II

104TH CONGRESS

2D SESSION S. 1704

To provide for the imposition of administrative fees for medicare overpayment

collection, and to require automated prepayment screening of medicare

claims, and for other purposes.

IN THE SENATE OF THE UNITED STATES

APRIL 25, 1996

Mr. MCCAIN introduced the following bill; which was read twice and referred

to the Committee on Finance

A BILL

To provide for the imposition of administrative fees for medicare overpayment collection, and to require automated

prepayment screening of medicare claims, 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.

4 This Act may be cited as the ‘‘Reduction In Medicare

5 Overpayment Costs Act of 1996’’.
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1 SEC. 2. ADMINISTRATIVE FEES FOR MEDICARE OVERPAY2 MENT COLLECTION.

3 (a) ADMINISTRATIVE FEES FOR PROVIDERS OF

4 SERVICES UNDER PART A.—Section 1815(d) of the Social

5 Security Act (42 U.S.C. 1395g(d)) is amended by insert6 ing ‘‘(1)’’ after ‘‘(d)’’ and by adding at the end the follow7 ing new paragraph:

8 ‘‘(2)(A) Except as provided in subparagraph (B), if

9 the payment of the excess described in paragraph (1) is

10 not made (or effected by offset) within 30 days of the date

11 of the determination, an administrative fee of 1 percent

12 of the outstanding balance of the excess (after application

13 of paragraph (1)), or such lower amount as an Adminis14 trative Law Judge may determine upon an appeal of the

15 initial determination of the excess, shall be imposed on the

16 provider, for deposit into the Trust Fund under this part.

17 ‘‘(B) The administrative fee shall be imposed under

18 subparagraph (A) on a provider of services paid on a pro19 spective basis only if such provider’s cost report with re20 spect to the payment determined to be in excess of the

21 payment due under this part indicates that the provider’s

22 projected costs exceeded its actual costs by 30 percent or

23 more.’’.

24 (b) ADMINISTRATIVE FEES FOR PROVIDERS OF

25 SERVICES OR OTHER PERSONS UNDER PART B.—Section

26 1833(j) of the Social Security Act (42 U.S.C. 1395l(j))
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1 is amended by inserting ‘‘(1)’’ after ‘‘(j)’’ and by adding

2 at the end the following new paragraph:

3 ‘‘(2) If the excess described in paragraph (1) is not

4 made (or effected by offset) within 30 days of the date

5 of the determination, an administrative fee of 1 percent

6 of the outstanding balance of the excess (after application

7 of paragraph (1)), or such lower amount as an Adminis8 trative Law Judge may determine upon an appeal of the

9 initial determination of the excess, shall be imposed on the

10 provider, or other person receiving the excess, for deposit

11 into the Trust Fund under this part.’’.

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

13 this section shall apply to final determinations made on

14 or after the date of the enactment of this Act.

15 SEC. 3. AUTOMATED PREPAYMENT SCREENING REQUIRE16 MENT.

17 (a) DETERMINATION BY ADMINISTRATOR.—By Sep18 tember 1 of each year (beginning with 1996), the Adminis19 trator of the Health Care Financing Administration, after

20 consultation with the Comptroller General of the United

21 States, shall determine—

22 (1) the medical diagnoses by providers of serv23 ices under title XVIII of the Social Security Act

24 which frequently result in overpayments to such pro25 viders under such title; and
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1 (2) the percentage of claims involving the diag2 noses described in paragraph (1), that fiscal

3 intermediaries and carriers under such title shall

4 screen before payment is made in order to avoid

5 such overpayments.

6 (b) REQUIREMENT FOR FISCAL INTERMEDIARIES

7 AND CARRIERS.—The Secretary of Health and Human

8 Services shall not enter into a contract with a fiscal

9 intermediary or carrier under title XVIII of the Social Se10 curity Act unless the Secretary finds that such

11 intermediary or carrier will screen the claims for payment,

12 in accordance with subsection (a), under such title.

13 (c) NOTICE TO FISCAL INTERMEDIARIES AND CAR14 RIERS.—The Secretary shall cause to have published in

15 the Federal Register, in the last 15 days of October of

16 each year, the results of the determination made under

17 subsection (a).

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