[Senate Report 114-177]
[From the U.S. Government Publishing Office]


                                                       Calendar No. 317
114th Congress }                                        { Report
                                 SENATE
   1st Session }                                        { 114-177

======================================================================
 
  AUDIT & APPEALS FAIRNESS, INTEGRITY, AND REFORMS IN MEDICARE ACT OF 
                                  2015

                                _______
                                

                December 8, 2015.--Ordered to be printed

                                _______
                                

               Mr. Hatch, from the Committee on Finance,
                        submitted the following

                              R E P O R T

                         [To accompany S. 2368]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Finance, having considered an original 
bill (S. 2368) to amend title XVIII of the Social Security Act 
to improve the efficiency of the Medicare appeals process, and 
for other purposes, having considered the same, reports 
favorably thereon without amendment, and recommends that the 
bill do pass.

                                CONTENTS

                                                                   Page
  I. LEGISLATIVE BACKGROUND...........................................2
 II. EXPLANATION OF THE BILL..........................................5
          A. SECTIONS 1-9, IMPROVEMENTS TO THE APPEALS PROCESS...     5
          B. SECTION 10, REVIEW PROGRAM IMPROVEMENTS.............    11
          C. SECTION 11, CREATION OF MEDICARE PROVIDER AND 
              SUPPLIER OMBUDSMAN FOR REVIEWS AND APPEALS.........    14
          D. SECTION 12, LIMITING THE AUDIT AND RECOVERY PERIOD 
              FOR PATIENT STATUS REVIEWS.........................    15
          E. SECTION 13, INCENTIVES AND DISINCENTIVES FOR 
              MEDICARE CONTRACTORS, PROVIDERS, AND SUPPLIERS.....    17
III. BUDGET EFFECTS OF THE BILL......................................18
          A. COMMITTEE ESTIMATES.................................    18
          B. BUDGET AUTHORITY....................................    20
          C. CONSULTATION WITH CONGRESSIONAL BUDGET OFFICE.......    20
 IV. VOTES OF THE COMMITTEE..........................................20
  V. REGULATORY IMPACT AND OTHER MATTERS.............................21
          A. REGULATORY IMPACT...................................    21
          B. UNFUNDED MANDATES STATEMENT.........................    21
 VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED...........21

                       I. Legislative Background

    The Committee on Finance, having considered an original 
bill, Audit & Appeals Fairness, Integrity, and Reforms in 
Medicare Act of 2015, to amend title XVIII of the Social 
Security Act intended to increase coordination and oversight of 
Medicare claims review contractors, implement new strategies to 
address the growing number of review contractor determination 
appeals, reduce review burdens on providers, and give review 
contractors the tools necessary to better protect the Medicare 
Trust Fund, having considered the same, reports favorably 
thereon as modified, and recommends that the bill, as modified, 
do pass.

Background and need for legislative action

    Medicare audits and appeals pose a serious burden for 
health care providers and suppliers as well as for review 
contractors seeking to reduce federal healthcare programs' 
improper payments. The Improper Payments Information Act of 
2002 requires the Department of Health and Human Services (HHS) 
to identify programs within HHS that may be susceptible to 
significant improper payments. Improper payment estimates 
reported by HHS and other federal agencies are not intended to 
be an estimate of fraud. Instead, improper payments include any 
payments that should not have been made or that were made in an 
incorrect amount (including overpayments and underpayments) 
under statutory, contractual, administrative, or other legally 
applicable requirements. Office of Management and Budget 
guidance directs agencies to include in their calculations any 
payments for which insufficient or no documentation was found.
    Within HHS, the Centers for Medicare & Medicaid Services 
(CMS) measures the improper payment rate, and the associated 
dollar amount, each year for the Medicare fee-for-service 
program, Parts C and D, and Medicaid. In 2009, Medicare's 
improper payment rate was 10.8 percent, or $30.8 billion. In 
2011, the error rate decreased to 8.6 percent, or $28.8 
billion, and by 2013, the error rate was back up to 10.1 
percent, or $36 billion. CMS has attributed the error rate's 
rise in part to new requirements for certain claims, 
particularly for DME and home health.
    The Medicare improper payment rate includes many different 
types of payments to many different types of providers and 
suppliers. The most common cause of improper payments during 
the 2013 report period (accounting for 56.8 percent of total 
improper payments) was a lack of documentation to support the 
services or supplies billed to Medicare. Improper payments are 
not consistent across the fee-for-service programs. In 2013, 
Medicare Part A had an error rate of 8.1 percent. In Medicare 
Part B, payments to suppliers of durable medical equipment, 
prosthetics, orthotics and supplies (DMEPOS) had an error rate 
of 58.2 percent.
    CMS hires a variety of private review contractors to 
identify improper Medicare payments and lower error rates. 
Medicare Administrative Contractors (MAC) primarily process 
claims and handle related functions. As part of their 
administrative role, MACs also conduct certain claims reviews 
to identify and correct improper payments. Zone Program 
Integrity Contractors (ZPIC) investigate instances of suspected 
fraud, waste, and abuse and take appropriate corrective 
actions. The Supplemental Medical Review Contractor (SMRC) was 
created to identify and employ more efficient methods of 
medical review, such as data extrapolation. The SMRC conducts 
nationwide medical reviews as directed by CMS, including issues 
identified by CMS data analysis and/or by agencies including 
the HHS Office of Inspector General (HHS-OIG), the Government 
Accountability Office, and the Comprehensive Error Rate Testing 
(CERT) auditor. CERT auditors measure improper payments in the 
Medicare fee-for-service program to determine the annual 
improper payment rate. Finally, Recovery Auditors (RA), 
formerly referred to as Recovery Audit Contractors (RAC), 
identify and correct improper overpayments and underpayments in 
the Medicare program. Unlike other types of Medicare 
contractors that are paid in fixed amounts based on their 
costs, RAs are paid on a contingency basis--receiving 9 to 12.5 
percent of the corrected improper payment amounts. This 
contingency fee structure gives RAs a financial incentive to 
identify and collect improper payments.
    Despite CMS's efforts, the improper payment rate in the 
Medicare program remains high. The Government Accountability 
Office found in fiscal year 2014, approximately 10 percent of 
the $603 billion Medicare payments were improperly paid. 
Dodaro, Gene L., Testimony before the Senate Committee on 
Finance, Fiscal Outlook: Addressing Improper Payments and the 
Tax Gap Would Improve the Government's Fiscal Position, GAO-16-
92T at 6 (Oct. 1, 2015), available at http://www.gao.gov/
assets/680/672884.pdf. The large number of improper payments 
has led to an increased number of audits to recapture 
improperly paid funds. Although CMS's contractors are making 
progress recovering funds, the increase in audits has 
contributed to an extraordinary increase in appeals of payment 
determinations.
    Providers and beneficiaries are able to appeal Part A and 
Part B improper payment determinations made by MACs or other 
Medicare review contractors through a four-stage administrative 
appeals process. The first level of appeal is reviewed by a 
MAC, the contractor that processes the claim submitted for 
payment and that may have made the original improper payment 
determination.\1\ For the second level of appeal, providers and 
beneficiaries can appeal to a Qualified Independent Contractor 
(QIC) and receive an independent review conducted by 
clinicians.\2\ The third level of appeal is heard by an 
Administrative Law Judge (ALJ) at HHS's Office of Medicare 
Hearings and Appeals (OMHA). For the third level, appellants 
must meet an amount in controversy threshold, which is updated 
on an annual basis ($150 for 2015). The fourth and final 
administrative stage of appeal is review by the Medicare 
Appeals Council (Appeals Council), which is a component of 
HHS's Departmental Appeals Board (DAB). After exhausting these 
four administrative appeals, parties can seek judicial review 
in federal District Court. For judicial review, appellants must 
again meet an amount in controversy threshold, which is also 
updated on an annual basis ($1460 for 2015).
---------------------------------------------------------------------------
    \1\Improper payment determinations by other Medicare contractors 
(for example, Medicare audit contractors like RAs and ZPICs) are also 
appealed to the MAC. Providers have an opportunity to question an 
overpayment determination with the contractor that made the 
determination before making the formal appeal (request for 
redetermination) to the MAC.
    \2\QICs do not process claims or conduct audits--they are only 
involved in the appeals process. QIC conduct independent 
reconsiderations of Medicare overpayment determinations and claims 
denials and are required to use clinicians (nurses and physicians) for 
cases involving questions of medical necessity. QICs were created by 
the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection 
Act (BIPA) of 2000, which included provisions to improve the Medicare 
appeals process. Part of these provisions mandate that all second-level 
appeals be conducted QICs.
---------------------------------------------------------------------------
    Although some beneficiaries appeal payment decisions, the 
majority of appellants (85 percent) are providers. Two percent 
of these providers accounted for nearly one-third of all ALJ 
appeals in FY 2010. And, some provider-appellants filed many 
more appeals than others. On average, providers filed six 
appeals each, but 96 providers filed at least 50 appeals each, 
and one provider filed over 1000 appeals.\3\ The vast majority 
of RA audits are not appealed (in 2011, only 6.7 percent of RA 
improper payment determinations were appealed).
---------------------------------------------------------------------------
    \3\Improvements are Needed at the Administrative Law Judge Level of 
Medicare Appeals, HHS-OIG, OEI-02-10-00340 (November 2012); see also 
Nudelman, Jodi, Statement to the House Committee on Ways and Means, 
Subcommittee on Health, Current Hospital Issues in the Medicare 
Program, Hearing May 20, 2014.
---------------------------------------------------------------------------
    Although most RA audit decisions are not appealed, the 
expansion of RA audits has coincided with the rise in appeals, 
which has contributed to the backlog at OMHA. At the time of 
this report, there are so many appeals being filed that the 
Office of Medicare Hearings and Appeals (OMHA) cannot docket an 
appeal for 20 to 24 weeks and the backlog of cases is near 
1,000,000.
    The HHS-OIG report found that some ALJs were more likely 
than others to make decisions that were fully favorable to 
appellants. Among the 66 ALJs, the fully favorable rate ranged 
from 18 to 85 percent. HHS-OIG reported that ALJ staff stated 
that different philosophies among ALJs contribute to the 
variation in fully favorable rates. ALJ staff said that given 
the same facts and the same applicable Medicare policy, some 
ALJs would make decisions that are favorable to appellants, 
while others would not.
    This bill addresses the primary causes of the increase in 
appeals and the backlog itself. First, the bill will improve 
CMS oversight of audit contractors and require better 
coordination between auditors and CMS. The bill will ensure 
that all parties receive transparent data regarding review 
practices and appeal outcomes at each level of review. Second, 
the bill will require that CMS create new incentives to improve 
auditor accuracy. It will also require that CMS create an 
independent Ombudsman for Medicare Reviews and Appeals to 
assist in resolving complaints by appellants and those 
considering appeal. Finally, the bill will make needed reforms 
to and increase funding for the Medicare appeals process to 
address the appeals backlog and ensure timely reviews, without 
sacrificing quality. The bill will raise the amount in 
controversy for review by an ALJ to match the amount for review 
by a District Court. The bill will create a new Medicare 
magistrate program for cases with lower costs, allowing senior 
attorneys with expertise in Medicare law and policies to 
adjudicate cases in the same way as ALJs. It will allow for the 
use of sampling and extrapolation, with the appellant's 
consent, to expedite the appeals process. The bill will also 
establish a voluntary alternate dispute resolutionprocess for 
multiple pending claims with similar issues to be settled as a unit, 
rather than as individual appeals.
    The Committee recognizes the need to address this serious 
backlog to ease the burden on physicians and other health care 
providers and on beneficiaries.

                      II. Explanation of the Bill

    The present law applicable to sections 2 through 6, and 8 
of the bill is discussed at the beginning of section II, part A 
(there are no provisions in present law for sections 1, 7 and 
9). Part A then explains the provisions of each section 
separately. The present law and provisions of sections 10, 11, 
12, and 13 of the bill are discussed in section II, parts B, C, 
D, and E respectively.

          A. SECTIONS 1-9, IMPROVEMENTS TO THE APPEALS PROCESS

                              PRESENT LAW

    Section 1869 of the Social Security Act (Act)\4\ and 
accompanying regulations establish a process for making 
determinations with respect to benefits under Parts A and B of 
Medicare and appealing these determinations when a claim for 
benefits is denied in whole or in part. In accordance with 
regulations, the Secretary of HHS (the Secretary) is required 
to make an initial determination concerning, for example, the 
amount of benefits available to the individual, or whether 
payment may not (or may no longer be) made for an item or 
service. The appeals process created under section 1869 offers 
up to five levels of review under which individuals (i.e., 
beneficiaries, providers, suppliers, and State Medicaid 
Agencies) may challenge an adverse initial determination. 
First, pursuant to this section and accompanying regulations, 
an individual may request a Medicare Administrative Contractor 
(MAC) to make a redetermination with respect to the claim. 
Redeterminations generally must be concluded no later than 60 
days after the day the contractor receives the request.
---------------------------------------------------------------------------
    \4\Section 1155 also results in appeals under Medicare A/B, from a 
Quality Improvement Organization initial determination, and 
reconsideration, to an ALJ and the Council. A different amount in 
controversy currently applies ($200) and the rules are in part 478 of 
42 CFR. In addition, sections 1852(g)(5), 1876(c)(5)(B), and 1860D-4(h) 
have appeal provisions for the Medicare managed care and prescription 
drug programs.
---------------------------------------------------------------------------
    Second, section 1869 of the Act permits any individual 
dissatisfied with the initial determination and the 
redetermination to file a request for reconsideration. Pursuant 
to section 1869(c), reconsiderations are conducted by Qualified 
Independent Contractors (QICs) that must meet certain specified 
requirements, and the Secretary is required to enter into 
contracts with no less than 4 of these entities. 
Reconsiderations must be processed within 60 days, subject to 
exception. Section 1869(b) of the Act also provides that an 
individual may request, and the Secretary must provide, an 
expedited determination or expedited reconsideration of an 
individual determination if an individual receives a notice 
that a provider of services plans to (1) terminate all services 
to an individual (and a physician certifies that failure to 
continue the provision of services likely places the 
individual's health at significant risk), or (2) discharge the 
individual from the provider.
    In accordance with section 1869 and implementing 
regulations, if an individual is dissatisfied with a QIC's 
reconsideration, or if the adjudication period for the QIC to 
conclude its reconsideration has passed, the party may request 
a hearing before an Administrative Law Judge (ALJ). Section 
1869(d) specifies that an ALJ must render a decision on such 
hearing no later than the end of the 90-day period following 
the date of when the request for the hearing was timely filed, 
subject to exception. Further, the Secretary must provide 
continuing education to these ALJs (as well as QICs) with 
respect to coverage of items or services under Medicare and 
certain policies of the Secretary, in order for such 
contractors and judges to make informed decisions on appeals.
    In order to be entitled to a hearing before an ALJ, certain 
amount in controversy requirements must be met. Section 1869(b) 
of the Act establishes amount in controversy threshold amounts 
for ALJ hearing requests for Medicare Part A and Part B 
appeals\5\ that are subject to an annual adjustment. As 
indicated in a notice published in the Federal Register, for 
calendar year 2015, if the amount in controversy is less than 
$150, an ALJ hearing is not available to an individual under 
this section. In determining the amount in controversy, the 
Secretary, pursuant to regulations, must permit two or more 
appeals to be aggregated\6\ if the appeals involve the similar 
or related services provided to the same individual by one or 
more providers or suppliers or common issues of law and fact 
arising from services provided to multiple individuals by one 
or more providers or suppliers.
---------------------------------------------------------------------------
    \5\Except those appeals for an ALJ hearing brought under Section 
1155 of the Act.
    \6\The amount in controversy (AIC) applies to the amount of the 
claim, and aggregation allows multiple claims that do not meet the AIC 
to be brought together to get a hearing--slight distinction, but an 
important one, as a single appeal may involve multiple claims.
---------------------------------------------------------------------------
    Section 1869(b)(3) of the Act currently states the 
following: ``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 QIC under 
subsection (c) of this section, unless there is good cause 
which precluded the introduction of such evidence at or before 
that reconsideration.''
    After an ALJ hearing decision or dismissal has been issued, 
or if the ALJ has failed to render a decision within the 
specified timeframe, parties may request review by the 
Departmental Appeals Board of the Department of Health and 
Human Services (HHS), the final level of administrative appeal. 
Under section 1869(d) of the Act, in general, the Departmental 
Appeals Board must conduct and conclude its review and make a 
decision or remand the case to the ALJ for further 
consideration no later than 90 days following the date of a 
request for review. If a party wishes to appeal the decision of 
the Board, or the Board's time frame for issuing a ruling has 
elapsed, judicial review may be requested. Claims are filed in 
U.S. district court, and are subject to an amount in 
controversy ($1,460 for calendar year 2015) and other 
requirements. Additionally, section 1869(b) directs the 
Secretary to establish a process under which beneficiaries, 
providers, and suppliers can obtain expedited access to 
judicial review. This access may be granted if a review entity 
(comprised of at least three ALJs or members of the 
Departmental Appeals Board) determines that the Board does not 
have authority to decide questions of law or regulation 
relevant to matters in controversy, and there is no material 
issue of fact in dispute. A party may also bring an action in 
district court if the review entity generally fails to make a 
determination within 60 days.
    According to the HHS, FY2016 Justification of Estimates for 
Appropriations Committees, the Office of Medicare Hearings and 
Appeals (OMHA) was appropriated discretionary funding of $82.4 
million in FY2014 and $87.4 million in FY2015. HHS requested 
$270 million in the President's FY2016 budget proposal which 
included $140 million in discretionary budget authority and 
$130 million in program funding from proposed legislation. The 
$130 million in proposed FY2016 program funding from 
legislation includes indefinite mandatory authority to access a 
$125 million appropriation from Medicare Recovery Audit 
Contractor (RA) overpayment recoveries.

                       EXPLANATION OF PROVISIONS

Section 1--Short title; table of contents

Section 2--Increased resources for the Office of Medicare Hearings and 
        Appeals and the Departmental Appeals Board

    The bill would require $127 million per year to be 
appropriated from the Medicare Hospital Insurance (HI) and 
Supplemental Medical Insurance (SMI) Trust Funds (in amounts to 
be determined at the Secretary's discretion) beginning in 
FY2016, providing $125 million to OMHA and $2 million to the 
Departmental Appeals Board of HHS for purposes of conducting 
reviews, hearings, and appeals. The funds appropriated would be 
available until spent and would be in addition to any other 
funds that may be available to OMHA and the Departmental 
Appeals Board for the same purposes.
    The bill would require the Government Accountability Office 
(GAO) to conduct a review of the use of the additional funds 
provided to determine if OMHA increased the number of appeals 
processed, decreased the time required to process an appeal, 
and achieved other program improvements. GAO would be required 
to report such information to Congress no later than December 
31, 2018.

Section 3--Establishment of Medicare magistrate reviews and revision of 
        amount in controversy thresholds

    The bill would establish within OMHA decision-making 
officials known as Medicare magistrates. Beginning on January 
1, 2017, Medicare magistrates would perform reviews and render 
decisions in certain appeals described below. Medicare 
magistrates would be licensed attorneys with expertise in the 
Medicare statute, policies, and procedures, who would be 
appointed by the Secretary of HHS, and meet other 
qualifications as determined by the Secretary of HHS.
    Medicare magistrates would perform reviews and render 
decisions that are appealed to OMHA when the amount in 
controversy of an appealed claim is less than the new amount in 
controversy as established by this section (described below) 
for an ALJ hearing through OMHA but equal to or greater than 
the amount in controversy under current law for an ALJ hearing 
through OMHA (for example for FY2015 an appealed claim with an 
amount in controversy that falls in between $150 and $1,460). 
The current rules and guidelines that govern appeals 
adjudicated by ALJs would apply to Medicare magistrates and the 
independent reviews conducted by Medicare magistrates. 
Decisions made by Medicare magistrates could be appealed to the 
Departmental Appeals Board but could not be appealed to the 
federal court level because the amount in controversy would be 
below the threshold required by the federal court level.
    The bill would increase the current amount in controversy 
threshold for Medicare appealed claims heard by an ALJ through 
the OMHA from the current amount of $150 set for FY2015 to a 
dollar threshold equal to the amount in controversy as required 
for Medicare appealed claims to be heard at the federal court 
level. The new threshold is effective in calendar year 2017 and 
would be indexed for inflation and updated annually as it is in 
current law.

Section 4--Remanding appeals to the redetermination level with the 
        introduction of new evidence

    Beginning on January 1, 2017, the bill would require a QIC; 
a Medicare magistrate, as established in section 2; an ALJ, or 
the Departmental Appeals Board to remand an appeal to the MAC 
for a redetermination when the appellant introduces new 
evidence into the administrative record at a subsequent level 
of appeal.
    The bill would provide an exception to the remand process 
described above when the introduction of new evidence is made 
by an individual entitled to, or enrolled for, benefits under 
part A or enrolled under part B, or CMS or its contractors, or 
justified due to 1) an inadvertent omission or erroneous 
decision by a lower level adjudicator to omit the evidence from 
the administrative record despite its timely submission by the 
appellant, 2) an instance where a decision by a lower-level 
adjudicator was made on new or different grounds than the 
initial decision, or 3) other circumstances as determined by 
the Secretary of HHS.

Section 5--Expedited access to appeals

    No later than January 1, 2017, the bill would require the 
Secretary of HHS to establish and implement a process whereby 
ALJs and Medicare magistrates, as established in section 2, 
could issue decisions, based on the evidence of record, without 
holding a hearing when there are no material issues of fact in 
dispute and the ALJ or the Medicare magistrate determines that 
there is a binding authority that controls the decision in the 
matter under review. The new process described above would 
apply to requests for review that are pending on or filed after 
the date of the enactment of this bill.
    The bill would require the Secretary of HHS to establish a 
process by which an appeal before an ALJ can be certified for 
expedited access to judicial review when 1) the appellant has 
not requested expedited access to judicial review, 2) there is 
no material fact in dispute, and 3) neither the ALJ nor the 
Departmental Appeals Board has the authority to decide the 
questions of law or regulation relevant to the matters in 
controversy. Such a determination would exhaust the 
administrative appeals process, rendering the appeal eligible 
for judicial review.

Section 6--Authority to use sampling and extrapolation methodologies 
        and to consolidate appeals for administrative efficiency

    As of the date of enactment, the bill would allow for a 
review entity (e.g., a MAC or a QIC); a Medicare magistrate, as 
established in section 2; an ALJ, or the Departmental Appeals 
Board to consolidate more than one pending request for review 
or appeal into a single action or appeal if 1) the individual 
requests involve one or more common question of fact or law for 
similar claims submitted by the same individual or entity, 2) 
the party requests aggregation of claims, 3) the requests for 
review or appeal were included within a statistical sample 
during initial review or previous level of appeal, or 4) other 
circumstances that are identified by the Secretary of HHS prior 
to the use of consolidation that would promote administrative 
efficiency.
    The bill would require a request for review or appeal that 
had been previously consolidated at a lower level of appeal or 
involving claims that were included as part of an extrapolation 
to be submitted as a single request for review or appeal in 
order to be entitled to a review or hearing. When an appeal 
involves a decision that was based on a statistical sample at a 
lower level, the adjudicator's decision of such appeal must be 
based on the same statistical sample. The bill would allow an 
adjudicator to use statistical sampling and extrapolation 
methodologies for any requests for review or appeals that are 
pending on or filed after the date of the enactment of this 
bill, with the consent of the appellant.

Section 7--Identification and referral of fraud

    No later than January 1, 2017, the bill would require the 
Secretary of HHS, in consultation with HHS Inspector General 
and the Attorney General, to establish and implement a process 
by which OMHA and the Departmental Appeals Board would refer 
credible suspicion of fraudulent activity to appropriate law 
enforcement entities and CMS.

Section 8--Study to assess hearing participation

    No later than January 1, 2017, the bill would require the 
Secretary of HHS to conduct a review to determine whether it 
would be feasible to increase the participation of the CMS or 
the review entity contractors (e.g., program integrity 
contractors, RAs, MACs, QICs) in appeal hearings conducted by 
OMHA, including a process to provide notice of a hearing to all 
relevant contractors.

Section 9--Improvements to the Office of Medicare Hearings and Appeals

    Beginning in calendar year 2017, the bill would require 
OMHA to conduct annual training for all ALJs and Medicare 
magistrates on Medicare policies, including changes made to 
such policies in a given year.
    Beginning on January 1, 2017, in the instance the 
magistrate or ALJ reach a different decision than the QIC, the 
written decision of the magistrate or ALJ must explain the 
reason the decision reached by the Medicare magistrate or ALJ 
is different than the decision made by the QIC.
    Beginning on January 1, 2017, the bill would require the 
Secretary of HHS to publish annually on a publically accessible 
website the following: 1) the percentage of appeals that 
receive fully favorable, partially favorable and unfavorable 
decisions; 2) such information (described in 1) for each 
individual ALJ and by type of service (e.g., Part A hospital, 
Part B, durable medical equipment); 3) the length of time 
elapsed between request for review and final decisions; 4) the 
instances in which the Departmental Appeals Board reversed or 
remanded the decisions of individual ALJs on the grounds that 
they diverted from Medicare policies and coverage; 5) the 
instances in which individual ALJs reached a decision that 
differed from the opinion of a physician employed by the QIC; 
and 6) other information as determined by the Secretary of HHS 
that would provide greater transparency of OMHA.
    The bill would require the GAO to conduct a review of 
decisions rendered at OMHA to identify the frequency in which 
(i) ALJ or Medicare magistrate decisions diverted from CMS 
interpretation of Medicare policies and program instruction, 
(ii) ALJ or Medicare magistrate decisions demonstrate 
significant variation in the interpretation of similar Medicare 
policies or instruction, and (iii) ALJ or Medicare magistrate 
decisions failed to apply the applicable Medicare law, 
regulation, policy or instruction. Nothing in this section 
shall be construed as questioning the independence of the ALJs, 
but is to be used to provide empirical information regarding 
how ALJ decisions are reached. Data related to the frequency in 
which ALJ decisions diverted from Medicare law, regulation, 
policy, or coverage decisions shall focus on decisions 
adjudicated no less than one year after the enactment of this 
bill and may be evaluated through the use of sampling. This 
shall be reported to Congress no later than January 1, 2018.
    No later than July 1, 2018, the bill would require the 
Secretary of HHS to establish and implement a process to 
identify Medicare policies or coverage decisions that, when 
surrounded by similar facts or circumstances are most 
frequently interpreted differently by Medicare review entity 
contractors, Medicare magistrates, ALJs, or the Departmental 
Appeals Board. Such a process should determine whether further 
clarification or adjustment to such policies is needed to 
prevent future varied interpretations.
    The bill would require the Secretary of HHS to determine if 
the specialization of ALJs by type of appeal (i.e., the type of 
Medicare service or provider) and/or the mandatory use of 
clinical experts alongside ALJs would lead to more consistent 
decisions made by ALJs for cases with similar facts. The 
Secretary of HHS shall conduct a study to investigate such 
issues and report to Congress no later than July 1, 2018.
    Beginning in calendar year 2017, the bill would require the 
Secretary to establish alternative dispute resolution 
processes, including mediation, in which providers, suppliers, 
beneficiaries, or State Medicaid Agencies could voluntarily 
resolve large volumes of pending appeals involving similar 
issues of law or fact. As part of any settlement agreement, the 
appellant would be required to withdraw all requests for 
hearing or review for the claims covered by the settlement. The 
Secretary would have discretion to establish the program in a 
cost-effective manner, including consideration of thresholds 
and available resources. The Secretary of HHS would establish a 
process to coordinate with appropriate law enforcement 
officials and/or CMS to avoid inadvertent settlement or 
resolution of cases or appeals with suspected fraud or abuse, 
systematic gaming, or delays in the provision of care or other 
criminal activity.

               B. SECTION 10, REVIEW PROGRAM IMPROVEMENTS

                              PRESENT LAW

    Current law does not specifically require the Secretary of 
HHS to establish guidelines and methodologies for reviewing 
reimbursement claims submitted by providers and suppliers.
    The Secretary is required to administer Medicare Parts A 
(Act, section 1816) and B (Act, section 1842) by contracting 
with MACs as identified at section 1874A of the Act. In 
addition, current law (Act, section 1893) established the 
Medicare Integrity Program (MIP), which requires the Secretary 
to contract with eligible entities to conduct program integrity 
activities. Under MIP, the Secretary is required to contract 
with Medicare RAs to identify Medicare overpayments and 
underpayments (Act, section 1893(h)). RAs are required to be 
paid only from funds that were recouped as a result of their 
reviews in the form of contingency fees which consist of a 
percentage of the overpayment and underpayment amounts they 
identify. The Secretary also was authorized to use a portion of 
RA recoveries to administer the RA program. All other RA 
overpayment funds recovered from providers are returned to the 
Medicare Trust Funds. Recently, Sec.  505(b) of the Medicare 
Access and CHIP Reauthorization Act of 2015 (MACRA, P.L. 114-
10) authorized the Secretary to use up to 15% of RA recoveries 
for additional purposes.
    In implementing MIP requirements, the Secretary also 
established contracts with other entities that include Zone 
Program Integrity Contractors (ZPIC), a Supplemental Medical 
Review Contractor (SMRC), and a Medicare-Medicaid Data Match 
Contractor (MMDMC).
    The Centers for Medicare & Medicaid Services uses Medicare 
contractors to review claims submitted by providers and 
suppliers both before and after claims are paid. MACs, in 
addition to initial and routine scanning for completeness and 
consistency, also conduct certain claim review activities prior 
to paying claims (prepayment review), as well as after paying 
claims (post-payment review). Other contractors such as RAs, 
ZPICs and SMRCs, also review Medicare claims after payment was 
made. Most post-payment claim reviews involve medical review, 
which CMS describes as ``the collection of information and 
clinical review of medical records by Medicare contractor staff 
to ensure that payment was made only for services that met all 
Medicare coverage, coding, and medical necessity 
requirements.''\7\ Medical review processes and decisions 
generally are guided by policies that may be provided in CMS 
manuals or required by CMS, but developed and implemented by 
contractor staff. Medical review processes and policies can 
vary depending on the contractor type--MAC, RA, ZPIC, QIC, 
SMRC, or MMDMC--conducting the review, the individual 
contractors, and the type of service under review. Current 
Medicare law gives Medicare contractors discretion to develop 
and tailor coverage decisions to local medical conventions and 
preferences; as a result there is some variation in 
interpreting and enforcing medical review policies.
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InpatientHospitalReviews.html
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    CMS, through contractor oversight and contractor 
performance requirements, facilitates most coordination among 
MACs. CMS also has administrative policies and procedures to 
help minimize medical review duplication or inconsistency with 
Medicare law, regulations, and program instructions, but is not 
required to do so under current law. The Secretary also is 
required to assure that the duties of MACs do not overlap with 
other contractors, including RAs, although overlap with durable 
medical equipment (DME) suppliers is permitted (Act, section 
1874A(a)(5)(A)).

                        EXPLANATION OF PROVISION

    The bill would require the Secretary of HHS to promote 
transparency and consistency in Medicare payment and coverage 
policy, as appropriate, and ensure that review entity 
contractors uniformly and consistently apply these policies and 
that Medicare magistrates, ALJs, and the Departmental Appeals 
Board are aware of and trained in these policies. Nothing in 
this section should be construed as questioning the 
independence of Medicare magistrates, ALJs, or the Departmental 
Appeals Board, but is to help ensure that consistent guidelines 
and methodologies exist and are available to those entities 
reviewing reimbursement claims submitted by providers and 
suppliers.
    The bill would require the Secretary of HHS to approve 
review guidelines and methodologies prior to their use in the 
review of any claims paid by Medicare. The bill would allow the 
Secretary of HHS to provide or establish a transition period by 
which existing reviews would be permitted to continue until 
such time as the Secretary of HHS is able to review and approve 
the review guidelines or methodologies. Review topics or 
guidelines that have been approved for use by the Secretary 
shall be made publically available on the CMS website, no less 
frequently than annually. Review topics shall be posted and 
publically available for a reasonable amount of time before 
they are used. The Secretary of HHS may prioritize the 
guideline and methodology approval process according to error 
rate, frequency of denials, and cost to the Medicare Trust 
Fund.
    The bill would require the Secretary of HHS to designate a 
point of contact to coordinate, oversee, and perform the 
following tasks, in order to improve upon the existing and 
future program integrity initiatives and to limit unnecessary 
provider or supplier burden.
          1. Develop a comprehensive strategy for claims review 
        determinations made on either a prepayment, post-
        payment, or prior-authorization basis. The strategy 
        shall focus on identifying and reducing those claim 
        errors that have the largest impact on the error rate, 
        pose the greatest risk to the Medicare Trust Fund, or 
        are likely to negatively affect quality of care. In 
        developing such strategy, the Secretary shall consider 
        ways to reduce unnecessary burden on providers and 
        suppliers and minimize any unintended effects of these 
        policies on beneficiaries. Such strategy should utilize 
        data and other sources including: claims data, Office 
        of Inspector General reports, GAO reports, news 
        reports, Medicare Payment Advisory Commission reports, 
        and Comprehensive Error Rate Testing (CERT) reports;
          2. Develop methods to ensure that there is not 
        unnecessary duplication of review of specific 
        individual claims among the review entity contractors 
        used by the Department to conduct claims review, 
        including the use of all available data;
          3. Work with all review entity contractors to develop 
        a uniform, consistent, and transparent review process 
        to reduce provider and supplier burden to the greatest 
        extent possible by including a uniform approach for 
        review entity contractors to notify parties of pending 
        reviews and requests for medical documentation; 
        improved communication with providers and suppliers; 
        methods for providing review results; and better 
        refinement of reviews to target claims that are at the 
        highest risk for improper payments or other errors; and 
        any other areas in which the Secretary determines 
        provider and supplier burdens may be decreased;
          4. Identify CMS local coverage determinations (LCDs), 
        national coverage determinations (NCDs), regulations, 
        and program instructions that need updating or 
        inappropriately conflict with other Medicare policies 
        and make the appropriate modifications. Nothing in this 
        section shall be construed as undermining the 
        independent authority of Medicare magistrates, ALJs, or 
        the Departmental Appeals Board; rather, these policies 
        should be modified and updated in a manner consistent 
        with all existing statute and regulations. In the event 
        that the Secretary of HHS identifies a lack of 
        necessary Medicare policies and review guidelines 
        related to a particular issue, the Secretary of HHS 
        shall establish such instructions, with input from 
        stakeholders, as appropriate;
          5. Post on a publicly accessible website the volume 
        and type of prepayment and post-payment claim reviews 
        performed by the Medicare review contractors;
          6. Coordinate with OMHA and the Departmental Appeals 
        Board to ensure that the improved methodologies and 
        evidentiary standards established within this bill, 
        such as the decision to remand an appeal, are properly 
        implemented;
          7. Ensure that providers and suppliers subject to 
        post-payment review are granted a discussion period 
        with the contractor of at least 30 days from the letter 
        from the review entity contractor regarding the result 
        of the review;
          8. Develop qualification standards for review entity 
        contractors to have audits conducted or approved by 
        medical doctors with knowledge of relevant Medicare 
        laws, policies, and program instruction, as 
        appropriate.
          9. Determine whether additional punitive actions 
        against review entity contractors could be taken and 
        what, if any, financial incentives or disincentives 
        could be used to promote the accuracy of a review 
        entity's reviews.
    The bill would require the Secretary to establish a secure 
internet based system for access by providers, and other 
appropriate entities, in order to determine status of claims 
under review by any Medicare audit or oversight contractor, or 
that is being processed as an appeal by a MAC, QIC, ALJ, or the 
Departmental Appeals Board. This system could be based on the 
existing database system of claims under review used by audit 
contractors, or a similar existing system. The Secretary shall 
report to Congress within 180 days of passage of the Act on a 
plan to establish and operate such a portal. The Secretary 
shall ensure that such system does not impede any ongoing 
investigations of potential fraud.
    The bill would require, as part of the annual RA report to 
Congress under current law, the following information be 
included: (1) include number of claims corrected in the 
discussion period; (2) a separate calculation that identifies a 
total overturn rate for appeals in which an appealed claim is 
only once, based upon the decision made at the highest appeal 
level; (3) carefully describe the denominator of total audits 
and appeals, given the likelihood that many appeals in a given 
year will not have a decision in that year; and (4) 
consistently report complex Part A, complex Part B, semi-
automated, and automated reviews separately.

C. SECTION 11, CREATION OF MEDICARE PROVIDER AND SUPPLIER OMBUDSMAN FOR 
                          REVIEWS AND APPEALS

                              PRESENT LAW

    Under current law, the Secretary is not required to offer 
Medicare providers or suppliers access to an Ombudsman. 
According to CMS's annual beneficiary publication, Medicare & 
You,\8\ an ombudsman is someone who reviews complaints and 
helps to resolve those complaints.
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    Current law requires the Secretary to conduct a 
satisfaction survey at least every five years of beneficiaries 
as well as providers and suppliers who submitted appeals (Act, 
section 1869(e)) and to submit a report to Congress on the 
results of the survey. In addition, section 1808(c) of the Act 
requires the Secretary to appoint a Medicare Beneficiary 
Ombudsman. The Office of Medicare Ombudsman (OMO) was created 
to identify and address systemic issues that affect Medicare 
beneficiaries, but OMO does not assist providers, suppliers, or 
Medicare contractors in resolving complaints and other issues.

                        EXPLANATION OF PROVISION

    The bill would require the Secretary of HHS to establish a 
CMS OMBUDSMAN FOR MEDICARE REVIEWS AND APPEALS. The Medicare 
Provider & Supplier Ombudsman's duties would include:
    1. Identifying, investigating, and assisting in the 
resolution of complaints and inquiries (including referring to 
the appropriate entity) involving Medicare review or appeals 
processes from appellants or those considering appeals.
    2. Identifying trends in complaints and inquiries regarding 
the current Medicare review and appeals systems to provide 
recommendations for improvements to the Secretary of HHS. Such 
recommendations would improve the efficacy and efficiency of 
the claims review and appeals system as well as communication 
to beneficiaries, providers, and suppliers regarding the claims 
review and appeals system.
    3. Designing a system by which to objectively measure and 
evaluate reviewer responsiveness to addressing provider and 
supplier issues and Ombudsman inquiries.
    4. Providing administrative and technical assistance to 
appellants and those considering appeals.
    5. Publish data regarding the number of review 
determinations appealed, each appeal's outcome, and aggregate 
appeal statistics for each contractor, provider and supplier 
type. Such data shall be displayed in a uniform, consistent, 
and easily understood format.
    6. Assisting in education and training efforts for 
providers, suppliers, and review entity contractors.
    7. Communicating with the Medicare Beneficiary Ombudsman to 
assist with the identifying, investigating, and resolution of 
beneficiary-related complaints, including those that overlap 
with reviews and appeals submitted by a provider.

   D. SECTION 12, LIMITING THE AUDIT AND RECOVERY PERIOD FOR PATIENT 
                             STATUS REVIEWS

                              PRESENT LAW

    Current law also requires RA contracts to permit RAs to 
review claims in the current fiscal year and retrospectively 
for up to four additional fiscal years, for a total of five 
fiscal years (SSA Sec. 1893(h)(4)(A) and (B)). According to the 
RA Statement of Work currently in effect, the look-back period 
is measured from the date of the initial determination to the 
daate of the RA issues the medical records request letter for 
complex reviews, the overpayment notification letter for semi-
automated reviews, or the demand letter for automated reviews. 
Currently, CMS has limited the RA look-back period to three 
fiscal years.
    Section 6404 of the Patient Protection and Affordable Care 
Act (ACA, P.L. 111-148) amended the SSA to limit the maximum 
period for provider and supplier submission of Medicare claims 
to one calendar year from the date of service (SSA 
Sec. 1814(a), Sec. 1842(b)(3), and Sec. 1835(a)). Under the new 
RA contracts, CMS indicated that it would limit the RA look-
back period to six months from the date of service for patient 
status reviews, where hospitals submitted claims within three 
months of the date of service.
    To comply with timely filing rules, as stated above, 
hospitals must submit a claim within one year from the date of 
service, but the RAs have a three year look-back period. When a 
RA issues a decision denying an inpatient status claim that is 
more than one year from the date of service, the hospital is 
unable to re-bill as an outpatient service because the time 
period for filing a claim has expired.
    For most acute care hospitals, Medicare uses two distinct 
payment systems for inpatient and outpatient services. 
Hospitals can sometimes receive substantially higher payments 
for the same services if patients were admitted to the hospital 
as inpatients rather than treated as outpatients.
    A number of hospital claims reviewed by RAs since FY2010 
were identified as inappropriate payments because RAs 
determined that the care should have been delivered in 
outpatient settings rather than the inpatient setting where 
hospitals delivered the services, so the claims were not 
reasonable and necessary for payment under Medicare Part A. 
When these (Part A) inpatient claims were denied, under the 
prior CMS policy, hospitals were prohibited from resubmitting 
the claims as (Part B) outpatient claims, except for a limited 
number of services. Hospitals appealed many of these claims. 
Some claims were overturned at third and fourth appeal levels 
(ALJ and Medicare Appeals Council levels); other claims are 
pending in the appeal process.
    On March 13, 2013, CMS issued a Ruling that established a 
process for handling these claims that were being appealed, 
which allowed rebilling of inpatient services under Part B when 
an inpatient claim was denied. CMS also published a rule 
finalizing the policy on rebilling these claims under Part B, 
on how claims should be re-submitted, and on how the resolution 
of claims already appealed could be expedited. The rule also 
clarified when it would generally be appropriate for an 
inpatient admission to be paid under Medicare Part A, referred 
to as the Two-Midnight Rule, which stipulated that in cases 
where a doctor expects a patient would require a hospital stay 
for at least two midnights, it would be considered a medically 
necessary inpatient stay. CMS believed that the Ruling and the 
Rule on Medicare Part B inpatient billing would help to clarify 
appropriate billing procedures and reduce overpayments and 
appeals.
    Even under the Part B inpatient billing policy, hospitals 
may be unable to resubmit denied Part A inpatient claims under 
Part B because providers and suppliers must submit claims 
within one calendar year of the date of service to comply with 
timely filing rules, whereas RAs can look back three previous 
fiscal years when reviewing claims. If RAs review Part A 
inpatient claims from three fiscal years ago prior and deny 
claims, under timely filing rules, it is too late for the 
hospital to resubmit the claim under Part B for payment.
    The Protecting Access to Medicare Act of 2014 (PAMA, P.L. 
113-93) required the Secretary to prohibit RAs from reviewing 
inpatient claims for patient status (whether a patient is an 
inpatient or an outpatient) with admission dates between 
October 1, 2013 and March 31, 2015 (PAMA, Sec. 111--Extension 
of Two-Midnight Rule). PAMA also specifically permitted the 
Secretary to review inpatient claims if there was evidence of 
systemic gaming, fraud, abuse, or delays in the provision of 
care. Under PAMA, other Medicare contractors, such as MACs, are 
permitted to review a sample of inpatient claims to assess 
compliance and educate providers on Medicare's Two-Midnight 
rule under a Probe and Educate process.
    MACRA extended the PAMA provisions at Sec. 111 that 
prohibited RA reviews of patient status on inpatient claims 
from April 1, 2015 through September 30, 2015 (MACRA, 
Sec. 521--Extension of Two-Midnight PAMA Rules on Certain 
Medical Review Activities). MACRA also stipulated that the 
Secretary was permitted to pursue fraud and abuse activities 
under RA authority or otherwise.

                        EXPLANATION OF PROVISION

    The bill would prohibit RAs from conducting patient status 
reviews (i.e., inpatient versus outpatient status) more than 6 
months after the date of service if the claim was submitted 
within 3 months of the date of service.
    The bill would require the Secretary to study the potential 
burden on providers and suppliers of the look-back period under 
current law and the impact of shortening the look-back period 
for other RA audits, including audits for physicians and other 
health care providers and suppliers, and would provide the 
Secretary with discretion to implement a look-back period to a 
period of less than three years. The bill would require the 
Secretary to make the study publicly available.
    The bill would direct the Secretary of Health and Human 
Services no later than six months after the enactment of this 
bill to submit a report to Congress with recommendations to 
change the recovery audit payment structure, in budget-neutral 
matter, from an incentive-based model to a non-incentive based 
approach without additional financial burdens on providers.

 E. SECTION 13, INCENTIVES AND DISINCENTIVES FOR MEDICARE CONTRACTORS, 
                        PROVIDERS, AND SUPPLIERS

                              PRESENT LAW

    Medicare law requires participating providers and suppliers 
to comply with Medicare requirements stipulated in the Act as 
well as CMS regulations. Medicare law also requires the 
Secretary to provide incentives for MACs to provide quality 
service and to promote efficiency (Act, section 
1874A(b)(1)(D)). In addition, the Secretary is required to 
develop contract performance requirements for MAC duties and 
standards for measuring MAC's performance in meeting those 
requirements (Act, section 1874A(b)(3)). Moreover, in 
developing standards for measuring MAC performance, the 
Secretary is required to consult with stakeholders and to make 
the performance standards publicly available.
    MACRA required MACs to have an improper payment outreach 
and education program that would provide outreach, education, 
training, and technical assistance to providers and suppliers 
within each contractor's geographic service area (Act, section 
1874A(a)(4)).
    CMS also requires all Medicare contractors to provide 
outreach and education to providers and suppliers and provides 
guidance to Medicare contractors on communications and 
interactions with providers and suppliers in the Medicare 
Contractor Beneficiary and Provider Communications Manual, 
Chapter 6--Provider Customer Service Program (Rev. 31, 02-13-
2015). This manual identifies a number of Medicare contractor 
requirements to provide education, outreach, and overall 
support through the Provider Customer Service Program (PCSP). 
CMS makes data available on the results of the PCSP on its 
Contractor-Provider Customer Service Program website including 
contractor performance data.
    In July 2014, CMS announced the establishment of a Provider 
Relations Coordinator. CMS indicated that the Provider 
Relations Coordinator was intended to improve communications 
between providers and CMS and to help increase program 
transparency while offering more efficient resolutions to 
providers affected by the review process. Providers were 
instructed to raise broader concerns with the Provider 
Relations Coordinator, but to continue to interact with MACs 
and RAs on individual claim questions.

                        EXPLANATION OF PROVISION

    The bill would require the Secretary to establish and 
implement, no later than January 1, 2017, a system that takes 
into account the denial rate as a percentage of claims audited 
and final determination of appeals by type of issue (for 
example, patient classification or medical necessity for 
specific procedures) by which providers or suppliers with a low 
error rate for claims subject to additional document requests 
over a two-year period are exempt from audits by RAs and MACs 
on a post-payment basis for one year unless there is evidence 
of systematic gaming, fraud, abuse, or delays in the provision 
of care.
    The Secretary of HHS shall assess the frequency in which 
decisions being made by the review entity contractors are 
consistent with Medicare payment and coverage law, regulations 
and program instruction (but taking into account geographical 
variation that are a result of local coverage determinations). 
The Secretary of HHS may use sampling to fulfill this 
requirement. The results of the validation shall be posted to 
the CMS website.
    The bill would require the Secretary to adjust the number 
of medical records a review entity can request from a provider 
or supplier for the purposes of review based on the assessment 
described above. This adjustment would be directly related to 
the accuracy of the review entity's reviews. Contractors with 
an accuracy rate of 95% or more may be eligible to request 
additional medical records. Contractors with an accuracy rate 
of less than 95% may be limited in their ability to request 
medical records, according to a sliding scale established by 
the Secretary.

                             EFFECTIVE DATE

    The provision is effective upon enactment.

                    III. Budget Effects of the Bill


                         A. COMMITTEE ESTIMATES

    In compliance with paragraph 11(a) of Rule XXVI of the 
Standing Rules of the Senate, the following Congressional 
Budget Office estimate is made concerning the estimated budget 
effects of the revenue provisions of the ``Audit & Appeals 
Fairness, Integrity, and Reforms in Medicare Act of 2015'' as 
reported.
    The bill is estimated to have the following effects on 
federal budget receipts for fiscal years 2016-2025:


Summary

    The bill would authorize the appropriation of $127 million 
per year from the Medicare Hospital Insurance (HI) and 
Supplemental Medical Insurance (SMI) Trust Funds (in amounts to 
be determined at the Secretary HHS's discretion) beginning in 
FY2016, providing $125 million to OMHA and $2 million to the 
Departmental Appeals Board of HHS for purposes of conducting 
reviews, hearings, and appeals. The funds appropriated would be 
available until spent and would be in addition to any other 
funds that may be available to OMHA and the Departmental 
Appeals Board for the same purposes. Implementing the Audit & 
Appeals Fairness, Integrity, and Reforms in Medicare Act of 
2015 would cost $1.31 billion over the 2016-2025 period, 
assuming appropriation of the specified amounts.
    For this estimate, CBO assumes that the legislation will be 
enacted near the beginning of fiscal year 2016 and that the 
amounts specified will be appropriate in that year. Enacting 
the Audit & Appeals Fairness, Integrity, and Reforms in 
Medicare Act of 2015 would affect direct spending or revenues; 
therefore, pay-as-you-go procedures apply. The bill would not 
impose intergovernmental or private sector mandates as defined 
in the Unfunded Mandates Reform Act and would impose no costs 
on state, local, or tribal governments. The annual estimated 
budgetary impact of the Audit & Appeals Fairness, Integrity, 
and Reforms in Medicare Act of 2015 is shown in the table 
above.

                          B. BUDGET AUTHORITY

Budget authority

    In compliance with section 308(a)(1) of the Congressional 
Budget and Impoundment Control Act of 1974 (``Budget Act''),\9\ 
the Committee states that the bill as reported involves 
increased budget authority (see table in Part A., above).
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    \9\ Pub. L. No. 93-344.
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Tax expenditures

    In compliance with section 308(a)(1) of the Budget Act, the 
Committee states that the bill does not involve increased tax 
expenditures.

            C. CONSULTATION WITH CONGRESSIONAL BUDGET OFFICE

    In accordance with section 403 of the Budget Act, the 
Committee advises that the Congressional Budget Office has 
submitted the preceding cost estimate on the bill.

                       IV. Votes of the Committee

    In compliance with paragraph 7(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee states that, with a 
majority present, the ``Audit & Appeals Fairness, Integrity, 
and Reforms in Medicare Act of 2015'' or the ``AFIRM Act'' was 
amended and ordered favorably reported on June 3, 2015 as 
follows:
    Final Passage of the Audit & Appeals Fairness, Integrity, 
and Reforms in Medicare Act of 2015 or the AFIRM Act--approved 
by voice vote.

                 V. Regulatory Impact and Other Matters


                          A. REGULATORY IMPACT

    Pursuant to paragraph 11(b) of rule XXVI of the Standing 
Rules of the Senate, the Committee makes the following 
statement concerning the regulatory impact that might be 
incurred in carrying out the provisions of the bill.

Impact on individuals and businesses, personal privacy and paperwork

    The bill is not expected to impose additional 
administrative requirements or regulatory burdens on 
individuals. The bill is expected to reduce administrative 
requirements and regulatory burdens on some businesses.
    The provisions of the bill do not impact personal privacy.

                     B. UNFUNDED MANDATES STATEMENT

    This information is provided in accordance with section 423 
of the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104-
4).
    The Committee has determined that the bill does not contain 
any private sector mandates. The Committee has determined that 
the bill contains no intergovernmental mandate.

       VI. Changes in Existing Law Made by the Bill, as Reported

    In the opinion of the Committee, it is necessary in order 
to expedite the business of the Senate, to dispense with the 
requirements of paragraph 12 of rule XXVI of the Standing Rules 
of the Senate (relating to the showing of changes in existing 
law made by the bill as reported by the Committee).

                                  [all]