I 

109TH CONGRESS 

1ST SESSION H. R. 2762 

To direct the Secretary of Health and Human Services to establish a demonstration project for the use of an Internet-based form for submission 

of certain claims under the Medicare Program. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 7, 2005 

Mr. ANDREWS introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on Energy 

and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To direct the Secretary of Health and Human Services to 

establish a demonstration project for the use of an Internet-based form for submission of certain claims under 

the Medicare Program. 

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

3 SECTION 1. MEDICARE INTERNET-BASED CLAIMS SUBMIS4 SION DEMONSTRATION PROJECT. 

5 (a) ESTABLISHMENT OF DEMONSTRATION

6 PROJECT.—The Secretary of Health and Human Services 

7 shall implement a demonstration project (in this section 
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1 referred to as the ‘‘project’’) to provide for the use of the 

2 Internet for the electronic submission of claims by pro3 viders of services under the medicare program for which 

4 the HCFA–1500 claim form is utilized. The Secretary 

5 may carry out the project directly or through a third-party 

6 contractor. 

7 (b) PROMPT PAYMENT OF CLAIMS.— 

8 (1) IN GENERAL.—Subject to paragraph (2), 

9 for each clean claim that is submitted electronically 

10 by a provider of services under the project, the Sec11 retary shall make payment to the provider of serv12 ices for the claim by not later than 30 days after re13 ceipt of the claim. 

14 (2) EXCEPTIONS FOR FRAUD.—Payment shall 

15 not be made if the Secretary determines the claim 

16 is fraudulent, in part or in whole. In promulgating 

17 regulations to carry out the project, the Secretary 

18 shall provide examples of fraudulent or otherwise de19 ficient claims for which payment would not be made 

20 under the medicare program or through the project. 

21 (c) DESIGNATION OF MEDICARE PAYMENT AREAS

22 COVERED BY PROJECT.—The Secretary shall designate 

23 medicare payment areas located in the New England or 

24 mid-Atlantic areas as areas in which the project under this 

25 section will be conducted. 
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1 (d) CONSULTATION.—Before implementing the 

2 project under this section, the Secretary shall consult with 

3 affected parties on— 

4 (1) the design of the project, including require5 ments for electronic signatures; 

6 (2) the selection criteria for the third-party con7 tractor; and 

8 (3) the establishment of performance standards, 

9 as described in subsection (e). 

10 (e) PERFORMANCE STANDARDS.— 

11 (1) IN GENERAL.—The Secretary shall establish 

12 performance standards for the accuracy and timeli13 ness of claims filing, processing, and payment func14 tions performed under the project. 

15 (2) NONCOMPLIANCE.—In the event that a 

16 third-party contractor (if any) is not in substantial 

17 compliance with the performance standards estab18 lished under paragraph (1), such claims filing, proc19 essing, and payment functions shall be performed by 

20 the Secretary unless the Secretary contracts with 

21 another third-party contractor. 

22 (f) CONFIDENTIALITY OF INFORMATION.— 

23 (1) COMPLIANCE WITH HIPAA RULES.—The 

24 Secretary shall ensure that a third-party contractor 

25 participating under the project shall protect the con-
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1 fidentiality of individually identifiable health infor2 mation consistent with the standards for the privacy 

3 of such information promulgated by the Secretary 

4 under the Health Insurance Portability and Ac5 countability Act of 1996, or any subsequent com6 prehensive and more protective set of confidentiality 

7 standards enacted into law or promulgated by the 

8 Secretary. 

9 (2) PROHIBITION ON SALE OF INDIVIDUALLY

10 IDENTIFIABLE HEALTH INFORMATION.—A third11 party contractor participating under the project may 

12 not sell any individually identifiable health informa13 tion collected under the project. 

14 (g) REPORT TO CONGRESS.—The Secretary shall pe15 riodically submit reports to the Congress providing— 

16 (1) analysis of the overall effectiveness of the 

17 project; 

18 (2) findings with respect to— 

19 (A) increase or reduction in funds lost to 

20 fraud, abuse, misuse, mistakes, and any other 

21 factor the Secretary determines to be appro22 priate; and 

23 (B) changes in efficiency in processing 

24 claims submitted by electronic means compared 

25 with claims not submitted electronically; and 
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1 (3) recommendations on— 

2 (A) continuation of the project; and 

3 (B) extension or expansion of the use of 

4 Internet-based electronic claims submission 

5 under the medicare program. 

6 (h) WAIVER AUTHORITY.—The Secretary shall waive 

7 compliance with the requirements of title XVIII of the So8 cial Security Act to such extent and for such period as 

9 the Secretary determines is necessary to conduct the 

10 project. 

11 (i) DURATION.—A demonstration project under this 

12 section shall be conducted for a 3-year period. 

13 (j) DEFINITIONS.—In this section: 

14 (1) The term ‘‘medicare program’’ means the 

15 health insurance program established under title 

16 XVIII of the Social Security Act (42 U.S.C. 1395 et 

17 seq.). 

18 (2) The term ‘‘provider of service’’ has the 

19 meaning given that term in section 1861(u) of such 

20 Act (42 U.S.C. 1395x(u)), and includes a physician 

21 (as defined in section 1861(r) of such Act (42 

22 U.S.C. 1395x(r)). 
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1 (3) The term ‘‘clean claim’’ has the meaning 

2 given that term in section 1816(c)(2)(B)(i) of such 

3 Act (42 U.S.C. 1395h(c)(2)(B)(i)). 

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