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[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 868 Introduced in House (IH)]

107th CONGRESS
  1st Session
                                H. R. 868

  To amend title XVIII of the Social Security Act to ensure that the 
Secretary of Health and Human Services provides appropriate guidance to 
  physicians, providers of services, and ambulance providers that are 
attempting to properly submit claims under the Medicare Program and to 
 ensure that the Secretary does not target inadvertent billing errors.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             March 6, 2001

   Mr. Toomey (for himself, Ms. Berkley, Mr. Paul, Mr. Schaffer, Mr. 
DeMint, Mr. Vitter, Mr. Sessions, Mr. McHugh, Mr. Saxton, Mrs. Myrick, 
Mr. Goode, Mr. Miller of Florida, Mr. Pitts, Mr. Hilleary, Mr. Cramer, 
Mr. Istook, Mr. Hilliard, Mr. Souder, Mr. Tancredo, Mr. Jones of North 
    Carolina, Mr. Hastings of Washington, Mr. Shaw, Mr. Tiahrt, Mr. 
Stenholm, Mrs. Jo Ann Davis of Virginia, Mr. Smith of New Jersey, Mrs. 
 Kelly, Mr. Fletcher, Mr. McGovern, Mr. Gordon, Mr. Baker, Mr. Shows, 
Mr. Goodlatte, Mr. Cunningham, Mr. Simmons, Mr. Ney, Mr. Reynolds, Mr. 
 Capuano, Mr. Ryun of Kansas, Mr. Tiberi, Mr. Foley, and Mr. Shadegg) 
 introduced the following bill; which was referred to the Committee on 
   Energy and Commerce, and in addition to the Committee on Ways and 
 Means, 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 amend title XVIII of the Social Security Act to ensure that the 
Secretary of Health and Human Services provides appropriate guidance to 
  physicians, providers of services, and ambulance providers that are 
attempting to properly submit claims under the Medicare Program and to 
 ensure that the Secretary does not target inadvertent billing errors.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Medicare Education 
and Regulatory Fairness Act of 2001''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Definitions.
                       TITLE I--REGULATORY REFORM

Sec. 101. Prospective application of certain regulations.
Sec. 102. Requirements for judicial and regulatory challenges of 
                            regulations.
Sec. 103. Prohibition of recovering past overpayments by certain means.
Sec. 104. Prohibition of recovering past overpayments if appeal 
                            pending.
Sec. 105. Prohibition of random prepayment audits.
Sec. 106. Exception on prohibition of waiving medicare copayment.
Sec. 107. Effective date.
                   TITLE II--APPEALS PROCESS REFORMS

Sec. 201. Construction of hearing rights related to decisions to deny 
                            or not renew a physician enrollment 
                            agreement.
Sec. 202. Reform of post-payment audit process.
Sec. 203. Definitions relating to physicians, providers of services, 
                            and providers of ambulance services.
Sec. 204. Right to appeal on behalf of deceased beneficiaries.
Sec. 205. Effective date.
                    TITLE III--EDUCATION COMPONENTS

Sec. 301. Designated funding levels for physician and provider 
                            education.
Sec. 302. Information requests.
               TITLE IV--SUSTAINABLE GROWTH RATE REFORMS

Sec. 401. Inclusion of regulatory costs in the calculation of the 
                            sustainable growth rate.
          TITLE V--POLICY DEVELOPMENT REGARDING E&M GUIDELINES

Sec. 501. Policy development regarding E&M Documentation Guidelines.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) Congress should focus more resources on and work with 
        physicians and health care providers to combat fraud in the 
        medicare program.
            (2) The overwhelming majority of physicians and other 
        providers in the United States are law-abiding citizens who 
        provide important services and care to patients each day.
            (3) Physicians and other providers of services that 
        participate in the medicare program often have trouble wading 
        through a confusing and sometimes even contradictory maze of 
        medicare regulations. Keeping track of the morass of medicare 
        regulations detracts from the time that physicians have to 
        treat patients.
            (4) Due to the overly complex nature of medicare 
        regulations and the risk of being the subject of an aggressive 
        government investigation, many physicians are leaving the 
        medicare program, limiting the number of medicare patients they 
        see, or refusing to accept new medicare patients at all. If 
        this trend continues, health care for the millions of patients 
        nationwide who depend on medicare will be seriously 
        compromised. Congress has an obligation to prevent this from 
        happening.
            (5) Regulatory fairness for physicians and providers as 
        well as increased access to education about medicare 
        regulations are necessary to preserve the integrity of our 
        health care system and provide for the health of our 
        population.

SEC. 3. DEFINITIONS.

    In this Act:
            (1) Billing.--The term ``billing'' includes any requirement 
        related to the content and timing of an order for care or a 
        plan of treatment by a physician, a provider of service, or a 
        provider of ambulance services.
            (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) Extrapolation.--The term ``extrapolation'' has the 
        meaning given such term in section 1861(ww)(1) of the Social 
        Security Act (as added by section 203(a)).
            (4) Fiscal intermediary.--The term ``fiscal intermediary'' 
        means a fiscal intermediary (as defined in section 1816(a) of 
        the Social Security Act (42 U.S.C. 1395h(a))) with an agreement 
        under section 1816 of such Act to administer benefits under 
        part A or B of such title.
            (5) HCFA.--The term ``HCFA'' means the Health Care 
        Financing Administration.
            (6) Medicare program.--The term ``medicare program'' means 
        the health benefits program under title XVIII of the Social 
        Security Act (42 U.S.C. 1395 et seq.).
            (7) 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)).
            (8) Prepayment review.--The term ``prepayment review'' has 
        the meaning given such term in section 1861(ww)(2) of the 
        Social Security Act (as added by section 203(a)).
            (9) Provider of services.--The term ``provider of 
        services'' has the meaning given such term in section 1861(u) 
        of the Social Security Act (42 U.S.C. 1395x(u)).
            (10) Provider of ambulance services.--The term ``provider 
        of ambulance services'' means a provider of ambulance services 
        described in section 1861(s)(7) of the Social Security Act (42 
        U.S.C. 1395x(s)(7)).
            (11) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.

                       TITLE I--REGULATORY REFORM

SEC. 101. PROSPECTIVE APPLICATION OF CERTAIN REGULATIONS.

    Section 1871(a) of the Social Security Act (42 U.S.C. 1395hh(a)) is 
amended by adding at the end the following new paragraphs:
            ``(3) Any regulation described under paragraph (2) shall 
        not take effect earlier than the effective date of the final 
        regulation. Any regulation described under such paragraph that 
        applies to an agency action, including any agency 
        determination, shall only apply as that regulation is in effect 
        at the time that agency action is taken.
            ``(4) The Secretary shall issue a final rule within 12 
        months of the date of publication of an interim final rule. 
        Such final rule shall provide responses to comments submitted 
        in response to the interim final rule. Such final rule shall 
        not establish or change a legal standard not raised in the 
        interim final rule unless a new 60-day comment period is 
        provided.
            ``(5) Carriers, fiscal intermediaries, and States pursuant 
        to an agreement under section 1864 shall not apply new policy 
        guidances or policy changes retroactively to services provided 
        before the date the new policy was issued.''.

SEC. 102. REQUIREMENTS FOR JUDICIAL AND REGULATORY CHALLENGES OF 
              REGULATIONS.

    (a) Right To Challenge Constitutionality and Statutory Authority of 
HCFA Regulations.--Section 1872 of the Social Security Act (42 U.S.C. 
1395ii) is amended to read as follows:

            ``application of certain provisions of title ii

    ``Sec. 1872. Subject to subparagraphs (A), (B), (D), and (E) of 
section 1848(i)(1), the provisions of sections 206 and 216(j), and of 
subsections (a), (d), (e), (h), (i), (j), (k), and (l) of section 205, 
shall also apply with respect to this title to the same extent as they 
are applicable with respect to title II, except that--
            ``(1) in applying such provisions with respect to this 
        title, 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; and
            ``(2) section 205(h) shall not apply with respect to any 
        action brought against the Secretary under section 1331, 1346, 
        1361, or 2201 of title 28, United States Code, regardless of 
        whether such action is unrelated to a specific determination of 
        the Secretary, that challenges--
                    ``(A) the constitutionality of any provision of 
                this title;
                    ``(B) the constitutionality of substantive or 
                interpretive rules of general applicability issued by 
                the Secretary to carry out this title'';
                    ``(C) the Secretary's statutory authority to 
                promulgate such substantive or interpretive rules of 
                general applicability; or
                    ``(D) a finding of good cause under subparagraph 
                (B) of the third sentence of section 553(b)(3) of title 
                5, United States Code, if used in the promulgation of 
                such substantive or interpretive rules of general 
                applicability.''.
    (b) Administrative and Judicial Review of Secretary 
Determinations.--Section 1866(h) of the Act (42 U.S.C. 1395cc(h)) is 
amended--
            (1) in paragraph (1), by striking ``(1)'' and all that 
        follows and inserting the following: ``(1) Except as provided 
        in paragraph (3), 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) 
        (regardless of whether such determination has been made by the 
        Secretary or by a State pursuant to an agreement entered into 
        with the Secretary under section 1864 and regardless of whether 
        the Secretary has imposed or may impose a remedy, penalty, or 
        other sanction on the institution or agency in connection with 
        such determination) 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, 
        and such hearings are subject to the deadlines specified in 
        paragraph (2)f.'';
            (2) by redesignating paragraph (2) as paragraph (3);
            (3) by inserting after paragraph (1) the following new 
        paragraph:
    ``(2)(A)(i) Except as provided in clause (ii), an administrative 
law judge shall conduct and conclude a hearing on a determination 
described in subsection (b)(2) and render a decision on such hearing by 
not later than the end of the 90-day period beginning on the date a 
request for hearing has been timely filed.
    ``(ii) The 90-day period under clause (i) shall not apply in the 
case of a motion or stipulation by the party requesting the hearing to 
waive such period.
    ``(B) The Department Appeals Board of the Department of Health and 
Human Services shall conduct and conclude a review of the decision on a 
hearing described in subparagraph (A) and make a decision or remand the 
case to the administrative law judge for reconsideration by not later 
than the end of the 90-day period beginning on the date a request for 
review has been timely filed.
    ``(C) In the case of a failure by an administrative law judge to 
render a decision by the end of the period described in subparagraph 
(A)(i), the party requesting the hearing may request a review by the 
Departmental Appeals Board of the Departmental of Health and Human 
Services, notwithstanding any requirements for a hearing for purposes 
of the party's right to such a review.
    ``(D) In the case of a request described in subparagraph (D), the 
Departmental Appeals Board shall review the case de novo. In the case 
of the failure of the Departmental Appeals Board to render a decision 
on such hearing by not later than the end of the 60-day period 
beginning on the date a request for such a Department Appeals Board 
hearing has been filed, the party requesting the hearing may seek 
judicial review of the Secretary's decision, notwithstanding any 
requirements for a hearing for purposes of the party's right to such 
review.
    ``(E) In the case of a request described in subparagraph (D), the 
court shall review the case de novo.''; and
            (4) by adding at the end the following new paragraph:
    ``(4) An institution or agency dissatisfied with a finding or 
determination by the Secretary, or by a State pursuant to an agreement 
under section 1864, that the institution or agency if out of compliance 
with any standard or condition of participation under this title 
(except a determination described in subsection (b)(2)) shall be 
entitled to a formal review or reconsideration of the finding or 
determination, in accordance with the regulations prescribed by the 
Secretary, prior to the imposition of any remedy, penalty, corrective 
action, or other sanction in connection with the finding or 
determination.''.

SEC. 103. PROHIBITION OF RECOVERING PAST OVERPAYMENTS BY CERTAIN MEANS.

    (a) In General.--Subject to section 104 and except as provided in 
subsection (b) and notwithstanding sections 1815(a), 1842(b), and 
1861(v)(1)(A)(ii) of the Social Security Act (42 U.S.C. 1395g(a), 
1395u(a), and 1395x(v)(1)(A)(ii)), or any other provision of law, for 
purposes of applying sections 1842(b)(3)(B)(ii), 1866(a)(1)(B)(ii), 
1870, and 1893 of such Act (42 U.S.C. 1395u(b)(3)(B)(ii), 
1395cc(a)(1)(B)(ii), 1395gg, and 1395ddd) to pending and future audits, 
the Secretary shall give a physician, provider of services, or provider 
of ambulance services the option of entering into an arrangement to 
offset alleged overpayments against future payments or entering into a 
repayment plan with its carrier or fiscal intermediary to recoup such 
an overpayment. Under such an arrangement or plan, a physician, 
provider of services, or provider of ambulance services shall have up 
to 3 years to offset or repay the overpayment if the amount of such 
overpayment exceeds $5,000.
    (b) Exception.--This section shall not apply to cases in which the 
Secretary finds clear and convincing evidence of fraud or similar fault 
on the part of the physician, provider of services, or provider of 
ambulance services or in the case of overpayments for which an offset 
arrangement is in place as of the date of the enactment of this Act.

SEC. 104. PROHIBITION OF RECOVERING PAST OVERPAYMENTS IF APPEAL 
              PENDING.

    Notwithstanding any provision of law, for purposes of applying 
sections 1842(b)(3)(B)(ii), 1866(a)(1)(B)(ii), 1870, and 1893 of the 
Social Security Act (42 U.S.C. 1395u(b)(3)(B)(ii), 1395cc(a)(1)(B)(ii), 
1395gg, and 1395ddd), the Secretary may not take any action (or 
authorize any other person, including any fiscal intermediary, carrier, 
and contractor under section 1893 of such Act (42 U.S.C. 1395ddd)) to 
recoup an overpayment or to impose a penalty during the period in which 
a physician, provider of services, or provider of ambulance services is 
appealing a determination that such an overpayment has been made or the 
amount of the overpayment.

SEC. 105. PROHIBITION OF RANDOM PREPAYMENT AUDITS.

    Carriers may not, prior to paying a claim under the medicare 
program, demand the production of records or documentation absent 
cause.

SEC. 106. EXCEPTION ON PROHIBITION OF WAIVING MEDICARE COPAYMENT.

    (a) In General.--Section 1128A(i)(6)(A) of the Social Security Act 
(42 U.S.C. 1320a-7a(i)(6)(A)) is amended by inserting ``, except for 
written, mailed communication with existing patients,'' before ``waiver 
is not''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to communications made on or after the date of the enactment of 
this Act.

SEC. 107. EFFECTIVE DATE.

    Except as otherwise provided in section 106(b), the amendments made 
by this title shall take effect 60 days after the date of enactment of 
this Act.

                   TITLE II--APPEALS PROCESS REFORMS

SEC. 201. CONSTRUCTION OF HEARING RIGHTS RELATED TO DECISIONS TO DENY 
              OR NOT RENEW A PHYSICIAN ENROLLMENT AGREEMENT.

    Section 1842 of the Social Security Act (42 U.S.C. 1395u) is 
amended by adding at the end the following new subsection:
    ``(u) A carrier decision to deny an initial physician enrollment 
application and a carrier decision not to renew a physician enrollment 
agreement shall be treated as an initial determination subject to the 
same course of appeals as other initial determinations under section 
1869.''.

SEC. 202. REFORM OF POST-PAYMENT AUDIT PROCESS.

    (a) Carriers.--Section 1842 of the Social Security Act (42 U.S.C. 
1395u), as amended by section 201, is further amended by adding at the 
end the following new subsection:
    ``(v) In carrying out its contract under subsection (b)(3), with 
respect to physicians' services or ambulance services, the carrier 
shall provide for the recoupment of overpayments in the following 
manner:
            ``(1)(A) During the 1-year period (or 18-month period in 
        the case of a physician who is in a practice with fewer than 10 
        full-time equivalent employees, including physicians) beginning 
        on the date on which a physician or provider of ambulance 
        services receives an overpayment, the physician or provider of 
        ambulance services may return the overpayment without penalty 
        or interest to the carrier making such overpayment if--
                    ``(i) the carrier has not requested any relevant 
                record or file; or
                    ``(ii) the case has not been referred before the 
                date of repayment to the Department of Justice or the 
                Office of Inspector General.
            ``(B) If a physician or provider of ambulance services 
        returns an overpayment under subparagraph (A), neither the 
        carrier, contractor under section 1893, nor any law enforcement 
        agency may begin an investigation or target such physician or 
        provider of ambulance services based on any claim associated 
        with the amount the physician or provider of ambulance services 
        has repaid.
            ``(2) If a carrier has decided to conduct a post-payment 
        audit of the physician or provider of ambulance services, the 
        carrier shall send written notice to the physician or provider 
        of ambulance services. If the physician or provider of 
        ambulance services practices in a rural area (as defined in 
        section 1886(d)(2)(D)), such notice must be sent by registered 
        mail.
            ``(3) The carrier or a contractor under section 1893 may 
        not recoup or offset payment amounts based on extrapolation (as 
        defined in section 1861(ww)(1)) for the first time that the 
        physician or provider of ambulance services is alleged as a 
        result of a post-payment audit to have received an overpayment.
            ``(4) As part of any written consent settlement 
        communication, the carrier or a contractor under section 1893 
        shall clearly state that the physician or provider of ambulance 
        services may submit additional information (including evidence 
        other than medical records) to dispute the overpayment amount 
        without waiving any administrative remedy or right to appeal 
        the amount of the overpayment.
            ``(5)(A) Each consent settlement communication from the 
        carrier or a contractor under section 1893 shall clearly state 
        that prepayment review (as defined in section 1861(ww)(2)) may 
        be imposed where the physician or provider of ambulance 
        services submits an actual or projected repayment to the 
        carrier or a contractor under section 1893. Subject to 
        subparagraph (D), any prepayment review shall cease when the 
        physician or provider of ambulance services has submitted 
        claims, found by carrier to be covered services and coded 
        properly for the same services that were the basis for 
        instituting the prepayment review, in a 180-day period or after 
        processing claims of at least 75 percent of the volume of the 
        claims (whichever occurs first) received by the carrier in the 
        full month preceding the start of the prepayment review. The 
        180-day period begins with the date of the carrier's written 
        notification that the physician or provider of ambulance 
        services is being placed on prepayment review.
            ``(B) Prepayment review may not be applied under this part 
        as a result of the voluntary submission of a claim or record 
        under section 1897(b)(2) or as a result of information provided 
        pursuant to a request under section 302(b) of the Medicare 
        Education and Regulatory Fairness Act of 2001.
            ``(C) Carrier prepayment and coverage policies and claims 
        processing screens used to identify claims for medical review 
        must be incorporated as part of the education programs on 
        medicare policy and proper coding made available to physicians 
        and providers of ambulance services.
            ``(D) The time and percentage claim limitations in 
        paragraph (5)(A) shall not apply to cases that have been 
        referred to the Department of Justice or the Office of the 
        Inspector General.''.
    (b) Fiscal Intermediaries.--Section 1816 of such Act (42 U.S.C. 
1395h) is amended by adding at the end the following new subsection:
    ``(m) In carrying out its agreement under this section, with 
respect to payment for items and services furnished under this part, 
the fiscal intermediary shall provide for the recoupment of 
overpayments in the following manner:
            ``(1)(A) During the 1-year period beginning on the date on 
        which a provider of services receives an overpayment, the 
        provider of services may return the overpayment without penalty 
        or interest to the fiscal intermediary making such overpayment 
        if--
                    ``(i) the fiscal intermediary has not requested any 
                relevant record or file; or
                    ``(ii) the case has not been referred before the 
                date of repayment to the Department of Justice or the 
                Office of Inspector General.
            ``(B) If a provider of services returns an overpayment 
        under subparagraph (A), neither the fiscal intermediary, 
        contractor under section 1893, nor any law enforcement agency 
        may begin an investigation or target such provider of services 
        based on any claim associated with the amount the provider of 
        services has repaid.
            ``(2) If a fiscal intermediary has decided to conduct a 
        post-payment audit of the provider of services, the fiscal 
        intermediary shall send written notice to the provider of 
        services. If the provider of services practices in a rural area 
        (as defined in section 1886(d)(2)(D)), such notice must be sent 
        by registered mail.
            ``(3) The fiscal intermediary or a contractor under section 
        1893 may not recoup or offset payment amounts based on 
        extrapolation (as defined in section 1861(ww)(1)) for the first 
        time that the provider of services is alleged as a result of a 
        post-payment audit to have received an overpayment.
            ``(4) As part of any written consent settlement 
        communication, the fiscal intermediary or a contractor under 
        section 1893 shall clearly state that the provider of services 
        may submit additional information (including evidence other 
        than medical records) to dispute the overpayment amount without 
        waiving any administrative remedy or right to appeal the amount 
        of the overpayment.
            ``(5)(A) Each consent settlement communication from the 
        fiscal intermediary or a contractor under section 1893 shall 
        clearly state that prepayment review (as defined in section 
        1861(ww)(2)) may be imposed where the provider of services 
        submits an actual or projected repayment to the fiscal 
        intermediary or a contractor under section 1893. Subject to 
        subparagraph (D), any prepayment review shall cease when the 
        provider of services has submitted claims, found by the fiscal 
        intermediary to be covered services and coded properly for the 
        same services that were the basis for instituting the 
        prepayment review, in a 180-day period or after processing 
        claims of at least 75 percent of the volume of the claims 
        (whichever occurs first) received by the fiscal intermediary in 
        the full month preceding the start of the prepayment review. 
        The 180-day period begins with the date of the fiscal 
        intermediary's written notification that the provider of 
        services is being placed on prepayment review.
            ``(B) Prepayment review may not be applied under this part 
        as a result of the voluntary submission of a claim, cost 
        report, or record under section 1897(b)(2) or as a result of 
        information provided pursuant to a request under section 302(b) 
        of the Medicare Education and Regulatory Fairness Act of 2001.
            ``(C) Fiscal intermediary prepayment and coverage policies 
        and claims processing screens used to identify claims for 
        medical review must be incorporated as part of the education 
        programs on medicare policy and proper coding made available to 
        providers of services.
            ``(D) The time and percentage claim limitations in 
        paragraph (5)(A) shall not apply to cases that have been 
        referred to the Department of Justice or the Office of the 
        Inspector General.''.

SEC. 203. DEFINITIONS RELATING TO PHYSICIANS, PROVIDERS OF SERVICES, 
              AND PROVIDERS OF AMBULANCE SERVICES.

    (a) In General.--Section 1861 of the Social Security Act (42 U.S.C. 
1395 et seq.), as amended by section 102(b) and 105(b) of 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), is amended 
by adding at the end the following new subsection:

   ``Definitions Relating to Physicians, Providers of Services, and 
                    Providers of Ambulance Services

    ``(ww) For purposes of provisions of this title relating to 
physicians, providers of services, and providers of ambulance services:
            ``(1) Extrapolation.--The term `extrapolation' means the 
        application of an overpayment dollar amount to a larger 
        grouping of claims than those in the audited sample to 
        calculate a projected overpayment figure.
            ``(2) Prepayment review.--The term `prepayment review' 
        means a carrier's and fiscal intermediary's practice of 
        withholding claim reimbursements from physicians, providers of 
        services, and providers of ambulance services pending review of 
        a claim even if the claims have been properly submitted and 
        reflect medical services provided.''.

SEC. 204. RIGHT TO APPEAL ON BEHALF OF DECEASED BENEFICIARIES.

    Notwithstanding section 1870 of the Social Security Act (42 U.S.C. 
1395gg) or any other provision of law, the Secretary shall permit any 
physician, provider of services, and provider of ambulance services to 
appeal any determination of the Secretary under the medicare program on 
behalf of a deceased beneficiary where no substitute party is 
available.

SEC. 205. EFFECTIVE DATE.

    The amendments made by this title shall take effect at the end of 
the 180-day period beginning on the date of the enactment of this Act.

                    TITLE III--EDUCATION COMPONENTS

SEC. 301. DESIGNATED FUNDING LEVELS FOR PHYSICIAN AND PROVIDER 
              EDUCATION.

    (a) Education Programs for Physicians, Providers of Services, and 
Providers of Ambulance Services.--Title XVIII of the Social Security 
Act (42 U.S.C. 1395 et seq.) is amended by adding at the end the 
following new section:

    ``education programs for physicians, providers of services, and 
                    providers of ambulance services

    ``Sec. 1897. (a) Education Program Defined.--In this section, the 
term `education programs' means programs undertaken in conjunction with 
health care associations that focus on current billing, coding, cost 
reporting, and documentation laws, regulations, program memoranda, 
instructions to regional offices, and fiscal intermediary and carrier 
manual instructions that place special emphasis on billing, coding, 
cost reporting, and documentation errors that the Secretary has found 
occur frequently and remedies for these improper billing, coding, cost 
reporting, and documentation practices.
    ``(b) Conduct of Education Programs.--
            ``(1) In general.--Carriers, fiscal intermediaries, and 
        contractors under section 1893 shall conduct education programs 
        for any physician (or a designee), provider of services, or 
        provider of ambulance services that submits a claim or cost 
        report under paragraph (2)(A). Such carriers, intermediaries, 
        and contractors under section 1893 shall conduct outreach to 
        specifically contact physicians and their designees, providers 
        of services, and providers of ambulance services with fewer 
        than 10 full-time-equivalent employees (including physicians) 
        to implement education programs tailored to their education 
        needs and in proximity to their practices.
            ``(2) Provider education.--
                    ``(A) Submission of claims, cost reports, and 
                records.--Any physician, provider of services, or 
                provider of ambulance services may voluntarily submit 
                any present or prior claim, cost report, or medical 
                record to the carrier or fiscal intermediary to 
                determine whether the billing, coding, and 
                documentation associated with the claim or cost report 
                is appropriate.
                    ``(B) Prohibition of extrapolation.--No claim 
                submitted under subparagraph (A) is subject to any type 
                of extrapolation (as defined in section 1861(ww)(1)).
                    ``(C) Safe harbor.--No submission of a claim, cost 
                report, or record under this section shall result in 
                the carrier, fiscal intermediary, a contractor under 
                section 1893, or any law enforcement agency beginning 
                an investigation or targeting an investigation based on 
                any claim, cost report, or record submitted under such 
                subparagraph.
            ``(3) Treatment of claims.--If the carrier or fiscal 
        intermediary finds a claim or cost report under paragraph (2) 
        to be improper, the physician, provider of services, or 
        provider of ambulance services shall have the following 
        options:
                    ``(A) Correction of problems.--To correct the 
                documentation, coding, or billing problem to 
                appropriately substantiate the claim or cost report and 
                either--
                            ``(i) remit the actual overpayment; or
                            ``(ii) receive the appropriate additional 
                        payment from the carrier or fiscal 
                        intermediary.
                    ``(B) Repayment.--To repay the actual overpayment 
                amount if the service is excluded from medicare 
                coverage under this title or if adequate documentation 
                does not exist.
            ``(4) Prohibition of physician and provider of services 
        tracking.--Carriers, fiscal intermediaries, and contractors 
        under section 1893 may not use the record of attendance or 
        information gathered during an education program conducted 
        under this section or the inquiry regarding claims or cost 
        reports under paragraph (2)(A) to select, identify, or track 
        such physician, provider of services, or provider of ambulance 
        services for the purpose of conducting any type of audit or 
        prepayment review.''.
    (b) Funding of Education Programs.--
            (1) Medicare integrity program.--Section 1893(b)(4) of such 
        Act (42 U.S.C. 1395ddd(b)(4)) is amended by adding at the end 
        the following new sentence: ``No less than 10 percent of the 
        program funds shall be devoted to the education programs for 
        physicians, providers of services, and providers of ambulance 
        services under section 1897.''.
            (2) Carriers.--Section 1842(b)(3)(H) of such Act (42 U.S.C. 
        1395u(b)(3)(H)) is amended by adding at the end the following 
        new clause:
                            ``(iii) No less than 2 percent of carrier 
                        funds shall be devoted to the education 
                        programs for physicians under section 1897.''.
            (3) Fiscal intermediaries.--Section 1816(b)(1) of such Act 
        (42 U.S.C. 1395h(b)(1)) is amended--
                    (A) in subparagraph (A), by striking ``and'' at the 
                end;
                    (B) in subparagraph (B), by striking ``; and'' and 
                inserting a comma; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(C) that such agency or organization is using no 
                less than 1 percent of its funding for education 
                programs for providers of services and providers of 
                ambulance services under section 1897.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to fiscal years beginning after the date of the enactment of this 
Act.

SEC. 302. INFORMATION REQUESTS.

    (a) Clear, Concise, and Accurate Answers.--Fiscal intermediaries 
and carriers shall do their utmost to provide physicians, providers of 
services, and providers of ambulance services with a clear, concise, 
and accurate answer regarding billing and cost reporting questions 
under the medicare program, and will give their true first and last 
names to such physicians, providers of services, and providers of 
ambulance services.
    (b) Written Requests.--
            (1) In general.--The Secretary shall establish a process 
        under which a physician, provider of services, or provider of 
        ambulance services may request, free of charge and in writing 
        from a fiscal intermediary or carrier, assistance in addressing 
        questions regarding coverage, billing, documentation, coding, 
        and cost reporting procedures under the medicare program and 
then the fiscal intermediary or carrier shall respond in writing within 
30 business days with the correct substantive or procedural answer.
            (2) Use of written statement.--
                    (A) In general.--Subject to subparagraph (C), a 
                written statement under paragraph (1) may be used by 
                the physician, provider of services, or provider of 
                ambulance services who submitted the information 
                request and submitted claims in conformance with the 
                answer of the carrier or fiscal intermediary as proof 
                against a future audit or overpayment allegation under 
                the medicare program.
                    (B) Extrapolation prohibition.--Subject to 
                subparagraph (C), no claim submitted under this section 
                shall be subject to extrapolation, if the claim adheres 
                to the conditions set forth in the information 
                response.
                    (C) Limitation on application.--Subparagraphs (A) 
                and (B) shall not apply to cases of fraudulent billing.
            (3) Safe harbor.--If a physician, provider of services, or 
        provider of ambulance services requests information under this 
        subsection, neither the fiscal intermediary, the carrier, a 
        contractor under section 1893 of the Social Security Act (42 
        U.S.C. 1395ddd), nor any law enforcement agency may begin an 
        investigation or target such physician or provider based on the 
        request.
    (c) Broad Policy Guidance by the Secretary.--The Secretary shall 
develop a mechanism to address written questions regarding medicare 
policy and regulations, which are submitted by health care 
associations. The Secretary shall issue such answers within 90 calendar 
days from the date of the receipt of the question and shall make the 
responses available to the public in an indexed, easily accessible 
format.
    (d) Notice of Changes in Policy.--Carriers and fiscal 
intermediaries shall provide written, mailed notice within 30 calendar 
days to physicians, providers of services, and providers of ambulance 
services of all policy or operational changes to the medicare program. 
Physicians, providers of services, and providers of ambulance services 
shall have not less than 30 days to comply with such policy changes.
    (e) Effective Date.--This section shall take effect 180 days after 
the date of the enactment of this Act.

               TITLE IV--SUSTAINABLE GROWTH RATE REFORMS

SEC. 401. INCLUSION OF REGULATORY COSTS IN THE CALCULATION OF THE 
              SUSTAINABLE GROWTH RATE.

    (a) In General.--Section 1848(f)(2) of the Social Security Act (42 
U.S.C. 1395w-4(f)(2)) is amended--
            (1) by redesignating subparagraphs (A) through (D) as 
        clauses (i) through (iv), respectively;
            (2) by striking ``Specification of growth rate.--The 
        sustainable growth rate'' and inserting ``Specification of 
        growth rate.--
                    ``(A) In general.--The sustainable growth rate''; 
                and
            (3) by adding at the end the following new subparagraphs:
                    ``(B) Inclusion of sgr regulatory costs.--The 
                estimate established under clause (iv) or any successor 
                thereto shall include--
                            ``(i) the impact on costs for physicians' 
                        services resulting from regulations implemented 
                        by the Secretary during the year for which the 
                        sustainable growth rate is estimated, including 
                        those regulations that may be implemented 
                        during such year; and
                            ``(ii) the costs described in subparagraph 
                        (C).
                    ``(C) Inclusion of other regulatory costs.--The 
                costs described in this subparagraph are per procedure 
                costs incurred by physicians' practices in complying 
                with regulations promulgated by the Secretary, 
                regardless of whether such regulation affects the fee 
                schedule established under subsection (b)(1).
                    ``(D) Inclusion of costs in regulatory impact 
                analyses.--With respect to any regulation promulgated 
                that may impose a regulatory cost described in 
                subparagraph (B)(i) or (C) on a physician, the 
                Secretary shall include in the regulatory impact 
                analysis accompanying such regulation an estimate of 
                any such cost.
                    ``(E) Inclusion of estimated cost on rural 
                physicians.--In promulgating regulations, the Secretary 
                shall specifically estimate the costs to rural 
                physicians and physicians practices in rural areas and 
                the estimated number of hours needed to comply with the 
                regulation.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply with respect to any estimate made (or regulation promulgated) by 
the Secretary of Health and Human Services on or after 1 year after the 
date of enactment of this Act.

          TITLE V--POLICY DEVELOPMENT REGARDING E&M GUIDELINES

SEC. 501. POLICY DEVELOPMENT REGARDING E&M DOCUMENTATION GUIDELINES.

    (a) In General.--HCFA may not implement any new evaluation and 
management documentation guidelines (in this section referred to as 
``E&M guidelines'') under the medicare program, unless HCFA--
            (1) has provided for an assessment of the proposed 
        guidelines by organizations representing physicians;
            (2) has established a plan that contains specific goals, 
        including a schedule, for improving use of such guidelines;
            (3) has completed a minimum of 4 pilot projects consistent 
        with subsection (b) in at least 4 different HCFA regions 
        administered by 4 different carriers (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 
                organizations representing physicians.
            (2) Peer review 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 carrier) which 
                evaluates medical record information for claims 
                submitted by physicians identified as statistical 
                outliers relative to definitions published in the CPT 
                book;
                    (B) at least one shall be conducted for services 
                furnished in a rural area (as defined in section 
                1886(d)(2)(D) of the Social Security Act, 42 U.S.C. 
                1395ww(d)(2)(D)); and
                    (C) at least one shall be conducted in a setting 
                where physicians bill under physicians services in 
                teaching settings (described in section 415.150 of 
                title 42, Code of Federal Regulations).
            (3) 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.
            (4) Study of impact.--Each pilot project shall examine the 
        effect of the E&M guidelines on--
                    (A) different types of physician practices, 
                including those with fewer than 10 full-time employees 
                (including physicians); and
                    (B) the costs of physician compliance, including 
                education, implementation, auditing, and monitoring.
    (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 
        code accurately and assess coding levels accurately.
            (2) Decreasing the level of non-clinically pertinent and 
        burdensome documentation time and content in the record.
            (3) Increased accuracy by carrier reviewers.
            (4) Education of both physicians and reviewers.
            (5) Promote appropriate use of E&M codes by physicians and 
        their staffs.
            (6) The extent to which the tested E&M documentation 
        guidelines substantially adhere to the CPT coding definitions 
        and rules.
    (d) Report on How Met Pilot Project Objectives.--HCFA shall submit 
a report to the Committees on Energy and Commerce and Ways and Means of 
the House of Representatives, the Committee on Finance of the Senate, 
and the Practicing Physicians Advisory Council, six months after the 
conclusion of the pilot projects. Such report shall include the extent 
to which the pilot projects met the objectives specified in subsections 
(b)(4) and (c).
                                 <all>
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