To reduce the amount of paperwork and improve payment policies for health care services, to prevent fraud and abuse through health care provider education, and for other purposes.

Summary: Health Care Paperwork Reduction and Fraud Prevention Act of 2009 - Establishes the Commission on Health Care Billing Codes and Forms Simplification which shall make recommendations regarding: (1) standardizing and simplifying credentialing and billing forms for health care claims; (2) reducing and simplifying billing codes; (3) reforming the Medicare regulatory and appeals processes to ensure that the Secretary of Health and Human Services provides appropriate guidance to providers for submitting Medicare claims and does not target inadvertent billing errors; and (4) updating electronic forms of the Centers for Medicare & Medicaid Services to ensure simplicity and privacy.

Directs the Secretary of Health and Human Services to establish a process under which a physician may request from a carrier written assistance in addressing questionable codes and procedures under the Medicare program.

Requires the Administrator of the Centers for Medicare & Medicaid Services to restore the toll-free telephone hotline so that physicians may call for information and questions about the Medicare program.

Prohibits the Administrator from implementing any new evaluation and management (E&M) guidelines under the Medicare program unless the Administrator: (1) has provided for an assessment of the proposed guidelines by physicians; (2) has established a plan that contains specific goals, including a schedule for improving participation of physicians in such assessment; (3) has carried out a minimum of four pilot projects in at least four different regions to test E&M guidelines; and (4) finds that specified objectives will be met in the implementation of such guidelines.

Sets forth provisions concerning: (1) physician participation and pilot program testing requirements and objectives for new E&M guidelines under Medicare; and (2) notice, administrative, and penalty requirements with respect to Medicare overpayments.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Health Care Paperwork Reduction and 
Fraud Prevention Act of 2009''.

SEC. 2. NATIONAL BIPARTISAN COMMISSION ON BILLING CODES AND FORMS 
              SIMPLIFICATION.

    (a) Establishment.--There is hereby established the Commission on 
Health Care Billing Codes and Forms Simplification (in this section 
referred to as the ``Commission'').
    (b) Duties.--The Commission shall make recommendations regarding 
the following:
            (1) Standardized and simplified forms.--Standardizing and 
        simplifying credentialing and billing forms respecting health 
        care claims, that all Federal Government agencies would use and 
        that the private sector is able (and is encouraged, but not 
        required) to use.
            (2) Reduction in billing codes.--A significant reduction 
        and simplification in the number of billing codes for health 
        care claims.
            (3) Regulatory and appeals process reform.--Reforms in the 
        regulatory and appeals processes under the Medicare program 
        under title XVIII of the Social Security Act in order to ensure 
        that the Secretary of Health and Human Services provides 
        appropriate guidance to suppliers and providers of services (as 
        such terms are defined in subsections (d) and (u), 
        respectively, of section 1861 of such Act), including 
        physicians and providers and suppliers of ambulance services, 
        that are attempting to properly submit claims under the 
        Medicare program and to ensure that the Secretary does not 
        target inadvertent billing errors.
            (4) Electronic forms and payments.--Simplifying and 
        updating electronic forms of the Centers for Medicare & 
        Medicaid Services to ensure simplicity as well as patient 
        privacy.
    (c) Membership.--
            (1) Number and appointment.--The Commission shall be 
        composed of 17 members, of whom--
                    (A) four shall be appointed by the President;
                    (B) six shall be appointed by the majority leader 
                of the Senate, in consultation with the minority leader 
                of the Senate, of whom not more than 4 shall be of the 
                same political party;
                    (C) six shall be appointed by the Speaker of the 
                House of Representatives, in consultation with the 
                minority leader of the House of Representatives, of 
                whom not more than 4 shall be of the same political 
                party; and
                    (D) one, who shall serve as Chairman of the 
                Commission, shall be appointed jointly by the 
                President, majority leader of the Senate, and the 
                Speaker of the House of Representatives.
            (2) Appointment.--Members of the Commission shall be 
        appointed by not later than 90 days after the date of the 
        enactment of this Act.
    (d) Incorporation of Bipartisan Commission Provisions.--The 
provisions of paragraphs (3) through (8) of subsection (c) and 
subsections (d), (e), and (h) of section 4021 of the Balanced Budget 
Act of 1997 shall apply to the Commission under this section in the 
same manner as they applied to the National Bipartisan Commission on 
the Future of Medicare under such section.
    (e) Report.--Not later than December 31, 2009, the Commission shall 
submit to the President and Congress a report which shall contain a 
detailed statement of only those recommendations, findings, and 
conclusions of the Commission that receive the approval of at least 11 
members of the Commission.
    (f) Termination.--The Commission shall terminate 30 days after the 
date of submission of the report required in subsection (e).

SEC. 3. EDUCATION OF PHYSICIANS AND PROVIDERS CONCERNING MEDICARE 
              PROGRAM PAYMENTS.

    (a) Written Requests.--
            (1) In general.--The Secretary of Health and Human Services 
        shall establish a process under which a physician may request, 
        in writing from a carrier, assistance in addressing 
        questionable codes and procedures under the Medicare program 
        under title XVIII of the Social Security Act and then the 
        carrier shall respond in writing within 30 business days with 
        the correct billing or procedural answer.
            (2) Use of written statement.--
                    (A) In general.--Subject to subparagraph (B), a 
                written statement under paragraph (1) may be used as 
                proof against a future audit or overpayment under the 
                Medicare program.
                    (B) Limit on application.--Subparagraph (A) shall 
                not apply retroactively and shall not apply to cases of 
                fraudulent billing.
    (b) Restoration of Toll-Free Hotline.--
            (1) In general.--The Administrator of the Centers for 
        Medicare & Medicaid Services shall restore the toll-free 
        telephone hotline previously maintained by the Centers for 
        Medicare & Medicaid Services so that physicians may call for 
        information and questions about the Medicare program.
            (2) Authorization of appropriations.--There are authorized 
        to be appropriated such sums as may be necessary to carry out 
        paragraph (1).
    (c) Definitions.--For purposes of this section:
            (1) Physician.--The term ``physician'' has the meaning 
        given such term in section 1861(r) of the Social Security Act 
        (42 U.S.C. 1395x(r)).
            (2) Carrier.--The term ``carrier'' means a carrier (as 
        defined in section 1842(f) of the Social Security Act (42 
        U.S.C. 1395u(f))) with a contract under title XVIII of such Act 
        to administer benefits under part B of such title.

SEC. 4. POLICY DEVELOPMENT REGARDING E&M GUIDELINES UNDER THE MEDICARE 
              PROGRAM.

    (a) In General.--The Administrator of the Centers for Medicare & 
Medicaid Services may not implement any new evaluation and management 
guidelines (in this section referred to as ``E&M guidelines'') under 
the Medicare program, unless the Administrator--
            (1) has provided for an assessment of the proposed 
        guidelines by physicians;
            (2) has established a plan that contains specific goals, 
        including a schedule, for improving participation of physicians 
        in the assessment described in paragraph (1);
            (3) has carried out a minimum of 4 pilot projects 
        consistent with subsection (b) in at least 4 different regions 
        (to be specified by the Secretary) to test such guidelines; and
            (4) finds that the objectives described in subsection (c) 
        will be met in the implementation of such guidelines.
    (b) Pilot Projects.--
            (1) Length and consultation.--Each pilot project under this 
        subsection shall--
                    (A) be of sufficient length to allow for 
                preparatory physician and carrier education, analysis, 
                and use and assessment of potential E&M guidelines; and
                    (B) be conducted, throughout the planning and 
                operational stages of the project, in consultation with 
                national and State medical societies.
            (2) Peer review and rural pilot projects.--Of the pilot 
        projects conducted under this subsection--
                    (A) at least one shall focus on a peer review 
                method by physicians which evaluates medical record 
                information for statistical outlier services relative 
                to definitions and guidelines published in the most 
                recent Current Procedural Terminology book, instead of 
                an approach using the review of randomly selected 
                medical records using non-clinical personnel; and
                    (B) at least one shall be conducted for services 
                furnished in a rural area.
            (3) Study of impact.--Each pilot project shall examine the 
        effect of the potential E&M guidelines on--
                    (A) different types of physician practices, such as 
                large and small groups; and
                    (B) the costs of compliance, and patient and 
                physician satisfaction.
            (4) Report on how met objectives.--Not later than 6 months 
        after the date of the conclusion of all of the pilot projects 
        under this subsection, the Administrator of the Centers for 
        Medicare & Medicaid Services shall submit a report to the 
        Committees on Commerce and Ways and Means of the House of 
        Representatives, the Committee on Finance of the Senate, and 
        the Practicing Physicians Advisory Council, on such pilot 
        projects. Such report shall include the extent to which the 
        pilot projects met the objectives specified in subsection (c).
    (c) Objectives for E&M Guidelines.--The objectives for E&M 
guidelines specified in this subsection are as follows (relative to the 
E&M guidelines and review policies in effect as of the date of the 
enactment of this Act):
            (1) Enhancing clinically relevant documentation needed to 
        accurately code and assess coding levels accurately.
            (2) Reducing administrative burdens.
            (3) Decreasing the level of non-clinically pertinent and 
        burdensome documentation time and content in the record.
            (4) Increased accuracy by carrier reviewers.
            (5) Education of both physicians and reviewers.
            (6) Appropriate use of evaluation and management codes by 
        physicians and their staffs.
            (7) The extent to which the tested evaluation and 
        management documentation guidelines substantially adhere to the 
        CPT coding rules.
            (8) Simplifying electronic billing.
    (d) Definitions.--For purposes of this section and section 5:
            (1) Physician.--The term ``physician'' has the meaning 
        given such term in section 1861(r) of the Social Security Act 
        (42 U.S.C. 1395x(r)).
            (2) Carrier.--The term ``carrier'' means a carrier (as 
        defined in section 1842(f) of the Social Security Act (42 
        U.S.C. 1395u(f))) with a contract under title XVIII of such Act 
        to administer benefits under part B of such title.
            (3) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (4) Medicare program.--The term ``Medicare program'' means 
        the program under title XVIII of the Social Security Act.

SEC. 5. OVERPAYMENTS UNDER THE MEDICARE PROGRAM.

    (a) Individualized Notice.--If a carrier proceeds with a post-
payment audit of a physician under the Medicare program, the carrier 
shall provide the physician with an individualized notice of billing 
problems, such as a personal visit or carrier-to-physician telephone 
conversation during normal working hours, within 3 months of initiating 
such audit. The notice should include suggestions to the physician on 
how the billing problem may be remedied.
    (b) Repayment of Overpayments Without Penalty.--The Secretary of 
Health and Human Services shall permit a physician to repay Medicare 
overpayments made to such physician without penalty or interest and 
without threat of denial of other claims based upon extrapolation, if 
such repayment is made not later than 3 months after such physician 
receives notification of such overpayment and if such overpayment was 
not determined by a final adverse action to be the result of fraudulent 
billing. If a physician should discover an overpayment before a carrier 
notifies the physician of the error, the physician may reimburse the 
Medicare program without penalty and the Secretary may not audit or 
target the physician on the basis of such repayment, unless other 
evidence of fraudulent billing exists.
    (c) Treatment of First-Time Billing Errors.--If a physician's 
Medicare billing error was a first-time error and the physician has not 
previously been the subject of a post-payment audit, the carrier may 
not assess a fine through extrapolation of such an error to other 
claims, unless the physician has submitted a fraudulent claim.
    (d) Timely Notice of Problem Claims Before Using Extrapolation.--A 
carrier may seek reimbursement or penalties against a physician based 
on extrapolation of a Medicare claim only if the carrier has informed 
the physician of potential problems with the claim not later than one 
year after the date the claim was submitted for reimbursement.
    (e) Submission of Additional Information.--A physician may submit 
additional information and documentation to dispute a carrier's charges 
of overpayment without waiving the physician's right to a hearing by an 
administrative law judge.
    (f) Limitation on Delay in Payment.--Following a post-payment 
audit, a carrier that is conducting a pre-payment screen on a physician 
service under the Medicare program may not delay reimbursements for 
more than one month and as soon as the physician submits a corrected 
claim, the carrier shall eliminate application of such a pre-payment 
screen.