs (B)
and (D), in the case of a medicare
administrative contractor (or a person who is a
director, officer, or employee of such a
contractor or who is engaged by the contractor
to participate directly in the claims
administration process) who is made a party to
any judicial or administrative proceeding
arising from or relating directly to the claims
administration process under this title, the
Secretary may, to the extent the Secretary
determines to be appropriate and as specified
in the contract with the contractor, indemnify
the contractor and such persons.
(B) Conditions.--The Secretary may not
provide indemnification under subparagraph (A)
insofar as the liability for such costs arises
directly from conduct that is determined by the
judicial proceeding or by the Secretary to be
criminal in nature, fraudulent, or grossly
negligent. If indemnification is provided by
the Secretary with respect to a contractor
before a determination that such costs arose
directly from such conduct, the contractor
shall reimburse the Secretary for costs of
indemnification.
(C) Scope of indemnification.--
Indemnification by the Secretary under
subparagraph (A) may include payment of
judgments, settlements (subject to subparagraph
(D)), awards, and costs (including reasonable
legal expenses).
(D) Written approval for settlements.--A
contractor or other person described in
subparagraph (A) may not propose to negotiate a
settlement or compromise of a proceeding
described in such subparagraph without the
prior written approval of the Secretary to
negotiate such settlement or compromise. Any
indemnification under subparagraph (A) with
respect to amounts paid under a settlement or
compromise of a proceeding described in such
subparagraph are conditioned upon prior written
approval by the Secretary of the final
settlement or compromise.
(E) Construction.--Nothing in this paragraph
shall be construed--
(i) to change any common law immunity
that may be available to a medicare
administrative contractor or person
described in subparagraph (A); or
(ii) to permit the payment of costs
not otherwise allowable, reasonable, or
allocable under the Federal Acquisition
Regulations.
(e) Requirements for Information Security.--
(1) Development of information security program.--A
medicare administrative contractor that performs the
functions referred to in subparagraphs (A) and (B) of
subsection (a)(4) (relating to determining and making
payments) shall implement a contractor-wide information
security program to provide information security for
the operation and assets of the contractor with respect
to such functions under this title. An information
security program under this paragraph shall meet the
requirements for information security programs imposed
on Federal agencies under paragraphs (1) through (8) of
section 3544(b) of title 44, United States Code (other
than requirements under paragraphs (2)(D)(i), (5)(A),
and (5)(B) of such section).
(2) Independent audits.--
(A) Performance of annual evaluations.--Each
year a medicare administrative contractor that
performs the functions referred to in
subparagraphs (A) and (B) of subsection (a)(4)
(relating to determining and making payments)
shall undergo an evaluation of the information
security of the contractor with respect to such
functions under this title. The evaluation
shall--
(i) be performed by an entity that
meets such requirements for
independence as the Inspector General
of the Department of Health and Human
Services may establish; and
(ii) test the effectiveness of
information security policies,
procedures, and practices of a
representative subset of the
contractor's information systems (as
defined in section 3502(8) of title 44,
United States Code) relating to such
functions under this title and an
assessment of compliance with the
requirements of this subsection and
related information security policies,
procedures, standards and guidelines,
including policies and procedures as
may be prescribed by the Director of
the Office of Management and Budget and
applicable information security
standards promulgated under section
11331 of title 40, United States Code.
(B) Deadline for initial evaluation.--
(i) New contractors.--In the case of
a medicare administrative contractor
covered by this subsection that has not
previously performed the functions
referred to in subparagraphs (A) and
(B) of subsection (a)(4) (relating to
determining and making payments) as a
fiscal intermediary or carrier under
section 1816 or 1842, the first
independent evaluation conducted
pursuant subparagraph (A) shall be
completed prior to commencing such
functions.
(ii) Other contractors.--In the case
of a medicare administrative contractor
covered by this subsection that is not
described in clause (i), the first
independent evaluation conducted
pursuant subparagraph (A) shall be
completed within 1 year after the date
the contractor commences functions
referred to in clause (i) under this
section.
(C) Reports on evaluations.--
(i) To the department of health and
human services.--The results of
independent evaluations under
subparagraph (A) shall be submitted
promptly to the Inspector General of
the Department of Health and Human
Services and to the Secretary.
(ii) To congress.--The Inspector
General of Department of Health and
Human Services shall submit to Congress
annual reports on the results of such
evaluations, including assessments of
the scope and sufficiency of such
evaluations.
(iii) Agency reporting.--The
Secretary shall address the results of
such evaluations in reports required
under section 3544(c) of title 44,
United States Code.
(f) Incentives To Improve Contractor Performance in Provider
Education and Outreach.--The Secretary shall use specific
claims payment error rates or similar methodology of medicare
administrative contractors in the processing or reviewing of
medicare claims in order to give such contractors an incentive
to implement effective education and outreach programs for
providers of services and suppliers.
(g) Communications with Beneficiaries, Providers of Services
and Suppliers.--
(1) Communication strategy.--The Secretary shall
develop a strategy for communications with individuals
entitled to benefits under part A or enrolled under
part B, or both, and with providers of services and
suppliers under this title.
(2) Response to written inquiries.--Each medicare
administrative contractor shall, for those providers of
services and suppliers which submit claims to the
contractor for claims processing and for those
individuals entitled to benefits under part A or
enrolled under part B, or both, with respect to whom
claims are submitted for claims processing, provide
general written responses (which may be through
electronic transmission) in a clear, concise, and
accurate manner to inquiries of providers of services,
suppliers and individuals entitled to benefits under
part A or enrolled under part B, or both, concerning
the programs under this title within 45 business days
of the date of receipt of such inquiries.
(3) Response to toll-free lines.--The Secretary shall
ensure that each medicare administrative contractor
shall provide, for those providers of services and
suppliers which submit claims to the contractor for
claims processing and for those individuals entitled to
benefits under part A or enrolled under part B, or
both, with respect to whom claims are submitted for
claims processing, a toll-free telephone number at
which such individuals, providers of services and
suppliers may obtain information regarding billing,
coding, claims, coverage, and other appropriate
information under this title.
(4) Monitoring of contractor responses.--
(A) In general.--Each medicare administrative
contractor shall, consistent with standards
developed by the Secretary under subparagraph
(B)--
(i) maintain a system for identifying
who provides the information referred
to in paragraphs (2) and (3); and
(ii) monitor the accuracy,
consistency, and timeliness of the
information so provided.
(B) Development of standards.--
(i) In general.--The Secretary shall
establish and make public standards to
monitor the accuracy, consistency, and
timeliness of the information provided
in response to written and telephone
inquiries under this subsection. Such
standards shall be consistent with the
performance requirements established
under subsection (b)(3).
(ii) Evaluation.--In conducting
evaluations of individual medicare
administrative contractors, the
Secretary shall take into account the
results of the monitoring conducted
under subparagraph (A) taking into
account as performance requirements the
standards established under clause (i).
The Secretary shall, in consultation
with organizations representing
providers of services, suppliers, and
individuals entitled to benefits under
part A or enrolled under part B, or
both, establish standards relating to
the accuracy, consistency, and
timeliness of the information so
provided.
(C) Direct monitoring.--Nothing in this
paragraph shall be construed as preventing the
Secretary from directly monitoring the
accuracy, consistency, and timeliness of the
information so provided.
(h) Conduct of Prepayment Review.--
(1) Conduct of random prepayment review.--
(A) In general.--A medicare administrative
contractor may conduct random prepayment review
only to develop a contractor-wide or program-
wide claims payment error rates or under such
additional circumstances as may be provided
under regulations, developed in consultation
with providers of services and suppliers.
(B) Use of standard protocols when conducting
prepayment reviews.--When a medicare
administrative contractor conducts a random
prepayment review, the contractor may conduct
such review only in accordance with a standard
protocol for random prepayment audits developed
by the Secretary.
(C) Construction.--Nothing in this paragraph
shall be construed as preventing the denial of
payments for claims actually reviewed under a
random prepayment review.
(D) Random prepayment review.--For purposes
of this subsection, the term ``random
prepayment review'' means a demand for the
production of records or documentation absent
cause with respect to a claim.
(2) Limitations on non-random prepayment review.--
(A) Limitations on initiation of non-random
prepayment review.--A medicare administrative
contractor may not initiate non-random
prepayment review of a provider of services or
supplier based on the initial identification by
that provider of services or supplier of an
improper billing practice unless there is a
likelihood of sustained or high level of
payment error (as defined in subsection
(i)(3)(A)).
(B) Termination of non-random prepayment
review.--The Secretary shall issue regulations
relating to the termination, including
termination dates, of non-random prepayment
review. Such regulations may vary such a
termination date based upon the differences in
the circumstances triggering prepayment review.
* * * * * * *
PROVIDER EDUCATION AND TECHNICAL ASSISTANCE
Sec. 1889. (a) Coordination of Education Funding.--The
Secretary shall coordinate the educational activities provided
through medicare contractors (as defined in subsection (g),
including under section 1893) in order to maximize the
effectiveness of Federal education efforts for providers of
services and suppliers.
(b) Enhanced Education and Training.--
(1) Additional resources.--There are authorized to be
appropriated to the Secretary (in appropriate part from
the Federal Hospital Insurance Trust Fund and the
Federal Supplementary Medical Insurance Trust Fund)
$25,000,000 for each of fiscal years 2005 and 2006 and
such sums as may be necessary for succeeding fiscal
years.
(2) Use.--The funds made available under paragraph
(1) shall be used to increase the conduct by medicare
contractors of education and training of providers of
services and suppliers regarding billing, coding, and
other appropriate items and may also be used to improve
the accuracy, consistency, and timeliness of contractor
responses.
(c) Tailoring Education and Training Activities for Small
Providers or Suppliers.--
(1) In general.--Insofar as a medicare contractor
conducts education and training activities, it shall
tailor such activities to meet the special needs of
small providers of services or suppliers (as defined in
paragraph (2)).
(2) Small provider of services or supplier.--In this
subsection, the term ``small provider of services or
supplier'' means--
(A) a provider of services with fewer than 25
full-time-equivalent employees; or
(B) a supplier with fewer than 10 full-time-
equivalent employees.
(d) Internet Sites; FAQs.--The Secretary, and each medicare
contractor insofar as it provides services (including claims
processing) for providers of services or suppliers, shall
maintain an Internet site which--
(1) provides answers in an easily accessible format
to frequently asked questions, and
(2) includes other published materials of the
contractor,
that relate to providers of services and suppliers under the
programs under this title (and title XI insofar as it relates
to such programs).
(e) Encouragement of Participation in Education Program
Activities.--A medicare contractor may not use a record of
attendance at (or failure to attend) educational activities or
other information gathered during an educational program
conducted under this section or otherwise by the Secretary to
select or track providers of services or suppliers for the
purpose of conducting any type of audit or prepayment review.
(f) Construction.--Nothing in this section or section 1893(g)
shall be construed as providing for disclosure by a medicare
contractor of information that would compromise pending law
enforcement activities or reveal findings of law enforcement-
related audits.
(g) Definitions.--For purposes of this section, the term
``medicare contractor'' includes the following:
(1) A medicare administrative contractor with a
contract under section 1874A, including a fiscal
intermediary with a contract under section 1816 and a
carrier with a contract under section 1842.
(2) An eligible entity with a contract under section
1893.
Such term does not include, with respect to activities of a
specific provider of services or supplier an entity that has no
authority under this title or title IX with respect to such
activities and such provider of services or supplier.
* * * * * * *
MEDICARE INTEGRITY PROGRAM
Sec. 1893. (a) * * *
* * * * * * *
(f) Recovery of Overpayments.--
(1) Use of repayment plans.--
(A) In general.--If the repayment, within 30
days by a provider of services or supplier, of
an overpayment under this title would
constitute a hardship (as defined in
subparagraph (B)), subject to subparagraph (C),
upon request of the provider of services or
supplier the Secretary shall enter into a plan
with the provider of services or supplier for
the repayment (through offset or otherwise) of
such overpayment over a period of at least 6
months but not longer than 3 years (or not
longer than 5 years in the case of extreme
hardship, as determined by the Secretary).
Interest shall accrue on the balance through
the period of repayment. Such plan shall meet
terms and conditions determined to be
appropriate by the Secretary.
(B) Hardship.--
(i) In general.--For purposes of
subparagraph (A), the repayment of an
overpayment (or overpayments) within 30
days is deemed to constitute a hardship
if--
(I) in the case of a provider
of services that files cost
reports, the aggregate amount
of the overpayments exceeds 10
percent of the amount paid
under this title to the
provider of services for the
cost reporting period covered
by the most recently submitted
cost report; or
(II) in the case of another
provider of services or
supplier, the aggregate amount
of the overpayments exceeds 10
percent of the amount paid
under this title to the
provider of services or
supplier for the previous
calendar year.
(ii) Rule of application.--The
Secretary shall establish rules for the
application of this subparagraph in the
case of a provider of services or
supplier that was not paid under this
title during the previous year or was
paid under this title only during a
portion of that year.
(iii) Treatment of previous
overpayments.--If a provider of
services or supplier has entered into a
repayment plan under subparagraph (A)
with respect to a specific overpayment
amount, such payment amount under the
repayment plan shall not be taken into
account under clause (i) with respect
to subsequent overpayment amounts.
(C) Exceptions.--Subparagraph (A) shall not
apply if--
(i) the Secretary has reason to
suspect that the provider of services
or supplier may file for bankruptcy or
otherwise cease to do business or
discontinue participation in the
program under this title; or
(ii) there is an indication of fraud
or abuse committed against the program.
(D) Immediate collection if violation of
repayment plan.--If a provider of services or
supplier fails to make a payment in accordance
with a repayment plan under this paragraph, the
Secretary may immediately seek to offset or
otherwise recover the total balance outstanding
(including applicable interest) under the
repayment plan.
(E) Relation to no fault provision.--Nothing
in this paragraph shall be construed as
affecting the application of section 1870(c)
(relating to no adjustment in the cases of
certain overpayments).
(2) Limitation on recoupment.--
(A) In general.--In the case of a provider of
services or supplier that is determined to have
received an overpayment under this title and
that seeks a reconsideration by a qualified
independent contractor on such determination
under section 1869(b)(1), the Secretary may not
take any action (or authorize any other person,
including any medicare contractor, as defined
in subparagraph (C)) to recoup the overpayment
until the date the decision on the
reconsideration has been rendered. If the
provisions of section 1869(b)(1) (providing for
such a reconsideration by a qualified
independent contractor) are not in effect, in
applying the previous sentence any reference to
such a reconsideration shall be treated as a
reference to a redetermination by the fiscal
intermediary or carrier involved.
(B) Collection with interest.--Insofar as the
determination on such appeal is against the
provider of services or supplier, interest on
the overpayment shall accrue on and after the
date of the original notice of overpayment.
Insofar as such determination against the
provider of services or supplier is later
reversed, the Secretary shall provide for
repayment of the amount recouped plus interest
at the same rate as would apply under the
previous sentence for the period in which the
amount was recouped.
(C) Medicare contractor defined.--For
purposes of this subsection, the term
``medicare contractor'' has the meaning given
such term in section 1889(g).
(3) Limitation on use of extrapolation.--A medicare
contractor may not use extrapolation to determine
overpayment amounts to be recovered by recoupment,
offset, or otherwise unless--
(A) there is a sustained or high level of
payment error (as defined by the Secretary by
regulation); or
(B) documented educational intervention has
failed to correct the payment error (as
determined by the Secretary).
(4) Provision of supporting documentation.--In the
case of a provider of services or supplier with respect
to which amounts were previously overpaid, a medicare
contractor may request the periodic production of
records or supporting documentation for a limited
sample of submitted claims to ensure that the previous
practice is not continuing.
(5) Consent settlement reforms.--
(A) In general.--The Secretary may use a
consent settlement (as defined in subparagraph
(D)) to settle a projected overpayment.
(B) Opportunity to submit additional
information before consent settlement offer.--
Before offering a provider of services or
supplier a consent settlement, the Secretary
shall--
(i) communicate to the provider of
services or supplier--
(I) that, based on a review
of the medical records
requested by the Secretary, a
preliminary evaluation of those
records indicates that there
would be an overpayment;
(II) the nature of the
problems identified in such
evaluation; and
(III) the steps that the
provider of services or
supplier should take to address
the problems; and
(ii) provide for a 45-day period
during which the provider of services
or supplier may furnish additional
information concerning the medical
records for the claims that had been
reviewed.
(C) Consent settlement offer.--The Secretary
shall review any additional information
furnished by the provider of services or
supplier under subparagraph (B)(ii). Taking
into consideration such information, the
Secretary shall determine if there still
appears to be an overpayment. If so, the
Secretary--
(i) shall provide notice of such
determination to the provider of
services or supplier, including an
explanation of the reason for such
determination; and
(ii) in order to resolve the
overpayment, may offer the provider of
services or supplier--
(I) the opportunity for a
statistically valid random
sample; or
(II) a consent settlement.
The opportunity provided under clause (ii)(I)
does not waive any appeal rights with respect
to the alleged overpayment involved.
(D) Consent settlement defined.--For purposes
of this paragraph, the term ``consent
settlement'' means an agreement between the
Secretary and a provider of services or
supplier whereby both parties agree to settle a
projected overpayment based on less than a
statistically valid sample of claims and the
provider of services or supplier agrees not to
appeal the claims involved.
(6) Notice of over-utilization of codes.--The
Secretary shall establish, in consultation with
organizations representing the classes of providers of
services and suppliers, a process under which the
Secretary provides for notice to classes of providers
of services and suppliers served by the contractor in
cases in which the contractor has identified that
particular billing codes may be overutilized by that
class of providers of services or suppliers under the
programs under this title (or provisions of title XI
insofar as they relate to such programs).
(7) Payment audits.--
(A) Written notice for post-payment audits.--
Subject to subparagraph (C), if a medicare
contractor decides to conduct a post-payment
audit of a provider of services or supplier
under this title, the contractor shall provide
the provider of services or supplier with
written notice (which may be in electronic
form) of the intent to conduct such an audit.
(B) Explanation of findings for all audits.--
Subject to subparagraph (C), if a medicare
contractor audits a provider of services or
supplier under this title, the contractor
shall--
(i) give the provider of services or
supplier a full review and explanation
of the findings of the audit in a
manner that is understandable to the
provider of services or supplier and
permits the development of an
appropriate corrective action plan;
(ii) inform the provider of services
or supplier of the appeal rights under
this title as well as consent
settlement options (which are at the
discretion of the Secretary);
(iii) give the provider of services
or supplier an opportunity to provide
additional information to the
contractor; and
(iv) take into account information
provided, on a timely basis, by the
provider of services or supplier under
clause (iii).
(C) Exception.--Subparagraphs (A) and (B)
shall not apply if the provision of notice or
findings would compromise pending law
enforcement activities, whether civil or
criminal, or reveal findings of law
enforcement-related audits.
(8) Standard methodology for probe sampling.--The
Secretary shall establish a standard methodology for
medicare contractors to use in selecting a sample of
claims for review in the case of an abnormal billing
pattern.
* * * * * * *
VII. DISSENTING VIEWS
For two years, members of this Committee have worked on a
bipartisan basis to write this legislation. Democratic and,
until now, Republican members have faithfully followed the
ground rules and operating principles established by the
Chairmen of the Committee and the Health Subcommittee with
respect to the creation and consideration of the Medicare
Regulatory and Contracting Reform Act. This common
understanding helped the Committee set aside partisan
differences and unified member support on both sides of the
aisle for this targeted bill. Such consensus on legislation
affecting Medicare has been virtually non-existent in the
Committee in recent years.
We stongly support the legislation as presented in the
Chairman's mark. Our vote to oppose reporting of the
legislation was primarily a reflection of our protest of the
abandonment of a process that had served both the Committee and
the issues under consideration well.
The addition of controversial amendments in the Committee
undercut the process and seriously undermined the trust and
goodwill that had accumulated among members around the
development and advancement of this particular legislation.
We do not normally like to be put in a position where
amendments are discouraged, as it undermines the free and full
debate that should be the hallmark of the democratic process.
However, in this case, it was well-understood to be a
bipartisan directive. When this legislation was before the
Committee in the 107th Congress, the Chairman had stipulated
that amendments could not be offered.
Given an opportunity for full and fair debate regarding the
amendments that were offered, some of us might have been able
to find bipartisan agreement on these issues, as has been done
on other provisions in the mark. That said, many of us are
concerned about the issues raised by the beneficiary
organizations that opposed the amendments. Those organizations,
whose letters have been inserted elsewhere in the Record,
include the AARP and the National Citizens' Coalition for
Nursing Home Reform. Testimony from the Center for Medicare
Advocacy at the Health Subcommittee hearing on H.R. 810 also
reflects concerns about both of the proposals that were offered
as amendments.
In addition, there was an explicit prior agreement between
the Chairman and Ranking Member of the Health Subcommittee that
the OASIS issue dealt with in the Johnson amendment would
instead be reflected in a General Accounting Office study.
Furthermore, the Camp amendment to rollback penalties for
nursing homes with serious deficiencies flies in the face of
the need to increase oversight and enforcement of quality
standards in the nursing homes.
Members and staff have spent countless hours meeting with
various affected interest groups, the Administration, and
colleagues on the Energy and Commerce Committee over the past
two years. The Chairman's Mark consisted of policies that were
broadly supported on both sides of the aisle. We hope that the
legislation brought to the floor reflects that agreement.
Pete Stark.
Stephanie Tubbs Jones.
Jerry Kleczka.
Lloyd Doggett.
William J. Jefferson.
Ben Cardin.
Richard E. Neal.
Earl Pomeroy.
Charles B. Rangel.
Sander Levin.
Xavier Becerra.
Michael R. McNulty.
Max Sandlin.
John Lewis.
Jim McDermott.
John S. Tanner.