[House Report 107-313]
[From the U.S. Government Publishing Office]
107th Congress Rept. 107-313
HOUSE OF REPRESENTATIVES
1st Session Part 1
======================================================================
MEDICARE REGULATORY, APPEALS, CONTRACTING, AND EDUCATION REFORM ACT OF
2001
_______
December 4, 2001.--Ordered to be printed
_______
Mr. Tauzin, from the Committee on Energy and Commerce, submitted the
following
R E P O R T
[To accompany H.R. 3046]
[Including cost estimate of the Congressional Budget Office]
The Committee on Energy and Commerce, to whom was referred
the bill (H.R. 3046) to amend title XVIII of the Social
Security Act to provide regulatory relief, appeals process
reforms, contracting flexibility, and education improvements
under the Medicare Program, and for other purposes, having
considered the same, report favorably thereon with an amendment
and recommend that the bill as amended do pass.
CONTENTS
Page
Amendment........................................................ 1
Purpose and Summary.............................................. 33
Background and Need for Legislation.............................. 33
Hearings......................................................... 35
Committee Consideration.......................................... 36
Committee Votes.................................................. 36
Committee Oversight Findings..................................... 36
Statement of General Performance Goals and Objectives............ 36
New Budget Authority, Entitlement Authority, and Tax Expenditures 36
Committee Cost Estimate.......................................... 36
Congressional Budget Office Estimate............................. 37
Federal Mandates Statement....................................... 44
Advisory Committee Statement..................................... 44
Constitutional Authority Statement............................... 44
Applicability to Legislative Branch.............................. 44
Section-by-Section Analysis of the Legislation................... 45
Changes in Existing Law Made by the Bill, as Reported............ 70
Amendment
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, Appeals, Contracting, and Education Reform Act of 2001''.
(b) Amendments to Social Security Act.--Except as otherwise
specifically provided, whenever in this Act an amendment is expressed
in terms of an amendment to or repeal of a section or other provision,
the reference shall be considered to be made to that section or other
provision of the Social Security Act.
(c) BIPA; Secretary.--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.
(d) 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.
Sec. 3. Construction.
TITLE I--REGULATORY REFORM
Sec. 101. Issuance of regulations.
Sec. 102. Compliance with changes in regulations and policies.
Sec. 103. Report on regulatory burdens.
Sec. 104. GAO report on the sustainable growth rate and regulatory
costs.
Sec. 105. GAO report on requirement for submission of claims for
categorically excluded dental services.
TITLE II--APPEALS PROCESS REFORM
Sec. 201. Transfer of responsibility for medicare appeals.
Sec. 202. Expedited access to judicial review.
Sec. 203. Expedited review of certain provider agreement
determinations.
Sec. 204. Revisions to medicare appeals process.
Sec. 205. Hearing rights related to decisions by the Secretary to deny
or not renew a medicare enrollment agreement.
Sec. 206. Appeals by providers when there is no other party available.
Sec. 207. Process for exceptions to national coverage determinations
under special medical circumstances.
Sec. 208. Prior determination process for certain items and services.
Sec. 209. BIPA-related technical amendments and corrections.
TITLE III--CONTRACTING REFORM
Sec. 301. Increased flexibility in medicare administration.
Sec. 302. Requirements for information security.
TITLE IV--EDUCATION AND OUTREACH IMPROVEMENTS
Sec. 401. Provider education and technical assistance.
Sec. 402. Access to and prompt responses from medicare administrative
contractors.
Sec. 403. Reliance on guidance.
Sec. 404. Facilitation of consistent information to providers.
Sec. 405. Policy development regarding evaluation and management (E &
M) documentation guidelines.
Sec. 406. Beneficiary outreach demonstration program; report on 1-800
medicare number.
Sec. 407. Provider enrollment applications.
TITLE V--REVIEW, RECOVERY, AND ENFORCEMENT REFORM
Sec. 501. Prepayment review.
Sec. 502. Recovery of overpayments.
Sec. 503. Process for correction of minor errors and omissions on
claims without pursuing appeals process.
Sec. 504. Authority to waive a program exclusion.
TITLE VI--EMTALA IMPROVEMENTS
Sec. 601. Payment for EMTALA-mandated screening and stabilization
services.
Sec. 602. Emergency Medical Treatment and Active Labor Act (EMTALA)
Task Force.
Sec. 603. Notification of providers when EMTALA investigation closed.
Sec. 604. Prior review by peer review organizations in EMTALA cases
involving termination of participation.
TITLE VII--MISCELLANEOUS IMPROVEMENTS
Sec. 701. Methods for determining payment basis for new lab tests.
Sec. 702. One year delay in lock in procedures for Medicare+Choice
plans.
SEC. 2. FINDINGS.
Congress finds the following:
(1) The overwhelming majority of providers of services,
physicians, practitioners, facilities, 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,
physicians, practitioners, facilities, and suppliers so that
they may spend more time caring for patients.
SEC. 3. CONSTRUCTION.
(a) No Effect on Legal Authority.--Nothing in this Act shall be
construed to compromise or affect existing legal authority for
addressing fraud or abuse, whether it be criminal prosecution, civil
enforcement, or administrative remedies, including under sections 3729
through 3733 of title 31, United States Code (known as the False Claims
Act).
(b) No Effect on Medicare Waste, Fraud, and Abuse Efforts.--Nothing
in this Act shall be construed 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.
(c) Clarification Related to Medicare Trust Funds.--The
consolidation of medicare administrative contracting set forth in this
Act does not constitute (or reflect any position on the issue of)
consolidation of the Federal Hospital Insurance Trust Fund and the
Federal Supplementary Medical Insurance Trust Fund.
TITLE I--REGULATORY REFORM
SEC. 101. ISSUANCE OF REGULATIONS.
(a) Consolidation of Promulgation to Once a Month.--
(1) In general.--Section 1871 (42 U.S.C. 1395hh) is amended
by adding at the end the following new subsection:
``(d)(1) Subject to paragraph (2), the Secretary shall issue final
(including interim final) regulations to carry out this title only on
one business day of every month.
``(2) The Secretary may issue a final regulation described in
paragraph (1) on any other day than the day described in paragraph (1)
if the Secretary--
``(A) finds that issuance of such regulation on another day
is necessary to comply with requirements under law; or
``(B) finds that with respect to that regulation the
limitation of issuance on the date described in paragraph (1)
is contrary to the public interest.
If the Secretary makes a finding under this paragraph, the Secretary
shall include such finding, and brief statement of the reasons for such
finding, in the issuance of such regulation.''.
(2) Report on publication of regulations on a quarterly
basis.--Not later than 3 years after the date of the enactment
of this Act, the Comptroller General of the United States shall
submit to Congress a report on the feasibility of requiring
that regulations described in section 1871(d) of the Social
Security Act be promulgated on a quarterly basis rather than on
a monthly basis.
(3) Effective date.--The amendment made by paragraph (1)
shall apply to regulations promulgated on or after the date
that is 30 days after the date of the enactment of this Act.
(b) Regular Timeline for Publication of Final Regulations.--
(1) In general.--Section 1871(a) (42 U.S.C. 1395hh(a)) is
amended by adding at the end the following new paragraph:
``(3)(A) The Secretary, in consultation with the Director of the
Office of Management and Budget, shall establish a regular timeline for
the publication of final regulations based on the previous publication
of a proposed regulation or an interim final regulation.
``(B) With respect to publication of final regulations based on the
previous publication of a proposed regulation, such timeline may vary
among different regulations based on differences in the complexity of
the regulation, the number and scope of comments received, and other
relevant factors.
``(C)(i) With respect to the publication of final regulations based
on the previous publication of an interim final regulation--
``(I) subject to clause (ii), the Secretary shall publish the
final regulation within the 12-month period that begins on the
date of publication of the interim final regulation;
``(II) if a final regulation is not published by the deadline
established under this subparagraph, the interim final
regulation shall not continue in effect unless the Secretary
publishes a notice described in clause (ii) by such deadline;
and
``(III) the final regulation shall include responses to
comments submitted in response to the interim final regulation.
``(ii) If the Secretary determines before the deadline otherwise
established in this subparagraph that there is good cause, specified in
a notice published before such deadline, for delaying the deadline
otherwise applicable under this subparagraph, the deadline otherwise
established under this subparagraph shall be extended for such period
as the Secretary specifies in such notice.''.
(2) Effective date.--The amendment made by paragraph (1)
shall take effect on the date of the enactment of this Act. The
Secretary shall provide for an appropriate transition to take
into account the backlog of previously published interim final
regulations.
(c) Limitations on New Matter in Final Regulations.--
(1) In general.--Section 1871(a) (42 U.S.C. 1395hh(a)), as
amended by subsection (b), is further amended by adding at the
end the following new paragraph:
``(4) Insofar as a final regulation (other than an interim final
regulation) includes a provision that is not a logical outgrowth of the
relevant notice of proposed rulemaking relating to such regulation,
that provision shall be treated as a proposed regulation and shall not
take effect until there is the further opportunity for public comment
and a publication of the provision again as a final regulation.''.
(2) Effective date.--The amendment made by paragraph (1)
shall apply to final regulations published on or after the date
of the enactment of this Act.
SEC. 102. COMPLIANCE WITH CHANGES IN REGULATIONS AND POLICIES.
(a) No Retroactive Application of Substantive Changes.--
(1) In general.--Section 1871 (42 U.S.C. 1395hh), as amended
by section 101(a), is amended by adding at the end the
following new subsection:
``(e)(1)(A) A substantive change in regulations, manual
instructions, interpretative rules, statements of policy, or guidelines
of general applicability under this title shall not be applied (by
extrapolation or otherwise) retroactively to items and services
furnished before the effective date of the change, unless the Secretary
determines that--
``(i) such retroactive application is necessary to comply
with statutory requirements; or
``(ii) failure to apply the change retroactively would be
contrary to the public interest.''.
(2) Effective date.--The amendment made by paragraph (1)
shall apply to substantive changes issued on or after the date
of the enactment of this Act.
(b) Timeline for Compliance with Substantive Changes After
Notice.--
(1) In general.--Section 1871(e)(1), as added by subsection
(a), is further amended by adding at the end the following:
``(B) A compliance action may be made against a provider of
services, physician, practitioner, facility, or supplier with respect
to noncompliance with a substantive change referred to in subparagraph
(A) only for items and services furnished on or after the effective
date of the change.
``(C)(i) Except as provided in clause (ii), a substantive change
referred to in subparagraph (A) may not take effect 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.''.
(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.
SEC. 103. REPORT ON REGULATORY BURDENS.
Section 1871 (42 U.S.C. 1395hh), as amended by sections 101(a) and
102, is amended by adding at the end the following new subsection:
``(f)(1) Not later than 2 years after the date of the enactment of
this subsection, and every 2 years thereafter, the Secretary shall
submit to Congress a report with respect to the administration of this
title and areas of inconsistency or conflict among the various
provisions under law and regulation.
``(2) In preparing a report under paragraph (1), the Secretary
shall collect--
``(A) information from beneficiaries, providers of services,
physicians, practitioners, facilities, and suppliers, and from
the individual under section 404 of the Medicare Regulatory,
Appeals, Contracting, and Education Reform Act of 2001 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.''.
SEC. 104. GAO REPORT ON THE SUSTAINABLE GROWTH RATE AND REGULATORY
COSTS.
Not later than 18 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 accuracy of the sustainable growth rate (under
section 1848(f) of the Social Security Act, 42 U.S.C. 1395w-4(f)) for
2002 and succeeding years in accounting for regulatory costs imposed on
physicians.
SEC. 105. GAO REPORT ON REQUIREMENT FOR SUBMISSION OF CLAIMS FOR
CATEGORICALLY EXCLUDED DENTAL SERVICES.
Not later than 18 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 extent to which--
(1) group health plans or other third party payors require
that claims for medicare categorically excluded dental services
be denied by under the medicare program before the plan or
payor will make payment for such claims; and
(2) medicare beneficiaries request dentists to submit claims
for such categorically excluded dental services.
TITLE II--APPEALS PROCESS REFORM
SEC. 201. TRANSFER OF RESPONSIBILITY FOR MEDICARE APPEALS.
(a) Transition Plan.--
(1) In general.--Not later than October 1, 2002, the
Commissioner of Social Security and the Secretary shall develop
and transmit to Congress and the Comptroller General of the
United States a plan under which the functions of
administrative law judges responsible for hearing cases under
title XVIII of the Social Security Act (and related provisions
in title XI of such Act) are transferred from the
responsibility of the Commissioner and the Social Security
Administration to the Secretary and the Department of Health
and Human Services.
(2) Contents.--The plan shall include information on the
following:
(A) 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.
(B) Cost projections.--Funding levels required for
fiscal year 2004 and subsequent fiscal years under this
subsection to hear such cases in a timely manner.
(C) Transition timetable.--A timetable for the
transition.
(D) Regulations.--The establishment of specific
regulations to govern the appeals process.
(E) 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.
(F) Feasibility of precedential authority.--The
feasibility of developing a process to give decisions
of the Departmental Appeals Board in the Department of
Health and Human Services addressing broad legal issues
binding, precedential authority.
(G) 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.
(3) Additional information.--The plan may also include
recommendations for further Congressional action, including
modifications to the requirements and deadlines established
under section 1869 of the Social Security Act (as amended by
sections 521 and 522 of BIPA, 114 Stat. 2763A-534).
(4) GAO evaluation.--The Comptroller General of the United
States shall evaluate the plan and, not later than April 1,
2003, shall submit to Congress a report on such evaluation.
(b) Transfer of Adjudication Authority.--
(1) In general.--Not earlier than July 1, 2003, and not later
than October 1, 2003, the Commissioner of Social Security and
the Secretary shall implement the transition plan under
subsection (a) and transfer the administrative law judge
functions described in such subsection from the Social Security
Administration to the Secretary.
(2) Assuring independence of judges.--The Secretary shall
assure the independence of judges performing the administrative
law judge functions transferred under paragraph (1) from the
Centers for Medicare & Medicaid Services and its contractors.
(3) Geographic distribution.--The Secretary shall provide for
an appropriate geographic distribution of 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 judges performing the administrative law judge functions
transferred under paragraph (1) from the Federal Hospital
Insurance Trust Fund and the Federal Supplementary Medical
Insurance Trust Fund shall become payable to the Secretary for
the functions so transferred.
(6) Shared resources.--The Secretary shall enter into such
arrangements with the Commissioner as may be appropriate with
respect to transferred functions of administrative law judges
to share office space, support staff, and other resources, with
appropriate reimbursement from the Trust Funds described in
paragraph (5).
(c) Increased Financial Support.--In addition to any amounts
otherwise appropriated, to ensure timely action on appeals before
administrative law judges and the Departmental Appeals Board consistent
with section 1869 of the Social Security Act (as amended by section 521
of BIPA, 114 Stat. 2763A-534), there are authorized to be appropriated
(in appropriate part from the Federal Hospital Insurance Trust Fund and
the Federal Supplementary Medical Insurance Trust Fund) to the
Secretary such sums as are necessary for fiscal year 2003 and each
subsequent fiscal year to--
(1) increase the number of administrative law judges (and
their staffs) under subsection (b)(4);
(2) improve education and training opportunities for
administrative law judges (and their staffs); and
(3) increase the staff of the Departmental Appeals Board.
(d) Conforming Amendment.--Section 1869(f)(2)(A)(i) (42 U.S.C.
1395ff(f)(2)(A)(i)), as added by section 522(a) of BIPA 114 Stat.
2763A-543, is amended by striking ``of the Social Security
Administration''.
SEC. 202. EXPEDITED ACCESS TO JUDICIAL REVIEW.
(a) In General.--Section 1869(b) (42 U.S.C. 1395ff(b)), as amended
by section 521 of BIPA, 114 Stat. 2763A-534, is amended--
(1) in paragraph (1)(A), by inserting ``, subject to
paragraph (2),'' before ``to judicial review of the Secretary's
final decision''; and
(2) 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 a beneficiary 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 the
Departmental Appeals Board does not have the authority
to decide the question of law or regulation relevant to
the matters in controversy and that there is no
material issue of fact in dispute. The appellant may
make such request only once with respect to a question
of law or regulation for a specific matter in dispute
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 the
Departmental Appeals Board does not have 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 the Departmental
Appeals Board does not have 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 the 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 any amounts in
controversy.--Where a provider of services or
supplier seeks judicial review pursuant to this
paragraph, the amount in controversy (if any)
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 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 and suppliers under this Act.
``(D) Review panel defined.--For purposes of this
subsection, a `review panel' is a panel of 3 members
from the Departmental Appeals Board, selected for the
purpose 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 beneficiaries 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, 2003.
SEC. 203. EXPEDITED REVIEW OF CERTAIN PROVIDER AGREEMENT
DETERMINATIONS.
(a) Termination and Immediate Sanctions.--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 sanction
of termination of participation or a sanction described in clause (i)
or (iii) of section 1819(h)(2)(B) of such Act (42 U.S.C. 1395i-
3(h)(2)(B)) has been imposed. Under such process priority shall be
provided in cases of termination.
(b) Increased Financial Support.--In addition to any amounts
otherwise appropriated, to reduce by 50 percent the average time for
administrative determinations on appeals under section 1866(h) of the
Social Security Act (42 U.S.C. 1395cc(h)), there are authorized to be
appropriated (in appropriate part from the Federal Hospital Insurance
Trust Fund and the Federal Supplementary Medical Insurance Trust Fund)
to the Secretary such additional sums for fiscal year 2003 and each
subsequent fiscal year as may be necessary to increase the number of
administrative law judges (and their staffs) at the Departmental
Appeals Board of the Department of Health and Human Services and to
educate such judges and staff on long-term care issues.
SEC. 204. REVISIONS TO MEDICARE APPEALS PROCESS.
(a) Timeframes for the Completion of the Record.--Section 1869(b) (42
U.S.C. 1395ff(b)), as amended by section 521 of BIPA, 114 Stat. 2763A-
534, and as amended in section 202(a), is further amended by adding at
the end the following new paragraph:
``(3) Timely completion of the record.--
``(A) Deadline.--Subject to subparagraph (B), the
deadline to complete the record in a hearing before an
administrative law judge or a review by the
Departmental Appeals Board is 90 days after the date
the request for the appeal is filed.
``(B) Extensions for good cause.--The person filing a
request under subparagraph (A) may request an extension
of such deadline for good cause. The administrative law
judge, in the case of a hearing, and the Departmental
Appeals Board in the case of a review, may extend such
deadline based upon a finding of good cause to a date
specified by such individual.
``(C) Delay in decision deadlines until completion of
record.--Notwithstanding any other provision of this
section, the deadlines otherwise established under
subsection (d) for the making of determinations in
hearings or review under this section shall begin on
the date on which the record is complete.
``(D) Complete described.--For purposes of this
paragraph, a record is complete when the administrative
law judge, in the case of a hearing, or the
Departmental Appeals Board, in the case of a review,
has received--
``(i) written or testimonial evidence, or
both, submitted by the person filing the
request,
``(ii) written or oral argument, or both, is
presented,
``(iii) the decision of, and the record for,
the prior level of appeal,
``(iv) such other evidence as such judge or
Board, as the case may be, determines is
required to make a determination on the
request.''.
(b) Use of Patients' Medical Records.--Section 1869(c)(3)(B)(i) (42
U.S.C. 1395ff(c)(3)(B)(i)) 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)) is amended by adding at the end
the following new paragraph:
``(4) Requirements of notice of determinations and
redeterminations.--A written notice of a determination on an
initial determination or on a redetermination, insofar as such
determination or redetermination results in a denial of a claim
for benefits, shall be provided in printed form and written in
a manner calculated to be understood by the beneficiary and
shall include--
``(A) the specific reasons for the determination,
including, as appropriate--
``(i) upon request in the case of an initial
determination, a summary of the clinical or
scientific evidence used in making the
determination; and
``(ii) in the case of a redetermination, such
a summary;
``(B) the procedures for obtaining additional
information concerning the determination or
redetermination; and
``(C) notification of the right to seek a
redetermination or otherwise appeal the determination
and instructions on how to initiate such a
redetermination or appeal under this section.''.
(2) Reconsiderations.--Section 1869(c)(3)(E) (42 U.S.C.
1395ff(c)(3)(E)) is amended--
(A) by inserting ``be written in a manner calculated
to be understood by the beneficiary, 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)) 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 beneficiary 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) Preparation of record for appeal.--Section 1869(c)(3)(J)
(42 U.S.C. 1395ff(c)(3)(J)) by striking ``such information as
is required for an appeal'' and inserting ``the record for the
appeal''.
(d) Qualified Independent Contractors.--
(1) Eligibility requirements of qualified independent
contractors.--Section 1869(c) (42 U.S.C. 1395ff(c)) is
amended--
(A) in paragraph (2)--
(i) by inserting ``(except in the case of a
utilization and quality control peer review
organization, as defined in section 1152)''
after ``means an entity or organization that'';
and
(ii) by striking the period at the end and
inserting the following: ``and meets the
following requirements:
``(A) General requirements.--
``(i) The entity or organization has
(directly or through contracts or other
arrangements) sufficient medical, legal, and
other expertise (including knowledge of the
program under this title) and sufficient
staffing to carry out duties of a qualified
independent contractor under this section on a
timely basis.
``(ii) The entity or organization has
provided assurances that it will conduct
activities consistent with the applicable
requirements of this section, including that it
will not conduct any activities in a case
unless the independence requirements of
subparagraph (B) are met with respect to the
case.
``(iii) The entity or organization meets such
other requirements as the Secretary provides by
regulation.
``(B) Independence requirements.--
``(i) In general.--Subject to clause (ii), an
entity or organization meets the independence
requirements of this subparagraph with respect
to any case if 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
(as determined under regulations).
``(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--
``(I) not exceed a reasonable level;
and
``(II) not be contingent on any
decision rendered by the contractor or
by any reviewing professional.''; and
(B) in paragraph (3)(A), by striking ``, and shall
have sufficient training and expertise in medical
science and legal matters to make reconsiderations
under this subsection''.
(2) Eligibility requirements for reviewers.--Section 1869 (42
U.S.C. 1395ff) is amended--
(A) by amending subsection (c)(3)(D) to read as
follows:
``(D) Qualifications for reviewers.--The requirements
of subsection (g) shall be met (relating to
qualifications of reviewing professionals).''; and
(B) by adding at the end the following new
subsection:
``(g) Qualifications of Reviewers.--
``(1) In general.--In reviewing determinations under this
section, a qualified independent contractor shall assure that--
``(A) each individual conducting a review shall meet
the qualifications of paragraph (2);
``(B) compensation provided by the contractor to each
such reviewer is consistent with paragraph (3); and
``(C) in the case of a review by a panel described in
subsection (c)(3)(B) composed of physicians or other
health care professionals (each in this subsection
referred to as a `reviewing professional'), each
reviewing professional meets the qualifications
described in paragraph (4) and, if the request for
review indicates that the item or service involved was
furnished (or ordered to be furnished) by a physician,
each reviewing professional shall be a physician.
``(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 (as determined under
regulations).
``(B) Exception.--Nothing in subparagraph (A) shall
be construed to--
``(i) prohibit an individual, solely on the
basis of affiliation with a fiscal
intermediary, carrier, or other contractor,
from serving as a reviewing professional if--
``(I) a non-affiliated individual is
not reasonably available;
``(II) the affiliated individual is
not involved in the provision of items
or services in the case under review;
``(III) the fact of such an
affiliation is disclosed to the
Secretary and the beneficiary (or
authorized representative) and neither
party objects; and
``(IV) the affiliated 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 such
affiliation if the affiliation is disclosed to
the Secretary and the beneficiary (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).
``(3) Limitations on reviewer compensation.--Compensation
provided by a qualified independent contractor to a reviewer in
connection with a review under this section shall--
``(A) not exceed a reasonable level; and
``(B) not be contingent on the decision rendered by
the reviewer.
``(4) Licensure and expertise.--Each reviewing professional
shall be a physician (allopathic or osteopathic) or health care
professional who--
``(A) is appropriately credentialed or licensed in 1
or more States to deliver health care services; and
``(B) typically treats the condition, makes the
diagnosis, or provides the type of treatment under
review.
``(5) Related party defined.--For purposes of this section,
the term `related party' means, with respect to a case under
this title involving an individual beneficiary, 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.''.
(e) Implementation of Certain BIPA Reforms.--
(1) 1-year delay in effective dates.--(A) Section 521(d) of
BIPA (114 Stat. 2763A-543) is amended by striking ``October 1,
2002'' and inserting ``October 1, 2003''.
(B) Section 522(d) of BIPA (114 Stat. 2763A-547) is amended
by striking ``October 1, 2001'' and inserting ``October 1,
2002''.
(2) Use of peer review organizations to conduct expedited
review during transition period.--
(A) In general.--Section 1154(e) (42 U.S.C. 1320c-
3(e)) is amended by adding at the end the following:
``(6)(A) In applying this subsection during the transition period
(described in subparagraph (C)), any reference in this subsection--
``(i) to a hospital is deemed a reference to a provider of
services;
``(ii) to inpatient hospital care or services is deemed a
reference to services of such a provider of services;
``(iii) a notice under paragraph (1) is deemed to include--
``(I) a notice to discharge the individual from the
provider of services; or
``(II) a notice of termination of services by a
provider of services, but only in the case in which a
physician certifies that failure to continue the
provision of such services is likely to place the
individual's health at significant risk; and
``(iv) an inpatient is deemed a reference to a patient.
``(B) After the transition period, paragraphs (2) through (5) shall
not apply.
``(C) For purposes of this paragraph and section 1869(b)(1)(F)(ii),
the transition period, with respect to an individual who resides in an
area served by a peer review organization--
``(i) begins on the date on which the last triennial contract
with any peer review organization under this part becomes
effective during 2002; and
``(ii) ends on the date that the triennial contract under
this part with the organization that serves such area expires
in 2006.''.
(B) Conforming amendment to bipa.--Subsection (c) of
section 521 of BIPA is repealed.
(C) Conforming amendment to section 1869.--Section
1869(b)(1)(F) (42 U.S.C. 1395ff(b)(1)(F)), as amended
by section 521 of BIPA, is amended by striking clause
(ii) and inserting the following:
``(ii) No application during transition
period.--Clause (i) shall not apply during the
transition period described in section
1154(e)(6)(C).''.
(D) Section 1155 transition.--Section 1155 (42 U.S.C.
1320c-4) is amended by adding at the end the following:
``In the case of a determination made under section
1154(e)(6)(A) during the period in which the provisions
of subsection (b) of section 1869 (as added by section
521 of 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) are in
effect, this section shall not apply but the individual
shall be entitled to a hearing on the determination
before an administrative law judge under such
subsection (b) in the same manner as such section
applies to a hearing under subsection (a) of such
section 1869.''.
(f) Effective Date.--The amendments made by this section 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.
(g) Transition.--In applying section 1869(g) of the Social Security
Act (as added by subsection (d)(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. 205. HEARING RIGHTS RELATED TO DECISIONS BY THE SECRETARY TO DENY
OR NOT RENEW A MEDICARE ENROLLMENT AGREEMENT.
(a) Hearing Rights.--Section 1866 (42 U.S.C. 1395cc) is amended by
adding at the end the following new subsection:
``(j) Hearing Rights in Cases of Denial or Non-Renewal.--A provider
of services, physician, practitioner, facility, 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 Date.--The amendment made by subsection (a) 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. 206. APPEALS BY PROVIDERS WHEN THERE IS NO OTHER PARTY AVAILABLE.
(a) In General.--Section 1870 (42 U.S.C. 1395gg) is amended by adding
at the end the following new subsection:
``(h) Notwithstanding subsection (f) or any other provision of law,
the Secretary shall permit a provider of services, physician,
practitioner, facility, or supplier to appeal any determination of the
Secretary under this title relating to services rendered under this
title to an individual who subsequently dies, if there is no other
party available to appeal such determination, so long as the estate of
the individual, and the individual's family and heirs, are not liable
for paying for the item or service and are not liable for any increased
coinsurance or deductible amounts resulting from any decision
increasing the reimbursement amount for the provider of services,
physician, practitioner, facility, or supplier.''.
(b) Effective Date.--The amendment made by subsection (a) shall take
effect on the date of the enactment of this Act and shall apply to
items and services furnished on or after such date.
SEC. 207. PROCESS FOR EXCEPTIONS TO NATIONAL COVERAGE DETERMINATIONS
UNDER SPECIAL MEDICAL CIRCUMSTANCES
(a) In General.--Section 1869(f) (42 U.S.C. 1395ff(f)), as added by
section 522 of BIPA, is amended--
(1) by redesignating paragraphs (6) through (8) as paragraphs
(7) through (9); and
(2) by inserting after paragraph (5) the following new
paragraph:
``(6) Process for exceptions to national coverage
determinations under special medical circumstances.--
``(A) Establishment of process.--The Secretary shall
establish a process whereby an individual described in
paragraph (5) may submit to the Secretary a request for
a determination that a national coverage determination,
which has the effect of denying coverage under this
title for items and services for the treatment of a
serious or life-threatening condition of the
individual, should not apply to the individual due to
the special medical circumstances of the individual
that involve medical factors that were not considered
during the national coverage determination
decisionmaking procedure and make the application of
the national coverage determination inappropriate for
the individual's particular case. Such request shall be
accompanied by supporting documentation and may be made
before the receipt of the items or services involved.
``(B) Use of panel.--Under such process, the
Secretary shall provide that--
``(i) the initial decision on the request is
made by a panel described in subparagraph (C);
or
``(ii) the individual is provided the
opportunity to appeal the initial decision on
the request to such a panel.
``(C) Panel.--A panel described in this subparagraph
is a panel of physicians or other appropriate health
care professionals in which each member of the panel
meets the requirements of paragraphs (2) and (4) of
subsection (g) (relating to independence and licensure
and expertise).
``(D) Appeal.--A decision on a request under this
paragraph shall be subject to further review (after any
appeal described in subparagraph (B)(ii)) by the
Departmental Appeals Board and to judicial review, in
the same manner as provided under subsection (b) with
respect to review of a final decision of the Secretary.
``(E) Expedition.--The process under this paragraph
shall provide for reasonable expedition for making
decisions on requests when the need for expedition is
certified by a physician.
``(F) Effect of decision.--If a request under this
paragraph is approved for an individual with respect to
a treatment, the national coverage determination shall
not be applied by any medicare administrative
contractor with respect to the treatment for that
individual.
``(G) Notice.--The Secretary shall provide, in an
appropriate annual publication available to the public,
a list of national coverage determinations and
information on how to get more information with respect
to such determinations, made in the previous year.''.
(b) Effective Date.--The amendments made by subsection (a) shall
apply as if included in the enactment of section 522 of BIPA.
SEC. 208. PRIOR DETERMINATION PROCESS FOR CERTAIN ITEMS AND SERVICES.
(a) In General.--Section 1869 (42 U.S.C. 1395ff(b)), as amended by
sections 521 and 522 of BIPA and section 204(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 items and services, 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, the term `eligible requester' means--
``(i) a physician, but only in the case of
items and services that may be furnished (or
ordered to be furnished) by the physician; and
``(ii) an individual entitled to benefits
under this title, but only with respect to an
item or service for which the individual
receives an advance beneficiary notice from the
provider or supplier of the item or service
under section 1879 that payment may not be made
(or may no longer be made) for the item or
service under this title.
``(2) Establishing eligible categories.--The Secretary shall
establish by regulation limits on the categories of 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 any
eligible requester may submit to the contractor a
request for a determination, before the furnishing (or
ordering the furnishing) of the 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) (relating to medical
necessity, etc.).
``(B) Accompanying documentation.--The request shall
be accompanied by a description of the item or service,
its billing code (as appropriate), supporting
documentation relating to the medical necessity for the
item or service, and any other appropriate
documentation that the Secretary may require. In the
case of a request submitted by an eligible requester
that is described in paragraph (1)(B)(ii), the request
shall 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.
In the case of a request in which an eligible requester
is not the beneficiary described in paragraph
(1)(B)(i), the process shall provide that the
beneficiary involved shall be informed of any
determination described in clause (ii) (relating to a
determination of non-coverage).
``(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).
``(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) 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 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).
``(C) Description of additional information
required.--If the contractor makes the determination
described in paragraph (4)(A)(iii), the contractor
shall include in the notice under paragraph (4)(A) a
description of the additional information required to
make the coverage determination.
``(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) Construction.--Nothing in this subsection shall
be construed as affecting the right of an individual,
after receiving items or services for which the
contractor has made a determination described in
paragraph (4)(A)(ii), from submitting a claim for such
item or service or from obtaining administrative or
judicial review respecting such claim under the other
applicable provisions of this section.''.
(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.
(c) Provisions Relating to Advance Beneficiary Notices.--
(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 and coverage
policies under the medicare program.
(3) GAO report.--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, including the
use of the prior determination process under such section
1869(g) and their receipt of services.
(4) Advance beneficiary notice defined.--In this subsection,
the term ``advance beneficiary notice'' means a written notice
provided under section 1879 of the Social Security Act (42
U.S.C. 1395pp) 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 on the basis that they are not
reasonable and necessary consistent with the applicable
requirements of section 1862(a) (relating to medical necessity,
etc.) of such title.
SEC. 209. 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
``section 1114(f)'' and inserting ``section 222 of the Public
Health Service Act''; and
(B) in subsection (j), as so transferred and redesignated--
(i) by striking ``subsection (f)'' and inserting
``section 222 of the Public Health Service Act'';
(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) Effective Date.--The amendments made by this section shall be
effective as if included in the enactment of BIPA.
TITLE III--CONTRACTING REFORM
SEC. 301. 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 or activity 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 or activity in relation to an
individual entitled to benefits under part A or
enrolled under part B, or both, a specific provider of
services, physician, practitioner, facility, or
supplier (or class of such providers of services,
physicians, practitioners, facilities, or suppliers),
the `appropriate' medicare administrative contractor is
the medicare administrative contractor that has a
contract under this section with respect to the
performance of that function or activity in relation to
that individual, provider of services, physician,
practitioner, facility, or supplier or class of
provider of services, physician, practitioner,
facility, or supplier.
``(4) Functions described.--The functions referred to in
paragraphs (1) and (2) are payment functions, provider services
functions, and beneficiary services functions as follows:
``(A) Determination of payment amounts.--Determining
(subject to the provisions of section 1878 and to such
review by the Secretary as may be provided for by the
contracts) the amount of the payments required pursuant
to this title to be made to providers of services,
physicians, practitioners, facilities, 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.--Serving
as a center for, and communicating to individuals
entitled to benefits under part A or enrolled under
part B, or both, with respect to education and outreach
for those individuals, and assistance with specific
issues, concerns or problems of those individuals.
``(D) Provider consultative services.--Providing
consultative services to institutions, agencies, and
other persons to enable them to establish and maintain
fiscal records necessary for purposes of this title and
otherwise to qualify as providers of services,
physicians, practitioners, facilities, or suppliers.
``(E) Communication with providers.--Serving as a
center for, and communicating to providers of services,
physicians, practitioners, facilities, and suppliers,
any information or instructions furnished to the
medicare administrative contractor by the Secretary,
and serving as a channel of communication from such
providers, physicians, practitioners, facilities, and
suppliers to the Secretary.
``(F) Provider education and technical assistance.--
Performing the functions described in subsections (e)
and (f), relating to education, training, and technical
assistance to providers of services, physicians,
practitioners, facilities, and suppliers.
``(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 functions carried out under the
Medicare Integrity Program under section 1893. The
previous sentence shall not apply with respect to the
activity described in section 1893(b)(5) (relating to
prior authorization of certain items of durable medical
equipment under section 1834(a)(15)).
``(B) Construction.--An entity shall not be treated
as a medicare administrative contractor merely by
reason of having entered into a contract with the
Secretary under section 1893.
``(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.
``(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 without regard to any provision of law
requiring competition. The Secretary shall ensure that
performance quality is considered in such transfers.
The Secretary shall provide notice (whether in the
Federal Register or otherwise) of any such transfer
(including a description of the functions so
transferred and contact information for the contractors
involved) to providers of services, physicians,
practitioners, facilities, and suppliers affected by
the transfer.
``(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,
and other matters as the Secretary finds pertinent.
``(3) Performance requirements.--
``(A) Development of specific performance
requirements.--The Secretary shall develop contract
performance requirements to carry out the specific
requirements applicable under this title to a function
described in subsection (a)(4) and shall develop
standards for measuring the extent to which a
contractor has met such requirements. The Secretary
shall publish in the Federal Register such performance
requirements and measurement standards.
``(B) Considerations.--The Secretary may include as
one of the standards satisfaction level as measured by
provider and beneficiary surveys.
``(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 published 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 gross negligence or intent to defraud the
United States, be liable with respect to any payments certified
by the individual under this section.
``(2) Disbursing officer.--No disbursing officer shall, in
the absence of gross negligence or intent to defraud the United
States, be liable with respect to any payment by such officer
under this section if it was based upon an authorization (which
meets the applicable requirements for such internal controls
established by the Comptroller General) of a certifying officer
designated as provided in paragraph (1) of this subsection.
``(3) Liability of medicare administrative contractor.--No
medicare administrative contractor shall be liable to the
United States for a payment by a certifying or disbursing
officer unless in connection with such payment or in the
supervision of or selection of such officer the medicare
administrative contractor acted with gross negligence.
``(4) Limitation on civil liability.--
``(A) In general.--No medicare administrative
contractor having a contract with the Secretary under
this section, and no person employed by, or having a
fiduciary relationship with, any such medicare
administrative contractor or who furnishes professional
services to such medicare administrative contractor,
shall by reason of the performance of any duty,
function, or activity required or authorized pursuant
to this section or to a valid contract entered into
under this section, be held civilly liable under any
law of the United States or of any State (or political
subdivision thereof) provided due care was exercised in
the performance of such duty, function, or activity.
``(B) Reimbursement of certain expenses.--The
Secretary shall make payment to a medicare
administrative contractor under contract with the
Secretary pursuant to this section, or to any member or
employee thereof, or to any person who furnishes legal
counsel or services to such medicare administrative
contractor, in an amount equal to the reasonable amount
of the expenses incurred, as determined by the
Secretary, in connection with the defense of any civil
suit, action, or proceeding brought against such
medicare administrative contractor or person related to
the performance of any duty, function, or activity
under such contract, provided due care was exercised in
the performance of such duty, function, or activity.''.
(2) Consideration of incorporation of current law
standards.--In developing contract performance requirements
under section 1874A(b) of the Social Security Act, as inserted
by paragraph (1), the Secretary shall consider inclusion of the
performance standards described in sections 1816(f)(2) of such
Act (relating to timely processing of reconsiderations and
applications for exemptions) and section 1842(b)(2)(B) of such
Act (relating to timely review of determinations and fair
hearing requests), as such sections were in effect before the
date of the enactment of this Act.
(b) Conforming Amendments to Section 1816 (Relating to Fiscal
Intermediaries).--Section 1816 (42 U.S.C. 1395h) is amended as follows:
(1) The heading is amended to read as follows:
``provisions relating to the administration of part a''.
(2) Subsection (a) is amended to read as follows:
``(a) The administration of this part shall be conducted through
contracts with medicare administrative contractors under section
1874A.''.
(3) Subsection (b) is repealed.
(4) Subsection (c) is amended--
(A) by striking paragraph (1); and
(B) in each of paragraphs (2)(A) and (3)(A), by
striking ``agreement under this section'' and inserting
``contract under section 1874A that provides for making
payments under this part''.
(5) Subsections (d) through (i) are repealed.
(6) Subsections (j) and (k) are each amended--
(A) by striking ``An agreement with an agency or
organization under this section'' and inserting ``A
contract with a medicare administrative contractor
under section 1874A with respect to the administration
of this part''; and
(B) by striking ``such agency or organization'' and
inserting ``such medicare administrative contractor''
each place it appears.
(7) Subsection (l) is repealed.
(c) Conforming Amendments to Section 1842 (Relating to Carriers).--
Section 1842 (42 U.S.C. 1395u) is amended as follows:
(1) The heading is amended to read as follows:
``provisions relating to the administration of part b''.
(2) Subsection (a) is amended to read as follows:
``(a) The administration of this part shall be conducted through
contracts with medicare administrative contractors under section
1874A.''.
(3) Subsection (b) is amended--
(A) by striking paragraph (1);
(B) in paragraph (2)--
(i) by striking subparagraphs (A) and (B);
(ii) in subparagraph (C), by striking
``carriers'' and inserting ``medicare
administrative contractors''; and
(iii) by striking subparagraphs (D) and (E);
(C) in paragraph (3)--
(i) in the matter before subparagraph (A), by
striking ``Each such contract shall provide
that the carrier'' and inserting ``The
Secretary'';
(ii) by striking ``will'' the first place it
appears in each of subparagraphs (A), (B), (F),
(G), (H), and (L) and inserting ``shall'';
(iii) in subparagraph (B), in the matter
before clause (i), by striking ``to the
policyholders and subscribers of the carrier''
and inserting ``to the policyholders and
subscribers of the medicare administrative
contractor'';
(iv) by striking subparagraphs (C), (D), and
(E);
(v) in subparagraph (H)--
(I) by striking ``if it makes
determinations or payments with respect
to physicians' services,''; and
(II) by striking ``carrier'' and
inserting ``medicare administrative
contractor'';
(vi) by striking subparagraph (I);
(vii) in subparagraph (L), by striking the
semicolon and inserting a period;
(viii) in the first sentence, after
subparagraph (L), by striking ``and shall
contain'' and all that follows through the
period; and
(ix) in the seventh sentence, by inserting
``medicare administrative contractor,'' after
``carrier,''; and
(D) by striking paragraph (5);
(E) in paragraph (6)(D)(iv), by striking ``carrier''
and inserting ``medicare administrative contractor'';
and
(F) in paragraph (7), by striking ``the carrier'' and
inserting ``the Secretary'' each place it appears.
(4) Subsection (c) is amended--
(A) by striking paragraph (1);
(B) in paragraph (2), by striking ``contract under
this section which provides for the disbursement of
funds, as described in subsection (a)(1)(B),'' and
inserting ``contract under section 1874A that provides
for making payments under this part'';
(C) in paragraph (3)(A), by striking ``subsection
(a)(1)(B)'' and inserting ``section 1874A(a)(3)(B)'';
(D) in paragraph (4), by striking ``carrier'' and
inserting ``medicare administrative contractor'';
(E) in paragraph (5), by striking ``contract under
this section which provides for the disbursement of
funds, as described in subsection (a)(1)(B), shall
require the carrier'' and ``carrier responses'' and
inserting ``contract under section 1874A that provides
for making payments under this part shall require the
medicare administrative contractor'' and ``contractor
responses'', respectively; and
(F) by striking paragraph (6).
(5) Subsections (d), (e), and (f) are repealed.
(6) Subsection (g) is amended by striking ``carrier or
carriers'' and inserting ``medicare administrative contractor
or contractors''.
(7) Subsection (h) is amended--
(A) in paragraph (2)--
(i) by striking ``Each carrier having an
agreement with the Secretary under subsection
(a)'' and inserting ``The Secretary''; and
(ii) by striking ``Each such carrier'' and
inserting ``The Secretary'';
(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) Application to competitively bid contracts.--The
amendments made by this section shall apply to
contracts that are competitively bid on or after such
date or dates (but not later than 2 years after the
date of the enactment of this Act) as the Secretary
specifies.
(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 until such date as the contract is let out
for competitive bidding under such amendments.
(C) Deadline for competitive bidding.--The Secretary
shall provide for the letting by competitive bidding of
all contracts for functions of medicare administrative
contractors for annual contract periods that begin on
or after October 1, 2008.
(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) Secretarial Submission of Legislative Proposal.--Not later than 6
months after the date of the enactment of this Act, the Secretary shall
submit to the appropriate committees of Congress a legislative proposal
providing for such technical and conforming amendments in the law as
are required by the provisions of this section.
(g) Reports on Implementation.--
(1) Proposal for implementation.--At least 1 year before the
date the Secretary proposes to first implement the plan for
implementation of the amendments made by this section, the
Secretary shall submit a report to Congress and the Comptroller
General of the United States that describes such plan. The
Comptroller General shall conduct an evaluation of such plan
and shall submit to Congress, not later than 6 months after the
date the report is received, a report on such evaluation and
shall include in such report such recommendations as the
Comptroller General deems appropriate.
(2) Status of implementation.--The Secretary shall submit a
report to Congress not later than October 1, 2006, that
describes the status of implementation of such amendments and
that includes a description of the following:
(A) The number of contracts that have been
competitively bid as of such date.
(B) The distribution of functions among contracts and
contractors.
(C) A timeline for complete transition to full
competition.
(D) A detailed description of how the Secretary has
modified oversight and management of medicare
contractors to adapt to full competition.
SEC. 302. REQUIREMENTS FOR INFORMATION SECURITY.
(a) In General.--Section 1874A, as added by section 301, is amended
by adding at the end the following new subsection:
``(e) Requirements for Information Security.--
``(1) Development of information security program.--A
medicare administrative contractor that performs the functions
referred to in subparagraphs (A) and (B) of subsection (a)(4)
(relating to determining and making payments) shall implement a
contractor-wide information security program to provide
information security for the operation and assets of the
contractor with respect to such functions under this title. An
information security program under this paragraph shall meet
the requirements for information security programs imposed on
Federal agencies under section 3534(b)(2) of title 44, United
States Code (other than requirements under subparagraphs
(B)(ii), (F)(iii), and (F)(iv) of such section).
``(2) Independent audits.--
``(A) Performance of annual evaluations.--Each year a
medicare administrative contractor that performs the
functions referred to in subparagraphs (A) and (B) of
subsection (a)(4) (relating to determining and making
payments) shall undergo an evaluation of the
information security of the contractor with respect to
such functions under this title. The evaluation shall--
``(i) be performed by an entity that meets
such requirements for independence as the
Inspector General of the Department of Health
and Human Services may establish; and
``(ii) test the effectiveness of information
security control techniques for an appropriate
subset of the contractor's information systems
(as defined in section 3502(8) of title 44,
United States Code) relating to such functions
under this title and an assessment of
compliance with the requirements of this
subsection and related information security
policies, procedures, standards and guidelines.
``(B) Deadline for initial evaluation.--
``(i) New contractors.--In the case of a
medicare administrative contractor covered by
this subsection that has not previously
performed the functions referred to in
subparagraphs (A) and (B) of subsection (a)(4)
(relating to determining and making payments)
as a fiscal intermediary or carrier under
section 1816 or 1842, the first independent
evaluation conducted pursuant subparagraph (A)
shall be completed prior to commencing such
functions.
``(ii) Other contractors.--In the case of a
medicare administrative contractor covered by
this subsection that is not described in clause
(i), the first independent evaluation conducted
pursuant subparagraph (A) shall be completed
within 1 year after the date the contractor
commences functions referred to in clause (i)
under this section.
``(C) Reports on evaluations.--
``(i) To the inspector general.--The results
of independent evaluations under subparagraph
(A) shall be submitted promptly to the
Inspector General of the Department of Health
and Human Services.
``(ii) To congress.--The Inspector General of
Department of Health and Human Services shall
submit to Congress annual reports on the
results of such evaluations.''.
(b) Application of Requirements to Fiscal Intermediaries and
Carriers.--
(1) In general.--The provisions of section 1874A(e)(2) of the
Social Security Act (other than subparagraph (B)), as added by
subsection (a), shall apply to each fiscal intermediary under
section 1816 of the Social Security Act (42 U.S.C. 1395h) and
each carrier under section 1842 of such Act (42 U.S.C. 1395u)
in the same manner as they apply to medicare administrative
contractors under such provisions.
(2) Deadline for initial evaluation.--In the case of such a
fiscal intermediary or carrier with an agreement or contract
under such respective section in effect as of the date of the
enactment of this Act, the first evaluation under section
1874A(e)(2)(A) of the Social Security Act (as added by
subsection (a)), pursuant to paragraph (1), shall be completed
(and a report on the evaluation submitted to the Secretary) by
not later than 1 year after such date.
TITLE IV--EDUCATION AND OUTREACH IMPROVEMENTS
SEC. 401. 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 (f), including under section
1893) in order to maximize the effectiveness of Federal education
efforts for providers of services, physicians, practitioners,
facilities, and suppliers.''.
(2) Effective date.--The amendment made by paragraph (1)
shall take effect on the date of the enactment of this Act.
(3) Report.--Not later than October 1, 2002, the Secretary
shall submit to Congress a report that includes a description
and evaluation of the steps taken to coordinate the funding of
provider education under section 1889(a) of the Social Security
Act, as added by paragraph (1).
(b) Incentives To Improve Contractor Performance.--
(1) In general.--Section 1874A, as added by section 301(a)(1)
and as amended by section 302, is amended by adding at the end
the following new subsection:
``(f) Incentives To Improve Contractor Performance in Provider
Education and Outreach.--In order to give medicare administrative
contractors an incentive to implement effective education and outreach
programs for providers of services, physicians, practitioners,
facilities, and suppliers, the Secretary shall implement, a methodology
to measure the specific claims payment error rates of such contractors
in the processing or reviewing of medicare claims.''.
(2) Application to fiscal intermediaries and carriers.--The
provisions of section 1874A(f) of the Social Security Act, as
added by paragraph (1), shall apply to each fiscal intermediary
under section 1816 of the Social Security Act (42 U.S.C. 1395h)
and each carrier under section 1842 of such Act (42 U.S.C.
1395u) in the same manner as they apply to medicare
administrative contractors under such provisions.
(3) Reports.--Not later than October 1, 2002--
(A) the Secretary shall submit to Congress a report
that describes how the Secretary intends to use the
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; and
(B) the Comptroller General of the United States
shall submit to Congress and to the Secretary a report
on the adequacy of such methodology and shall include
in the report such recommendations as the Comptroller
General determines appropriate with respect to the
methodology.
(c) Requirement To Maintain Internet Sites.--
(1) In general.--Section 1889, as added by subsection (a), is
amended by adding at the end the following new subsection:
``(b) Internet Sites; FAQs.--The Secretary, and each medicare
contractor insofar as it provides services (including claims
processing) for providers of services, physicians, practitioners,
facilities, or suppliers, shall maintain an Internet site which--
``(1) provides answers in an easily accessible format to
frequently asked questions, and
``(2) includes all materials published by the Secretary or
the contractor, respectively,
relating to such providers of services, physicians, practitioners,
facilities, and suppliers under the programs under this title and title
XI insofar as it relates to such programs.''.
(2) Effective date.--The amendment made by paragraph (1)
shall take effect on October 1, 2002.
(d) Improved Provider Education and Training.--
(1) Increased funding for enhanced education and training
through medicare integrity program.--Section 1817(k)(4) (42
U.S.C. 1395i(k)(4)) is amended--
(A) in subparagraph (A), by striking ``, subject to
subparagraph (B)'' and inserting ``and functions
described in subparagraph (C)(ii), subject to
subparagraphs (B) and (C)'';
(B) in subparagraph (B), by striking ``The amount
appropriated'' and inserting ``Subject to subparagraph
(C), the amount appropriated''; and
(C) by adding at the end the following new
subparagraph:
``(C) Enhanced provider education and training.--
``(i) In general.--In addition to the amount
appropriated under subparagraph (B), the amount
appropriated under subparagraph (A) for a
fiscal year (beginning with fiscal year 2003)
is increased by $35,000,000.
``(ii) Use.--The funds made available under
this subparagraph shall be used only to
increase the conduct by medicare contractors of
education and training of providers of
services, physicians, practitioners,
facilities, and suppliers regarding billing,
coding, and other appropriate items and may
also be used to improve the accuracy,
consistency, and timeliness of contractor
responses to written and phone inquiries from
providers of services, physicians,
practitioners, facilities, and suppliers.''.
(2) Tailoring education and training for small providers or
suppliers.--
(A) In general.--Section 1889, as added by subsection
(a) and as amended by subsection (c), is further
amended by adding at the end the following new
subsection:
``(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 take into
consideration the special needs of small providers of services
or suppliers (as defined in paragraph (2)). Such education and
training activities for small providers or services and
suppliers may include the provision of technical assistance
(such as review of billing systems and internal controls to
determine program compliance and to suggest more efficient and
effective means of achieving such compliance).
``(2) Small provider of services or supplier.--In this
subsection, the term `small provider of services or supplier'
means--
``(A) an institutional provider of services with
fewer than 25 full-time-equivalent employees; or
``(B) a physician, practitioner, facility, or
supplier with fewer than 10 full-time-equivalent
employees.''.
(B) Effective date.--The amendment made by
subparagraph (A) shall take effect on October 1, 2002.
(e) Additional Provider Education Provisions.--
(1) In general.--Section 1889, as added by subsection (a) and
as amended by subsections (c) and (d)(2), is further amended by
adding at the end the following new subsections:
``(d) Encouragement of Participation in Education Program
Activities.--A medicare contractor may not use a record of attendance
at (or failure to attend) educational activities or other information
gathered during an educational program conducted under this section or
otherwise by the Secretary to select or track providers of services,
physicians, practitioners, facilities, or suppliers for the purpose of
conducting any type of audit or prepayment review.
``(e) Construction.--Nothing in this section or section 1893(g) shall
be construed as providing for disclosure by a medicare contractor of
information that would compromise pending law enforcement activities or
reveal findings of law enforcement-related audits.
``(f) Definitions.--For purposes of this section and section
1817(k)(4)(C), the term `medicare contractor' includes the following:
``(1) A medicare administrative contractor with a contract
under section 1874A, 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, physician, practitioner, facility, or supplier an
entity that has no authority under this title or title XI with respect
to such activities and such provider of services, physician,
practitioner, facility, or supplier.''.
(2) Effective date.--The amendment made by paragraph (1)
shall take effect on the date of the enactment of this Act.
SEC. 402. ACCESS TO AND PROMPT RESPONSES FROM MEDICARE ADMINISTRATIVE
CONTRACTORS.
(a) In General.--Section 1874A, as added by section 301 and as
amended by sections 302 and 401(b)(1), is further amended by adding at
the end the following new subsection:
``(g) Communications with Beneficiaries, Providers of Services,
Physicians, Practitioners, Facilities, and Suppliers.--
``(1) Communication strategy.--The Secretary shall develop a
strategy for communications with beneficiaries and with
providers of services, physicians, practitioners, facilities,
and suppliers under this title.
``(2) Response to written inquiries.--Each medicare
administrative contractor shall, for those providers of
services, physicians, practitioners, facilities, and suppliers
which submit claims to the contractor for claims processing and
for those beneficiaries with respect to which 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 by
beneficiaries, providers of services, physicians,
practitioners, facilities, and suppliers concerning the
programs under this title within 45 business days of the date
of receipt of such inquiries.
``(3) Response to toll-free lines.--Each medicare
administrative contractor shall, for those providers of
services, physicians, practitioners, facilities, and suppliers
which submit claims to the contractor for claims processing and
for those beneficiaries with respect to which claims are
submitted for claims processing, maintain a toll-free telephone
number at which beneficiaries, providers, physicians,
practitioners, facilities, 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 publish in the Federal Register)
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).
``(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.''.
(b) Effective Date.--The amendment made by subsection (a) shall take
effect October 1, 2002.
(c) Application to Fiscal Intermediaries and Carriers.--The
provisions of section 1874A(g) 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. 403. RELIANCE ON GUIDANCE.
(a) In General.--Section 1871(e), as added by section 102(a), is
further amended by adding at the end the following new paragraph:
``(2) If--
``(A) a provider of services, physician, practitioner,
facility, or supplier follows written guidance (which may have
been transmitted electronically) provided--
``(i) by the Secretary; or
``(ii) by a medicare contractor (as defined in
section 1889(f) and whether in the form of a written
response to a written inquiry under section 1874A(g)(1)
or otherwise) acting within the scope of the
contractor's contract authority,
in response to a written inquiry with respect to the furnishing
of an item or service or the submission of a claim for benefits
for such an item or service;
``(B) the Secretary determines that--
``(i) the provider of services, physician,
practitioner, facility, or supplier has accurately
presented the circumstances relating to such item,
service, and claim to the Secretary or the contractor
in the written guidance; and
``(ii) there is no indication of fraud or abuse
committed by the provider of services, physician,
practitioner, facility, or supplier against the program
under this title; and
``(C) the guidance was in error;
the provider of services, physician, practitioner, facility, or
supplier shall not be subject to any penalty or interest (relating to
an overpayment, if any) under this title (or the provisions of title XI
insofar as they relate to this title) relating to the provision of such
item or service or such claim if the provider of services, physician,
practitioner, facility, or supplier reasonably relied on such guidance.
In applying this paragraph with respect to guidance in the form of
general responses to frequently asked questions, the Secretary retains
authority to determine the extent to which such general responses apply
to the particular circumstances of individual claims. 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).''.
(b) Effective Date.--The amendment made by subsection (a) shall apply
to penalties imposed on or after the date of the enactment of this Act.
SEC. 404. FACILITATION OF CONSISTENT INFORMATION TO PROVIDERS.
The Secretary shall appoint an individual within the Department of
Health and Human Services who shall be responsible--
(1) for responding to complaints and grievances from
providers of services, physicians, practitioners, facilities,
and suppliers under the medicare program under title XVIII of
the Social Security Act (including provisions of title XI of
the Social Security Act insofar as they relate to such title
XVIII and are not administered by the Office of the Inspector
General of the Department of Health and Human Services)
concerning inconsistent information or inconsistent responses
provided under such program; and
(2) in so responding, for facilitating an appropriate
response from the Department of Health and Human Services or
from appropriate medicare contractors.
Such individual shall not serve as an advocate for any specific policy
within the Department.
SEC. 405. POLICY DEVELOPMENT REGARDING EVALUATION AND MANAGEMENT (E &
M) DOCUMENTATION GUIDELINES.
(a) In General.--The Secretary may not implement any new
documentation guidelines for evaluation and management physician
services under the title XVIII of the Social Security Act on or after
the date of the enactment of this Act unless the Secretary--
(1) has developed the guidelines in collaboration with
practicing physicians (including both generalists and
specialists) and provided for an assessment of the proposed
guidelines by the physician community;
(2) has established a plan that contains specific goals,
including a schedule, for improving the use of such guidelines;
(3) has conducted appropriate and representative pilot
projects under subsection (b) to test 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.
The Secretary may make changes to the manner in which existing
evaluation and management documentation guidelines are implemented to
reduce paperwork burdens on physicians.
(b) Pilot Projects to Test Evaluation and Management Documentation
Guidelines.--
(1) 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 new 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) 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. 406. BENEFICIARY OUTREACH DEMONSTRATION PROGRAM; REPORT ON 1-800
MEDICARE NUMBER.
(a) Beneficiary Outreach Demonstration Program.--
(1) In general.--The Secretary shall establish a
demonstration program (in this subsection referred to as the
``demonstration program'') under which medicare specialists
employed by the Department of Health and Human Services provide
advice and assistance to medicare beneficiaries at the location
of existing local offices of the Social Security
Administration.
(2) Locations.--
(A) In general.--The demonstration program shall be
conducted in at least 6 offices or areas. Subject to
subparagraph (B), in selecting such offices and areas,
the Secretary shall provide preference for offices with
a high volume of visits by medicare beneficiaries.
(B) 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.
(3) Duration.--The demonstration program shall be conducted
over a 3-year period.
(4) Evaluation and report.--
(A) Evaluation.--The Secretary shall provide for an
evaluation of the demonstration program. Such
evaluation shall include an analysis of--
(i) utilization of, and beneficiary
satisfaction with, the assistance provided
under the program; and
(ii) the cost-effectiveness of providing
beneficiary assistance through out-stationing
medicare specialists at local offices of the
Social Security Administration.
(B) 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.
(b) Report on 1-800 Medicare Number.--
(1) Study.--The Comptroller General of the United States
shall conduct a study to monitor the accuracy and consistency
of information provided to medicare beneficiaries through the
toll-free 1-800 Medicare Number, including an assessment of
whether the information provided is sufficient to answer
beneficiary questions. In conducting the study, the Comptroller
General shall examine the education and training of the
individuals providing information through the 1-800 Medicare
Number.
(2) 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 paragraph (1).
SEC. 407. PROVIDER ENROLLMENT APPLICATIONS.
(a) Deadlines and Monitoring.--Section 1871 (42 U.S.C. 1395hh), as
amended by sections 101(a), 102, and 103, is further amended by adding
at the end the following new subsection:
``(g)(1)(A) The Secretary shall establish by regulation procedures
under which there are deadlines for actions on applications for
enrollment (and, if applicable, renewal of enrollment).
``(B) The Secretary shall monitor the performance of medicare
administrative contractors in meeting the deadlines established under
subparagraph (A).''.
(b) Consultation Before Changing Provider Enrollment Forms.--
(1) In general.--Section 1871(g) (42 U.S.C. 1395hh(g)), as
added by subsection (a), is amended by adding at the end the
following new paragraph:
``(2) The Secretary shall consult with providers of services,
physicians, practitioners, facilities, and suppliers before making
changes in the provider enrollment forms required of such providers,
physicians, practitioners, facilities, and suppliers to be eligible to
submit claims for which payment may be made under this title.''.
(2) Effective date.--The amendment made by paragraph (1)
shall apply with respect to changes in provider enrollment
forms made on or after January 1, 2002.
TITLE V--REVIEW, RECOVERY, AND ENFORCEMENT REFORM
SEC. 501. PREPAYMENT REVIEW.
(a) In General.--Section 1874A, as added by section 301 and as
amended by sections 302, 401(b)(1), and 402, is further amended by
adding at the end the following new subsection:
``(h) Conduct of Prepayment Review.--
``(1) Standardization of random prepayment review.--If a
medicare administrative contractor conducts a random prepayment
review, the contractor may only conduct such review in
accordance with a standard protocol for random prepayment
audits developed by the Secretary.
``(2) Limitations on initiation of non-random prepayment
review.--A medicare administrative contractor may not initiate
non-random prepayment review of a provider of services,
physician, practitioner, facility, or supplier based on the
initial identification by that provider of services, physician,
practitioner, facility, or supplier of an improper billing
practice unless there is a likelihood of sustained or high
level of payment error (as defined by the Secretary).
``(3) 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.
``(4) Construction.--Nothing in this subsection shall be
construed as preventing the denial of payments for claims
actually reviewed under a random prepayment review. In the case
of a provider of services, physician, practitioner, facility,
or supplier with respect to which amounts were previously
overpaid, nothing in this subsection shall be construed as
limiting the ability of a medicare administrative contractor to
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) Random prepayment review defined.--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.''.
(b) Effective Date.--
(1) In general.--Except as provided in this subsection, the
amendment made by subsection (a) shall take effect on 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) 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. 502. RECOVERY OF OVERPAYMENTS.
(a) In General.--Section 1874A, as added by section 301 and as
amended by sections 302, 401(b)(1), 402, and 501(a), is further amended
by adding at the end the following new subsection:
``(i) Recovery of Overpayments.--
``(1) Use of repayment plans.--
``(A) In general.--If the repayment, within the
period otherwise permitted by a provider of services,
physician, practitioner, facility, or supplier, of an
overpayment under this title meets the standards
developed under subparagraph (B), subject to
subparagraph (C), and the provider, physician,
practitioner, facility, or supplier requests the
Secretary to enter into a repayment plan with respect
to such overpayment, the Secretary shall enter into a
plan with the provider, physician, practitioner,
facility, or supplier for the offset or repayment (at
the election of the provider, physician, practitioner,
facility, or supplier) of such overpayment over a
period of at least one year, but not longer than 3
years. Interest shall accrue on the balance through the
period of repayment. The repayment plan shall meet
terms and conditions determined to be appropriate by
the Secretary.
``(B) Development of standards.--The Secretary shall
develop standards for the recovery of overpayments.
Such standards shall--
``(i) include a requirement that the
Secretary take into account (and weigh in favor
of the use of a repayment plan) the reliance
(as described in section 1871(e)(2)) by a
provider of services, physician, practitioner,
facility, and supplier on guidance when
determining whether a repayment plan should be
offered; and
``(ii) provide for consideration of the
financial hardship imposed on a provider of
services, physician, practitioner, facility, or
supplier in considering such a repayment plan.
In developing standards with regard to financial
hardship with respect to a provider of services,
physician, practitioner, facility, or supplier, the
Secretary shall take into account the amount of the
proposed recovery as a proportion of payments made to
that provider, physician, practitioner, facility, or
supplier.
``(C) Exceptions.--Subparagraph (A) shall not apply
if--
``(i) the Secretary has reason to suspect
that the provider of services, physician,
practitioner, facility, 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, physician,
practitioner, facility, 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) No recoupment until reconsideration
exercised.--In the case of a provider of services,
physician, practitioner, facility, 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) Payment of interest.--
``(i) Return of recouped amount with interest
in case of reversal.--Insofar as such
determination on appeal against the provider of
services, physician, practitioner, facility, or
supplier is later reversed, the Secretary shall
provide for repayment of the amount recouped
plus interest for the period in which the
amount was recouped.
``(ii) Interest in case of affirmation.--
Insofar as the determination on such appeal is
against the provider of services, physician,
practitioner, facility, or supplier, interest
on the overpayment shall accrue on and after
the date of the original notice of overpayment.
``(iii) Rate of interest.--The rate of
interest under this subparagraph shall be the
rate otherwise applicable under this title in
the case of overpayments.
``(C) Medicare contractor defined.--For purposes of
this subsection, the term `medicare contractor' has the
meaning given such term in section 1889(f).
``(3) Payment audits.--
``(A) Written notice for post-payment audits.--
Subject to subparagraph (C), if a medicare contractor
decides to conduct a post-payment audit of a provider
of services, physician, practitioner, facility, or
supplier under this title, the contractor shall provide
the provider of services, physician, practitioner,
facility, 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, physician, practitioner,
facility, or supplier under this title, the contractor
shall--
``(i) give the provider of services,
physician, practitioner, facility, or supplier
a full review and explanation of the findings
of the audit in a manner that is understandable
to the provider of services, physician,
practitioner, facility, or supplier and permits
the development of an appropriate corrective
action plan;
``(ii) inform the provider of services,
physician, practitioner, facility, 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,
physician, practitioner, facility, 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, physician, practitioner, facility, 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.
``(4) Notice of over-utilization of codes.--The Secretary
shall establish, in consultation with organizations
representing the classes of providers of services, physicians,
practitioners, facilities, and suppliers, a process under which
the Secretary provides for notice to classes of providers of
services, physicians, practitioners, facilities, and suppliers
served by a medicare contractor in cases in which the
contractor has identified that particular billing codes may be
overutilized by that class of providers of services,
physicians, practitioners, facilities, or suppliers under the
programs under this title (or provisions of title XI insofar as
they relate to such programs).
``(5) 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.
``(6) Consent settlement reforms.--
``(A) In general.--The Secretary may use a consent
settlement (as defined in subparagraph (D)) to settle a
projected overpayment.
``(B) Opportunity to submit additional information
before consent settlement offer.--Before offering a
provider of services, physician, practitioner,
facility, or supplier a consent settlement, the
Secretary shall--
``(i) communicate to the provider of
services, physician, practitioner, facility, or
supplier in a non-threatening manner--
``(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, physician, practitioner,
facility, or supplier should take to
address the problems; and
``(ii) provide for a 45-day period during
which the provider of services, physician,
practitioner, facility, or supplier may furnish
additional information concerning the medical
records for the claims that had been reviewed.
``(C) Consent settlement offer.--The Secretary shall
review any additional information furnished by the
provider of services, physician, practitioner,
facility, or supplier under subparagraph (B)(ii).
Taking into consideration such information, the
Secretary shall determine if there still appears to be
an overpayment. If so, the Secretary--
``(i) shall provide notice of such
determination to the provider of services,
physician, practitioner, facility, or supplier,
including an explanation of the reason for such
determination; and
``(ii) in order to resolve the overpayment,
may offer the provider of services, physician,
practitioner, facility, or supplier--
``(I) the opportunity for a
statistically valid random sample; or
``(II) a consent settlement.
The opportunity provided under clause (ii)(I) does not
waive any appeal rights with respect to the alleged
overpayment involved.
``(D) Consent settlement defined.--For purposes of
this paragraph, the term `consent settlement' means an
agreement between the Secretary and a provider of
services, physician, practitioner, facility, or
supplier whereby both parties agree to settle a
projected overpayment based on less than a
statistically valid sample of claims and the provider
of services, physician, practitioner, facility, or
supplier agrees not to appeal the claims involved.
``(7) 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).''.
(b) Effective Dates and Deadlines.--
(1) Not later than 1 year after the date of the enactment of
this Act, the Secretary of Health and Human Services shall
first--
(A) develop standards for the recovery of
overpayments under section 1874A(i)(1)(B) of the Social
Security Act, as added by subsection (a);
(B) establish the process for notice of
overutilization of billing codes under section
1874A(i)(4) of the Social Security Act, as added by
subsection (a); and
(C) establish a standard methodology for selection of
sample claims for abnormal billing patterns under
section 1874A(i)(5) of the Social Security Act, as
added by subsection (a).
(2) Section 1874A(i)(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) Section 1874A(i)(3) of the Social Security Act, as added
by subsection (a), shall apply to audits initiated after the
date of the enactment of this Act.
(4) Section 1874A(i)(6) 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.
(5) Section 1874A(i)(7) of the Social Security Act, as added
by subsection (a), shall apply to statistically valid random
samples initiated after the date of the enactment of this Act.
SEC. 503. PROCESS FOR CORRECTION OF MINOR ERRORS AND OMISSIONS ON
CLAIMS WITHOUT PURSUING APPEALS PROCESS.
(a) In General.--The Secretary shall develop, in consultation with
appropriate medicare contractors (as defined in section 1889(f) of the
Social Security Act, as added by section 401(e)(1)) and representatives
of providers of services, physicians, practitioners, facilities, 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, physician, practitioner, facility, 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) Deadline.--Not later than 1 year after the date of the enactment
of this Act, the Secretary of Health and Human Services shall first
develop the process under subsection (a).
SEC. 504. PROGRAM AND PAYMENT EXCLUSIONS.
(a) 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 beneficiaries
under that program, 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.''.
(b) Exception for Certain Payment Exclusions.--
(1) In general.--Section 1862(a)(11) (42 U.S.C. 1395y(a)(11))
is amended--
(A) by inserting ``(other than a child)'' after
``immediate relatives''; and
(B) by inserting before the semicolon the following;
``, unless the items or services are furnished in a
rural area (as defined in section 1886(d)(2)(D))''.
(2) Effective date.--The amendments made by paragraph (1)
shall apply to items and services furnished on or after January
1, 2003.
TITLE VI--EMTALA IMPROVEMENTS
SEC. 601. PAYMENT FOR EMTALA-MANDATED SCREENING AND STABILIZATION
SERVICES.
(a) 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.''.
(b) Effective Date.--The amendment made by subsection (a) shall apply
to items and services furnished on or after January 1, 2002.
SEC. 602. EMERGENCY MEDICAL TREATMENT AND ACTIVE LABOR ACT (EMTALA)
TASK FORCE.
(a) Establishment.--There is established within the Department of
Health and Human Services the Emergency Medical Treatment and Active
Labor Act (EMTALA) Task Force (in this section referred to as the
``Task Force''). 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 Task Force shall be composed of 22 members as
follows:
(1) The Administrator of the Centers for Medicare & Medicaid
Services.
(2) The Inspector General of the Department of Health and
Human Services.
(3) 5 individuals selected by such Administrator--
(A) 4 of whom are staff at regional offices of such
Centers involved in investigations of violations of
EMTALA, and 1 each from the Northeastern Consortium,
Midwestern Consortium, Southern Consortium, and Western
Consortium; and
(B) 1 of whom is involved in EMTALA policy at the
national level.
(4) 2 individuals who participate in peer review
organizations' review of EMTALA determinations.
(5) 4 hospital administrators who have experience with the
application of EMTALA.
(6) 8 practicing physicians who have experience with the
application of EMTALA, of whom--
(A) 2 are practicing physicians in the field of
emergency medicine;
(B) 1 is a practicing physician in the field of
general surgery;
(C) 1 is a practicing physician in the field of
orthopedic surgery;
(D) 1 is a practicing physician in the field of
neurosurgery;
(E) 1 is a practicing physician in the field of
ophthalmology;
(F) 1 is a practicing physician in the field of
obstetrics and gynecology; and
(G) 1 is a practicing physician in the field of
psychiatry.
(7) 1 who is a representative of consumers.
(8) 1 practicing defense attorney specializing in EMTALA
defense cases.
The Administrator of the Centers for Medicare & Medicaid Services shall
select the members described in paragraphs (3) through (8) and shall
provide special consideration to qualified individuals nominated by
organizations in the relevant areas of specialty.
(c) General Responsibilities.--The Task Force--
(1) shall review EMTALA regulations;
(2) shall provide advice and recommendations to the Secretary
of Health and Human Services 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 Task Force shall elect a
member to serve as chairperson of the Task Force for the life
of the Task Force.
(2) Meetings.--The Task Force shall first meet at the
direction of the Secretary. The Task Force shall then meet
twice per year and at such other times as the Task Force may
provide.
(e) Termination.--The Task Force shall terminate 3 years after the
date of its first meeting.
(f) Exemption from Advisory Committee Act.--The Task Force shall be
exempt from the Federal Advisory Committee Act.
SEC. 603. 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.''.
SEC. 604. PRIOR REVIEW BY PEER REVIEW ORGANIZATIONS IN EMTALA CASES
INVOLVING TERMINATION OF PARTICIPATION.
(a) In General.--Section 1867(d)(3) (42 U.S.C. 1395dd(d)(3)) is
amended--
(1) in the first sentence, by inserting ``or in terminating a
hospital's participation under this title'' after ``in imposing
sanctions under paragraph (1)''; and
(2) 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 business days for such
review. The organization shall provide a copy of the report on
its findings to the hospital or physician consistent with
confidentiality requirements imposed on the organization under
such part B.''.
(b) Effective Date.--The amendments made by subsection (a) shall
apply to terminations of participation initiated on or after the date
of the enactment of this Act.
TITLE VII--MISCELLANEOUS IMPROVEMENTS
SEC. 701. METHODS FOR DETERMINING PAYMENT BASIS FOR NEW LAB TESTS.
Section 1833(h) (42 U.S.C. 1395l(h)) is amended by adding at the end
the following:
``(8)(A) The Secretary shall establish by regulation procedures for
determining the basis for, and amount of, payment under this subsection
for any clinical diagnostic laboratory test with respect to which a new
or substantially revised HCPCS code is assigned on or after January 1,
2003 (in this paragraph referred to as `new tests').
``(B) Determinations under subparagraph (A) shall be made only after
the Secretary--
``(i) makes available to the public (through an Internet site
and other appropriate mechanisms) a list that includes any such
test for which establishment of a payment amount under this
subsection is being considered for a year;
``(ii) on the same day such list is made available, causes to
have published in the Federal Register notice of a meeting to
receive comments and recommendations (and data on which
recommendations are based) from the public on the appropriate
basis under this subsection for establishing payment amounts
for the tests on such list;
``(iii) not less than 30 days after publication of such
notice convenes a meeting, that includes representatives of
officials of the Centers for Medicare & Medicaid Services
involved in determining payment amounts, to receive such
comments and recommendations (and data on which the
recommendations are based);
``(iv) taking into account the comments and recommendations
(and accompanying data) received at such meeting, develops and
makes available to the public (through an Internet site and
other appropriate mechanisms) a list of proposed determinations
with respect to the appropriate basis for establishing a
payment amount under this subsection for each such code,
together with an explanation of the reasons for each such
determination, the data on which the determinations are based,
and a request for public written comments on the proposed
determination; and
``(v) taking into account the comments received during the
public comment period, develops and makes available to the
public (through an Internet site and other appropriate
mechanisms) a list of final determinations of the payment
amounts for such tests under this subsection, together with the
rationale for each such determination, the data on which the
determinations are based, and responses to comments and
suggestions received from the public.
``(C) Under the procedures established pursuant to subparagraph (A),
the Secretary shall--
``(i) set forth the criteria for making determinations under
subparagraph (A); and
``(ii) make available to the public the data (other than
proprietary data) considered in making such determinations.
``(D) The Secretary may convene such further public meetings to
receive public comments on payment amounts for new tests under this
subsection as the Secretary deems appropriate.
``(E) For purposes of this paragraph:
``(i) The term `HCPCS' refers to the Health Care Procedure
Coding System.
``(ii) A code shall be considered to be `substantially
revised' if there is a substantive change to the definition of
the test or procedure to which the code applies (such as a new
analyte or a new methodology for measuring an existing analyte-
specific test).''.
SEC. 702. ONE YEAR DELAY IN LOCK IN PROCEDURES FOR MEDICARE+CHOICE
PLANS.
Section 1851(e) (42 U.S.C. 1395w-21(e)) is amended--
(1) in paragraph (2)(A), by striking ``through 2001'' and
``and 2001'' and inserting ``through 2002'' and ``2001, and
2002'', respectively;
(2) in paragraph (2)(B), by striking ``during 2002'' and
inserting ``during 2003'';
(3) in paragraphs (2)(B)(i) and (2)(C)(i), by striking
``2002'' and inserting ``2003'' each place it appears;
(4) in paragraph (2)(D), by striking ``2001'' and inserting
``2002''; and
(5) in paragraph (4), by striking ``2002'' and inserting
``2003'' each place it appears.
Purpose and Summary
The purpose of H.R. 3046, the Medicare Regulatory, Appeals,
Contracting, and Education Reform Act, is to streamline
Medicare's regulatory process, ease paperwork burdens, and
improve Medicare's responsiveness to beneficiaries and health
care providers. Most importantly, this legislation addresses
the need for consistent and accurate written responses from
Medicare contractors. It also includes significant reform of
Medicare's contracting and administrative appeals processes,
and improvements in beneficiary and provider outreach and
education.
Background and Need for Legislation
Covering about 40 million beneficiaries at an annual cost
of nearly $240 billion, the Medicare program is the nation's
largest health insurance program. It enrolls and pays claims
from nearly one million providers of services, physicians,
practitioners, facilities, suppliers, and health plans. The
Centers for Medicare and Medicaid Services (CMS) is the federal
agency that administers Medicare, relying on contractors to
annually process and pay about 900 million claims for services
furnished under the traditional fee-for-service program.
The complexity of the Medicare program and the environment
in which CMS operates is widely recognized. Because of the
large number of laws and regulations that govern the Medicare
program, many health care providers are forced to spend as much
time negotiating the maze of CMS bureaucracy as they do
treating patients. Complaints about confusing and burdensome
regulations are common.
Over the past year, the Subcommittee on Health and the
Subcommittee on Oversight and Investigations conducted a
comprehensive review of the major programs, policies, and
operations of CMS, focusing specifically on the agency's
administration of the Medicare program. As part of this ongoing
initiative, known as ``Patients First: A 21st Century Promise
to Ensure Quality and Affordable Health Coverage,'' the
Subcommittees examined the current complexities in the Medicare
program, the extent to which such complexities are affecting
patient care, and the role Congress can play in addressing
these concerns.
In an effort to identify concerns and burdens that Medicare
beneficiaries and health care providers face on a daily basis,
the Committee on Energy and Commerce disseminated two surveys,
one for beneficiaries and the other for health care providers.
These surveys were designed to elicit input about ways the
delivery of quality health care could be improved and waste,
mismanagement, and bureaucratic delays could be eliminated. The
surveys asked Medicare's true stakeholders--beneficiaries and
health care providers--to report on their interactions with the
Medicare program and identify areas where problems exist. The
provider survey also asked providers of services, physicians,
practitioners, facilities, and suppliers to identify some of
the most burdensome regulations they deal with routinely, as
well as provide recommendations to improve the federal health
care system. With more than 3,500 responses, the surveys were a
valuable Committee resource.
Through the ``Patients First'' project and survey
responses, the Committee documented and identified many of the
complexities of the Medicare program and the systemic problems
faced by Medicare beneficiaries and health care providers. For
example, the majority of health care providers who responded to
the Committee's survey described the difficulty associated with
getting guidance from CMS to appropriately navigate the federal
rules and regulations governing Medicare, often describing the
inconsistent information they receive when seeking answers to
their questions. In addition, many health care providers stated
that the educational materials they receive from Medicare are
neither clear nor concise. Further, many beneficiaries reported
problems with Medicare's customer service.
Representatives Toomey and Berkley introduced legislation
earlier this year to address many of these problems. Their
legislation focused specifically on the concern that Medicare's
complexity and extensive paperwork requirements were detracting
from the time physicians could spend with patients as well as
the time they could spend learning about new medical
advancements. The Medicare Regulatory, Appeals, Contracting,
and Education Reform Act builds upon this earlier legislation.
The Committee worked with stakeholders, including provider
associations, beneficiary groups, and government officials, to
balance the government's obligation to protect the Medicare
Trust Funds with the need to reform Medicare for the provider
community and the patients it serves. The Medicare Regulatory,
Appeals, Contracting, and Education Reform Act embodies this
balance.
Hearings
The Subcommittee on Health held four joint hearings with
the Subcommittee on Oversight and Investigations as part of the
``Patients First'' initiative.
The first hearing, held on Thursday, March 1, 2001,
examined Medicare's processes for determining coverage,
assigning billing codes, and setting payment levels. The
Subcommittees received testimony from: Mr. Art Linkletter,
National Spokesman, United Seniors Association; Dr. Paul
Shreve, Director, General Nuclear Imaging Section, University
of Michigan Medical Center; Ms. Kathy Dziuba, Rochester Hills,
Michigan; Dr. Jeffrey J. Popma, Director, Interventional
Cardiology, Brigham and Women's Hospital; Mr. Donald Latulippe,
Boston, Massachusetts; Dr. Jeffrey Kang, Director, Office of
Clinical Standards and Quality, Health Care Financing
Administration (now the Centers for Medicare and Medicaid
Services); Dr. Clifford Goodman, Senior Scientist for Medical
Technology, Lewin Group; and Dr. Murray N. Ross, Executive
Director, Medicare Payment Advisory Commission.
The second hearing, held on Wednesday, April 4, 2001,
focused on how the Health Care Financing Administration (now
the Centers for Medicare and Medicaid Services) interacts with
health care providers regarding the rules and regulations that
guide the Medicare program. The Subcommittees received
testimony from: Dr. Mark Miller, Acting Director, Center for
Health Plans and Providers, Health Care Financing
Administration (now the Centers for Medicare and Medicaid
Services); Mr. Michael Mangano, Acting Inspector General,
Department of Health and Human Services; Dr. David Becker,
Largo, Florida, on behalf of the Pinellas County Medical
Society; Jyl D. Bradley, Administrator, Dunning Street
Ambulatory Care Center, on behalf of the Medical Group
Management Association; Dr. Douglas L. Wood, Vice Chair,
Department of Medicine, Mayo Foundation; and Mr. Harvey
Friedman, Vice President, Medicare and Seniors Program, Blue
Cross Blue Shield Association.
The third hearing, held on Thursday, May 10, 2001, featured
four former administrators of the Health Care Financing
Administration (now the Centers for Medicare and Medicaid
Services) to discuss what works at the agency and what can be
improved. The Subcommittees received testimony from: Mr.
William L. Roper, Dean of the School of Public Health,
University of North Carolina at Chapel Hill; Dr. Gail R.
Wilensky, John M. Olin Senior Fellow, Project HOPE, and Chair
of the Medicare Payment Advisory Commission; Dr. Bruce C.
Vladeck, Senior Vice President for Policy, Institute for
Medicare Practice, Mount Sinai School of Medicine; and Ms.
Nancy-Ann Min DeParle, the immediate former administrator of
the Health Care Financing Administration (now the Centers for
Medicare and Medicaid Services).
The fourth hearing, held on Thursday, June 28, 2001,
examined Medicare's existing contracting authority and
proposals to refine this authority to secure the efficient and
responsive delivery of high quality services to Medicare
beneficiaries. The Subcommittees receivedtestimony from: Mr.
Thomas Scully, Administrator, Centers for Medicare and Medicaid
Services; Mr. Michael Mangano, Acting Inspector General, Department of
Health and Human Services; Ms. Leslie G. Aronovitz, Director, Health
Care-Program Administration and Integrity Issues, U.S. General
Accounting Office; Mr. Scott P. Serota, President and Chief Executive
Officer, Blue Cross Blue Shield Association; Mr. Timothy F. Cullen,
Chairman of the Board, United Government Services, LLC; and Mr. Alfred
J. Chiplin, Jr., Managing Attorney, Health Care Rights Project, Center
for Medicare Advocacy.
Committee Consideration
On Wednesday, October 17, 2001, the Subcommittee on Health
met in open markup session and approved H.R. 3046, the Medicare
Regulatory, Appeals, Contracting, and Education Reform Act, for
Full Committee consideration, as amended, by a voice vote. On
Wednesday, October 31, 2001, the Committee on Energy and
Commerce met in open markup session and favorably ordered
reported H.R. 3046, as amended, by a voice vote.
Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto.
There were no record votes taken in connection with ordering
H.R. 3046 reported. A motion by Mr. Tauzin to order H.R. 3046
reported to the House, as amended, was agreed to by a voice
vote.
Committee Oversight Findings
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the Committee held four oversight
hearings and made findings that are reflected in this report.
Statement of General Performance Goals and Objectives
The objective of H.R. 3046 is to provide regulatory relief
to providers of services, physicians, practitioners,
facilities, and suppliers furnishing health care services to
Medicare beneficiaries and improve education and outreach to
beneficiaries and providers.
New Budget Authority, Entitlement Authority, and Tax Expenditures
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee finds that H.R.
3046, the Medicare Regulatory, Appeals, Contracting, and
Education Reform Act, would result in no new or increased
budget authority, entitlement authority, or tax expenditures or
revenues.
Committee Cost Estimate
The Committee adopts as its own the cost estimate prepared
by the Director of the Congressional Budget Office pursuant to
section 402 of the Congressional Budget Act of 1974.
Congressional Budget Office Estimate
Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate
provided by the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, December 4, 2001.
Hon. W.J. ``Billy'' Tauzin,
Chairman, Committee on Energy and Commerce,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 3046, the Medicare
Regulatory and Contracting Reform Act of 2001.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Alexis
Ahlstrom and Niall Brennan.
Sincerely,
Steven Lieberman
(For Dan L. Crippen, Director).
Enclosure.
H.R. 3046--Medicare Regulatory and Contracting Reform Act of 2001
Summary: The Medicare Regulatory and Contracting Reform Act
of 2001 would require the Centers for Medicare and Medicaid
Services (CMS) to modify how Medicare regulations and policies
are developed, communicated, 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, and would require the completion of
several studies and reports.
The bill would also affect direct spending by changing
procedures for determining whether a service is covered by
Medicare, and by appropriating additional funds to the Medicare
Integrity Program.
CBO estimates that implementing H.R. 3046 would cost $59
million in 2002 and $1.4 billion over the 2002-2006 period from
appropriated funds. CBO also estimates that implementing the
bill would increase direct spending by $27 million in 2002,
$1.3 billion over the 2002-2006 period, and $5.4 billion over
the 2002-2011 period. Because the bill would affect direct
spending, pay-as-you-go procedures would apply.
H.R. 3046 would preempt state and local laws governing
liability for Medicare administrative contractors in some
cases. This preemption would be an intergovernmental mandate as
defined in the Unfunded Mandates Reform Act (UMRA) because it
would prevent the application of state laws. However, because
the preemption would not require state or local governments to
make any specific action, it would impose no costs on those
governments. Other provisions of the bill would have no
significant effect on the budgets of state, local, or tribal
governments. H.R. 3046 contains no private-sector mandates as
defined in UMRA.
Estimated cost to the Federal Government: Table 1 shows the
estimated authorization levels and outlays for Medicare
administrative expenses under current law and under H.R. 3046.
Assuming appropriation of the estimated amounts, CBO estimates
that implementing H.R. 3046 would cost $59 million in 2002 and
$1.4 billion over the 2002-2006 period. The table also shows
the estimated effect of H.R. 3046 on direct spending, a total
of $1.3 billion over the 2002-2006 period. The costs of this
legislation fall within budget function 570 (Medicare).
TABLE 1.--ESTIMATED BUDGETARY IMPACT OF H.R. 3046
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-----------------------------------------------------------
2001 2002 2003 2004 2005 2006
----------------------------------------------------------------------------------------------------------------
SPENDING SUBJECT TO APPROPRIATION
Spending for Medicare Administrative Costs Under
Current Law:
Estimated Budget Authority \1\.................. 3,352 3,500 3,646 3,797 3,955 4,118
Estimated Outlays............................... 3,321 3,464 3,631 3,757 3,913 4,074
Proposed Changes:
Estimated Authorization Level................... 0 65 416 347 264 318
Estimated Outlays............................... 0 59 381 354 273 312
Spending for Medicare Administrative Costs Under
H.R. 3046:
Estimated Authorization Level \1\............... 3,352 3,565 4,062 4,144 4,219 4,436
Estimated Outlays............................... 3,321 3,523 4,012 4,111 4,186 4,386
DIRECT SPENDING
Medicare Spending Under Current Law \2\:
Estimated Budget Authority...................... 214,473 225,915 240,076 255,769 278,493 294,073
Estimated Outlays............................... 214,114 225,933 239,855 256,065 278,411 293,843
Proposed Changes:
Estimated Budget Authority...................... 0 27 131 243 385 554
Estimated Outlays............................... 0 27 122 243 385 554
Medicare Spending Under H.R. 3046 \2\:
Estimated Budget Authority...................... 214,473 225,942 240,207 256,012 278,878 294,627
Estimated Outlays............................... 214,114 225,960 239,977 256,308 278,796 294,397
----------------------------------------------------------------------------------------------------------------
\1\ Budget authority and outlays for 2001 are the amounts appropriated and spent that year.
\2\ Includes direct spending for benefits and administrative costs less premium receipts.
Basis of estimate: For this estimate, CBO assumes that the
legislation would be enacted this fall and that estimated
amounts would be appropriated each year.
Spending subject to appropriations
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 of contractors. CBO
estimates that these provisions would increase the cost of
administering contracts and the total amount CMS spends on
contracts by $35 million in 2002 and $1.2 billion over the
2002-2006 period.
Contracting Changes. H.R. 3046 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 $233 million
over the 2002-2006 period.
H.R. 3046 would require CMS to competitively bid contracts
with fiscal intermediaries and carriers at least every five
years. CBO expects that an additional 3-5 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 $54
million over the 2002-2006 period.
Contractor Oversight. In addition, the bill would direct
Medicare program to measure the payment error rates for
individual contractors, which are believed to indicate how well
providers understand proper Medicare billing procedures, with
the intent of identifying contractors who have achieved high
levels of provider education. This provision would expand
current practice, which is to calculate system-wide error
rates. The bill would also expand the requirement for
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 $30 million
over the 2002-2006 period.
New Contractor Activities. The bill would require
contractors to respond to written requests for guidance within
45 days of receipt, and would make that response binding on the
Medicare program. We expect that contractors would receive 50
percent more written requests under H.R. 3046 than they would
under current law, with each request costing $15 dollars to
process in 2002. 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 2002
and $76 million over the 2002-2006 period.
Beginning in July 2003, 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 $100 per determination (at 2003
prices). We estimate the cost of administering this program
would total $35 million over the 2002-2006 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 payments via the
appeals process. CBO estimates the cost of developing and
operating systems to process these resubmitted claims would
total $5 million in 2002 and $46 million over the 2002-2006
period.
The bill would require contractors to give providers or
beneficiaries, upon request, a summary of the clinical and
scientific evidence used in making a determination. CBO
estimates the cost of making available scientific and clinical
evidence on determinations would total $686 million over the
2002-2006 period.
Appeals Reform.--H.R. 3046 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. It would also
create a new mechanism for individuals to challenge National
Coverage Determinations (NCDs.) CBO estimates that implementing
these provisions would cost $8 million in 2002 and $114 million
over the 2002-2006 period.
Administrative Law Judge Transfer. The bill would transfer
certain administrative 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 2002 and
would total $39 million over the 2002-2006 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.
3046 would create procedures by which appellants may petition
for expedited access to judicial review in federal district
court in certain circumstances. CBO estimates that implementing
those provisions would cost $34 million over the 2002-2006
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.
National Coverage Determinations. H.R. 3046 would also
establish a process for seeking exceptions to national coverage
determinations under special medical circumstances. In general,
new medical technologies are integrated into existing Medicare
payment systems as soon as they are approved by the Food and
Drug Administration. However, in certain instances,
breakthrough technologies that are clinically different from
existing treatment options require a more detailed examination,
either at the local level by Medicare contractors, or through
an NCD issued by CMS.
Current law provides for a process by which Medicare-
eligible individuals seeking coverage of a service excluded by
an NCD can appeal that decision. Such an appeal would be
reviewed by the Departmental Appeals Board (DAB) of the
Department of Health and Human Services. If the DAB determines
that there is inadequate information to support the validity of
an NCD, it can permit the taking of evidence to evaluate the
reasonableness of the NCD. However, CMS has not yet established
a formal appeals process for NCDs, and no appeals have been
filed to date.
In addition to the current NCD appeals process, H.R. 3046
would require the Secretary to establish a process whereby
Medicare-eligible individuals may request an exception, due to
their special medical circumstances, to an NCD that has the
effect of denying coverage for items and services for the
treatment of a serious or life-threatening condition.
Furthermore, these special medical circumstances must not have
been considered during the initial NCD process. Each request
would be reviewed by an independent panel of physicians or
other health care professionals. If the panel supports the
request for an exception, the NCD would not be applied by any
Medicare contractor with respect to treatment for that
individual.
CBO assumes that the two appeals process are not perfect
substitutes. Specifically, CBO assumes that some individuals
who would not appeal an NCD under current law would request an
exception to an NCD under the procedures outlined in H.R. 3046.
CBO estimates that this provision would result in an additional
3,000 requests for exceptions above and beyond the existing NCD
appeals process beginning in 2003. CBO estimates that
adjudicating these requests for exceptions, including
assembling panels of physicians, would cost $6 million over the
2002-2006 period. (The additional claims payments that would
result from this process would be direct spending and are
discussed later in this estimate.)
Demonstrations and New program Areas.--H.R. 3046 would
direct CMS to expand its programs to educate beneficiaries and
providers. CBO estimates that implementing these provisions
would cost $6 million in 2002 and $35 million during the 2002-
2006 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
2002-2006 period.
H.R. 3046 would require CMS to designate a person to act as
a liaison between providers and Medicare and to respond to
providers' complaints. CBO assumes that in order to comply with
this provision, this person would require the aid of several
staff members. CBO estimates the cost of implementing this
provision would be $4 million in 2002 and $31 million over the
2002-2006 period.
Development of Policies, Procedures, and Time Lines.--H.R.
3046 would require CMS to develop new policies, procedures, and
time lines with regard to the issuance of regulations and
documentation guidelines for evaluation and management
services. CBO estimates the cost of implementing these
provisions would be $10 million in 2002 and $38 million during
the 2002-2006 period.
Final Regulations. The bill would require CMS to create a
time line for publishing final regulations and would limit
publication of new regulations to once a month. There currently
are 22 ``interim final rules''; the bill would require CMS to
make those rules final, and would require CMS to finalize all
future regulations. We estimate that CMS would need to hire an
additional 3 to 5 people, at the GS-11 level or higher, to
comply with the requirement to finalize all future interim
regulations and to produce the required reports. CBO estimates
the cost of implementing these provisions would be $9 million
in 2002 and $19 million during the 2002-2006 period.
Documentation Guidelines for Evaluation and Management
(E&M) Services. H.R. 3046 would restrict CMS from implementing
new documentation guidelines for evaluation and management
services until several conditions have been met. Those
conditions include:
Establishing plans to improve the
guidelines;
Completing pilot projects to test
modifications to the guidelines;
Educating providers about the guidelines;
and
Consulting providers during the entire
process of testing and establishing the guidelines.
CMS currently has E&M guidelines in place, and the bill would
not require changes in those guidelines. CBO assumes that CMS
will attempt to update those guidelines during the next few
years, because both CMS and provider groups have expressed
interest in doing so. The new procedural requirements would
increase the cost of developing and implementing new E&M
guidelines. Establishing new guidelines for E&M documentation
would require the hiring of at least two FTEs for the
administration of the pilot projects, for outreach to
providers, and for consultation with providers. CBO further
estimates that CMS would conduct at least three pilot projects,
with each project costing around $1 million per year, and that
the studies and reports required by these provisions would cost
another $1 million.
Direct spending
H.R. 3046 would change the conditions under which Medicare
would pay for services, create a process to establish whether
an item or service is covered prior to a beneficiary receiving
the service, and create mechanisms by which previously excluded
services would be provided in special medical circumstances.
The bill would also appropriate funds to the Medicare Integrity
Program.\1\ CBO estimates that implementing H.R. 3046 would
increase direct spending by $27 million in 2002, $1.3 billion
over the 2002-2006 period, and $5.4 billion over the 2002-2011
period.
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\1\ Funds appropriated by an authorizing bill are considered direct
spending.
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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.
CBO estimates that contractors would process about 100,000
requests for prior determination each year, and that half of
those requests would be approved. CBO assumes that:
About three-quarters of the approved requests
would involve beneficiaries who, under current law, would
choose the lower-priced service when offered the choice of a
lower-priced service that Medicare is known to cover and a
higher-priced service involving an ABN; in such cases, the new
process would result in the use of higher-priced services.
About one-quarter of the approved requests would
involve beneficiaries who, under current law, would decline a
relatively high-cost service when asked to sign an ABN; in such
cases, the new process would result in the use of additional
services.
Very few requests would involve beneficiaries who,
under current law, would sign an ABN and receive a service for
which Medicare coverage is uncertain.\2\
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\2\ The vast majority of ABNs are for low-cost items and services
(the average payment for approved services is about $18). CBO believes
that beneficiaries are unlikely to request prior determination and wait
up to 45 days for an answer for such low-cost services.
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For beneficiaries who would receive a lower-priced service
under current law, the estimate assumes there would be a
difference of about $250, on average, between the services
furnished under current law and services furnished following
approval for Medicare payment; the average added cost for
beneficiaries who would decline a service under current law
would be $500, we estimate. Those amounts are in 2003 prices,
and include the cost of additional visits for beneficiaries who
return to a provider after receiving approval for Medicare
payment. CBO estimates that the cost of complying with this
provision would be $187 million over the 2002-2011 period.
Under current law, relatives of beneficiaries cannot
receive payments from Medicare for the provision of items or
services to that beneficiary. H.R. 3046 would eliminate that
restriction for relatives who provide care to beneficiaries in
rural areas. CBO expects that this provision would have a
particularly strong impact in the area of home health care--
increasing spending on home health care by an estimated 2
percent--because some care givers would become employed by home
health agencies to get paid for the care that they currently
provide without remuneration. CBO estimates the cost of
implementing this provision would be $27 million in 2002 and
$4.6 billion over the 2002-2011 period.
The bill would allow beneficiaries to appeal national
coverage determinations based on their individual medical
circumstances. CBO estimates that this provision would result
in an additional 3,000 requests for exceptions above and beyond
the existing NCD appeals process, beginning in 2003. We
estimate that the cost of paying claims related to these
exceptions would not increase direct spending in 2002, but
would increase direct spending by $376 million over the 2002-
2011 period.
H.R. 3046 would appropriate $35 million a year in
additional funds to the Medicare Integrity Program beginning in
fiscal year 2003. CBO estimates this provision would increase
direct spending by $306 million over the 2002-2011 period.
Under current law, if a beneficiary dies after receiving
services from a provider who does not accept assignment (that
is, for all services furnished to Medicare beneficiaries, agree
to accept payment at Medicare rates as payment in full), the
provider may not appeal a denial of payment. The bill would
permit those providers to make such appeals. CBO estimates that
enacting this provision would result in about 2,000 denials
being reversed and paid each year. We estimate that this
provision would not have a significant effect on spending in
2002, and would increase spending by $5 million over the 2002-
2011 period.
Pay-as-you-go considerations: The Balanced Budget and
Emergency Deficit Control Act sets up pay-as-you-go procedures
for legislation affecting direct spending or receipts. The
table below shows the effect of H.R. 3046 on direct spending.
For pay-as-you-go purposes, only the effects in the current
year, the budget year, and the succeeding four years are
counted.
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
----------------------------------------------------------------------
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
----------------------------------------------------------------------------------------------------------------
Changes in outlays....................... 27 122 243 385 554 629 713 807 912 1,044
Changes in receipts...................... Not applicable
----------------------------------------------------------------------------------------------------------------
Estimated impact on state, local, and tribal governments:
H.R. 3046 would preempt state and local laws governing
liability for Medicare administrative contractors in some
cases. This preemption would be an intergovernmental mandate as
defined in UMRA because it would prevent the application of
state laws. However, because the preemption would not require
the state or local governments to take any specific action, it
would impose no costs on those governments. Other provisions of
the bill would have no significant effect on the budgets of
state, local, or tribal governments.
Estimated impact on the private sector: H.R. 3046 contains
no private-sector mandates as defined in UMRA.
Estimate prepared by: Federal Costs: Alexis Ahlstrom and
Niall Brennan. Impact on State, Local, and Tribal Governments:
Leo Lex. Impact on the Private Sector: Stuart Guterman.
Estimate approved by: Robert A. Sunshine, Assistant
Director for Budget Analysis.
Federal Mandates Statement
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Constitutional Authority Statement
Pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee finds that the
Constitutional authority for this legislation is provided in
Article I, section 8, clause 3, which grants Congress the power
to regulate commerce with foreign nations, among the several
States, and with the Indian tribes.
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
Section-by-Section Analysis of the Legislation
Section 1. Short title; amendments to Social Security Act; table of
contents
Section 1 provides the short title of the legislation, the
Medicare Regulatory, Appeals, Contracting, and Education Reform
Act. Except as otherwise specified, the provisions of this bill
would amend or repeal a section or other provisions of the
Social Security Act. ``BIPA'' means the Medicare, Medicaid, and
SCHIP Benefits Improvement and Protection Act of 2000 and
``Secretary'' means the Secretary of the Department of Health
and Human Services (HHS).
Section 2. Findings
In this section, Congress finds that the overwhelming
majority of providers of services, physicians, practitioners,
facilities, and suppliers are law-abiding citizens providing
important services and care to Medicare beneficiaries each day
and directs the Secretary to streamline Medicare's paperwork
requirements and clarify its instructions so that time spent on
patient care can increase.
Section 3. Construction
Section three states that none of the provisions shall be
construed to (1) compromise the existing legal authority for
addressing Medicare fraud or abuse with respect to criminal
prosecution, civil enforcement, or administrative remedies,
including those established by the False Claims Act or (2)
prevent the Department of Health and Human Services (HHS) from
its ongoing efforts to eliminate waste, fraud, and abuse in
Medicare. Also, consolidation of Medicare's administrative
contracting (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 does not reflect
any position on that issue.
TITLE I--REGULATORY REFORM
Section 101. Issuance of regulations
Under current law, the Secretary is required to prescribe
regulations that are necessary to administer parts A and B of
the Medicare program. No rule, requirement, or policy statement
(other than a national coverage determination) that establishes
or changes a substantive legal standard determining Medicare's
scope of benefits, level of payment, or eligibility of
individuals, entities, or organizations to receive benefits or
furnish services can take effect unless it is promulgated by
regulation. The Secretary must publish a proposed regulation in
the Federal Register, with at least 60 days to solicit public
comment, before issuing the final regulation with the following
exceptions: (1) the statute permits the regulation to be issued
in interim final form or provides for a shorter public comment
period; (2) the statutory deadline for implementation of a
provision is less than 150 days after the date of enactment of
the statute containing the provision; (3) under the good cause
exception containedin the rule-making provision of Title 5 of
the United States Code, notice and public comment procedures are deemed
impracticable, unnecessary, or contrary to the public interest. The
Secretary must publish in the Federal Register no less frequently than
every three months a list of all manual instructions, interpretative
rules, statements of policy, and guidelines, which are promulgated to
carry out Medicare law.
This section requires the Secretary to issue final and
interim final regulations on one business day of every month,
unless the Secretary finds that publication on other dates is
required to comply with Medicare law or that this restriction
is contrary to the public interest. In such instances, the
Secretary would be required to include an explanation of such a
finding when the regulations are issued. The Comptroller
General of the U.S. General Accounting Office (GAO) would be
required to report to Congress within three years on the
feasibility of issuing regulations on one day each calendar
quarter.
The Secretary, in consultation with the Office of
Management and Budget, would establish a regular timeline for
the publication of final regulations based on the previous
publication of a proposed regulation or interim final
regulation. Timelines may vary for different regulations based
on differences in the regulatory complexity and the scope and
number of comments received. However, the Secretary would be
required to publish a final regulation within the 12-month
period following the publication of an interim final
regulation. The final regulation would include responses to
comments submitted in response to the interim final regulation.
If the final regulation is not published by that 12-month
deadline, the interim final regulation would not remain in
effect unless the Secretary publishes a notice before the
deadline that establishes a good cause for the delay and
extends the deadline.
Provisions that are not logical outgrowths of proposed
regulations would be effective only after a public comment
period and separate publication as a final regulation. The
logical outgrowth provision would not apply to interim final
regulations. The Committee on Energy and Commerce 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 past
custom to recognize such details in final rules as a ``logical
outgrowth'' of proposed rules.
The publication restriction applies to regulations
promulgated on or after 30 days from the date of enactment. The
regular timeline requirement is effective on enactment. The
Secretary shall provide for an appropriate transition for the
backlog of previously published interim regulations. The
logical outgrowth provision applies to final regulations
published on or after enactment.
Section 102. Compliance with changes in regulations and policies
In section 102, 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.
After enactment, a compliance action against a provider of
services, physician, practitioner, facility, or supplier with
respect to such a substantive change would be permitted for
items and services furnished on or after the effective date of
the change. The substantive change would be effective not
earlier than 30 days after its issuance or publication date
except when the Secretary waives the 30-day period to comply
with statutory requirements or finds such a waiver to be in the
public interest. The Secretary would be required to include a
brief explanation of such a finding in the issuance or
publication of the substantive change if an earlier date is
established.
The effective date for substantive changes and compliance
actions is on or after enactment.
Section 103. Report on regulatory burdens
This section requires the Secretary 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 of services, practitioners,
facilities, suppliers, provider facilitators (established in
Section 404 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.
This section is effective upon enactment.
Section 104. GAO report on the sustainable growth rate and regulatory
costs
This section would require the GAO to report to Congress on
the accuracy of the sustainable growth rate (SGR) in accounting
for regulatory costs imposed on physicians for 2002 and
subsequent years. The report is due no later than 18 months
after enactment.
Section 105. GAO report on requirement for submission of claims for
categorically excluded dental services
This section would require the GAO to submit a report to
Congress on the extent to which group health plans or other
insurers require dentists to obtain documentation from Medicare
that categorically excluded dental services are not covered
prior to paying the claim. The report would include the number
of Medicare beneficiaries that request dentists to submit
claims to Medicare for these excluded dental services. The
report is due no later than 18 months after enactment.
TITLE II--APPEALS PROCESS REFORM
Section 201. Transfer of responsibility for Medicare appeals
Under 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 governs Medicare
claims appeals, was amended by BIPA in its entirety. However,
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 administratively and then may go
to federal district court. A hearing by an administrative law
judge (ALJ) in the Social Security Administration (SSA) and
review by the Departmental Appeals Board (DAB) are components
of the administrative appeals process.
This section requires the Commissioner of SSA and the
Secretary to develop a plan by October 1, 2002 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
the GAO no later than October 1, 2002, and would include (1)
information on the number of ALJs and support staff required
now and in the future to hear and decide cases in a timely
manner, taking into account the current and anticipated number
of claims, appeals, beneficiaries, and statutory changes; (2)
cost projections for FY2004 and subsequently; (3) a timetable
for the transition; (4) information on regulations needed to
govern the appeals process; (5) the development of a case
tracking system that would accommodate the maintenance and
transfer of case specific data across the fee-for-service and
managed care components of Medicare; (6) the feasibility of
giving binding, precedential authority to DAB decisions that
address broad legal issues; and (7) the feasibility of filing
appeals electronically or through video conferencing. This plan
would also include recommendations for further Congressional
action, including modifications to the appeals requirements and
deadlines imposed by BIPA. The GAO would evaluate the plan and
submit a report to Congress by April 1, 2003.
The Secretary and the Commissioner of SSA would implement
the transition plan and transfer the ALJ functions no earlier
than July 1, 2003 but no later than October 1, 2003. The
Secretary would (1) assure the ALJ's independence from CMS; and
(2) locate the ALJs with an appropriate geographic distribution
to ensure continued 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 Medicare ALJ functions
would be paid to the Secretary. 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 ensure timely action on
appeals before ALJs and the DAB. Additional appropriations
would be used toincrease the number of ALJs and support staff,
improve education and training for ALJs and their staff, and increase
DAB staff.
This section is effective upon enactment unless otherwise
specified.
Section 202. Expedited access to judicial review
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 a 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 contested amount is
greater than $100, an individual is entitled to a hearing
before an ALJ 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 in cases 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.
This section would require the Secretary to establish an
appeals process that would permit access to judicial review
when a review panel determines, no later than 60 days after the
date of the written request and submission of supporting
documentation, that no entity within the administrative appeals
process has the authority to decide the question of law or
regulation relevant to the matter in controversy and there are
no material facts in dispute. A review panel would consist of a
panel of three members from the DAB. An appellant would go
straight to the DAB in these cases; no additional steps in the
administrative appeals process would be necessary. The
appellant would be able to make such request only once with
respect to a question of law or regulation for a specific
dispute. 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 is located,
or in the district court for the District of Columbia. The
amount in controversy (if any) would be subject to annual
interest awarded to the prevailing party by the reviewing
court. Interest (equal to the rate of interest on obligations
issued for purchase by the Federal Supplementary Medical
Insurance Trust Fund effective for the month that the civil
action commences) would accrue beginning on the first day of
the first month beginning after the filing deadline. The
interest payments would not be deemed to be Medicare
reimbursement. The provision for expedited access to judicial
review would apply to an institution's appeal concerning
program participation, provided that the same requirements are
met (no entity in the administrative appeals process has the
authority to decide the relevant question of law or regulation,
and no material facts are in dispute). Remedies applied to
assure quality of care in skilled nursing facilities (under
Section 1819) would not be affected while such appeals are
pending.
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.
This section is effective for appeals filed on or after
October 1, 2003.
Section 203. Expedited review of certain provider agreement
determinations
Section 1866(h) of the Social Security Act permits any
institution or agency dissatisfied with a determination that it
is not a provider (or that it can no longer be a provider)
access to an administrative hearing and judicial review.
This section requires the Secretary to develop and
implement a process under 1866(h) to expedite provider
agreement determinations, including those instances where
participation is terminated or other sanctions (including the
denial of payment for 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
FY2003 and subsequently would be authorized to (1) reduce the
average time for administrative decisions on appeals of
provider agreement determinations 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.
This section is effective upon enactment.
Section 204. Revisions to Medicare appeals process
Section 521 of BIPA (which is not yet implemented) amends
Section 1869 to establish certain filing and decision making
deadlines in Medicare's administrative appeals process. The
Secretary is required to establish in regulation the time
limits for requesting a hearing by the ALJ or DAB.
BIPA also established 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 meets the established requirements for sufficient training
and expertise in medical science and legal matters. To
reconsider whether a service is reasonable and necessary, a QIC
will employ a panel of physicians or other appropriate health
care professionals to review the facts and the circumstances of
the initial determination. This reconsideration is to be based
on applicable information, including clinical experience, and
medical, technical, and scientific evidence.
The BIPA provisions regarding appeals of Medicare's initial
determinations become effective on or after October 1, 2002,
and those applying to national coverage determinations become
effective on or after October 1, 2001.
Section 1154 of the Social Security Act describes the
required functions of utilization and quality control peer
review organizations (PROs). These entities review, subject to
the provisions of their contract, the professional activities
of physicians, other practitioners, and institutional providers
in rendering services to Medicare beneficiaries. Generally, PRO
reviews focus on determining the reasonableness of care, the
quality of care, and the appropriateness of the setting. These
determinations are ordinarily binding for purposes of
determining whether benefits should be paid.
Certain PRO review procedures have been established for
inpatient hospital care. If a hospital determines, and the
attending physician agrees, that a continued hospital stay for
a Medicare beneficiary is no longer necessary, the hospital may
provide the patient (or the patient's representative) a notice
of noncoverage. If the attending physician does not agree with
the hospital's determination that care is no longer necessary,
the hospital may request the PRO to review the validity of its
determination. If a Medicare beneficiary receives a Medicare
notice of noncoverage and requests a PRO review, the PRO must
review the determination and provide notice to the patient,
hospital, and attending physician, regardless of the patient's
financial liability for the continued stay. Certain deadlines,
conditions, and other notice requirements are established for
these PRO reviews of inpatient care discharges.
This section establishes a deadline of 90 days to complete
an appeal record for an ALJ hearing and the subsequent DAB
review, a deadline that starts the day the request for such
action is filed. The appellant would be permitted to request an
extension of the 90-day deadline for theALJ hearing or the DAB
review for good cause; the ALJ or the DAB may extend the deadline based
on a finding of good cause. The mandated deadlines for the appeals
process established elsewhere would begin on the date the record is
complete. A record would be complete when an ALJ or the DAB has
received written or testimonial evidence, written or oral arguments,
the decision and record of any prior appeal, and other evidence
determined to be necessary.
The provisions would establish that a written notice of an
initial determination associated with a claims denial be
provided. The notice would be written in a manner designed to
be understood by the beneficiary and would include: (1) the
reason for the decision and an appropriate summary of the
evidence used to support the decision; (2) the procedures for
obtaining additional information concerning the determination
or redetermination; and (3) the notification of appeal rights
and associated instructions. A summary of the clinical or
scientific evidence used to support the determination would be
provided upon request. This summary would be provided in a
redetermination notice.
The provisions would amend the existing requirement that a
reconsideration decision be written. The reconsideration
decision would have to be written in a manner that could be
understood by the beneficiary and would only need to include 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, and a notification of
appeal rights and instructions.
Medical records of the individual would be included as part
of the applicable information used by QICs in making
reconsiderations. Otherwise qualified utilization and quality
control peer review organizations (PROs) would be able to act
as QICs.
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
staffing and independence to make reconsiderations. A QIC would
be required to assure that reviewers meet professional
qualifications, independence, and compensation requirements. If
the request for review indicates that the item or service was
furnished (or was ordered to be furnished) by a physician, each
reviewing professional shall be a physician. Subject to
reasonable compensation requirements and other exceptions,
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
relationship with a related party; (3) have a conflict of
interest with respect to a related party. A QIC's compensation
would not exceed a reasonable level and would not be contingent
on any decision by the QIC or by any reviewing professional. A
reviewer's compensation from a QIC would not exceed a
reasonable level and 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; fiscal intermediary; carrier; any fiduciary,
officer, director or employee of HHS or a 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 non-affiliated individual is not reasonably available;
(2) the affiliated individual is not involved in the provision
of items or services of the case; (3) the fact of the
affiliation is disclosed to the Secretary, the beneficiary, or
the authorized representative and no one objects; and (4) the
affiliated individual is not a direct employee and does not
provide services exclusively, primarily, or on behalf of a
Medicare contractor. Individuals with staff privileges at the
institution where treatment occurs would be able to serve as a
reviewer if the affiliation is disclosed without objection,
subject to limits on compensation. Each reviewing professional
shall be an allopathic or osteopathic physician or health care
professional who (1) is appropriately credentialed or licensed
in one or more states or (2) typically treats the condition,
makes the diagnosis, or provides the treatment under review.
The effective date of BIPA provisions regarding appeals of
initial determinations would be changed from on or after
October 1, 2002 to on or after October 1, 2003; the effective
date of BIPA provisions with respect to national coverage
determinations would be changed from on or after October 1,
2001 to those made on or after October 1, 2002.
The provisions would modify Section 1154 of the Social
Security Act. Individuals who receive a notice of termination
of service or are discharged from a hospital during the
transition period would be able to request, in writing or
orally, an expedited review from a PRO. (In the case of a
termination of service, a physician would need to certify that
the failure to continue services is likely to place the
individual's health at significant risk). The transition period
would be defined for each PRO service area as beginning on the
date when the last triennial PRO contract becomes effective in
FY2002 and ending on the expiration date of the PRO contract in
FY2006. The current references established in 1154(e) would be
changed to broaden the scope of the PRO review to include the
other expedited appeal rights for terminations of services
created under BIPA. The Secretary would transfer the PRO
hearing functions to the QICs as appropriate. An expedited
determination or redetermination by a QIC would preclude review
by a PRO, but the individual would be entitled to an ALJ
hearing.
The qualification and compensation requirements for
reviewers would apply to fiscal intermediaries and carriers as
well as Medicare administrative contractors.
These provisions are effective as if included in BIPA,
subject to the specified modifications.
Section 205. Hearing rights related to decisions by the Secretary to
deny or not renew a medicare enrollment agreement
Under 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
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 physicians,
practitioners, facilities, or suppliers.
Providers of services, physicians, practitioners,
facilities or 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 under section 1866(h).
This section applies to denials that occur after a date
specified by the Secretary, but not later than one year after
the date of enactment.
Section 206. Appeals by providers when there is no other party
available
Under this section, a provider of services, physician,
practitioner, facility, or supplier would be able to appeal any
determination for a deceased beneficiary, if there are no other
parties to appeal the determination, so long as the estate of
the beneficiary or the beneficiary's family or heirs are not
liable for increased out-of-pocket expenditures that might
result from the decision.
This section applies to items and services furnished after
enactment.
Section 207. Process for exceptions to national coverage determinations
under special medical circumstances
This section would require the Secretary to establish a
process where an individual with (1) a serious or life-
threatening condition and (2) special medical circumstances
that were not considered when forming the national coverage
determination (NCD) may request an exception to a national
coverage determination. Unlike the existing process established
under BIPA, the new additional process would not be a challenge
to the reasonableness of the NCD as a whole, but would make
clear that the NCD did not apply to that individual. A panel of
physicians or other health professionals would make or review
an initial decision. An expedited review of these decisions
would be available if certified as necessary by a physician.
Requests for exceptions would be subject to review by the DAB
and subsequent judicial review. If an exception is approved for
an individual, the national coveragedetermination shall not be
applied to the treatment for that individual by any Medicare
administrative contractor. The Secretary would provide information on
(1) national coverage determinations made in the past year and (2) how
to get more information with respect to the national determinations in
an annual publication.
This section is effective as if included in BIPA, as
subsequently modified.
Section 208. Prior determination process for certain items and services
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, Medicare will pay for noncovered 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 for 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 (ABN) 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 may 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, there is
no way for a beneficiary or provider to find out in advance of
an item or service being provided whether or not Medicare will
cover that item or service for that particular beneficiary.
This section requires the Secretary to establish a process
through regulation where certain categories of 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 provider or supplier. The provisions would establish (1)
that 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) that contractors' advance 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 a notice
that includes information explaining the beneficiary's right to
receive the service and request that a Medicare claim be
submitted so that they can access the appeals process under
section 1869. The Secretary must establish a 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 determination notices provided and establish a
beneficiary and provider outreach and education program on the
use of ABNs and national coverage decisions. The GAO is
required to report on the use of the advance beneficiary notice
and prior determination process within 18 months of
implementation of the process.
The process would be in place to address requests for
advance determinations filed on or after 18 months from
enactment.
Section 209. BIPA-related technical amendments and corrections
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 from the advisory committee or
the Executive Committee.
This section corrects the statutory reference in BIPA to
the advisory committees by changing the reference to the Public
Health Service Actto that of the Social Security Act. Other
BIPA references would be changed from ``policy'' to ``determinations''
to match the language in the underlying Medicare statute.
This section is effective as if included in BIPA.
title iii--contracting reform
Section 301. Increased flexibility in Medicare administration
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 a carrier or intermediary
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 to
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.
This section would add Section 1874A to the Social Security
Act, which would permit the Secretary to enter into contracts
with any eligible entity to serve as a Medicare administrative
contractor. These contractors would perform or secure the
performance (through subcontracting) some or all of the
following tasks: determine payment amounts; make payments;
educate and assist beneficiaries; 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 or activity must (1)
demonstrate capability to carry out such function; (2) comply
with conflict of interest standards that are generally
applicable to 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 a 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 or activity is the entity that has the contract for
that activity for any given beneficiary, any given provider of
service, physician, practitioner, facility, or supplier, or
class of such providers, physicians, practitioners, facilities,
or suppliers.
The Federal Acquisition Regulation would apply to Medicare
administration contracts, except to the extent inconsistent
with a specificMedicare requirement. Except as provided in laws
that are generally applicable to Federal acquisition and procurement,
the Secretary would be required to use competitive procedures when
entering into a Medicare administrative contract. 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 without regard to
any provision of law requiring competition. The Secretary would be
required to (1) consider performance quality and (2) provide notice of
such transfer (in the Federal Register or otherwise) that describes the
transferred functions and includes contractor contact information.
This section requires the Secretary to (1) provide
incentives for the Medicare administrative contractors to
provide efficient, high-quality services; (2) develop
performance standards with respect to each of the payment,
provider service, and beneficiary service functions required of
the contractors; and (3) develop standards for measuring the
extent to which a contractor has met such requirements. The
Secretary would be required to contract only with those
entities that will perform efficiently and effectively; will
meet standards for financial responsibility, legal authority
and service quality among other pertinent matters; will agree
to furnish timely and necessary data; and will maintain and
provide access to necessary records and data.
The Committee believes beneficiaries and providers should
play an important role in evaluating contractor performance.
The Secretary would be required to publish performance
requirements and measurement standards in the Federal Register
and may include beneficiary and provider satisfaction (as
measured by surveys) as one of the standards. The performance
requirements (1) would be set forth in the contract between the
Secretary and the appropriate Medicare contractor; (2) would be
used to evaluate contractor performance; and (3) would be
consistent with the contract's written statement of work. 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, fair
hearings, 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 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 (DME). An entity with a MIP contract would
not be treated as a Medicare administrative contractor solely
by reason of the 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. The liability standard of gross
negligence is retained. The contractor's employee who certifies
the amount of Medicare payments is not liable for erroneous
payments in the absence of gross negligence or intent to
defraud the United States. The contractor's employee who
disburses payments is not liable for erroneous payments in the
absence of gross negligence or intent to defraud the United
States, if such payments are based upon an authorization from
the certifying employee and the authorization meets the
internal control standards established by the GAO. The
contractor is not liable for payments made by certifying or
disbursing officers unless grossly negligent when supervising
or selecting these officers. No Medicare administrative
contractor, subcontractor, or employee would be held civilly
liable under any federal, state, or county law for performing
any duty, function or activity authorized by a valid Medicare
administrative contract, providing due care was exercised in
the performance of such duty. The Secretary would pay the
Medicare administrative contractor, its employees, or their
legal representatives for defending these contractors or
employers in a civil action related to the performance of their
contractual duties, provided due care was exercised in the
performance of these duties. These payments would be equal to
the reasonable amount of legal expenses incurred, as determined
by the Secretary.
The provisions establish that the activities of fiscal
intermediaries in administering Medicare would be conducted
through contracts withMedicare administrative contractors. 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.
The provisions would establish that the activities of
carriers administering Medicare would be conducted through
contracts with Medicare administrative contractors. Certain
instructions including those pertaining to nursing facility
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.
Carrier fair hearing requirements would be eliminated. (BIPA
eliminated the carrier fair hearing step in the administrative
appeals process). Certain annual reporting requirements
concerning the contractor's overpayment recovery efforts would
be retained.
The provisions would apply to contracts that are
competitively bid on or after dates specified by the Secretary
(but not later than two years after enactment). Until the
provisions are effective, the terms and conditions of contracts
that are in effect would remain in effect until the date the
contract is let out for competitive bidding. All Medicare
administrative contracts would have to be competitively bid by
October 1, 2008. The requirement that MIP contracts be awarded
on a competitive basis would continue to apply and would be
unaffected by the provisions in this section. All references to
fiscal intermediaries or carriers would be deemed a reference
to an appropriate Medicare administrative contractor once the
contracting changes are effective.
The Secretary would submit a legislative proposal
containing necessary conforming and technical amendments to the
appropriate Congressional committees within six months of
enactment. The Secretary would submit an implementation plan to
Congress and the GAO one year before the intended
implementation date. The GAO would evaluate the plan and
include appropriate recommendations no later than six months
after the plan is received. No later than October 1, 2006, 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 transition to
full competition; and (4) a description of changes to
contractor oversight and management.
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 carrier to process all claims of
laboratory entities operating in more than one state. CMS is
directed to report back to the Committee on Energy and Commerce
within three months detailing the action it has taken to
implement this directive.
This section is effective upon enactment.
Section 302. Requirements for information security
This section requires Medicare administrative contractors,
that determine and make payments, 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 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 ofenactment. 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.
This section is effective upon enactment.
TITLE IV--EDUCATION AND OUTREACH IMPROVEMENTS
Section 401. Provider education and technical assistance
Under 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.
This section 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) submit an evaluation
to Congress, no later than October 1, 2002, on actions taken to
coordinate the funding of provider education.
The Secretary would also be required to implement a
methodology to measure the specific claims payment error rates
of each contractor. 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, 2002, the Secretary would submit to Congress a
report that describes how the methodology would be used in
assessing contractor performance and whether the methodology
would be a basis for performance bonuses. This section requires
the GAO to submit to Congress a report on the adequacy of the
methodology, including recommendations as appropriate, by
October 1, 2002.
By October 1, 2002, 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 all Medicare and Medicare-related materials published
by the Secretary or the contractor.
The provisions would authorize a $35 million increase in
Medicare appropriations starting in FY2003 to increase provider
education and training and to improve the accuracy and quality
of contractor information provided in response to written and
telephone inquiries. In conducting training activities (which
may include the provision of technical assistance), Medicare
contractors would be required to take into consideration the
special needs of small providers and suppliers. The provision
defines a small provider as an institution with fewer than 25
full-time equivalents (FTEs) or a physician, practitioner,
facility, or supplier with fewer than 10 FTEs.
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 this section or section 1893(g)
shall be construed as preventing the disclosure by a Medicare
contractor of information on attendance at educational
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. 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.
This section is effective upon enactment.
Section 402. Access to and prompt responses from Medicare
administrative contractors
The Medicare 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
paymentand (2) serve as a center for any information as well as a
channel for communication with providers.
This section requires the Secretary to develop a
communication strategy with beneficiaries, providers of
services, physicians, practitioners, facilities, 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 inquiries from beneficiaries, providers of services,
physicians, practitioners, facilities and suppliers within 45
business days; and (2) maintain a toll-free telephone number
where these interested parties may obtain billing, coding,
claims, coverage, and other appropriate Medicare information.
The Secretary would be required to establish and publish in the
Federal Register standards to monitor the accuracy,
consistency, and timeliness of information provided in response
to written and telephone inquiries. The standards would also be
also used in contractors' performance evaluations. 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.
This section takes effect on October 1, 2002.
Section 403. Reliance on guidance
Under current law, there is no provision with respect to
reliance on written guidance. However, under certain
circumstances, overpayments are not recovered if the incorrect
payment has been made with respect to an individual who is
without fault or where the recovery would decrease payments to
another person who is without fault.
Under this section, if (1) a provider of services,
physician, practitioner, facility, 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;
(3) there is no indication of fraud or abuse; and (4) the
guidance is inaccurate, then the provider of services,
physician, practitioner, facility, or supplier would not be
subject to any penalty or interest, if they reasonably relied
on such guidance. The Secretary would retain the authority to
determine whether the guidance in the form of general responses
to FAQs applied to the particular circumstance of the
individual claim. This provision would not affect the waiver of
certain types of overpayments already established in the
Medicare statute.
This section is effective for penalties imposed on or after
enactment.
Section 404. Facilitation of consistent information to providers
This section requires the Secretary to appoint an
individual within HHS (who is not an advocate of any specific
departmental policy) to (1) respond to complaints and
grievances from providers of services, physicians,
practitioners, facilities, and suppliers regarding inconsistent
Medicare and Medicare-related requirements (such as peer review
and other administrative provisions); and (2) facilitate an
appropriate response from HHS or the appropriate Medicare
contractor. The Committee recognizes that as specific functions
are assigned to separate contractors, there is the possibility
of conflicting interpretations of policy. In such cases, the
Committee expects that the provider facilitator created by this
section would help to resolve these conflicts. This individual
is not intended to be the first stop for providers of services,
physicians, practitioners, facilities, and suppliers with
questions about the Medicare program. Instead, this individual
is intended to be used as a resource after other attempts to
resolve conflicting or inconsistent information have failed.
This section is effective upon enactment.
Section 405. Policy development regarding evaluation and management
(E&M) documentation guidelines
This section would not permit the Secretary to implement
any new documentation guidelines 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 pilot
projects to test modifications to thecodes; (4) are found to
meet the desired objectives; and (5) are preceded by the establishment
(and concurrent implementation) of a program to educate the physician
community. The Secretary would make changes to existing E&M guidelines
to reduce paperwork burdens on physicians. This section requires the
Secretary 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 (1) be voluntary; (2) last long
enough (as determined by the Secretary) to educate physicians
and contractors on E&M guidelines; and (3) be conducted in
consultation with practicing physicians (both generalists and
specialists) to allow for an assessment of E&M guidelines and
their use. A range of different projects would be established,
including at least one that (1) has a peer review method by
physicians; (2) has an alternative method based on documented
face-to-face patient time; (3) is in a rural area; (4) is
outside a rural area; (5) is in a teaching setting; and (6) is
in a 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 limitation would apply
only to claims filed as part of the pilot project and would
last only for the duration of the projects and only as long as
the provider is a participant in the pilot project. The
Secretary would be required to submit periodic reports on the
pilot projects to Congress.
This section is effective upon enactment.
Section 406. Beneficiary Outreach Demonstration Program; report on 1-
800 MEDICARE number
This section requires the Secretary 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 established on a permanent basis.
The 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 via the toll-free number. This
section requires that the GAO submit a report to Congress no
later than one year from enactment.
This section is effective upon enactment.
Section 407. Provider enrollment applications
This section requires the Secretary to (1) establish in
regulation deadlines for actions on applications for enrollment
and reenrollment; (2) monitor the performance of Medicare
administrative contractors in meeting the deadlines; and (3)
consult with providers, physicians, practitioners, facilities,
and suppliers before changing Medicare's enrollment forms. The
consultation process would be required for provider enrollment
forms that are changed on or after January 1, 2002.
This section is effective upon enactment.
TITLE V--REVIEW, RECOVERY, AND ENFORCEMENT REFORM
Section 501. Prepayment reviews
This section would require Medicare contractors who conduct
random prepayment reviews to do so in accordance with a
standard protocol developed by the Secretary. Contractors would
not be able to initiate non-random payment reviews based on the
initial self-identification by a provider of services,
physician, practitioner, facility, or supplier of an improper
billing practice unless there is a likelihood of a sustained or
high level of payment error. The Secretary would be required to
issue regulations establishing a concrete endpoint for
prepayment review. The termination of prepayment review may
varybased upon the differences in the circumstances triggering
such a review. No provision would prevent the denial of payment for
claims actually reviewed under random prepayment review or prevent a
Medicare administrative contractor from requesting documentation for a
limited sample of submitted claims to ensure that the previous practice
is not continuing.
The regulations required under this section must be issued
not later than one year after enactment. The use of a standard
protocol applies to random prepayment audits conducted on or
after a date specified by the Secretary (which cannot be later
than one year after the date of enactment).
Section 502. Recovery of overpayments
There is no current statutory 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.
This section requires the Secretary to enter into a
repayment plan at the request of a provider of services,
physician, practitioner, facility, or supplier for the offset
or repayment of an overpayment for a period of at least one
year but no longer than three years if the provider of
services, physician, practitioner, facility, or supplier meets
certain standards. The provider of services, physician,
practitioner, facility, or supplier may choose between offset
and a repayment plan provided they meet the established
standards. Not later than one year after enactment, the
Secretary would be required to develop standards for the
recovery of overpayments, which would consider reliance on
guidance and financial hardship. The financial hardship
standard would take into account the amount of the proposed
recovery as a proportion of Medicare payments. The Secretary
would not be required to establish a repayment plan if (1)
there is reason to suspect that the provider of services,
physician, practitioner, facility, or supplier may file
bankruptcy or discontinue program participation; or (2) there
is an indication of fraud or abuse. The Secretary would be
allowed to seek immediate collection if payments including
interest are not made as scheduled.
Upon enactment, the Secretary would not be able to initiate
any overpayment recovery action if the provider of services,
physician, practitioner, facility, or supplier has sought a
reconsideration of the Medicare overpayment by a qualified
independent contractor (QIC) until the date of the
reconsideration decision. If QICs are not yet in place, the
overpayment 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.
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, in consultation with health
care associations, a process under which classes of providers,
physicians, practitioners, facilities, and suppliers would be
notified when their Medicare contractor has identified specific
billing codes that the class may be over-utilizing.
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 probe sample of
claims for a review of abnormal billing patterns.
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 (1) in a non-threatening
manner to a provider of services, physician, practitioner,
facility, or supplier that, based on a preliminary evaluation
of medical records, an overpayment may exist; (2) the nature of
the identified problems; and (3) the necessary steps to address
the problem. The Secretary would allow providers of services,
physicians, practitioners, facilities, and suppliers 45 days to
submit additional information concerning the claims that 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 projection from a smaller sample of claims with a waiver
of appeal rights) to resolve the overpayment amounts.
A Medicare contractor would not be able to use
extrapolation to determine overpayment amounts for
statistically valid random samples 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.
These provisions are effective upon enactment, unless
otherwise specified.
Section 503. Process for correction of minor errors and omissions on
claims without pursuing appeals process
This section requires the Secretary to develop, in
consultation with appropriate Medicare contractors and health
care associations, a process under which minor errors and
omissions on claims can be corrected and the corrected claims
resubmitted without appealing the claims denial.
The Committee intends that this provision cover home health
claims (on a pre- or post-payment basis) that are inadvertently
submitted prior to the time that a physician certification or
recertification of a plan of care is signed and dated. The
claim would be returned to the home health agency, which would
be allowed to resubmit such claim in lieu of filing an appeal.
The process required by this section would be developed no
later than one year after date of enactment.
Section 504. Program and payment exclusions
Under 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.
Under current law, Medicare will not cover services that
are furnished by a beneficiary's immediate relative.
This section allows the administrator of a Federal health
program 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.
The exclusions for Medicare coverage would be changed.
Medicare would be permitted to cover the expenses of providers
who furnish Medicare services to (and impose charges on) their
parents. Medicare would also be permitted to cover services
rendered by all immediate relatives of beneficiaries living in
rural areas.
This section is effective for items and services furnished
on or after January 1, 2003.
TITLE VI--EMTALA IMPROVEMENTS
Section 601. Payment for EMTALA-mandated screening and stabilization
services
Under 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 exists prior
to asking about the insurance status of the patient.
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.
Under this section, emergency room services provided to
screen and stabilize a Medicare beneficiary 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 or after the time of admission
or visit.
This section applies to items and services furnished after
January 1, 2002.
Section 602. Emergency Medical Treatment and Labor Act (EMTALA) Task
Force
This section establishes a 23-member task force within HHS.
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. The members of the
task force are selected by the CMS Administrator under
specified requirements. The Task Force would comprise the
following members: the CMS Administrator; the OIG; four
regional CMS staff involved in EMTALA investigations; one CMS
headquarters staff involved in EMTALA policy; two individuals
who participate in PRO reviews of EMTALA violations; four
hospital administrators who have EMTALA experience; eight
practicing physicians with EMTALA experience; one consumer
representative; and one practicing defense attorney
specializing in EMTALA cases. The task force would be required
to (1) elect a member to serve as chairperson; (2) schedule its
first meeting at the direction of the Secretary and meet at
least twice a year subsequently; (3) terminate three years
after the date of its first meeting; and (4) be exempt from the
Federal Advisory Committee Act. The Task Force 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.
This section is effective upon enactment.
Section 603. Notification of providers when EMTALA investigation closed
This section requires the Secretary to establish a
procedure to notify hospitals and physicians when an EMTALA
investigation is closed.
This section is effective upon enactment.
Section 604. Prior review by peer review organizations in EMTALA cases
involving termination of participation
Under current law, hospitals that are found to be in
violation of EMTALA requirements may face civil monetary
penalties and termination of their provider agreements. 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 a 60-day period for these requested PRO reviews.
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 makes the current discretionary PRO
review process mandatory. It requires that the Secretary
request a PRO review in those cases that involve a question of
medical judgment before making a compliance determination that
would terminate a hospital's Medicare participation. The
current period of review for the discretionary review (five
business days) applies except in the case where a delay would
jeopardize the health and safety of individuals. The PRO shall
provide a copy of the report of its findings to the hospital or
physician, consistent with existing confidentiality
requirements.
This section applies to terminations initiated on or after
enactment.
title vii--miscellaneous improvements
Section 701. Methods for determining payment basis for new lab tests
Under current law, outpatient clinical diagnostic
laboratory tests are paid on the basis of area-wide fee
schedules. The law establishes a cap on the payment amounts,
which 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.
This section requires the Secretary to establish procedures
(by regulation) for determining the basis for, and amount of,
payments for new clinical diagnostic laboratory tests. New
laboratory tests would be defined as those assigned a new HCFA
Common Procedure Coding System (HCPCS) code on or after January
1, 2003. 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.
Under these regulations, the Secretary shall develop the
criteria to be applied in making determinations regarding
whether the payment level for a test should be established
using gap-filling or cross-walking methodologies, and how these
methodologies will be used. Among other things, the criteria
will address when it is appropriate to cross-walk a new test to
a clinically similar test (and its corresponding payment level)
for which a fee schedule amount has already been established.
When cross-walking is not appropriate and gap-filling is used,
the criteria shall explain how market data may be collected and
analyzed to arrive at a fair and appropriate payment amount.
The intent of these provisions is also to improve
stakeholder input under a transparent and predictable process.
In the beginning of the process, 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 the analyte used in the test, the methodology
employed, the technological features of the test, or the
measurement used in the test). Using the input CMS receives
throughout the open, public process, CMS will develop and make
available to the public final determinations, together with the
rationale for each such determination, the data on which the
determination is based, and responses to comments received from
the public.
This section is effective upon enactment.
Section 702. One year delay in lock in procedures for Medicare+Choice
plans
Under the provisions in the Balanced Budget Act of 1997,
Medicare beneficiaries are able to enroll in a Medicare+Choice
plan, change plans, or return to traditional fee-for-service
Medicare at any point in the calendar year through 2001. After
this transition period where beneficiaries are able to make and
change elections on an ongoing basis, these elections will be
made and changed only during an annualcoordinated election
period. There is also a 3-month period after making an election when a
beneficiary can change their election. Additional election periods
called ``special election periods'' will apply for newly eligible
Medicare beneficiaries and beneficiaries who experience certain events.
December 31, 2001 is the last day of continuous open
enrollment and disenrollment during which a beneficiary can
change elections an unlimited number of times. January 1, 2002
is the first year in which elections become locked in. The
first six months of 2002 are a transition period when a
beneficiary can change election only once (other than an
election during the coordinated annual election period or in
the case of an event qualifying for a special election).
Starting January 1, 2003, new elections become effective the
first day of January following each election period. Each year
there is a 3-month period when an individual can change her
election one time. Otherwise, elections cannot be changed until
the next annual coordinated election period (unless the
beneficiary qualifies for a special enrollment period). Limited
exceptions are provided.
This section delays the implementation of the
Medicare+Choice lock in provision (which limits beneficiaries'
ability to enroll and disenroll in Medicare managed care plans)
from FY2002 to FY2003.
This section is effective upon enactment.
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.
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
* * * * * * *
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 beneficiaries under
that program, 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) * * *
* * * * * * *
(6)(A) In applying this subsection during the transition
period (described in subparagraph (C)), any reference in this
subsection--
(i) to a hospital is deemed a reference to a provider
of services;
(ii) to inpatient hospital care or services is deemed
a reference to services of such a provider of services;
(iii) a notice under paragraph (1) is deemed to
include--
(I) a notice to discharge the individual from
the provider of services; or
(II) a notice of termination of services by a
provider of services, but only in the case in
which a physician certifies that failure to
continue the provision of such services is
likely to place the individual's health at
significant risk; and
(iv) an inpatient is deemed a reference to a patient.
(B) After the transition period, paragraphs (2) through (5)
shall not apply.
(C) For purposes of this paragraph and section
1869(b)(1)(F)(ii), the transition period, with respect to an
individual who resides in an area served by a peer review
organization--
(i) begins on the date on which the last triennial
contract with any peer review organization under this
part becomes effective during 2002; and
(ii) ends on the date that the triennial contract
under this part with the organization that serves such
area expires in 2006.
* * * * * * *
right to hearing and judicial review
Sec. 1155. Any beneficiary who is entitled to benefits under
title XVIII, and, subject to section 1154(a)(3)(D), any
practitioner or provider, who is dissatisfied with a
determination made by a contracting peer review organization in
conducting its review responsibilities under this part, shall
be entitled to a reconsideration of such determination by the
reviewing organization. Where the reconsideration is adverse to
the beneficiary and where the matter in controversy is $200 or
more, such beneficiary shall be entitled to a hearing by the
Secretary (to the same extent as beneficiaries under title II
are entitled to a hearing by the Commissioner of Social
Security under section 205(b)). For purposes of the preceding
sentence, subsection (l) of section 205 shall apply, except
that any reference in such subsection to the Commissioner of
Social Security or the Social Security Administration shall be
deemed a reference to the Secretary or the Department of Health
and Human Services, respectively. Where the amount in
controversy is $2,000 or more, such beneficiary shall be
entitled to judicial review of any final decision relating to a
reconsideration described in this subsection. In the case of a
determination made under section 1154(e)(6)(A) during the
period in which the provisions of subsection (b) of section
1869 (as added by section 521 of 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) are in
effect, this section shall not apply but the individual shall
be entitled to a hearing on the determination before an
administrative law judge under such subsection (b) in the same
manner as such section applies to a hearing under subsection
(a) of such section 1869.
* * * * * * *
TITLE XVIII--HEALTH INSURANCE FOR THE AGED AND DISABLED
* * * * * * *
Part A--Hospital Insurance Benefits for the Aged and Disabled
* * * * * * *
[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) furnish the provider and the individual with
respect to whom the claim is made with a written
explanation of the denial and of the statutory or
regulatory basis for the denial; and
(2) in the case of a request for reconsideration of a
denial, promptly notify such individual and the
provider of the disposition of such reconsideration.
(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.]
FEDERAL HOSPITAL INSURANCE TRUST FUND
Sec. 1817. (a) * * *
* * * * * * *
(k) Health Care Fraud and Abuse Control Account.--
(1) * * *
* * * * * * *
(4) Appropriated amounts to account for Medicare
integrity program.--
(A) In general.--There are hereby
appropriated to the Account from the Trust Fund
for each fiscal year such amounts as are
necessary to carry out the Medicare Integrity
Program under section 1893[, subject to
subparagraph (B)] and functions described in
subparagraph (C)(ii), subject to subparagraphs
(B) and (C) and to be available without further
appropriation.
(B) Amounts specified.--[The amount
appropriated] Subject to subparagraph (C), the
amount appropriated under subparagraph (A) for
a fiscal year is as follows:
(i) * * *
* * * * * * *
(C) Enhanced provider education and
training.--
(i) In general.--In addition to the
amount appropriated under subparagraph
(B), the amount appropriated under
subparagraph (A) for a fiscal year
(beginning with fiscal year 2003) is
increased by $35,000,000.
(ii) Use.--The funds made available
under this subparagraph shall be used
only to increase the conduct by
medicare contractors of education and
training of providers of services,
physicians, practitioners, facilities,
and suppliers regarding billing,
coding, and other appropriate items and
may also be used to improve the
accuracy, consistency, and timeliness
of contractor responses to written and
phone inquiries from providers of
services, physicians, practitioners,
facilities, and suppliers.
* * * * * * *
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, 2003 (in this paragraph
referred to as ``new tests'').
(B) Determinations under subparagraph (A) shall be made only
after the Secretary--
(i) makes available to the public (through an
Internet site and other appropriate mechanisms) a list
that includes any such test for which establishment of
a payment amount under this subsection is being
considered for a year;
(ii) on the same day such list is made available,
causes to have published in the Federal Register notice
of a meeting to receive comments and recommendations
(and data on which recommendations are based) from the
public on the appropriate basis under this subsection
for establishing payment amounts for the tests on such
list;
(iii) not less than 30 days after publication of such
notice convenes a meeting, that includes
representatives of officials of the Centers for
Medicare & Medicaid Services involved in determining
payment amounts, to receive such comments and
recommendations (and data on which the recommendations
are based);
(iv) taking into account the comments and
recommendations (and accompanying data) received at
such meeting, develops and makes available to the
public (through an Internet site and other appropriate
mechanisms) a list of proposed determinations with
respect to the appropriate basis for establishing a
payment amount under this subsection for each such
code, together with an explanation of the reasons for
each such determination, the data on which the
determinations are based, and a request for public
written comments on the proposed determination; and
(v) taking into account the comments received during
the public comment period, develops and makes available
to the public (through an Internet site and other
appropriate mechanisms) a list of final determinations
of the payment amounts for such tests under this
subsection, together with the rationale for each such
determination, the data on which the determinations are
based, and responses to comments and suggestions
received from the public.
(C) Under the procedures established pursuant to subparagraph
(A), the Secretary shall--
(i) set forth the criteria for making determinations
under subparagraph (A); and
(ii) make available to the public the data (other
than proprietary data) considered in making such
determinations.
(D) The Secretary may convene such further public meetings to
receive public comments on payment amounts for new tests under
this subsection as the Secretary deems appropriate.
(E) For purposes of this paragraph:
(i) The term ``HCPCS'' refers to the Health Care
Procedure Coding System.
(ii) A code shall be considered to be ``substantially
revised'' if there is a substantive change to the
definition of the test or procedure to which the code
applies (such as a new analyte or a new methodology for
measuring an existing analyte-specific test).
* * * * * * *
[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 ona
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 Secretarypursuant 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 (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] medicare
administrative contractor 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) 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] contract under section 1874A that
provides for making payments under this part shall require the
medicare administrative contractor to meet criteria developed
by the Secretary to measure the timeliness of [carrier
responses] contractor 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 of bills for services, [such carrier] such contractor
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 resultin 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) * * *
* * * * * * *
(e) Coverage Election Periods.--
(1) * * *
(2) Open enrollment and disenrollment
opportunities.--Subject to paragraph (5)--
(A) Continuous open enrollment and
disenrollment [through 2001] through 2002.--At
any time during 1998, 1999, 2000, [and 2001]
2001, and 2002, a Medicare+Choice eligible
individual may change the election under
subsection (a)(1).
(B) Continuous open enrollment and
disenrollment for first 6 months [during 2002]
during 2003.--
(i) In general.--Subject to clause
(ii) and subparagraph (D), at any time
during the first 6 months of [2002]
2003, or, if the individual first
becomes a Medicare+Choice eligible
individual during [2002] 2003, during
the first 6 months during [2002] 2003
in which the individual is a
Medicare+Choice eligible individual, a
Medicare+Choice eligible individual may
change the election under subsection
(a)(1).
* * * * * * *
(C) Continuous open enrollment and
disenrollment for first 3 months in subsequent
years.--
(i) In general.--Subject to clause
(ii) and subparagraph (D), at any time
during the first 3 months of a year
after [2002] 2003, or, if the
individual first becomes a
Medicare+Choice eligible individual
during a year after [2002] 2003, during
the first 3 months of such year in
which the individual is a
Medicare+Choice eligible individual, a
Medicare+
Choice eligible individual may change
the election under subsection (a)(1).
* * * * * * *
(D) Continuous open enrollment for
institutionalized individuals.--At any time
after [2001] 2002 in the case of a
Medicare+Choice eligible individual who is
institutionalized (as defined by the
Secretary), the individual may elect under
subsection (a)(1)--
(i) to enroll in a Medicare+Choice
plan; or
(ii) to change the Medicare+Choice
plan in which the individual is
enrolled.
* * * * * * *
(4) Special election periods.--Effective as of
January 1, [2002] 2003, an individual may discontinue
an election of a Medicare+Choice plan offered by a
Medicare+Choice organization other than during an
annual, coordinated election period and make a new
election under this section if--
(A) * * *
* * * * * * *
Effective as of January 1, [2002] 2003, an individual
who, upon first becoming eligible for benefits under
part A at age 65, enrolls in a Medicare+Choice plan
under this part, the individual may discontinue the
election of such plan, and elect coverage under the
original fee-for-service plan, at any time during the
12-month period beginning on the effective date of such
enrollment.
* * * * * * *
benefits and beneficiary protections
Sec. 1852. (a) Basic Benefits.--
(1) * * *
(2) Satisfaction of requirement.--
(A) * * *
(2) Section 1852(a)(2)(C) (42 U.S.C. 1395w-22(a)(2)(C)) is
amended by striking ``policy'' and inserting ``determination''
both places it appears.
* * * * * * *
(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.
* * * * * * *
Part D--Miscellaneous Provisions
* * * * * * *
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) * * *
* * * * * * *
(11) where such expenses constitute charges imposed
by immediate relatives (other than a child) of such
individual or members of his household, unless the
items or services are furnished in a rural area (as
defined in section 1886(d)(2)(D));
* * * * * * *
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 )]
section 222 of the Public Health Service Act 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 )] section 222 of the Public Health Service Act
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.
* * * * * * *
agreements with providers of services; enrollment processes
Sec. 1866. (a) * * *
* * * * * * *
(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
beneficiaries 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) Hearing Rights in Cases of Denial or Non-Renewal.--A
provider of services, physician, practitioner, facility, 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 business days for such review. The
organization shall provide of copy of the report on its
findings 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.
* * * * * * *
The text of existing law for section 1869 is shown to reflect the
amendments made to that section by Public Law 106-554, effective
October 1, 2002.
determinations; appeals
Sec. 1869. (a) Initial Determinations.--
(1) * * *
* * * * * * *
(4) Requirements of notice of determinations and
redeterminations.--A written notice of a determination
on an initial determination or on a redetermination,
insofar as such determination or redetermination
results in a denial of a claim for benefits, shall be
provided in printed form and written in a manner
calculated to be understood by the beneficiary and
shall include--
(A) the specific reasons for the
determination, including, as appropriate--
(i) upon request in the case of an
initial determination, a summary of the
clinical or scientific evidence used in
making the determination; and
(ii) in the case of a
redetermination, such a summary;
(B) the procedures for obtaining additional
information concerning the determination or
redetermination; and
(C) notification of the right to seek a
redetermination or otherwise appeal the
determination and instructions on how to
initiate such a redetermination or appeal under
this section.
(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) * * *
[(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.]
(ii) No application during transition
period.--Clause (i) shall not apply
during the transition period described
in section 1154(e)(6)(C).
* * * * * * *
(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 a beneficiary 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
the Departmental Appeals Board does not have
the authority to decide the question of law or
regulation relevant to the matters in
controversy and that there is no material issue
of fact in dispute. The appellant may make such
request only once with respect to a question of
law or regulation for a specific matter in
dispute 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 the Departmental Appeals
Board does not have 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 the Departmental Appeals
Board does not have 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 the 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 any amounts in
controversy.--Where a provider of
services or supplier seeks judicial
review pursuant to this paragraph, the
amount in controversy (if any) 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 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 and suppliers
under this Act.
(D) Review panel defined.--For purposes of
this subsection, a ``review panel'' is a panel
of 3 members from the Departmental Appeals
Board, selected for the purpose of making
determinations under this paragraph.
(3) Timely completion of the record.--
(A) Deadline.--Subject to subparagraph (B),
the deadline to complete the record in a
hearing before an administrative law judge or a
review by the Departmental Appeals Board is 90
days after the date the request for the appeal
is filed.
(B) Extensions for good cause.--The person
filing a request under subparagraph (A) may
request an extension of such deadline for good
cause. The administrative law judge, in the
case of a hearing, and the Departmental Appeals
Board in the case of a review, may extend such
deadline based upon a finding of good cause to
a date specified by such individual.
(C) Delay in decision deadlines until
completion of record.--Notwithstanding any
other provision of this section, the deadlines
otherwise established under subsection (d) for
the making of determinations in hearings or
review under this section shall begin on the
date on which the record is complete.
(D) Complete described.--For purposes of this
paragraph, a record is complete when the
administrative law judge, in the case of a
hearing, or the Departmental Appeals Board, in
the case of a review, has received--
(i) written or testimonial evidence,
or both, submitted by the person filing
the request,
(ii) written or oral argument, or
both, is presented,
(iii) the decision of, and the record
for, the prior level of appeal,
(iv) such other evidence as such
judge or Board, as the case may be,
determines is required to make a
determination on the request.
(c) Conduct of Reconsiderations by Independent Contractors.--
(1) * * *
(2) Qualified independent contractor.--For purposes
of this subsection, the term ``qualified independent
contractor'' means an entity or organization that
(except in the case of a utilization and quality
control peer review organization, as defined in section
1152) is independent of any organization under contract
with the Secretary that makes initial determinations
under subsection (a)(1), and that meets the
requirements established by the Secretary consistent
with paragraph (3)[.] and meets the following
requirements:
(A) General requirements.--
(i) The entity or organization has
(directly or through contracts or other
arrangements) sufficient medical,
legal, and other expertise (including
knowledge of the program under this
title) and sufficient staffing to carry
out duties of a qualified independent
contractor under this section on a
timely basis.
(ii) The entity or organization has
provided assurances that it will
conduct activities consistent with the
applicable requirements of this
section, including that it will not
conduct any activities in a case unless
the independence requirements of
subparagraph (B) are met with respect
to the case.
(iii) The entity or organization
meets such other requirements as the
Secretary provides by regulation.
(B) Independence requirements.--
(i) In general.--Subject to clause
(ii), an entity or organization meets
the independence requirements of this
subparagraph with respect to any case
if 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 (as determined
under regulations).
(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--
(I) not exceed a reasonable
level; and
(II) not be contingent on any
decision rendered by the
contractor or by any reviewing
professional.
(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 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 beneficiary, 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 [such
information as is required for an appeal] the
record for the 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.
* * * * * * *
(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 beneficiary
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)] subparagraph (A) (other than [subclause
(IV)] clause (iv)) is deemed to be a national
coverage determination for purposes of review
under [subparagraph (A)] paragraph (1)(A).
* * * * * * *
(6) Process for exceptions to national coverage
determinations under special medical circumstances.--
(A) Establishment of process.--The Secretary
shall establish a process whereby an individual
described in paragraph (5) may submit to the
Secretary a request for a determination that a
national coverage determination, which has the
effect of denying coverage under this title for
items and services for the treatment of a
serious or life-threatening condition of the
individual, should not apply to the individual
due to the special medical circumstances of the
individual that involve medical factors that
were not considered during the national
coverage determination decisionmaking procedure
and make the application of the national
coverage determination inappropriate for the
individual's particular case. Such request
shall be accompanied by supporting
documentation and may be made before the
receipt of the items or services involved.
(B) Use of panel.--Under such process, the
Secretary shall provide that--
(i) the initial decision on the
request is made by a panel described in
subparagraph (C); or
(ii) the individual is provided the
opportunity to appeal the initial
decision on the request to such a
panel.
(C) Panel.--A panel described in this
subparagraph is a panel of physicians or other
appropriate health care professionals in which
each member of the panel meets the requirements
of paragraphs (2) and (4) of subsection (g)
(relating to independence and licensure and
expertise).
(D) Appeal.--A decision on a request under
this paragraph shall be subject to further
review (after any appeal described in
subparagraph (B)(ii)) by the Departmental
Appeals Board and to judicial review, in the
same manner as provided under subsection (b)
with respect to review of a final decision of
the Secretary.
(E) Expedition.--The process under this
paragraph shall provide for reasonable
expedition for making decisions on requests
when the need for expedition is certified by a
physician.
(F) Effect of decision.--If a request under
this paragraph is approved for an individual
with respect to a treatment, the national
coverage determination shall not be applied by
any medicare administrative contractor with
respect to the treatment for that individual.
(G) Notice.--The Secretary shall provide, in
an appropriate annual publication available to
the public, a list of national coverage
determinations and information on how to get
more information with respect to such
determinations, made in the previous year.
[(6)] (7) Publication on the internet of decisions of
hearings of the secretary.--Each decision of a hearing
by the Secretary with respect to a national coverage
determination shall be made public, and the Secretary
shall publish each decision on the Medicare Internet
site of the Department of Health and Human Services.
The Secretary shall remove from such decision any
information that would identify any individual,
provider of services, or supplier.
[(7)] (8) Annual report on national coverage
determinations.--
(A) * * *
* * * * * * *
[(8)] (9) Construction.--Nothing in this subsection
shall be construed as permitting administrative or
judicial review pursuant to this section insofar as
such review is explicitly prohibited or restricted
under another provision of law.
(g) Qualifications of Reviewers.--
(1) In general.--In reviewing determinations under
this section, a qualified independent contractor shall
assure that--
(A) each individual conducting a review shall
meet the qualifications of paragraph (2);
(B) compensation provided by the contractor
to each such reviewer is consistent with
paragraph (3); and
(C) in the case of a review by a panel
described in subsection (c)(3)(B) composed of
physicians or other health care professionals
(each in this subsection referred to as a
``reviewing professional''), each reviewing
professional meets the qualifications described
in paragraph (4) and, if the request for review
indicates that the item or service involved was
furnished (or ordered to be furnished) by a
physician, each reviewing professional shall be
a physician.
(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 (as
determined under regulations).
(B) Exception.--Nothing in subparagraph (A)
shall be construed to--
(i) prohibit an individual, solely on
the basis of affiliation with a fiscal
intermediary, carrier, or other
contractor, from serving as an
reviewing professional if--
(I) a non-affiliated
individual is not reasonably
available;
(II) the affiliated
individual is not involved in
the provision of items or
services in the case under
review;
(III) the fact of such an
affiliation is disclosed to the
Secretary and the beneficiary
(or authorized representative)
and neither party objects; and
(IV) the affiliated
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 such affiliation if the
affiliation is disclosed to the
Secretary and the beneficiary (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).
(3) Limitations on reviewer compensation.--
Compensation provided by a qualified independent
contractor to a reviewer in connection with a review
under this section shall--
(A) not exceed a reasonable level; and
(B) not be contingent on the decision
rendered by the reviewer.
(4) Licensure and expertise.--Each reviewing
professional shall be a physician (allopathic or
osteopathic) or health care professional who--
(A) is appropriately credentialed or licensed
in 1 or more States to deliver health care
services; and
(B) typically treats the condition, makes the
diagnosis, or provides the type of treatment
under review.
(5) Related party defined.--For purposes of this
section, the term ``related party'' means, with respect
to a case under this title involving an individual
beneficiary, 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 items
and services, 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, the term ``eligible requester''
means--
(i) a physician, but only in the case
of items and services that may be
furnished (or ordered to be furnished)
by the physician; and
(ii) an individual entitled to
benefits under this title, but only
with respect to an item or service for
which the individual receives an
advance beneficiary notice from the
provider or supplier of the item or
service under section 1879 that payment
may not be made (or may no longer be
made) for the item or service under
this title.
(2) Establishing eligible categories.--The Secretary
shall establish by regulation limits on the categories
of 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 any eligible requester may submit to
the contractor a request for a determination,
before the furnishing (or ordering the
furnishing) of the 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) (relating to
medical necessity, etc.).
(B) Accompanying documentation.--The request
shall be accompanied by a description of the
item or service, its billing code (as
appropriate), supporting documentation relating
to the medical necessity for the item or
service, and any other appropriate
documentation that the Secretary may require.
In the case of a request submitted by an
eligible requester that is described in
paragraph (1)(B)(ii), the request shall 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.
In the case of a request in which an eligible
requester is not the beneficiary described in
paragraph (1)(B)(i), the process shall provide
that the beneficiary involved shall be informed
of any determination described in clause (ii)
(relating to a determination of non-coverage).
(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).
(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) 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 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).
(C) Description of additional information
required.--If the contractor makes the
determination described in paragraph
(4)(A)(iii), the contractor shall include in the
notice under paragraph (4)(A) a description of
the additional information required to make the
coverage determination.
(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) Construction.--Nothing in this subsection
shall be construed as affecting the right of an
individual, after receiving items or services
for which the contractor has made a
determination described in paragraph
(4)(A)(ii), from submitting a claim for such
item or service or from obtaining
administrative or judicial review respecting
such claim under the other applicable
provisions of this section.
overpayment on behalf of individuals and settlement of claims for
benefits on behalf of deceased individuals
Sec. 1870. (a) * * *
* * * * * * *
(h) Notwithstanding subsection (f) or any other provision of
law, the Secretary shall permit a provider of services,
physician, practitioner, facility, or supplier to appeal any
determination of the Secretary under this title relating to
services rendered under this title to an individual who
subsequently dies, if there is no other party available to
appeal such determination, so long as the estate of the
individual, and the individual's family and heirs, are not
liable for paying for the item or service and are not liable
for any increased coinsurance or deductible amounts resulting
from any decision increasing the reimbursement amount for the
provider of services, physician, practitioner, facility, or
supplier.
REGULATIONS
Sec. 1871. (a)(1) * * *
* * * * * * *
(3)(A) The Secretary, in consultation with the Director of
the Office of Management and Budget, shall establish a regular
timeline for the publication of final regulations based on the
previous publication of a proposed regulation or an interim
final regulation.
(B) With respect to publication of final regulations based on
the previous publication of a proposed regulation, such
timeline may vary among different regulations based on
differences in the complexity of the regulation, the number and
scope of comments received, and other relevant factors.
(C)(i) With respect to the publication of final regulations
based on the previous publication of an interim final
regulation--
(I) subject to clause (ii), the Secretary shall
publish the final regulation within the 12-month period
that begins on the date of publication of the interim
final regulation;
(II) if a final regulation is not published by the
deadline established under this subparagraph, the
interim final regulation shall not continue in effect
unless the Secretary publishes a notice described in
clause (ii) by such deadline; and
(III) the final regulation shall include responses to
comments submitted in response to the interim final
regulation.
(ii) If the Secretary determines before the deadline
otherwise established in this subparagraph that there is good
cause, specified in a notice published before such deadline,
for delaying the deadline otherwise applicable under this
subparagraph, the deadline otherwise established under this
subparagraph shall be extended for such period as the Secretary
specifies in such notice.
(4) Insofar as a final regulation (other than an interim
final regulation) includes a provision that is not a logical
outgrowth of the relevant notice of proposed rulemaking
relating to such regulation, that provision shall be treated as
a proposed regulation and shall not take effect until there is
the further opportunity for public comment and a publication of
the provision again as a final regulation.
* * * * * * *
(d)(1) Subject to paragraph (2), the Secretary shall issue
final (including interim final) regulations to carry out this
title only on one business day of every month.
(2) The Secretary may issue a final regulation described in
paragraph (1) on any other day than the day described in
paragraph (1) if the Secretary--
(A) finds that issuance of such regulation on another
day is necessary to comply with requirements under law;
or
(B) finds that with respect to that regulation the
limitation of issuance on the date described in
paragraph (1) is contrary to the public interest.
If the Secretary makes a finding under this paragraph, the
Secretary shall include such finding, and brief statement of
the reasons for such finding, in the issuance of such
regulation.
(e)(1)(A) A substantive change in regulations, manual
instructions, interpretative rules, statements of policy, or
guidelines of general applicability under this title shall not
be applied (by extrapolation or otherwise) retroactively to
items and services furnished before the effective date of the
change, unless the Secretary determines that--
(i) such retroactive application is necessary to
comply with statutory requirements; or
(ii) failure to apply the change retroactively would
be contrary to the public interest.
(B) A compliance action may be made against a provider of
services, physician, practitioner, facility, or supplier with
respect to noncompliance with a substantive change referred to
in subparagraph (A) only for items and services furnished on or
after the effective date of the change.
(C)(i) Except as provided in clause (ii), a substantive
change referred to in subparagraph (A) may not take effect
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.
(2) If--
(A) a provider of services, physician, practitioner,
facility, or supplier follows written guidance (which
may have been transmitted electronically) provided--
(i) by the Secretary; or
(ii) by a medicare contractor (as defined in
section 1889(f) and whether in the form of a
written response to a written inquiry under
section 1874A(g)(1) or otherwise) acting within
the scope of the contractor's contract
authority,
in response to a written inquiry with respect to the
furnishing of an item or service or the submission of a
claim for benefits for such an item or service;
(B) the Secretary determines that--
(i) the provider of services, physician,
practitioner, facility, or supplier has
accurately presented the circumstances relating
to such item, service, and claim to the
Secretary or the contractor in the written
guidance; and
(ii) there is no indication of fraud or abuse
committed by the provider of services,
physician, practitioner, facility, or supplier
against the program under this title; and
(C) the guidance was in error;
the provider of services, physician, practitioner, facility, or
supplier shall not be subject to any penalty or interest
(relating to an overpayment, if any) under this title (or the
provisions of title XI insofar as they relate to this title)
relating to the provision of such item or service or such claim
if the provider of services, physician, practitioner, facility,
or supplier reasonably relied on such guidance. In applying
this paragraph with respect to guidance in the form of general
responses to frequently asked questions, the Secretary retains
authority to determine the extent to which such general
responses apply to the particular circumstances of individual
claims. 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).
(f)(1) Not later than 2 years after the date of the enactment
of this subsection, and every 2 years thereafter, the Secretary
shall submit to Congress a report with respect to the
administration of this title and areas of inconsistency or
conflict among the various provisions under law and regulation.
(2) In preparing a report under paragraph (1), the Secretary
shall collect--
(A) information from beneficiaries, providers of
services, physicians, practitioners, facilities, and
suppliers, and from the individual under section 404 of
the Medicare Regulatory, Appeals, Contracting, and
Education Reform Act of 2001 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.
(g)(1)(A) The Secretary shall establish by regulation
procedures under which there are deadlines for actions on
applications for enrollment (and, if applicable, renewal of
enrollment).
(B) The Secretary shall monitor the performance of medicare
administrative contractors in meeting the deadlines established
under subparagraph (A).
(2) The Secretary shall consult with providers of services,
physicians, practitioners, facilities, and suppliers before
making changes in the provider enrollment forms required of
such providers, physicians, practitioners, facilities, and
suppliers to be eligible to submit claims for which payment may
be made under this title.
* * * * * * *
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 or activity
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 or activity in relation
to an individual entitled to benefits under
part A or enrolled under part B, or both, a
specific provider of services, physician,
practitioner, facility, or supplier (or class
of such providers of services, physicians,
practitioners, facilities, or suppliers), the
``appropriate'' medicare administrative
contractor is the medicare administrative
contractor that has a contract under this
section with respect to the performance of that
function or activity in relation to that
individual, provider of services, physician,
practitioner, facility, or supplier or class of
provider of services, physician, practitioner,
facility, or supplier.
(4) Functions described.--The functions referred to
in paragraphs (1) and (2) are payment functions,
provider services functions, and beneficiary services
functions as follows:
(A) Determination of payment amounts.--
Determining (subject to the provisions of
section 1878 and to such review by the
Secretary as may be provided for by the
contracts) the amount of the payments required
pursuant to this title to be made to providers
of services, physicians, practitioners,
facilities, 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.--
Serving as a center for, and communicating to
individuals entitled to benefits under part A
or enrolled under part B, or both, with respect
to education and outreach for those
individuals, and assistance with specific
issues, concerns or problems of those
individuals.
(D) Provider consultative services.--
Providing consultative services to
institutions, agencies, and other persons to
enable them to establish and maintain fiscal
records necessary for purposes of this title
and otherwise to qualify as providers of
services, physicians, practitioners,
facilities, or suppliers.
(E) Communication with providers.--Serving as
a center for, and communicating to providers of
services, physicians, practitioners,
facilities, and suppliers, any information or
instructions furnished to the medicare
administrative contractor by the Secretary, and
serving as a channel of communication from such
providers, physicians, practitioners,
facilities, and suppliers to the Secretary.
(F) Provider education and technical
assistance.--Performing the functions described
in subsections (e) and (f), relating to
education, training, and technical assistance
to providers of services, physicians,
practitioners, facilities, and suppliers.
(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 functions carried out under the
Medicare Integrity Program under section 1893.
The previous sentence shall not apply with
respect to the activity described in section
1893(b)(5) (relating to prior authorization of
certain items of durable medical equipment
under section 1834(a)(15)).
(B) Construction.--An entity shall not be
treated as a medicare administrative contractor
merely by reason of having entered into a
contract with the Secretary under section 1893.
(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.
(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 without regard to
any provision of law requiring competition. The
Secretary shall ensure that performance quality
is considered in such transfers. The Secretary
shall provide notice (whether in the Federal
Register or otherwise) of any such transfer
(including a description of the functions so
transferred and contact information for the
contractors involved) to providers of services,
physicians, practitioners, facilities, and
suppliers affected by the transfer.
(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, and other
matters as the Secretary finds pertinent.
(3) Performance requirements.--
(A) Development of specific performance
requirements.--The Secretary shall develop
contract performance requirements to carry out
the specific requirements applicable under this
title to a function described in subsection
(a)(4) and shall develop standards for
measuring the extent to which a contractor has
met such requirements. The Secretary shall
publish in the Federal Register such
performance requirements and measurement
standards.
(B) Considerations.--The Secretary may
include as one of the standards satisfaction
level as measured by provider and beneficiary
surveys.
(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 published 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 gross
negligence or intent to defraud the United States, be
liable with respect to any payments certified by the
individual under this section.
(2) Disbursing officer.--No disbursing officer shall,
in the absence of gross negligence or intent to defraud
the United States, be liable with respect to any
payment by such officer under this section if it was
based upon an authorization (which meets the applicable
requirements for such internal controls established by
the Comptroller General) of a certifying officer
designated as provided in paragraph (1) of this
subsection.
(3) Liability of medicare administrative
contractor.--No medicare administrative contractor
shall be liable to the United States for a payment by a
certifying or disbursing officer unless in connection
with such payment or in the supervision of or selection
of such officer the medicare administrative contractor
acted with gross negligence.
(4) Limitation on civil liability.--
(A) In general.--No medicare administrative
contractor having a contract with the Secretary
under this section, and no person employed by,
or having a fiduciary relationship with, any
such medicare administrative contractor or who
furnishes professional services to such
medicare administrative contractor, shall by
reason of the performance of any duty,
function, or activity required or authorized
pursuant to this section or to a valid contract
entered into under this section, be held
civilly liable under any law of the United
States or of any State (or political
subdivision thereof) provided due care was
exercised in the performance of such duty,
function, or activity.
(B) Reimbursement of certain expenses.--The
Secretary shall make payment to a medicare
administrative contractor under contract with
the Secretary pursuant to this section, or to
any member or employee thereof, or to any
person who furnishes legal counsel or services
to such medicare administrative contractor, in
an amount equal to the reasonable amount of the
expenses incurred, as determined by the
Secretary, in connection with the defense of
any civil suit, action, or proceeding brought
against such medicare administrative contractor
or person related to the performance of any
duty, function, or activity under such
contract, provided due care was exercised in
the performance of such duty, function, or
activity.
(e) Requirements for Information Security.--
(1) Development of information security program.--A
medicare administrative contractor that performs the
functions referred to in subparagraphs (A) and (B) of
subsection (a)(4) (relating to determining and making
payments) shall implement a contractor-wide information
security program to provide information security for
the operation and assets of the contractor with respect
to such functions under this title. An information
security program under this paragraph shall meet the
requirements for information security programs imposed
on Federal agencies under section 3534(b)(2) of title
44, United States Code (other than requirements under
subparagraphs (B)(ii), (F)(iii), and (F)(iv) of such
section).
(2) Independent audits.--
(A) Performance of annual evaluations.--Each
year a medicare administrative contractor that
performs the functions referred to in
subparagraphs (A) and (B) of subsection (a)(4)
(relating to determining and making payments)
shall undergo an evaluation of the information
security of the contractor with respect to such
functions under this title. The evaluation
shall--
(i) be performed by an entity that
meets such requirements for
independence as the Inspector General
of the Department of Health and Human
Services may establish; and
(ii) test the effectiveness of
information security control techniques
for an appropriate subset of the
contractor's information systems (as
defined in section 3502(8) of title 44,
United States Code) relating to such
functions under this title and an
assessment of compliance with the
requirements of this subsection and
related information security policies,
procedures, standards and guidelines.
(B) Deadline for initial evaluation.--
(i) New contractors.--In the case of
a medicare administrative contractor
covered by this subsection that has not
previously performed the functions
referred to in subparagraphs (A) and
(B) of subsection (a)(4) (relating to
determining and making payments) as a
fiscal intermediary or carrier under
section 1816 or 1842, the first
independent evaluation conducted
pursuant subparagraph (A) shall be
completed prior to commencing such
functions.
(ii) Other contractors.--In the case
of a medicare administrative contractor
covered by this subsection that is not
described in clause (i), the first
independent evaluation conducted
pursuant subparagraph (A) shall be
completed within 1 year after the date
the contractor commences functions
referred to in clause (i) under this
section.
(C) Reports on evaluations.--
(i) To the inspector general.--The
results of independent evaluations
under subparagraph (A) shall be
submitted promptly to the Inspector
General of the Department of Health and
Human Services.
(ii) To congress.--The Inspector
General of Department of Health and
Human Services shall submit to Congress
annual reports on the results of such
evaluations.
(f) Incentives To Improve Contractor Performance in Provider
Education and Outreach.--In order to give medicare
administrative contractors an incentive to implement effective
education and outreach programs for providers of services,
physicians, practitioners, facilities, and suppliers, the
Secretary shall implement, a methodology to measure the
specific claims payment error rates of such contractors in the
processing or reviewing of medicare claims.
(g) Communications With Beneficiaries, Providers of Services,
Physicians, Practitioners, Facilities, and Suppliers.--
(1) Communication strategy.--The Secretary shall
develop a strategy for communications with
beneficiaries and with providers of services,
physicians, practitioners, facilities, and suppliers
under this title.
(2) Response to written inquiries.--Each medicare
administrative contractor shall, for those providers of
services, physicians, practitioners, facilities, and
suppliers which submit claims to the contractor for
claims processing and for those beneficiaries with
respect to which 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 by
beneficiaries, providers of services, physicians,
practitioners, facilities, and suppliers concerning the
programs under this title within 45 business days of
the date of receipt of such inquiries.
(3) Response to toll-free lines.--Each medicare
administrative contractor shall, for those providers of
services, physicians, practitioners, facilities, and
suppliers which submit claims to the contractor for
claims processing and for those beneficiaries with
respect to which claims are submitted for claims
processing, maintain a toll-free telephone number at
which beneficiaries, providers, physicians,
practitioners, facilities, 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 publish in the Federal
Register) 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).
(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) Standardization of random prepayment review.--If
a medicare administrative contractor conducts a random
prepayment review, the contractor may only conduct such
review in accordance with a standard protocol for
random prepayment audits developed by the Secretary.
(2) Limitations on initiation of non-random
prepayment review.--A medicare administrative
contractor may not initiate non-random prepayment
review of a provider of services, physician,
practitioner, facility, or supplier based on the
initial identification by that provider of services,
physician, practitioner, facility, or supplier of an
improper billing practice unless there is a likelihood
of sustained or high level of payment error (as defined
by the Secretary).
(3) 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.
(4) Construction.--Nothing in this subsection shall
be construed as preventing the denial of payments for
claims actually reviewed under a random prepayment
review. In the case of a provider of services,
physician, practitioner, facility, or supplier with
respect to which amounts were previously overpaid,
nothing in this subsection shall be construed as
limiting the ability of a medicare administrative
contractor to 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) Random prepayment review defined.--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.
(i) Recovery of Overpayments.--
(1) Use of repayment plans.--
(A) In general.--If the repayment, within the
period otherwise permitted by a provider of
services, physician, practitioner, facility, or
supplier, of an overpayment under this title
meets the standards developed under
subparagraph (B), subject to subparagraph (C),
and the provider, physician, practitioner,
facility, or supplier requests the Secretary to
enter into a repayment plan with respect to
such overpayment, the Secretary shall enter
into a plan with the provider, physician,
practitioner, facility, or supplier for the
offset or repayment (at the election of the
provider, physician, practitioner, facility, or
supplier) of such overpayment over a period of
at least one year, but not longer than 3 years.
Interest shall accrue on the balance through
the period of repayment. The repayment plan
shall meet terms and conditions determined to
be appropriate by the Secretary.
(B) Development of standards.--The Secretary
shall develop standards for the recovery of
overpayments. Such standards shall--
(i) include a requirement that the
Secretary take into account (and weigh
in favor of the use of a repayment
plan) the reliance (as described in
section 1871(e)(2)) by a provider of
services, physician, practitioner,
facility, and supplier on guidance when
determining whether a repayment plan
should be offered; and
(ii) provide for consideration of the
financial hardship imposed on a
provider of services, physician,
practitioner, facility, or supplier in
considering such a repayment plan.
In developing standards with regard to
financial hardship with respect to a provider
of services, physician, practitioner, facility,
or supplier, the Secretary shall take into
account the amount of the proposed recovery as
a proportion of payments made to that provider,
physician, practitioner, facility, or supplier.
(C) Exceptions.--Subparagraph (A) shall not
apply if--
(i) the Secretary has reason to
suspect that the provider of services,
physician, practitioner, facility, 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,
physician, practitioner, facility, 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) No recoupment until reconsideration
exercised.--In the case of a provider of
services, physician, practitioner, facility, 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) Payment of interest.--
(i) Return of recouped amount with
interest in case of reversal.--Insofar
as such determination on appeal against
the provider of services, physician,
practitioner, facility, or supplier is
later reversed, the Secretary shall
provide for repayment of the amount
recouped plus interest for the period
in which the amount was recouped.
(ii) Interest in case of
affirmation.--Insofar as the
determination on such appeal is against
the provider of services, physician,
practitioner, facility, or supplier,
interest on the overpayment shall
accrue on and after the date of the
original notice of overpayment.
(iii) Rate of interest.--The rate of
interest under this subparagraph shall
be the rate otherwise applicable under
this title in the case of overpayments.
(C) Medicare contractor defined.--For
purposes of this subsection, the term
``medicare contractor'' has the meaning given
such term in section 1889(f).
(3) Payment audits.--
(A) Written notice for post-payment audits.--
Subject to subparagraph (C), if a medicare
contractor decides to conduct a post-payment
audit of a provider of services, physician,
practitioner, facility, or supplier under this
title, the contractor shall provide the
provider of services, physician, practitioner,
facility, 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,
physician, practitioner, facility, or supplier
under this title, the contractor shall--
(i) give the provider of services,
physician, practitioner, facility, or
supplier a full review and explanation
of the findings of the audit in a
manner that is understandable to the
provider of services, physician,
practitioner, facility, or supplier and
permits the development of an
appropriate corrective action plan;
(ii) inform the provider of services,
physician, practitioner, facility, 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,
physician, practitioner, facility, 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, physician,
practitioner, facility, 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.
(4) Notice of over-utilization of codes.--The
Secretary shall establish, in consultation with
organizations representing the classes of providers of
services, physicians, practitioners, facilities, and
suppliers, a process under which the Secretary provides
for notice to classes of providers of services,
physicians, practitioners, facilities, and suppliers
served by a medicare contractor in cases in which the
contractor has identified that particular billing codes
may be overutilized by that class of providers of
services, physicians, practitioners, facilities, or
suppliers under the programs under this title (or
provisions of title XI insofar as they relate to such
programs).
(5) 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.
(6) Consent settlement reforms.--
(A) In general.--The Secretary may use a
consent settlement (as defined in subparagraph
(D)) to settle a projected overpayment.
(B) Opportunity to submit additional
information before consent settlement offer.--
Before offering a provider of services,
physician, practitioner, facility, or supplier
a consent settlement, the Secretary shall--
(i) communicate to the provider of
services, physician, practitioner,
facility, or supplier in a non-
threatening manner--
(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,
physician, practitioner,
facility, or supplier should
take to address the problems;
and
(ii) provide for a 45-day period
during which the provider of services,
physician, practitioner, facility, or
supplier may furnish additional
information concerning the medical
records for the claims that had been
reviewed.
(C) Consent settlement offer.--The Secretary
shall review any additional information
furnished by the provider of services,
physician, practitioner, facility, or supplier
under subparagraph (B)(ii). Taking into
consideration such information, the Secretary
shall determine if there still appears to be an
overpayment. If so, the Secretary--
(i) shall provide notice of such
determination to the provider of
services, physician, practitioner,
facility, or supplier, including an
explanation of the reason for such
determination; and
(ii) in order to resolve the
overpayment, may offer the provider of
services, physician, practitioner,
facility, or supplier--
(I) the opportunity for a
statistically valid random
sample; or
(II) a consent settlement.
The opportunity provided under clause (ii)(I)
does not waive any appeal rights with respect
to the alleged overpayment involved.
(D) Consent settlement defined.--For purposes
of this paragraph, the term ``consent
settlement'' means an agreement between the
Secretary and a provider of services,
physician, practitioner, facility, or supplier
whereby both parties agree to settle a
projected overpayment based on less than a
statistically valid sample of claims and the
provider of services, physician, practitioner,
facility, or supplier agrees not to appeal the
claims involved.
(7) 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).
* * * * * * *
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 (f),
including under section 1893) in order to maximize the
effectiveness of Federal education efforts for providers of
services, physicians, practitioners, facilities, and suppliers.
(b) Internet Sites; FAQs.--The Secretary, and each medicare
contractor insofar as it provides services (including claims
processing) for providers of services, physicians,
practitioners, facilities, or suppliers, shall maintain an
Internet site which--
(1) provides answers in an easily accessible format
to frequently asked questions, and
(2) includes all materials published by the Secretary
or the contractor, respectively,
relating to such providers of services, physicians,
practitioners, facilities, and suppliers under the programs
under this title and title XI insofar as it relates to such
programs.
(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
take into consideration the special needs of small
providers of services or suppliers (as defined in
paragraph (2)). Such education and training activities
for small providers or services and suppliers may
include the provision of technical assistance (such as
review of billing systems and internal controls to
determine program compliance and to suggest more
efficient and effective means of achieving such
compliance).
(2) Small provider of services or supplier.--In this
subsection, the term ``small provider of services or
supplier'' means--
(A) an institutional provider of services
with fewer than 25 full-time-equivalent
employees; or
(B) a physician, practitioner, facility, or
supplier with fewer than 10 full-time-
equivalent employees.
(d) Encouragement of Participation in Education Program
Activities.--A medicare contractor may not use a record of
attendance at (or failure to attend) educational activities or
other information gathered during an educational program
conducted under this section or otherwise by the Secretary to
select or track providers of services, physicians,
practitioners, facilities, or suppliers for the purpose of
conducting any type of audit or prepayment review.
(e) Construction.--Nothing in this section or section 1893(g)
shall be construed as providing for disclosure by a medicare
contractor of information that would compromise pending law
enforcement activities or reveal findings of law enforcement-
related audits.
(f) Definitions.--For purposes of this section and section
1817(k)(4)(C), the term ``medicare contractor'' includes the
following:
(1) A medicare administrative contractor with a
contract under section 1874A, 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, physician, practitioner,
facility, or supplier an entity that has no authority under
this title or title XI with respect to such activities and such
provider of services, physician, practitioner, facility, or
supplier.
* * * * * * *
----------
MEDICARE, MEDICAID, AND SCHIP BENEFITS IMPROVEMENT AND PROTECTION ACT
OF 2000
* * * * * * *
TITLE V--PROVISIONS RELATING TO PARTS A AND B
* * * * * * *
Subtitle C--Changes in Medicare Coverage and Appeals Process
SEC. 521. REVISIONS TO MEDICARE APPEALS PROCESS.
(a) * * *
* * * * * * *
[(c) Conforming Amendment.--Section 1154(e) (42 U.S.C. 1320c-
3(e)) is amended by striking paragraphs (2), (3), and (4).]
(d) Effective Date.--The amendments made by this section
shall apply with respect to initial determinations made on or
after October 1, [2002] 2003.
SEC. 522. REVISIONS TO MEDICARE COVERAGE PROCESS.
(a) * * *
* * * * * * *
(d) Effective Date.--The amendments made by this section
shall apply with respect to--
(1) * * *
* * * * * * *
on or after October 1, [2001] 2002.
* * * * * * *