II

106TH CONGRESS

1ST SESSION S. 1231

To amend title XVIII of the Social Security Act to establish additional

provisions to combat waste, fraud, and abuse within the medicare program, and for other purposes.

IN THE SENATE OF THE UNITED STATES

JUNE 17, 1999

Ms. COLLINS (for herself, Mr. DURBIN, and Mr. GRASSLEY) introduced the

following bill; which was read twice and referred to the Committee on Finance

A BILL

To amend title XVIII of the Social Security Act to establish

additional provisions to combat waste, fraud, and abuse

within the medicare program, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Medicare Fraud Prevention and Enforcement Act of

6 1999’’.

7 (b) TABLE OF CONTENTS.—The table of contents for

8 this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Site inspections and background checks.
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Sec. 3. Registration of billing agencies.

Sec. 4. Expanded access to the health integrity protection database (HIPDB).

Sec. 5. Liability of medicare carriers and fiscal intermediaries for claims submitted by excluded providers.

Sec. 6. Community mental health centers.

Sec. 7. Limiting the use of discharge in bankruptcy proceedings for provider liability for health care fraud.

Sec. 8. Illegal distribution of a medicare or medicaid beneficiary identification

or provider number.

Sec. 9. Treatment of certain Social Security Act crimes as Federal health care

offenses.

Sec. 10. Authority of Office of Inspector General of the Department of Health

and Human Services.

Sec. 11. Universal product numbers on claims forms for reimbursement under

the medicare program.

1 SEC. 2. SITE INSPECTIONS AND BACKGROUND CHECKS.

2 (a) SITE INSPECTIONS FOR DME SUPPLIERS, COM3 MUNITY MENTAL HEALTH CENTERS, AND OTHER PRO4 VIDER GROUPS.—Title XVIII of the Social Security Act

5 (42 U.S.C. 1395 et seq.) is amended by adding at the end

6 the following:

7 ‘‘SITE INSPECTIONS FOR DME SUPPLIERS, COMMUNITY

8 MENTAL HEALTH CENTERS, AND OTHER PROVIDER

9 GROUPS

10 ‘‘SEC. 1897. (a) SITE INSPECTIONS.—

11 ‘‘(1) IN GENERAL.—The Secretary shall con12 duct a site inspection for each applicable provider

13 (as defined in paragraph (2)) that applies for a pro14 vider number in order to provide items or services

15 under this title. Such site inspection shall be in addi16 tion to any other site inspection that the Secretary

17 would otherwise conduct with regard to an applica18 ble provider.
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1 ‘‘(2) APPLICABLE PROVIDER DEFINED.—

2 ‘‘(A) IN GENERAL.—Except as provided in

3 subparagraph (B), in this section, the term ‘ap4 plicable provider’ means—

5 ‘‘(i) a supplier of durable medical

6 equipment (including items described in

7 section 1834(a)(13));

8 ‘‘(ii) a supplier of prosthetics,

9 orthotics, or supplies (including items de10 scribed in paragraphs (8) and (9) of sec11 tion 1861(s));

12 ‘‘(iii) a community mental health cen13 ter; or

14 ‘‘(iv) any other provider group, as de15 termined by the Secretary.

16 ‘‘(B) EXCEPTION.—In this section, the

17 term ‘applicable provider’ does not include—

18 ‘‘(i) a physician that provides durable

19 medical equipment (as described in sub20 paragraph (A)(i)) or prosthetics, orthotics,

21 or supplies (as described in subparagraph

22 (A)(ii)) to an individual as incident to an

23 office visit by such individual; or

24 ‘‘(ii) a hospital that provides durable

25 medical equipment (as described in sub-
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1 paragraph (A)(i)) or prosthetics, orthotics,

2 or supplies (as described in subparagraph

3 (A)(ii)) to an individual as incident to an

4 emergency room visit by such individual.

5 ‘‘(b) STANDARDS AND REQUIREMENTS.—In con6 ducting the site inspection pursuant to subsection (a), the

7 Secretary shall ensure that the site being inspected is in

8 full compliance with all the conditions and standards of

9 participation and requirements for obtaining medicare bill10 ing privileges under this title.

11 ‘‘(c) TIME.—The Secretary shall conduct the site in12 spection for an applicable provider prior to the issuance

13 of a provider number to such provider.

14 ‘‘(d) TIMELY REVIEW.—The Secretary shall provide

15 for procedures to ensure that the site inspection required

16 under this section does not unreasonably delay the

17 issuance of a provider number to an applicable provider.’’.

18 (b) BACKGROUND CHECKS.—Title XVIII of the So19 cial Security Act (42 U.S.C. 1395 et seq.) (as amended

20 by subsection (a)) is amended by adding at the end the

21 following:

22 ‘‘BACKGROUND CHECKS

23 ‘‘SEC. 1898. (a) BACKGROUND CHECK REQUIRED.—

24 Except as provided in subsection (b), the Secretary shall

25 conduct a background check on any individual or entity

26 that applies to the Secretary for a provider number for
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1 the purpose of furnishing any item or service under this

2 title. In performing the background check, the Secretary

3 shall—

4 ‘‘(1) conduct the background check before

5 issuing a provider number to an individual or entity;

6 ‘‘(2) include a search of criminal records in the

7 background check; and

8 ‘‘(3) provide for procedures that ensure the

9 background check does not unreasonably delay the

10 issuance of a provider number to an eligible indi11 vidual or entity.

12 ‘‘(b) USE OF STATE LICENSING PROCEDURE.—The

13 Secretary may use the results of a State licensing proce14 dure as a background check under subsection (a) if the

15 State licensing procedure meets the requirements of sub16 section (a).

17 ‘‘(c) ATTORNEY GENERAL REQUIRED TO PROVIDE

18 INFORMATION.—

19 ‘‘(1) IN GENERAL.—Upon request of the Sec20 retary, the Attorney General shall provide the crimi21 nal background check information referred to in sub22 section (a)(2) to the Secretary.

23 ‘‘(2) RESTRICTION ON USE OF DISCLOSED IN24 FORMATION.—The Secretary may only use the infor25 mation disclosed under subsection (a) for the pur-
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1 pose of carrying out the Secretary’s responsibilities

2 under this title.

3 ‘‘(d) REFUSAL TO ISSUE PROVIDER NUMBER.—

4 ‘‘(1) AUTHORITY.—In addition to any other

5 remedy available to the Secretary, the Secretary may

6 refuse to issue a provider number to an individual

7 or entity if the Secretary determines, after a back8 ground check conducted under this section, that

9 such individual or entity has a history of acts that

10 indicate issuance of a provider number to such indi11 vidual or entity would be detrimental to the best in12 terests of the program or program beneficiaries.

13 Such acts may include, but are not limited to—

14 ‘‘(A) any bankruptcy;

15 ‘‘(B) any act resulting in a civil judgment

16 against such individual or entity; or

17 ‘‘(C) any felony conviction under Federal

18 or State law.

19 ‘‘(2) REPORTING OF REFUSAL TO ISSUE PRO20 VIDER NUMBER TO THE HEALTH INTEGRITY PRO21 TECTION DATABASE (HIPDB).—A determination to

22 refuse to issue a provider number to an individual

23 or entity as a result of a background check con24 ducted under this section shall be reported to the

25 health integrity protection database established
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1 under section 1128E in accordance with the proce2 dures for reporting final adverse actions taken

3 against a health care provider, supplier, or practi4 tioner under that section.’’.

5 (c) REGULATIONS; EFFECTIVE DATE.—

6 (1) REGULATIONS.—Not later than 1 year after

7 the date of enactment of this Act, the Secretary of

8 Health and Human Services shall promulgate such

9 regulations as are necessary to implement the

10 amendments made by subsections (a) and (b).

11 (2) EFFECTIVE DATE.—The amendments made

12 by subsections (a) and (b) shall apply to applications

13 received by the Secretary of Health and Human

14 Services on or after January 1, 2000.

15 (d) USE OF MEDICARE INTEGRITY PROGRAM

16 FUNDS.—The Secretary of Health and Human Services

17 may use funds appropriated or transferred for purposes

18 of carrying out the medicare integrity program established

19 under section 1893 of the Social Security Act (42 U.S.C.

20 1395ddd) to carry out the provisions of sections 1897 and

21 1898 of that Act (as added by subsections (a) and (b)).

22 SEC. 3. REGISTRATION OF BILLING AGENCIES.

23 (a) REGISTRATION OF BILLING AGENCIES AND INDI24 VIDUALS.—Title XVIII of the Social Security Act (42
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1 U.S.C. 1395 et seq.) (as amended by section 2(b)) is

2 amended by adding at the end the following:

3 ‘‘REGISTRATION OF BILLING AGENCIES AND INDIVIDUALS

4 ‘‘SEC. 1899. (a) REGISTRATION.—The Secretary

5 shall establish procedures for the registration of all appli6 cable persons.

7 ‘‘(b) REQUIRED APPLICATION.—Each applicable per8 son shall submit a registration application to the Secretary

9 at such time, in such manner, and accompanied by such

10 information as the Secretary may require.

11 ‘‘(c) IDENTIFICATION NUMBER.—If the Secretary ap12 proves an application submitted under subsection (b), the

13 Secretary shall assign a unique identification number to

14 the applicable person.

15 ‘‘(d) REQUIREMENT.—Every claim for reimburse16 ment under this title that is compiled and submitted by

17 an applicable person shall contain the identification num18 ber that is assigned to the applicable person pursuant to

19 subsection (c).

20 ‘‘(e) TIMELY REVIEW.—The Secretary shall provide

21 for procedures that ensure the timely consideration and

22 determination regarding approval of applications under

23 this section.

24 ‘‘(f) DEFINITION OF APPLICABLE PERSON.—In this

25 section, the term ‘applicable person’ means an individual

26 or an entity that compiles and submits claims for reim-
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1 bursement under this title to the Secretary on behalf of

2 any individual or entity.’’.

3 (b) PERMISSIVE EXCLUSION.—Section 1128(b) of

4 the Social Security Act (42 U.S.C. 1320a–7(b)) is amend5 ed by adding at the end the following:

6 ‘‘(16) FRAUD BY APPLICABLE PERSON.—An ap7 plicable person (as defined in section 1899(f)) that

8 the Secretary determines knowingly submitted or

9 caused to be submitted a claim for reimbursement

10 under title XVIII that the applicable person knows

11 or should know is false or fraudulent.’’.

12 (c) REGULATIONS; EFFECTIVE DATE.—

13 (1) REGULATIONS.—Not later than 1 year after

14 the date of enactment of this Act, the Secretary of

15 Health and Human Services shall promulgate such

16 regulations as are necessary to implement the

17 amendment made by subsections (a) and (b).

18 (2) EFFECTIVE DATE.—The amendment made

19 by subsections (a) and (b) shall take effect on Janu20 ary 1, 2000.

21 SEC. 4. EXPANDED ACCESS TO THE HEALTH INTEGRITY

22 PROTECTION DATABASE (HIPDB).

23 (a) IN GENERAL.—Section 1128E(d)(1) of the Social

24 Security Act (42 U.S.C. 1320a–7e(d)(1)) is amended to

25 read as follows:
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1 ‘‘(1) AVAILABILITY.—The information in the

2 database maintained under this section shall be

3 available to—

4 ‘‘(A) Federal and State government agen5 cies and health plans, and any health care pro6 vider, supplier, or practitioner entering an em7 ployment or contractual relationship with an in8 dividual or entity who could potentially be the

9 subject of a final adverse action, where the con10 tract involves the furnishing of items or services

11 reimbursed by 1 or more Federal health care

12 programs (regardless of whether the individual

13 or entity is paid by the programs directly, or

14 whether the items or services are reimbursed di15 rectly or indirectly through the claims of a di16 rect provider); and

17 ‘‘(B) utilization and quality control peer

18 review organizations and accreditation entities

19 as defined by the Secretary, including but not

20 limited to organizations described in part B of

21 title XI and in section 1154(a)(4)(C).’’.

22 (b) CRIMINAL PENALTY FOR MISUSE OF INFORMA23 TION.—Section 1128B(b) of the Social Security Act (42

24 U.S.C. 1320a–7b(b)) is amended by adding at the end the

25 following:
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1 ‘‘(4) Whoever knowingly uses information maintained

2 in the health integrity protection database maintained in

3 accordance with section 1128E for a purpose other than

4 a purpose authorized under that section shall be impris5 oned for not more than 3 years or fined under title 18,

6 United States Code, or both.’’.

7 (c) EFFECTIVE DATE.—The amendments made by

8 this section shall take effect on the date of enactment of

9 this Act.

10 SEC. 5. LIABILITY OF MEDICARE CARRIERS AND FISCAL

11 INTERMEDIARIES FOR CLAIMS SUBMITTED

12 BY EXCLUDED PROVIDERS.

13 (a) REIMBURSEMENT TO THE SECRETARY FOR

14 AMOUNTS PAID TO EXCLUDED PROVIDERS.—

15 (1) REQUIREMENTS FOR FISCAL INTER16 MEDIARIES.—

17 (A) IN GENERAL.—Section 1816 of the So18 cial Security Act (42 U.S.C. 1395h) is amended

19 by adding at the end the following:

20 ‘‘(m) An agreement with an agency or organization

21 under this section shall require that such agency or orga22 nization reimburse the Secretary for any amounts paid by

23 the agency or organization for a service under this title

24 which is furnished by an individual or entity during any

25 period for which the individual or entity is excluded, pur-
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1 suant to section 1128, 1128A, or 1156, from participation

2 in the health care program under this title if the amounts

3 are paid after the 60-day period beginning on the date

4 the Secretary provides notice of the exclusion to the agen5 cy or organization, unless the payment was made as a re6 sult of incorrect information provided by the Secretary or

7 the individual or entity excluded from participation has

8 concealed or altered their identity.’’.

9 (B) CONFORMING AMENDMENT.—Section

10 1816(i) of the Social Security Act (42 U.S.C.

11 1395h(i)) is amended by adding at the end the

12 following:

13 ‘‘(4) Nothing in this subsection shall be con14 strued to prohibit reimbursement by an agency or

15 organization pursuant to subsection (m).’’.

16 (2) REQUIREMENTS FOR CARRIERS.—Section

17 1842(b)(3) of the Social Security Act (42 U.S.C.

18 1395u(b)(3)) is amended—

19 (A) by striking ‘‘and’’ at the end of sub20 paragraph (I); and

21 (B) by inserting after subparagraph (I) the

22 following:

23 ‘‘(J) will reimburse the Secretary for any

24 amounts paid by the carrier for an item or service

25 under this part which is furnished by an individual
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1 or entity during any period for which the individual

2 or entity is excluded, pursuant to section 1128,

3 1128A, or 1156, from participation in the health

4 care program under this title if the amounts are

5 paid after the 60-day period beginning on the date

6 the Secretary provides notice of the exclusion to the

7 carrier, unless the payment was made as a result of

8 incorrect information provided by the Secretary or

9 the individual or entity excluded from participation

10 has concealed or altered their identity; and’’.

11 (b) CONFORMING REPEAL OF MANDATORY PAYMENT

12 RULE.—Section 1862(e) of the Social Security Act (42

13 U.S.C. 1395y(e)) is amended—

14 (1) in paragraph (1)(B), by striking ‘‘and when

15 the person’’ and all that follows through ‘‘person)’’;

16 and

17 (2) by amending paragraph (2) to read as fol18 lows:

19 ‘‘(2) No individual or entity may bill (or collect any

20 amount from) any individual for any item or service for

21 which payment is denied under paragraph (1). No indi22 vidual is liable for payment of any amounts billed for such

23 an item or service in violation of the preceding sentence.’’.

24 (c) EFFECTIVE DATE.—
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1 (1) IN GENERAL.—The amendments made by

2 this section shall apply to claims for payment sub3 mitted on or after the date of enactment of this Act.

4 (2) CONTRACT MODIFICATION.—The Secretary

5 of Health and Human Services shall take such steps

6 as may be necessary to modify contracts and agree7 ments entered into, renewed, or extended prior to

8 the date of enactment of this Act to conform such

9 contracts or agreements to the provisions of this sec10 tion.

11 SEC. 6. COMMUNITY MENTAL HEALTH CENTERS.

12 (a) IN GENERAL.—Section 1861(ff)(3)(B) of the So13 cial Security Act (42 U.S.C. 1395x(ff)(3)(B)) is amended

14 by striking ‘‘entity’’ and all that follows and inserting the

15 following: ‘‘entity that—

16 ‘‘(i) provides the community mental health serv17 ices specified in paragraph (1) of section 1913(c) of

18 the Public Health Service Act;

19 ‘‘(ii) meets applicable certification or licensing

20 requirements for community mental health centers

21 in the State in which it is located;

22 ‘‘(iii) provides a significant share of its services

23 to individuals who are not eligible for benefits under

24 this title; and
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1 ‘‘(iv) meets such additional standards or re2 quirements for obtaining medicare billing privileges

3 as the Secretary may specify to ensure—

4 ‘‘(I) the health and safety of beneficiaries

5 receiving such services; or

6 ‘‘(II) the furnishing of such services in an

7 effective and efficient manner.’’.

8 (b) RESTRICTION.—Section 1861(ff)(3)(A) of the So9 cial Security Act (42 U.S.C. 1395x(ff)(3)(A)) is amended

10 by inserting ‘‘other than in an individual’s home or in an

11 inpatient or residential setting’’ before the period.

12 (c) EFFECTIVE DATE.—The amendments made by

13 this section shall apply to items and services furnished

14 after the sixth month that begins after the date of enact15 ment of this Act.

16 SEC. 7. LIMITING THE DISCHARGE OF DEBTS IN BANK17 RUPTCY PROCEEDINGS IN CASES WHERE A

18 HEALTH CARE PROVIDER OR A SUPPLIER EN19 GAGES IN FRAUDULENT ACTIVITY.

20 (a) IN GENERAL.—

21 (1) CIVIL MONETARY PENALTIES.—Section

22 1128A(a) of the Social Security Act (42 U.S.C.

23 1320a–7a(a)) is amended by adding at the end the

24 following: ‘‘Notwithstanding any other provision of

25 law, amounts made payable under this section are
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1 not dischargeable under section 727, 1141, 1228(a)

2 or (b), or 1328 of title 11, United States Code, or

3 any other provision of such title.’’.

4 (2) RECOVERY OF OVERPAYMENT TO PRO5 VIDERS OF SERVICES UNDER PART A OF MEDI6 CARE.—Section 1815(d) of the Social Security Act

7 (42 U.S.C. 1395g(d)) is amended—

8 (A) by inserting ‘‘(1)’’ after ‘‘(d)’’; and

9 (B) by adding at the end the following:

10 ‘‘(2) Notwithstanding any other provision of law,

11 amounts due to the Secretary under this section are not

12 dischargeable under section 727, 1141, 1228(a) or (b), or

13 1328 of title 11, United States Code, or any other provi14 sion of such title if the overpayment was the result of

15 fraudulent activity, as may be defined by the Secretary.’’.

16 (3) RECOVERY OF OVERPAYMENT OF BENEFITS

17 UNDER PART B OF MEDICARE.—Section 1833(j) of

18 the Social Security Act (42 U.S.C. 1395l(j)) is

19 amended—

20 (A) by inserting ‘‘(1)’’ after ‘‘(j)’’; and

21 (B) by adding at the end the following:

22 ‘‘(2) Notwithstanding any other provision of law,

23 amounts due to the Secretary under this section are not

24 dischargeable under section 727, 1141, 1228(a) or (b), or

25 1328 of title 11, United States Code, or any other provi-
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1 sion of such title if the overpayment was the result of

2 fraudulent activity, as may be defined by the Secretary.’’.

3 (4) COLLECTION OF PAST-DUE OBLIGATIONS

4 ARISING FROM BREACH OF SCHOLARSHIP AND LOAN

5 CONTRACT.—Section 1892(a) of the Social Security

6 Act (42 U.S.C. 1395ccc(a)) is amended by adding at

7 the end the following:

8 ‘‘(5) Notwithstanding any other provision of

9 law, amounts due to the Secretary under this section

10 are not dischargeable under section 727, 1141,

11 1228(a) or (b), or 1328 of title 11, United States

12 Code, or any other provision of such title.’’.

13 (b) EFFECTIVE DATE.—The amendments made by

14 subsection (a) shall apply to bankruptcy petitions filed

15 after the date of enactment of this Act.

16 SEC. 8. ILLEGAL DISTRIBUTION OF A MEDICARE OR MED17 ICAID BENEFICIARY IDENTIFICATION OR

18 PROVIDER NUMBER.

19 Section 1128B(b) of the Social Security Act (42

20 U.S.C. 1320a–7b(b)), as amended by section 4(b), is

21 amended by adding at the end the following:

22 ‘‘(5) Whoever knowingly, intentionally, and with the

23 intent to defraud purchases, sells or distributes, or ar24 ranges for the purchase, sale, or distribution of 2 or more

25 medicare or medicaid beneficiary identification numbers or
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1 provider numbers shall be imprisoned for not more than

2 3 years or fined under title 18, United States Code (or,

3 if greater, an amount equal to the monetary loss to the

4 Federal and any State government as a result of such

5 acts), or both.’’.

6 SEC. 9. TREATMENT OF CERTAIN SOCIAL SECURITY ACT

7 CRIMES AS FEDERAL HEALTH CARE OF8 FENSES.

9 (a) IN GENERAL.—Section 24(a) of title 18, United

10 States Code, is amended—

11 (1) by striking the period at the end of para12 graph (2) and inserting ‘‘; or’’; and

13 (2) by adding at the end the following:

14 ‘‘(3) section 1128B of the Social Security Act

15 (42 U.S.C. 1320a–7b).’’.

16 (b) EFFECTIVE DATE.—The amendment made by

17 subsection (a) shall take effect on the date of enactment

18 of this Act and apply to acts committed on or after the

19 date of enactment of this Act.

20 SEC. 10. AUTHORITY OF OFFICE OF INSPECTOR GENERAL

21 OF THE DEPARTMENT OF HEALTH AND

22 HUMAN SERVICES.

23 (a) AUTHORITY.—Notwithstanding any other provi24 sion of law, upon designation by the Inspector General of

25 the Department of Health and Human Services, any
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1 criminal investigator of the Office of Inspector General of

2 such department may, in accordance with guidelines

3 issued by the Secretary of Health and Human Services

4 and approved by the Attorney General, while engaged in

5 activities within the lawful jurisdiction of such Inspector

6 General—

7 (1) obtain and execute any warrant or other

8 process issued under the authority of the United

9 States;

10 (2) make an arrest without a warrant for—

11 (A) any offense against the United States

12 committed in the presence of such investigator;

13 or

14 (B) any felony offense against the United

15 States, if such investigator has reasonable cause

16 to believe that the person to be arrested has

17 committed or is committing that felony offense;

18 and

19 (3) exercise any other authority necessary to

20 carry out the authority described in paragraphs (1)

21 and (2).

22 (b) FUNDS.—The Office of Inspector General of the

23 Department of Health and Human Services may receive

24 and expend funds that represent the equitable share from

25 the forfeiture of property in investigations in which the
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1 Office of Inspector General participated, and that are

2 transferred to the Office of Inspector General by the De3 partment of Justice, the Department of the Treasury, or

4 the United States Postal Service. Such equitable sharing

5 funds shall be deposited in a separate account and shall

6 remain available until expended.

7 SEC. 11. UNIVERSAL PRODUCT NUMBERS ON CLAIMS

8 FORMS FOR REIMBURSEMENT UNDER THE

9 MEDICARE PROGRAM.

10 (a) UPNS ON CLAIMS FORMS FOR REIMBURSEMENT

11 UNDER THE MEDICARE PROGRAM.—

12 (1) ACCOMMODATION OF UPNS ON MEDICARE

13 CLAIMS FORMS.—Not later than February 1, 2001,

14 all claims forms developed or used by the Secretary

15 of Health and Human Services for reimbursement

16 under the medicare program under title XVIII of the

17 Social Security Act (42 U.S.C. 1395 et seq.) shall

18 accommodate the use of universal product numbers

19 for a UPN covered item.

20 (2) REQUIREMENT FOR PAYMENT OF CLAIMS.—

21 Title XVIII of the Social Security Act (42 U.S.C.

22 1395 et seq.) is amended by adding at the end the

23 following:

24 ‘‘USE OF UNIVERSAL PRODUCT NUMBERS

25 ‘‘SEC. 1899A. (a) IN GENERAL.—No payment shall

26 be made under this title for any claim for reimbursement
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1 for any UPN covered item unless the claim contains the

2 universal product number of the UPN covered item.

3 ‘‘(b) DEFINITIONS.—In this section:

4 ‘‘(1) UPN COVERED ITEM.—

5 ‘‘(A) IN GENERAL.—Except as provided in

6 subparagraph (B), the term ‘UPN covered

7 item’ means—

8 ‘‘(i) a covered item as that term is de9 fined in section 1834(a)(13);

10 ‘‘(ii) an item described in paragraph

11 (8) or (9) of section 1861(s);

12 ‘‘(iii) an item described in paragraph

13 (5) of section 1861(s); and

14 ‘‘(iv) any other item for which pay15 ment is made under this title that the Sec16 retary determines to be appropriate.

17 ‘‘(B) EXCLUSION.—The term ‘UPN cov18 ered item’ does not include a customized item

19 for which payment is made under this title.

20 ‘‘(2) UNIVERSAL PRODUCT NUMBER.—The

21 term ‘universal product number’ means a number

22 that is—

23 ‘‘(A) affixed by the manufacturer to each

24 individual UPN covered item that uniquely

25 identifies the item at each packaging level; and
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1 ‘‘(B) based on commercially acceptable

2 identification standards such as, but not limited

3 to, standards established by the Uniform Code

4 Council-International Article Numbering Sys5 tem or the Health Industry Business Commu6 nication Council.’’.

7 (3) DEVELOPMENT AND IMPLEMENTATION OF

8 PROCEDURES.—

9 (A) INFORMATION INCLUDED IN UPN.—

10 The Secretary of Health and Human Services,

11 in consultation with manufacturers and entities

12 with appropriate expertise, shall determine the

13 relevant descriptive information appropriate for

14 inclusion in a universal product number for a

15 UPN covered item.

16 (B) REVIEW OF PROCEDURE.—From the

17 information obtained by the use of universal

18 product numbers on claims for reimbursement

19 under the medicare program, the Secretary of

20 Health and Human Services, in consultation

21 with interested parties, shall periodically review

22 the UPN covered items billed under the Health

23 Care Financing Administration Common Proce24 dure Coding System and adjust such coding

25 system to ensure that functionally equivalent
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1 UPN covered items are billed and reimbursed

2 under the same codes.

3 (4) EFFECTIVE DATE.—The amendment made

4 by paragraph (2) shall apply to claims for reim5 bursement submitted on and after February 1,

6 2002.

7 (b) STUDY AND REPORTS TO CONGRESS.—

8 (1) STUDY.—The Secretary of Health and

9 Human Services shall conduct a study on the results

10 of the implementation of the provisions in paragraph

11 (1) and (3) of subsection (a) and the amendment to

12 the Social Security Act in paragraph (2) of that sub13 section.

14 (2) REPORTS.—

15 (A) PROGRESS REPORT.—Not later than 6

16 months after the date of enactment of this Act,

17 the Secretary of Health and Human Services

18 shall submit a report to Congress that contains

19 a detailed description of the progress of the

20 matters studied pursuant to paragraph (1).

21 (B) IMPLEMENTATION.—Not later than 18

22 months after the date of enactment of this Act,

23 and annually thereafter for 3 years, the Sec24 retary of Health and Human Services shall sub25 mit a report to Congress that contains a de-
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1 tailed description of the results of the study

2 conducted pursuant to paragraph (1), together

3 with the Secretary’s recommendations regard4 ing the use of universal product numbers and

5 the use of data obtained from the use of such

6 numbers.

7 (c) DEFINITIONS.—In this section:

8 (1) UPN COVERED ITEM.—The term ‘‘UPN

9 covered item’’ has the meaning given such term in

10 section 1899A(b)(1) of the Social Security Act (as

11 added by subsection (a)(2)).

12 (2) UNIVERSAL PRODUCT NUMBER.—The term

13 ‘‘universal product number’’ has the meaning given

14 such term in section 1899A(b)(2) of the Social Secu15 rity Act (as added by subsection (a)(2)).

16 (d) AUTHORIZATION OF APPROPRIATIONS.—There

17 are authorized to be appropriated such sums as may be

18 necessary for the purpose of carrying out the provisions

19 in paragraphs (1) and (3) of subsection (a), subsection

20 (b), and section 1899A of the Social Security Act (as

21 added by subsection (a)(2)).

Æ