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[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 3131 Introduced in Senate (IS)]

106th CONGRESS
  2d Session
                                S. 3131

  To amend title XVIII of the Social Security Act to ensure that the 
Secretary of Health and Human Services provides appropriate guidance to 
   physicians and other health care providers that are attempting to 
 properly submit claims under the Medicare Program and to ensure that 
  the Secretary targets truly fraudulent activity for enforcement of 
 Medicare billing regulations, rather than inadvertent billing errors.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

           September 28 (legislative day, September 22), 2000

 Mr. Murkowski (for himself and Mr. Abraham) 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 ensure that the 
Secretary of Health and Human Services provides appropriate guidance to 
   physicians and other health care providers that are attempting to 
 properly submit claims under the Medicare Program and to ensure that 
  the Secretary targets truly fraudulent activity for enforcement of 
 Medicare billing regulations, rather than inadvertant 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 Billing 
and Education Act of 2000''.
    (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.
                   TITLE II--APPEALS PROCESS REFORMS

Sec. 201. Reform of post-payment audit process.
Sec. 202. Definitions relating to protections for physicians, 
                            suppliers, and providers of services.
Sec. 203. Right to appeal on behalf of deceased beneficiaries.
                    TITLE III--EDUCATION COMPONENTS

Sec. 301. Designated funding levels for provider education.
Sec. 302. Advisory opinions.
               TITLE IV--SUSTAINABLE GROWTH RATE REFORMS

Sec. 401. Inclusion of regulatory costs in the calculation of the 
                            sustainable growth rate.
                      TITLE V--STUDIES AND REPORTS

Sec. 501. GAO audit and report on compliance with certain statutory 
                            administrative procedure requirements.
Sec. 502. GAO study and report on provider participation.
Sec. 503. GAO audit of random sample audits.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) Physicians, providers of services, and suppliers of 
        medical equipment and supplies that participate in the Medicare 
        Program under title XVIII of the Social Security Act must 
        contend with over 100,000 pages of complex Medicare 
        regulations, most of which are unknowable to the average health 
        care provider.
            (2) Many physicians are choosing to discontinue 
        participation in the Medicare Program to avoid becoming the 
        target of an overzealous Government investigation regarding 
        compliance with the extensive regulations governing the 
        submission and payment of Medicare claims.
            (3) Health Care Financing Administration contractors send 
        post-payment review letters to physicians that require the 
        physician to submit to additional substantial Government 
        interference with the practice of the physician in order to 
        preserve the physician's right to due process.
            (4) When a Health Care Financing Administration contractor 
        sends a post-payment review letter to a physician, that 
        contractor often has no telephone or face-to-face communication 
        with the physician, provider of services, or supplier.
            (5) The Health Care Financing Administration targets 
        billing errors as though health care providers have committed 
        fraudulent acts, but has not adequately educated physicians, 
        providers of services, and suppliers regarding Medicare billing 
        requirements.
            (6) The Office of the Inspector General of the Department 
        of Health and Human Services found that 75 percent of surveyed 
        physicians had never received any educational materials from a 
        Health Care Financing Administration contractor concerning the 
        equipment and supply ordering process.

SEC. 3. DEFINITIONS.

    In this Act:
            (1) Applicable authority.--The term ``applicable 
        authority'' has the meaning given such term in section 
        1861(uu)(1) of the Social Security Act (as added by section 
        202).
            (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(uu)(2) of the Social 
        Security Act (as added by section 202).
            (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) Health care provider.--The term ``health care 
        provider'' has the meaning given the term ``eligible provider'' 
        in section 1897(a)(2) of the Social Security Act (as added by 
        section 301).
            (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) Prepayment review.--The term ``prepayment review'' has 
        the meaning given such term in section 1861(uu)(3) of the 
        Social Security Act (as added by section 202).
            (8) 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 paragraph:
            ``(3) Any regulation described under paragraph (2) may not 
        take effect earlier than the date on which such regulation 
        becomes a 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.''.

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. 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 or 1346 
        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 substantive or 
                interpretive rules of general applicability issued by 
                the Secretary;
                    ``(B) the Secretary's statutory authority to 
                promulgate such substantive or interpretive rules of 
                general applicability; or
                    ``(C) a finding of good cause under subparagraph 
                (B) of the sentence following section 553(b)(3) of 
                title 5, United States Code, if used in the 
                promulgation of substantive or interpretive rules of 
                general applicability issued by the Secretary.''.
    (b) Construction of Hearing Rights Relating to Determinations by 
the Secretary Regarding Agreements With Providers of Services.--Section 
1866(h) of the Social Security Act (42 U.S.C. 1395cc(h)) is amended by 
adding at the end the following new paragraph:
    ``(3) For purposes of applying paragraph (1), an institution or 
agency dissatisfied with a determination by the Secretary described in 
such paragraph shall be entitled to a hearing thereon regardless of 
whether--
            ``(A) such determination has been made by the Secretary or 
        by a State pursuant to an agreement entered into with the 
        Secretary under section 1864; or
            ``(B) the Secretary has imposed or may impose a remedy, 
        penalty, or other sanction on the institution or agency in 
        connection with such determination.''.

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

    (a) In General.--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), the Secretary may not offset any future payment to a 
health care provider to recoup a previously made overpayment, but 
instead shall establish a repayment plan to recoup such an overpayment.
    (b) Exception.--This section shall not apply to cases in which the 
Secretary finds evidence of fraud or similar fault on the part of such 
provider.

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

    (a) 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 during the period in which a health care provider 
is appealing a determination that such an overpayment has been made or 
the amount of the overpayment.
    (b) Exception.--This section shall not apply to cases in which the 
Secretary finds evidence of fraud or similar fault on the part of such 
provider.

                   TITLE II--APPEALS PROCESS REFORMS

SEC. 201. REFORM OF POST-PAYMENT AUDIT PROCESS.

    (a) Communications to Physicians.--Section 1842 of the Social 
Security Act (42 U.S.C. 1395u) is amended by adding at the end the 
following new subsection:
    ``(u)(1)(A) Except as provided in paragraph (2), in carrying out 
its contract under subsection (b)(3), with respect to physicians' 
services, the carrier shall provide for the recoupment of overpayments 
in the manner described in the succeeding subparagraphs if--
            ``(i) the carrier or a contractor under section 1893 has 
        not requested any relevant record or file; and
            ``(ii) the case has not been referred to the Department of 
        Justice or the Office of Inspector General.
    ``(B)(i) During the 1-year period beginning on the date on which a 
physician receives an overpayment, the physician may return the 
overpayment to the carrier making such overpayment without any penalty.
    ``(ii) If a physician returns an overpayment under clause (i), 
neither the carrier nor the contractor under section 1893 may begin an 
investigation or target such physician based on any claim associated 
with the amount the physician has repaid.
    ``(C) The carrier or a contractor under section 1893 may not recoup 
or offset payment amounts based on extrapolation (as defined in section 
1861(uu)(2)) if the physician has not been the subject of a post-
payment audit.
    ``(D) As part of any written consent settlement communication, the 
carrier or a contractor under section 1893 shall clearly state that the 
physician 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.
    ``(E) As part of the administrative appeals process for any amount 
in controversy, a physician may directly appeal any adverse 
determination of the carrier or a contractor under section 1893 to an 
administrative law judge.
    ``(F)(i) Each consent settlement communication from the carrier or 
a contractor under section 1893 shall clearly state that prepayment 
review (as defined in section 1861(uu)(3)) may be imposed where the 
physician submits an actual or projected repayment to the carrier or a 
contractor under section 1893. Any prepayment review shall cease if the 
physician demonstrates to the carrier that the physician has properly 
submitted clean claims (as defined in section 1816(c)(2)(B)(i)).
    ``(ii) Prepayment review may not be applied as a result of an 
action under section 201(a), 301(b), or 302.
    ``(2) If a carrier or a contractor under section 1893 identifies 
(before or during post-payment review activities) that a physician has 
submitted a claim with a coding, documentation, or billing 
inconsistency, before sending any written communication to such 
physician, the carrier or a contractor under section 1893 shall contact 
the physician by telephone or in person at the physician's place of 
business during regular business hours and shall--
            ``(i) identify the billing anomaly;
            ``(ii) inform the physician of how to address the anomaly; 
        and
            ``(iii) describe the type of coding or documentation that 
        is required for the claim.''.
    (b) Effective Date.--The amendments made by this section shall take 
effect 60 days after the date of enactment of this Act.

SEC. 202. DEFINITIONS RELATING TO PROTECTIONS FOR PHYSICIANS, 
              SUPPLIERS, AND PROVIDERS OF SERVICES.

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

 ``Definitions Relating to Protections for Physicians, Suppliers, and 
                         Providers of Services

    ``(uu) For purposes of provisions of this title relating to 
protections for physicians, suppliers of medical equipment and 
supplies, and providers of services:
            ``(1) Applicable authority.--The term `applicable 
        authority' means the carrier, contractor under section 1893, or 
        fiscal intermediary that is responsible for making any 
        determination regarding a payment for any item or service under 
        the Medicare Program under this title.
            ``(2) Extrapolation.--The term `extrapolation' means the 
        application of an overpayment dollar amount to a larger 
        grouping of physician claims than those in the audited sample 
        to calculate a projected overpayment figure.
            ``(3) Prepayment review.--The term `prepayment review' 
        means the carriers' and fiscal intermediaries' practice of 
        withholding claim reimbursements from eligible providers even 
        if the claims have been properly submitted and reflect medical 
        services provided.''.

SEC. 203. 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 
health care provider to appeal any determination of the Secretary under 
the Medicare Program on behalf of a deceased beneficiary where no 
substitute party is available.

                    TITLE III--EDUCATION COMPONENTS

SEC. 301. DESIGNATED FUNDING LEVELS FOR PROVIDER EDUCATION.

    (a) Education Programs for Physicians, Providers of Services, and 
Suppliers.--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 
                               suppliers

    ``Sec. 1897. (a) Definitions.--In this section:
            ``(1) Education programs.--The term `education programs' 
        means programs undertaken in conjunction with Federal, State, 
        and local medical societies, specialty societies, other 
        providers, and the Federal, State, and local associations of 
        such providers that--
                    ``(A) focus on current billing, coding, cost 
                reporting, and documentation laws, regulations, fiscal 
                intermediary and carrier manual instructions;
                    ``(B) place special emphasis on billing, coding, 
                cost reporting, and documentation errors that the 
                Secretary has found occur with the highest frequency; 
                and
                    ``(C) emphasize remedies for these improper 
                billing, coding, cost reporting, and documentation 
                practices.
            ``(2) Eligible providers.--The term `eligible provider' 
        means a physician (as defined in section 1861(r)), a provider 
        of services (as defined in section 1861(u)), or a supplier of 
        medical equipment and supplies (as defined in section 
        1834(j)(5)).
    ``(b) Conduct of Education Programs.--
            ``(1) In general.--Carriers and fiscal intermediaries shall 
        conduct education programs for any eligible provider that 
        submits a claim under paragraph (2)(A).
            ``(2) Eligible provider education.--
                    ``(A) Submission of claims and records.--Any 
                eligible provider may voluntarily submit any present or 
                prior claim or medical record to the applicable 
                authority (as defined in section 1861(uu)(1)) to 
                determine whether the billing, coding, and 
                documentation associated with the claim is appropriate.
                    ``(B) Prohibition of extrapolation.--No claim 
                submitted under subparagraph (A) is subject to any type 
                of extrapolation (as defined in section 1861(uu)(2)).
    ``(c) Safe Harbor.--No submission of a claim or record under this 
section shall result in the carrier or a contractor under section 1893 
beginning an investigation or targeting an individual or entity based 
on any claim or record submitted under such subparagraph.
            ``(3) Treatment of improper claims.--If the carrier or 
        fiscal intermediary finds a claim to be improper, the eligible 
        provider shall have the following options:
                    ``(A) Correction of problems.--To correct the 
                documentation, coding, or billing problem to 
                appropriately substantiate the claim 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 was not covered under the 
                Medicare Program under this title or if adequate 
                documentation does not exist.
            ``(4) Prohibition of eligible provider tracking.--The 
        applicable authorities may not use the record of attendance of 
        any eligible provider at an education program conducted under 
        this section or the inquiry regarding claims under paragraph 
        (2)(A) to select, identify, or track such eligible provider 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 the 
        Social Security 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 eligible providers under section 1897.''.
            (2) Carriers.--Section 1842(b)(3)(H) of the Social Security 
        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 eligible providers under section 
                        1897.''.
            (3) Fiscal intermediaries.--Section 1816(b)(1) of the 
        Social Security 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 eligible providers under section 1897.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect 60 days after the date of enactment of this Act.

SEC. 302. ADVISORY OPINIONS.

    (a) Straight Answers.--
            (1) In general.--Fiscal intermediaries and carriers shall 
        do their utmost to provide health care providers with one, 
        straight and correct answer regarding billing and cost 
        reporting questions under the Medicare Program, and will, when 
        requested, give their true first and last names to providers.
            (2) Written requests.--
                    (A) In general.--The Secretary shall establish a 
                process under which a health care provider may request, 
                in writing from a fiscal intermediary or carrier, 
                assistance in addressing questionable 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 billing or 
                procedural answer.
                    (B) Use of Written Statement.--
                            (i) In general.--Subject to clause (ii), a 
                        written statement under paragraph (1) may be 
                        used as proof against a future payment audit or 
                        overpayment determination under the Medicare 
                        Program.
                            (ii) Extrapolation prohibition.--Subject to 
                        clause (iii), no claim submitted under this 
                        section shall be subject to extrapolation.
                            (iii) Limitation on application.--Clauses 
                        (i) and (ii) shall not apply to cases of 
                        fraudulent billing.
                    (C) Safe harbor.--If a physician requests an 
                advisory opinion under this subsection, neither the 
                fiscal intermediary, the carrier, nor a contractor 
                under section 1893 of the Social Security Act (42 
                U.S.C. 1395ddd) may begin an investigation or target 
                such physician based on any claim cited in the request.
    (b) Extension of Existing Advisory Opinion Provisions of Law.--
Section 1128D(b) of the Social Security Act (42 U.S.C. 1320a-7d(b)) is 
amended--
            (1) in paragraph (4), by adding at the end the following 
        new subparagraph:
                    ``(C) Safe harbor.--If a party requests an advisory 
                opinion under this subsection, neither the fiscal 
                intermediary, the carrier, nor a contractor under 
                section 1893 may begin an investigation or target such 
                party based on any claim cited in the request.''; and
            (2) in paragraph (6), by striking, `` and before the date 
        which is 4 years after such date of enactment''.

               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 
                Secretary shall include in the estimate established 
                under clause (iv)--
                            ``(i) the costs for each physicians' 
                        service resulting from any regulation 
                        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 any per 
                procedure costs incurred by each physicians' practice 
                in complying with each regulation 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 
                on or after January 1, 2001, 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.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply with respect to any estimate made by the Secretary of Health and 
Human Services on or after the date of enactment of this Act.

                      TITLE V--STUDIES AND REPORTS

SEC. 501. GAO AUDIT AND REPORT ON COMPLIANCE WITH CERTAIN STATUTORY 
              ADMINISTRATIVE PROCEDURE REQUIREMENTS.

    (a) Audit.--The Comptroller General of the United States shall 
conduct an audit of the compliance of the Health Care Financing 
Administration and all regulations promulgated by the Department of 
Health and Human Resources under statutes administered by the Health 
Care Financing Administration with--
            (1) the provisions of such statutes;
            (2) subchapter II of chapter 5 of title 5, United States 
        Code (including section 553 of such title); and
            (3) chapter 6 of title 5, United States Code.
    (b) Report.--Not later than 18 months after the date of enactment 
of this Act, the Comptroller General shall submit to Congress a report 
on the audit conducted under subsection (a), together with such 
recommendations for legislative and administrative action as the 
Comptroller General determines appropriate.

SEC. 502. GAO STUDY AND REPORT ON PROVIDER PARTICIPATION.

    (a) Study.--The Comptroller General of the United States shall 
conduct a study on provider participation in the Medicare Program to 
determine whether policies or enforcement efforts against health care 
providers have reduced access to care for Medicare beneficiaries. Such 
study shall include a determination of the total cost to physician, 
supplier, and provider practices of compliance with Medicare laws and 
regulations, the number of physician, supplier, and provider audits, 
the actual overpayments assessed in consent settlements, and the 
attendant projected overpayments communicated to physicians, suppliers, 
and providers as part of the consent settlement process.
    (b) Report.--Not later than 18 months after the date of enactment 
of this Act, the Comptroller General shall submit to Congress a report 
on the study conducted under subsection (a), together with such 
recommendations for legislative and administrative action as the 
Comptroller General determines appropriate.

SEC. 503. GAO AUDIT OF RANDOM SAMPLE AUDITS.

    (a) Audit.--The Comptroller General of the United States shall 
conduct an audit to determine--
            (1) the statistical validity of random sample audits 
        conducted under the Medicare Program before the date of the 
        enactment of this Act;
            (2) the necessity of such audits for purposes of 
        administering sections 1815(a), 1842(a), 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));
            (3) the effects of the application of such audits to health 
        care providers under sections 1842(b), 1866(a)(1)(B)(ii), 1870, 
        and 1893 of such Act (42 U.S.C. 1395u(a), 1395cc(a)(1)(B)(ii), 
        1395gg, and 1395ddd); and
            (4) the percentage of claims found to be improper from 
        these audits, as well as the proportion of the extrapolated 
        overpayment amounts to the overpayment amounts found from the 
        analysis of the original sample.
    (b) Report.--Not later than 18 months after the date of the 
enactment of this Act, the Comptroller General shall submit to Congress 
a report on the audit conducted under subsection (a), together with 
such recommendations for legislative and administrative action as the 
Comptroller General determines appropriate.
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