I 

114TH CONGRESS 

1ST SESSION H. R. 2568 

To amend title XVIII of the Social Security Act to improve the process 

of audits by recovery audit contractors and the recovery of overpayments 

under the Medicare program. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 22, 2015 

Mr. HOLDING (for himself and Mr. NUNES) 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 amend title XVIII of the Social Security Act to improve 

the process of audits by recovery audit contractors and 

the recovery of overpayments 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. SHORT TITLE; TABLE OF CONTENTS. 

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

5 ‘‘Fair Medical Audits Act of 2015’’. 

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

7 this Act is as follows: 


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Sec. 1. Short title; table of contents. 

Sec. 2. Transparency of audit process and audit report. 

Sec. 3. Qualifications of auditors. 

Sec. 4. Recoupments. 

Sec. 5. Extrapolation. 

Sec. 6. Payment for the provision of supporting documentation. 

Sec. 7. Notice of over-utilization of codes. 

Sec. 8. Change in look back period. 

Sec. 9. General effective date. 

1 SEC. 2. TRANSPARENCY OF AUDIT PROCESS AND AUDIT RE2 PORT. 

3 Section 1893(h)(1) of the Social Security Act (42 

4 U.S.C. 1395ddd(h)(1)) is amended— 

5 (1) by redesignating subparagraphs (B) and 

6 (C) as subparagraphs (C) and (D), respectively; and 

7 (2) by inserting after subparagraph (A) the fol8 lowing new subparagraph: 

9 ‘‘(B) contractors shall be required to pro10 vide healthcare providers with— 

11 ‘‘(i) the names and contact informa12 tion for the auditors; 

13 ‘‘(ii) the legal authority under which 

14 the audit is conducted; 

15 ‘‘(iii) a clear designation of the 

16 records to be reviewed under the audit; 

17 ‘‘(iv) the dates by which records shall 

18 be submitted; 

19 ‘‘(v) the address to which the records 

20 shall be sent; 


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1 ‘‘(vi) identification of any errors dis2 covered in the audit, including specification 

3 of all medical and reimbursement policies 

4 used in the audit findings; 

5 ‘‘(vii) identification of any underpay6 ments discovered in the audit; and 

7 ‘‘(viii) a description of how any re8 quested overpayment amount was cal9 culated, including, in cases in which ex10 trapolation was used, the extrapolation for11 mula and a description of how the random 

12 sample was developed;’’. 

13 SEC. 3. QUALIFICATIONS OF AUDITORS. 

14 Section 1893(h)(6) of the Social Security Act (42 

15 U.S.C. 1395ddd)(h)(6)) is amended— 

16 (1) in subparagraph (A), by inserting before the 

17 period at the end the following: ‘‘, including knowl18 edge and experience in applicable ICD, CPT, and 

19 HCPCS codes, the format and contents of medical 

20 records and claims forms, and (for those individuals 

21 conducting medical necessity reviews) licensure in a 

22 clinical discipline providing necessary expertise to 

23 determine whether clinical tests and procedures were 

24 medically necessary without the benefit of examining 

25 the patient, specifically including, for medical necesVerDate Sep 11 2014 00:38 May 30, 2015 Jkt 049200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2568.IH H2568

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1 sity reviews of physician records, a doctor of medi2 cine or osteopathy of the same specialty and sub3 specialty and with knowledge of the coverage rules 

4 being applied for the same area as the physician 

5 under review’’; and 

6 (2) by adding at the end the following new sub7 paragraphs: 

8 ‘‘(D) LIABILITY FOR EXCESSIVE OVER9 TURNED DETERMINATIONS.—Contractors that 

10 have a certain percentage (as determined by the 

11 Secretary in regulations) of overpayment deter12 minations overturned by an Administrative Law 

13 Judge at the Office of Medicare Hearings and 

14 Appeals shall be subject to administrative pen15 alty established by the Secretary in such regula16 tions. 

17 ‘‘(E) PROVIDER COMPENSATION FOR CER18 TAIN CONTRACTOR ERRORS.—A contractor shall 

19 be liable for payment to providers of service and 

20 suppliers for reasonable attorneys’ fees when 

21 the contractor’s overpayment determination is 

22 equal to or more than double the final overpay23 ment amount determined by an Administrative 

24 Law Judge at the Office of Medicare Hearings 

25 and Appeals. 


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1 ‘‘(F) INCENTIVE PAYMENTS FOR PROVIDER

2 EDUCATION.—Administrative penalties collected 

3 under subparagraph (D) shall be available to 

4 the Secretary without appropriation to provide 

5 incentive payments to Medicare administrative 

6 contractors under section 1874A to carry out 

7 improper payment outreach and education pro8 grams under subsection (h) of such section.’’. 

9 SEC. 4. RECOUPMENTS. 

10 (a) IN GENERAL.—Section 1893(f)(2)(A) of the So11 cial Security Act (42 U.S.C. 1395ddd(f)(2)(A)) is amend12 ed— 

13 (1) by striking ‘‘until the date the decision on 

14 the reconsideration has been rendered.’’ and insert15 ing the following: ‘‘until the date a decision has been 

16 rendered at the third level of appeal by an Adminis17 trative Law Judge at the Office of Medicare Hear18 ings and Appeals.’’; and 

19 (2) by adding at the end the following: ‘‘Any 

20 recoupments made under this subparagraph based 

21 on a decision that is subsequently reversed on appeal 

22 shall be returned to the provider of services or sup23 plier involved not later than 30 business days after 

24 the date of the decision of reversal on appeal.’’. 


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

2 subsection (a) shall apply to recoupments occurring after 

3 the date of the enactment of this Act. 

4 SEC. 5. EXTRAPOLATION. 

5 (a) IN GENERAL.—Section 1893(f)(3) of the Social 

6 Security Act (42 U.S.C. 1395ddd(f)(3)) is amended— 

7 (1) by striking the last sentence; and 

8 (2) by adding after and below subparagraph 

9 (B) the following: 

10 ‘‘Extrapolation may only be used if it is based on a 

11 statistically valid, stratified random sample, with all 

12 zero paid claims and outliers removed. When ex13 trapolation is used, the median amount shall be used 

14 as the central data point for calculating overpay15 ments unless the data are normally distributed, ap16 proximately normally distributed, or symmetrical.’’. 

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

18 subsection (a) shall apply to determinations made after 

19 the date of the enactment of this Act. 

20 SEC. 6. PAYMENT FOR THE PROVISION OF SUPPORTING 

21 DOCUMENTATION. 

22 Section 1893(f)(4) of the Social Security Act (42 

23 U.S.C. 1395ddd(f)(4)) is amended by adding at the end 

24 the following: ‘‘The Secretary shall require that contrac25 tors reimburse providers of services or suppliers for the 


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1 cost of such production at rates established by the Sec2 retary.’’. 

3 SEC. 7. NOTICE OF OVER-UTILIZATION OF CODES. 

4 Section 1893(f)(6) of the Social Security Act (42 

5 U.S.C. 1395ddd(f)(6)) is amended by adding at the end 

6 the following: ‘‘The Secretary shall require that contrac7 tors provide such notice of over-utilization of codes at least 

8 90 days before the date of initiating an audit, documenta9 tion request, or recoupment with respect to the identified 

10 over-utilized codes against any member of the class of pro11 viders of services or suppliers identified by the contractor 

12 as over-utilizing codes.’’. 

13 SEC. 8. CHANGE IN LOOK BACK PERIOD. 

14 Section 1893(h)(4)(B) of the Social Security Act (42 

15 U.S.C. 1395ddd(h)(4)(B)) is amended by striking ‘‘4 fis16 cal years’’ and inserting ‘‘2 fiscal years’’. 

17 SEC. 9. GENERAL EFFECTIVE DATE. 

18 Except as otherwise provided, the amendments made 

19 by this Act shall apply with respect to contracts entered 

20 into, or renewed, after the date of the enactment of this 

21 Act. 

Æ 


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