II

106TH CONGRESS

1ST SESSION S. 1451

To amend titles XI and XVIII of the Social Security Act to improve efforts

to combat medicare fraud, waste, and abuse.

IN THE SENATE OF THE UNITED STATES

JULY 28, 1999

Mr. HARKIN (for himself, Mr. HOLLINGS, Mr. BIDEN, and Mr. GRAHAM) introduced the following bill; which was read twice and referred to the Committee on Finance

A BILL

To amend titles XI and XVIII of the Social Security Act

to improve efforts to combat medicare fraud, waste, and

abuse.

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 ‘‘Medicare Waste Tax Reduction Act of 1999’’.

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

7 this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Increased medical reviews and antifraud activities.

Sec. 3. Oversight of home health agencies.

Sec. 4. No markup for drugs or biologicals.
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Sec. 5. Ensuring that the medicare program does not reimburse claims owed

by other payers.

Sec. 6. Extension of subpoena and injunction authority.

Sec. 7. Civil monetary penalties for services ordered or prescribed by an excluded individual or entity.

Sec. 8. Civil monetary penalties for false certification of eligibility to receive

partial hospitalization and hospice services.

Sec. 9. Application of certain provisions of the bankruptcy code.

Sec. 10. Improving private sector coordination in combatting health care fraud.

Sec. 11. Fees for agreements with medicare providers and suppliers.

Sec. 12. Increased medicare compliance, education, and assistance for health

care providers.

Sec. 13. Paperwork and administrative hassle reduction.

Sec. 14. Clarification of application of sanctions to Federal health care programs.

Sec. 15. Payments for durable medical equipment.

Sec. 16. Implementation of commercial claims auditing systems.

Sec. 17. Partial hospitalization payment reforms.

Sec. 18. Expansion of medicare senior waste patrol nationwide.

Sec. 19. Application of inherent reasonableness to all part B services other than

physicians’ services.

Sec. 20. Standards regarding payment for certain orthotics and prosthetics.

Sec. 21. Increased flexibility in contracting for medicare claims processing.

Sec. 22. Exemption of Inspectors General from Paperwork Reduction Act requirements.

1 SEC. 2. INCREASED MEDICAL REVIEWS AND ANTIFRAUD

2 ACTIVITIES.

3 (a) IN GENERAL.—Section 1893(d) of the Social Se4 curity Act (42 U.S.C. 1395ddd(d)) is amended by insert5 ing after paragraph (3) the following:

6 ‘‘(4) In the case of fiscal year 2000 and each

7 subsequent fiscal year, procedures to ensure that—

8 ‘‘(A) the number of medical reviews, utili9 zation reviews, and fraud reviews in a fiscal

10 year of providers of services and other individ11 uals and entities furnishing items and services

12 for which payment may be made under this title

13 is equal to at least twice the number of such re14 views that were conducted in fiscal year 1999;
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1 ‘‘(B) the number of provider cost reports

2 audited in a fiscal year is equal to at least—

3 ‘‘(i) 15 percent of those submitted by

4 a home health agency or a skilled nursing

5 facility; and

6 ‘‘(ii) twice the number of such reports

7 that were audited in fiscal year 1999 for

8 those submitted by any other provider of

9 services or any other individual or entity

10 furnishing items and services for which

11 payment may be made under this title; and

12 ‘‘(C) in determining which providers of

13 services, individuals, entities, or cost reports to

14 review or audit, priority is placed on providers,

15 individuals, entities, and areas that the Sec16 retary determines are subject to abuse and

17 most likely to result in mispayment or overpay18 ment recoveries.’’.

19 (b) INCREASE IN APPROPRIATED AMOUNTS FOR

20 MEDICARE AND MEDICAID ACTIVITIES.—

21 (1) IN GENERAL.—Section 1817(k)(3)(A)(i) of

22 the Social Security Act (42 U.S.C.

23 1395i(k)(3)(A)(i)) is amended—

24 (A) in subclause (II)—
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1 (i) by striking ‘‘through 2003’’ and

2 inserting ‘‘and 1999’’; and

3 (ii) by striking ‘‘and’’ at the end;

4 (B) by redesignating subclause (III) as

5 subclause (IV); and

6 (C) by inserting after subclause (II) the

7 following:

8 ‘‘(III) for each of the fiscal years

9 2000 through 2003, the limit for the pre10 ceding fiscal year, increased by 25 percent;

11 and’’.

12 (2) ACTIVITIES.—Section 1817(k)(3)(A)(ii) of

13 the Social Security Act (42 U.S.C.

14 1395i(k)(3)(A)(ii)) is amended—

15 (A) in subclause (IV), by striking ‘‘not less

16 than $110,000,000 and not more than

17 $120,000,000’’ and inserting ‘‘$160,000,000’’;

18 (B) in subclause (V), by striking ‘‘not less

19 than $120,000,000 and not more than

20 $130,000,000’’ and inserting ‘‘$190,000,000’’;

21 (C) in subclause (VI), by striking ‘‘not less

22 than $140,000,000 and not more than

23 $150,000,000’’ and inserting ‘‘$230,000,000’’;

24 and
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1 (D) in subclause (VII), by striking ‘‘not

2 less than $150,000,000 and not more than

3 $160,000,000’’ and inserting ‘‘$260,000,000’’.

4 (c) INCREASE IN APPROPRIATED AMOUNTS FOR

5 MEDICARE INTEGRITY PROGRAM.—Section 1817(k)(4) of

6 the Social Security Act (42 U.S.C. 1395i(k)(4)(B)) is

7 amended—

8 (1) in subparagraph (A), by striking ‘‘such

9 amounts as are necessary to carry out the Medicare

10 Integrity Program under section 1893, subject to

11 subparagraph (B) and to’’ and inserting ‘‘the

12 amount appropriated under subparagraph (B), and

13 such amount shall’’; and

14 (2) in subparagraph (B)—

15 (A) in clause (iv), by striking ‘‘such

16 amount shall be not less than $620,000,000

17 and not more than $630,000,000’’ and insert18 ing ‘‘$780,000,000’’;

19 (B) in clause (v), by striking ‘‘such amount

20 shall be not less than $670,000,000 and not

21 more than $680,000,000’’ and inserting

22 ‘‘$830,000,000’’;

23 (C) in clause (vi), by striking ‘‘such

24 amount shall be not less than $690,000,000
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1 and not more than $700,000,000’’ and insert2 ing ‘‘$850,000,000’’; and

3 (D) in clause (vii), by striking ‘‘such

4 amount shall be not less than $710,000,000

5 and not more than $720,000,000’’ and insert6 ing ‘‘$870,000,000’’.

7 SEC. 3. OVERSIGHT OF HOME HEALTH AGENCIES.

8 (a) VALIDATION SURVEYS OF HOME HEALTH AGEN9 CIES.—Section 1891(c) of the Social Security Act (42

10 U.S.C. 1395bbb(c)) is amended by adding at the end the

11 following:

12 ‘‘(3)(A)(i) The Secretary shall conduct onsite surveys

13 of a representative sample of home health agencies in each

14 State, in a sufficient number to allow inferences about the

15 adequacies of each State’s surveys conducted under this

16 subsection.

17 ‘‘(ii) A survey described in clause (i) shall be con18 ducted by the Secretary within 2 months of the date of

19 the survey conducted by the State and may be conducted

20 concurrently with the State survey.

21 ‘‘(iii) In conducting a survey described in clause (i),

22 the Secretary shall use the same survey protocols as the

23 State is required to use under this subsection.

24 ‘‘(iv) If, through a State survey, the State has deter25 mined that a home health agency is in compliance with
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1 the requirements specified in or pursuant to section

2 1861(o), this section, or this title, but the Secretary deter3 mines (after conducting the survey described in clause (i))

4 that the facility does not meet such requirements, the Sec5 retary’s determination as to the facility’s noncompliance

6 with such requirements is binding and supersedes that of

7 the State survey.

8 ‘‘(B) With respect to each State, the Secretary shall

9 conduct surveys under subparagraph (A) each year with

10 respect to at least 5 percent of the number of home health

11 agencies surveyed by the State in the year, but in no case

12 less than 5 home health agencies in the State.

13 ‘‘(C) If the Secretary finds, on the basis of such sur14 veys, that a State has failed to perform surveys as re15 quired under this subsection or that a State’s survey and

16 certification performance otherwise is not adequate, the

17 Secretary shall provide for an appropriate remedy, which

18 may include the training of survey teams in the State.

19 ‘‘(D) If the Secretary has reason to question the com20 pliance of a home health agency with any of the require21 ments specified in or pursuant to section 1861(o), this sec22 tion, or this title, the Secretary may conduct a survey of

23 the agency and, on the basis of that survey, make inde24 pendent and binding determinations concerning the extent
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1 to which the home health agency meets such require2 ments.’’.

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

4 subsection (a) shall take effect on the date of enactment

5 of this Act.

6 SEC. 4. NO MARKUP FOR DRUGS OR BIOLOGICALS.

7 (a) IN GENERAL.—Section 1842(o) (42 U.S.C.

8 1395u(o)) is amended to read as follows:

9 ‘‘(o)(1) If a physician’s, supplier’s, or any other per10 son’s bill or request for payment for services includes a

11 charge for a drug or biological for which payment may

12 be made under this part and the drug or biological is not

13 paid on a cost or prospective payment basis as otherwise

14 provided in this part, the payment amount established in

15 this subsection for the drug or biological shall be the low16 est of the following:

17 ‘‘(A) The actual acquisition cost, as defined in

18 paragraph (2), to the person submitting the claim

19 for payment for the drug or biological.

20 ‘‘(B) 83 percent of the average wholesale price

21 of such drug or biological, as determined by the Sec22 retary.

23 ‘‘(C) For payments for any drug or biological

24 furnished on or after January 1, 2001, the median

25 actual acquisition cost of all claims for payment for
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1 such drug or biological for the 12-month period be2 ginning July 1, 1999 (and adjusted, as the Sec3 retary determines appropriate, to reflect changes in

4 the cost of such drug or biological due to inflation,

5 and such other factors as the Secretary determines

6 appropriate).

7 ‘‘(D) The amount otherwise determined under

8 this part.

9 ‘‘(2) For purposes of paragraph (1)(A), the term ‘ac10 tual acquisition cost’ means, with respect to such drug or

11 biological, the cost of the drug or biological based on the

12 most economical case size in inventory on the date of dis13 pensing or, if less, the most economical case size pur14 chased within 6 months of the date of dispensing whether

15 or not that specific drug or biological was furnished to

16 an individual whether or not enrolled under this part.

17 Such term includes appropriate adjustments, as deter18 mined by the Secretary, for all discounts, rebates, or any

19 other benefit in cash or in kind (including travel, equip20 ment, or free products). The Secretary shall include an

21 additional payment for administrative, storage, and han22 dling costs.

23 ‘‘(3)(A) No payment shall be made under this part

24 for any drug or biological to a person whose bill or request
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1 for payment for such drug or biological does not include

2 a statement of the person’s actual acquisition cost.

3 ‘‘(B) A person may not bill an individual enrolled

4 under this part—

5 ‘‘(i) any amount other than the payment

6 amount specified in paragraph (1) or (4) (plus any

7 applicable deductible and coinsurance amounts), or

8 ‘‘(ii) any amount for such drug or biological for

9 which payment may not be made pursuant to sub10 paragraph (A).

11 ‘‘(C) If a person knowingly and willfully in repeated

12 cases bills 1 or more individuals in violation of subpara13 graph (B), the Secretary may apply sanctions against that

14 person in accordance with subsection (j)(2).

15 ‘‘(4) The Secretary may pay a reasonable dispensing

16 fee (less the applicable deductible and coinsurance

17 amounts) for any drug or biological to a licensed phar18 macy approved to dispense drugs or biologicals under this

19 part, if payment for such drug or biological is made to

20 the pharmacy.’’.

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

22 subsection (a) shall apply to drugs or biologicals furnished

23 on or after January 1, 2000.
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1 (c) ELIMINATION OF REPORT ON AVERAGE WHOLE2 SALE PRICE.—Section 4556 of the Balanced Budget Act

3 of 1997 is amended by striking subsection (c).

4 SEC. 5. ENSURING THAT THE MEDICARE PROGRAM DOES

5 NOT REIMBURSE CLAIMS OWED BY OTHER

6 PAYERS.

7 (a) INFORMATION FROM GROUP HEALTH PLANS.—

8 Section 1862(b) of the Social Security Act (42 U.S.C.

9 1395y(b)) is amended by adding at the end the following:

10 ‘‘(7) INFORMATION FROM GROUP HEALTH

11 PLANS.—

12 ‘‘(A) PROVISION OF INFORMATION BY

13 GROUP HEALTH PLANS.—The administrator of

14 a group health plan that is subject to the re15 quirements of paragraph (1) shall provide the

16 Secretary with the information described in

17 subparagraph (C) for each individual covered

18 under the plan who is entitled to any benefits

19 under this title. Such information shall be pro20 vided in such manner and at such times as the

21 Secretary may specify (but in no case more fre22 quently than 4 times per year).

23 ‘‘(B) PROVISION OF INFORMATION BY EM24 PLOYERS AND EMPLOYEE ORGANIZATIONS.—An

25 employer (or employee organization) that main-
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1 tains or participates in a group health plan that

2 is subject to the requirements of paragraph (1)

3 shall provide to the administrator of the plan

4 the information described in subparagraph (C)

5 for each individual covered under the plan who

6 is entitled to any benefits under this title. Such

7 information shall be provided in such manner

8 and at such times as the Secretary may specify

9 (but in no case more frequently than 4 times

10 per year).

11 ‘‘(C) INFORMATION.—The information de12 scribed in this subparagraph is as follows:

13 ‘‘(i) ELEMENTS CONCERNING THE IN14 DIVIDUAL.—

15 ‘‘(I) The individual’s name.

16 ‘‘(II) The individual’s date of

17 birth.

18 ‘‘(III) The individual’s sex.

19 ‘‘(IV) The individual’s social se20 curity insurance number.

21 ‘‘(V) The number assigned by the

22 Secretary to the individual for claims

23 under this title.

24 ‘‘(VI) The family relationship of

25 the individual to the person who has
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1 current or prior employment status

2 with the employer.

3 ‘‘(ii) ELEMENTS CONCERNING THE

4 FAMILY MEMBER WITH CURRENT OR PRIOR

5 EMPLOYMENT STATUS.—

6 ‘‘(I) The name of the person in

7 the individual’s family who has cur8 rent or prior employment status with

9 the employer.

10 ‘‘(II) That person’s social secu11 rity insurance number.

12 ‘‘(III) The number or other iden13 tifier assigned by the plan to that per14 son.

15 ‘‘(IV) The periods of coverage for

16 that person under the plan.

17 ‘‘(V) The employment status of

18 that person (current or former em19 ployee) during those periods of cov20 erage.

21 ‘‘(VI) The classes (of that per22 son’s family members) covered under

23 the plan.

24 ‘‘(iii) PLAN ELEMENTS.—
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1 ‘‘(I) The items and services cov2 ered under the plan.

3 ‘‘(II) The name and address to

4 which claims under the plan are to be

5 sent.

6 ‘‘(III) The name, address, and

7 tax identification number of the plan

8 sponsor.

9 ‘‘(iv) ELEMENTS CONCERNING THE

10 EMPLOYER.—

11 ‘‘(I) The employer’s name.

12 ‘‘(II) The employer’s address.

13 ‘‘(III) The employer identifica14 tion number of the employer.

15 ‘‘(IV) The tax identification num16 ber of the employer if different than

17 the number in clause (iii)(III).

18 ‘‘(D) USE OF IDENTIFIERS.—The adminis19 trator of a group health plan shall utilize a

20 unique identifier for the plan in providing infor21 mation under subparagraph (A) and in other

22 transactions, as may be specified by the Sec23 retary, related to the provisions of this sub24 section. The Secretary may provide to the ad-
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1 ministrator the unique identifier described in

2 the preceding sentence.

3 ‘‘(E) PENALTY FOR NONCOMPLIANCE.—

4 Any individual or entity that knowingly and

5 willfully fails to comply with a requirement im6 posed by this paragraph shall be subject to a

7 civil money penalty not to exceed $1,000 for

8 each incident of such failure. The provisions of

9 section 1128A (other than subsections (a) and

10 (b)) shall apply to a civil money penalty under

11 the previous sentence in the same manner as

12 those provisions apply to a penalty or pro13 ceeding under section 1128A(a).

14 ‘‘(F) GROUP HEALTH PLAN DEFINED.—In

15 this paragraph, the term ‘group health plan’

16 has the meaning given such term in paragraph

17 (1)(A)(v).’’.

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

19 subsection (a) shall take effect on January 1, 2000.

20 SEC. 6. EXTENSION OF SUBPOENA AND INJUNCTION AU21 THORITY.

22 (a) SUBPOENA AUTHORITY.—Section 1128A(j)(1) of

23 the Social Security Act (42 U.S.C. 1320a–7a(j)(1)) is

24 amended by inserting ‘‘and section 1128’’ after ‘‘with re25 spect to this section’’.
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1 (b) INJUNCTION AUTHORITY.—Section 1128A(k) of

2 the Social Security Act (42 U.S.C. 1320a–7a(k)) is

3 amended by inserting ‘‘or an exclusion under section

4 1128,’’ after ‘‘subject to a civil monetary penalty under

5 this section,’’.

6 (c) CLARIFYING AMENDMENTS.—

7 (1) IN GENERAL.—Section 1128A(j)(1) of the

8 Social Security Act (42 U.S.C. 1320a–7a(j)(1)) is

9 amended—

10 (A) by inserting ‘‘, except that, in so ap11 plying such sections, any reference therein to

12 the Commissioner of Social Security or the So13 cial Security Administration shall be considered

14 a reference to the Secretary or the Department

15 of Health and Human Services, respectively’’

16 after ‘‘with respect to title II’’; and

17 (B) by striking the second sentence.

18 (2) AUTHORITY.—Section 1128A(j)(2) of the

19 Social Security Act (42 U.S.C. 1320a–7a(j)(2)) is

20 amended to read as follows:

21 ‘‘(2) The Secretary may delegate to the Inspector

22 General of the Department of Health and Human Services

23 any or all authority granted under this section or under

24 section 1128.’’.
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1 (d) CONFORMING AMENDMENT.—Section 1128 of the

2 Social Security Act (42 U.S.C. 1320a–7) is amended by

3 adding at the end the following:

4 ‘‘(k) For provisions of law concerning the Secretary’s

5 subpoena and injunction authority with respect to activi6 ties under this section, see subsections (j) and (k) of sec7 tion 1128A.’’.

8 SEC. 7. CIVIL MONETARY PENALTIES FOR SERVICES OR9 DERED OR PRESCRIBED BY AN EXCLUDED IN10 DIVIDUAL OR ENTITY.

11 (a) IN GENERAL.—Section 1128A(a)(1) of the Social

12 Security Act (42 U.S.C. 1320a–7a(a)(1)) is amended—

13 (1) in subparagraph (D)—

14 (A) by inserting ‘‘, ordered, or prescribed

15 by such person’’ after ‘‘other item or service

16 furnished’’;

17 (B) by inserting ‘‘(pursuant to this title or

18 title XVIII)’’ after ‘‘period in which the person

19 was excluded’’;

20 (C) by striking ‘‘pursuant to a determina21 tion by the Secretary’’ and all that follows

22 through ‘‘the provisions of section 1842(j)(2)’’;

23 and

24 (D) by striking ‘‘or’’ at the end;
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1 (2) by redesignating subparagraph (E) as sub2 paragraph (F); and

3 (3) by adding after subparagraph (D) the fol4 lowing:

5 ‘‘(E) is for a medical or other item or serv6 ice ordered or prescribed by a person excluded

7 (pursuant to this title or title XVIII) from the

8 program under which the claim was made, and

9 the person furnishing such item or service

10 knows or should know of such exclusion, or’’.

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

12 subsection (a) shall apply to claims presented on or after

13 the date of enactment of this Act.

14 SEC. 8. CIVIL MONETARY PENALTIES FOR FALSE CERTIFI15 CATION OF ELIGIBILITY TO RECEIVE PAR16 TIAL HOSPITALIZATION AND HOSPICE SERV17 ICES.

18 (a) IN GENERAL.—Section 1128A(b)(3) of the Social

19 Security Act (42 U.S.C. 1320a–7a(b)(3)) is amended—

20 (1) in subparagraph (A)(ii), by inserting ‘‘, hos21 pice care, or partial hospitalization services’’ after

22 ‘‘home health services’’; and

23 (2) in subparagraph (B), by inserting ‘‘, section

24 1814(a)(7) in the case of hospice care, or section
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1 1835(a)(2)(F) in the case of partial hospitalization

2 services’’ after ‘‘home health services’’.

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

4 subsection (a) shall apply to documents executed on or

5 after the date of enactment of this Act.

6 SEC. 9. APPLICATION OF CERTAIN PROVISIONS OF THE

7 BANKRUPTCY CODE.

8 (a) RESTRICTED APPLICABILITY OF BANKRUPTCY

9 STAY, DISCHARGE, AND PREFERENTIAL TRANSFER PRO10 VISIONS TO MEDICARE AND MEDICAID DEBTS.—Title XI

11 of the Social Security Act (42 U.S.C. 1301 et seq.) is

12 amended by inserting after section 1143 the following:

13 ‘‘APPLICATION OF CERTAIN PROVISIONS OF THE

14 BANKRUPTCY CODE

15 ‘‘SEC. 1144. (a) MEDICARE- AND MEDICAID-RE16 LATED ACTIONS NOT STAYED BY BANKRUPTCY PRO17 CEEDINGS.—The commencement or continuation of any

18 action against a debtor under this title, title XVIII, or title

19 XIX (other than an action with respect to health care

20 services provided to the debtor under title XVIII), includ21 ing any action or proceeding to exclude or suspend the

22 debtor from program participation, assess civil money pen23 alties, recoup or set off overpayments, or deny or suspend

24 payment of claims shall not be subject to the provisions

25 of section 362(a) of title 11, United States Code.
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1 ‘‘(b) MEDICARE- AND MEDICAID-RELATED DEBT

2 NOT DISCHARGEABLE IN BANKRUPTCY.—A debt owed to

3 the United States or to a State for an overpayment under

4 title XVIII or title XIX (other than an overpayment for

5 health care services provided to the debtor under title

6 XVIII), or for a penalty, fine, or assessment under this

7 title, title XVIII, or title XIX, shall not be dischargeable

8 under any provision of title 11, United States Code.

9 ‘‘(c) REPAYMENT OF CERTAIN DEBTS CONSIDERED

10 FINAL.—Payments made to repay a debt to the United

11 States or to a State with respect to items or services pro12 vided, or claims for payment made, under title XVIII or

13 XIX (including repayment of an overpayment (other than

14 an overpayment for health care services provided to the

15 debtor under title XVIII)), or to pay a penalty, fine, or

16 assessment under this title, title XVIII, or title XIX, shall

17 be considered final and not preferential transfers under

18 section 547 of title 11, United States Code.’’.

19 (b) MEDICARE RULES APPLICABLE TO BANKRUPTCY

20 PROCEEDINGS.—Title XVIII of the Social Security Act

21 (42 U.S.C. 1395 et seq.) is amended by adding at the end

22 the following:

23 ‘‘APPLICATION OF PROVISIONS OF THE BANKRUPTCY

24 CODE

25 ‘‘SEC. 1897. (a) USE OF MEDICARE STANDARDS AND

26 PROCEDURES.—Notwithstanding any provision of title 11,
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1 United States Code, or any other provision of law, in the

2 case of claims by a debtor in bankruptcy for payment

3 under this title, the determination of whether the claim

4 is allowable, and of the amount payable, shall be made

5 in accordance with the provisions of this title and title XI.

6 ‘‘(b) NOTICE TO CREDITOR OF BANKRUPTCY PETI7 TIONER.—In the case of a debt owed to the United States

8 with respect to items or services provided, or claims for

9 payment made, under this title (including a debt arising

10 from an overpayment or a penalty, fine, or assessment

11 under title XI or this title), the notices to the creditor of

12 bankruptcy petitions, proceedings, and relief required

13 under title 11, United States Code (including under sec14 tion 342 of that title and section 2002(j) of the Federal

15 Rules of Bankruptcy Procedure), shall be given to the Sec16 retary. Provision of such notice to a fiscal agent of the

17 Secretary shall not be considered to satisfy this require18 ment.

19 ‘‘(c) TURNOVER OF PROPERTY TO THE BANKRUPTCY

20 ESTATE.—For purposes of section 542(b) of title 11,

21 United States Code, a claim for payment under this title

22 shall not be considered to be a matured debt payable to

23 the estate of a debtor until such claim has been allowed

24 by the Secretary in accordance with procedures under this

25 title.’’.
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1 (c) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to petitions filed on or after the

3 date of enactment of this Act.

4 SEC. 10. IMPROVING PRIVATE SECTOR COORDINATION IN

5 COMBATTING HEALTH CARE FRAUD.

6 (a) IN GENERAL.—Title XI of the Social Security Act

7 (42 U.S.C. 1301 et seq.) is amended by inserting after

8 section 1157 the following:

9 ‘‘IMPROVING PRIVATE SECTOR COORDINATION IN

10 COMBATTING HEALTH CARE FRAUD

11 ‘‘SEC. 1157A. (a) IN GENERAL.—Notwithstanding

12 any other provision of law, no health plan (as defined in

13 section 1128C(c)), issuer of a health plan, or employee of

14 a health plan shall be held liable in any civil action with

15 respect to the provision of information regarding sus16 pected health care fraud, including Federal health care of17 fenses (as defined in section 24(a) of title 18, United

18 States Code) to an applicable individual unless such infor19 mation is false and the person providing it knew, or had

20 reason to believe, that such information was false.

21 ‘‘(b) APPLICABLE INDIVIDUAL.—In subsection (a),

22 the term ‘applicable individual’ means—

23 ‘‘(1) a Federal, State, or local law enforcement

24 official responsible for the investigation or prosecu25 tion of suspected health care fraud offenses; or
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1 ‘‘(2) an employee of a health plan or issuer of

2 a health plan.

3 ‘‘(c) ATTORNEY’S FEES.—Any health plan, issuer of

4 a health plan, or employee of a health plan against whom

5 a civil action is brought, and who is found to be entitled

6 to immunity from liability by reason of this section, shall

7 be entitled to recover reasonable attorney’s fees and costs

8 from the person who brought the civil action.’’.

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

10 subsection (a) shall take effect on the date of enactment

11 of this Act.

12 SEC. 11. FEES FOR AGREEMENTS WITH MEDICARE PRO13 VIDERS AND SUPPLIERS.

14 (a) FEES RELATED TO MEDICARE PROVIDER AND

15 SUPPLIER ENROLLMENT AND REENROLLMENT.—Section

16 1866 of the Social Security Act (42 U.S.C. 1395cc) is

17 amended by adding at the end the following:

18 ‘‘(j) ENROLLMENT PROCEDURES AND FEES.—

19 ‘‘(1) ENROLLMENT OF INDIVIDUALS AND ENTI20 TIES THAT ARE NOT PROVIDERS OF SERVICES.—The

21 Secretary may establish a procedure for enrollment

22 (and periodic reenrollment) of individuals or entities

23 that are not providers of services subject to the pro24 visions of subsection (a) but that furnish health care

25 items or services under this title.
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1 ‘‘(2) FEES.—

2 ‘‘(A) IN GENERAL.—The Secretary may

3 impose fees for initiation and renewal of pro4 vider agreements under subsection (a) and for

5 enrollment and periodic reenrollment of other

6 individuals and entities furnishing health care

7 items or services under this title under para8 graph (1), in amounts up to the full amount

9 which the Secretary reasonably estimates to be

10 sufficient to cover the Secretary’s costs related

11 to the process for initiating and reviewing such

12 agreements and enrollments.

13 ‘‘(B) FEES CREDITED TO SPECIAL FUND

14 IN TREASURY.—Fees collected pursuant to this

15 paragraph shall be credited to a special fund of

16 the United States Treasury, and shall remain

17 available until expended, to the extent and in

18 such amounts as provided in advance in appro19 priations Acts, for necessary expenses for these

20 purposes, including costs of establishing and

21 maintaining procedures and records systems,

22 processing applications, and conducting back23 ground investigations.’’.
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1 (b) CLERICAL AMENDMENT.—The heading of section

2 1866 of the Social Security Act (42 U.S.C. 1395cc) is

3 amended to read as follows:

4 ‘‘AGREEMENTS WITH PROVIDERS OF SERVICES AND EN5 ROLLMENT OF OTHER PERSONS FURNISHING SERV6 ICES’’.

7 SEC. 12. INCREASED MEDICARE COMPLIANCE, EDUCATION,

8 AND ASSISTANCE FOR HEALTH CARE PRO9 VIDERS.

10 (a) DEVELOPMENT OF PLAN.—Not later than 6

11 months after the date of enactment of this Act, the Sec12 retary of Health and Human Services shall, in consulta13 tion with health care provider representatives, develop and

14 implement a comprehensive plan of activities to—

15 (1) maximize health care provider knowledge of

16 medicare program integrity requirements, including

17 anti-fraud and abuse laws and administrative ac18 tions;

19 (2) assist health care providers with medicare

20 program integrity compliance, including educating

21 such providers regarding compliance activities and

22 procedures of the Health Care Financing Adminis23 tration and the Inspector General of the Department

24 of Health and Human Services;

25 (3) develop improved computer technology for

26 health care providers to both reduce their adminis-
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1 trative hassles and facilitate their compliance with

2 medicare program requirements, including physician

3 evaluation and management guidelines; and

4 (4) otherwise improve compliance among health

5 care providers with rules and regulations under the

6 medicare program.

7 (b) FUNDING.—Notwithstanding any other provision

8 of law, of the amounts appropriated under section

9 1817(k)(4) of the Social Security Act (42 U.S.C.

10 1395i(k)(4)) for a fiscal year, there shall be made avail11 able $10,000,000 in fiscal year 2000 and such sums as

12 are necessary in fiscal years 2001 through 2004 to carry

13 out the purposes of this section.

14 SEC. 13. PAPERWORK AND ADMINISTRATIVE HASSLE RE15 DUCTION.

16 (a) STUDY BY COMMITTEE.—

17 (1) ESTABLISHMENT.—Not later than 90 days

18 after the date of enactment of this Act, the Sec19 retary of Health and Human Services shall contract

20 with the Institute of Medicine of the National Acad21 emy of Sciences to establish a committee to study

22 medicare program administrative requirements that

23 are applicable to health care providers under such

24 program.
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1 (2) COMMITTEE.—The committee described in

2 paragraph (1) shall be composed of—

3 (A) at least 9 health care providers who

4 participate in, and have significant experience

5 working with, the medicare program;

6 (B) experts in paperwork reduction; and

7 (C) beneficiaries under the medicare pro8 gram or their representatives.

9 (b) RECOMMENDATIONS.—The committee described

10 in subsection (a) shall develop recommendations regarding

11 how paperwork and administrative requirements under the

12 medicare program can be minimized in a manner that—

13 (1) increases the time health care providers

14 that are subject to such requirements have to spend

15 in direct patient care; and

16 (2) maintains medicare program integrity and

17 compliance with anti-fraud and abuse requirements.

18 In developing such recommendations, the committee shall

19 seek to streamline variations in administrative and paper20 work requirements between the medicare program and

21 other government health programs and private health

22 plans.

23 (c) REPORT.—

24 (1) IN GENERAL.—Not later than June 1,

25 2000, the committee described in subsection (a)
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1 shall submit a report to the Secretary of Health and

2 Human Services, the Committees on Finance and

3 Appropriations of the Senate and the Committees on

4 Ways and Means, Commerce, and Appropriations of

5 the House of Representatives.

6 (2) CONTENTS.—The report required under

7 paragraph (1) shall contain a detailed description of

8 the matters studied pursuant to subsection (a) and

9 the recommendations developed pursuant to sub10 section (b), including such legislation and adminis11 trative actions as the committee considers appro12 priate.

13 (d) AUTHORIZATION OF APPROPRIATIONS.—

14 (1) IN GENERAL.—There are authorized to be

15 appropriated $1,000,000 for fiscal year 2000 to

16 carry out the purposes of this section.

17 (2) AVAILABILITY.—Any sums appropriated

18 under the authorization contained in this subsection

19 shall remain available, without fiscal year limitation,

20 until expended.

21 SEC. 14. CLARIFICATION OF APPLICATION OF SANCTIONS

22 TO FEDERAL HEALTH CARE PROGRAMS.

23 (a) COVERAGE OF EMPLOYMENT.—Section 1128 of

24 the Social Security Act (42 U.S.C. 1320a–7) is

25 amended—
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1 (1) in subsection (a), in the matter preceding

2 paragraph (1), by inserting ‘‘(including employment

3 under)’’ after ‘‘participation in’’; and

4 (2) in subsection (b), in the matter preceding

5 paragraph (1), by inserting ‘‘(including employment

6 under)’’ after ‘‘participation in’’.

7 (b) APPLICATION UNDER CIVIL MONEY PENALTY

8 AUTHORITY.—Section 1128A of the Social Security Act

9 (42 U.S.C. 1320a–7a) is amended—

10 (1) in subsection (a)(4), by striking ‘‘program

11 under title XVIII or a State health care program’’

12 and inserting ‘‘Federal health care program’’ each

13 place it appears;

14 (2) in subsection (a)(5)—

15 (A) by striking ‘‘title XVIII of this Act, or

16 under a State health care program (as defined

17 in section 1128(h))’’ and inserting ‘‘a Federal

18 health care program’’; and

19 (B) by striking ‘‘title XVIII, or a State

20 health care program (as so defined)’’ and in21 serting ‘‘such program’’;

22 (3) in the last sentence of subsection (a), by

23 striking ‘‘and to direct the appropriate State agency

24 to exclude the person from participation in any State

25 health care program’’; and
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•S 1451 IS

1 (4) in subsection (h), by striking ‘‘State agency

2 or agencies administering or supervising the admin3 istration of State health care programs (as defined

4 in section 1128(h))’’ and inserting ‘‘Federal or State

5 agency or agencies administering or supervising the

6 administration of any Federal health care program’’.

7 (c) APPLICATION OF WAIVER PROVISIONS TO FED8 ERAL HEALTH CARE PROGRAMS.—Section 1128 of the

9 Social Security Act (42 U.S.C. 1320a–7) is amended—

10 (1) in subsection (c)(3)(B), by striking ‘‘upon

11 the request of a State’’ and inserting ‘‘upon the re12 quest of the director of a Federal health care pro13 gram’’;

14 (2) in subsection (d)(3)(B)(i)—

15 (A) by striking ‘‘State health care pro16 gram’’ and inserting ‘‘Federal health care pro17 gram’’; and

18 (B) by striking ‘‘State agency’’ and insert19 ing ‘‘Federal or State agency’’; and

20 (3) in subsection (d)(3)(B)(ii), by striking

21 ‘‘State health care program’’ and inserting ‘‘Federal

22 health care program (other than under title

23 XVIII)’’.
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•S 1451 IS

1 (d) NOTICE PROVISION REGARDING FEDERAL

2 HEALTH CARE PROGRAMS.—Section 1128 of the Social

3 Security Act (42 U.S.C. 1320a–7) is amended—

4 (1) in the heading of subsection (d), by striking

5 ‘‘TO STATE AGENCIES AND EXCLUSION UNDER

6 STATE HEALTH CARE PROGRAMS’’ and inserting

7 ‘‘AND EXCLUSION UNDER FEDERAL HEALTH CARE

8 PROGRAMS’’;

9 (2) in subsection (d)(1), by striking ‘‘State’’

10 and inserting ‘‘Federal’’;

11 (3) in subsection (d)(2)—

12 (A) by striking ‘‘State agency’’ and insert13 ing ‘‘Federal or State agency’’ each place it ap14 pears; and

15 (B) by striking ‘‘State health care pro16 gram’’ and inserting ‘‘Federal health care pro17 gram’’ each place it appears;

18 (4) in subsection (d)(3)(A), by striking ‘‘State’’

19 and inserting ‘‘Federal’’; and

20 (5) in subsection (g)(3)—

21 (A) by striking ‘‘State agency’’ and insert22 ing ‘‘Federal or State agency’’; and

23 (B) by striking ‘‘State health care pro24 gram’’ and inserting ‘‘Federal health care pro25 gram’’.
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1 (e) USE OF DEFINITION OF FEDERAL HEALTH CARE

2 PROGRAM AND TREATMENT OF FEDERAL EMPLOYEES

3 HEALTH BENEFITS PROGRAM AS A FEDERAL HEALTH

4 CARE PROGRAM.—Section 1128B(f) of the Social Security

5 Act (42 U.S.C. 1320a–7b(f)) is amended—

6 (1) in the matter preceding paragraph (1), by

7 inserting ‘‘and sections 1128 and 1128A’’ after ‘‘this

8 section’’; and

9 (2) in paragraph (1), by striking ‘‘(other than

10 the health insurance program under chapter 89 of

11 title 5, United States Code)’’.

12 (f) AUTHORITY TO EXCLUDE FROM FEDERAL

13 HEALTH CARE PROGRAMS BASED ON PRO REC14 OMMENDATIONS.—Section 1156(b)(1) of the Social Secu15 rity Act (42 U.S.C. 1320c–5(b)(1)) is amended—

16 (1) in the second sentence, by striking ‘‘eligi17 bility to provide services under this Act on a reim18 bursable basis’’ and inserting ‘‘participation in any

19 Federal health care program (as defined in section

20 1128B(f))’’; and

21 (2) in the third sentence, by striking ‘‘eligibility

22 to provide services on a reimbursable basis’’ and in23 serting ‘‘participation in such programs’’.

24 (g) EFFECTIVE DATE.—
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1 (1) IN GENERAL.—Subject to paragraph (2),

2 the amendments made by this section shall take ef3 fect on the date of enactment of this Act.

4 (2) CONVICTIONS UNDER FEHBP.—The amend5 ment made by subsection (e)(2) shall apply, with re6 spect to convictions under the health insurance pro7 gram under chapter 89 of title 5, United States

8 Code, to convictions that occur on or after the date

9 of enactment of this Act.

10 SEC. 15. PAYMENTS FOR DURABLE MEDICAL EQUIPMENT.

11 (a) IN GENERAL.—Section 1834(a)(1) of the Social

12 Security Act (42 U.S.C. 1395m(a)(1)) is amended—

13 (1) in subparagraph (B)—

14 (A) in clause (i), by striking ‘‘, or’’ at the

15 end and inserting a semicolon; and

16 (B) by inserting after clause (ii) the fol17 lowing:

18 ‘‘(iii) the least expensive amount that

19 the supplier of the item is paid by a

20 Medicare+Choice organization for such

21 item; or

22 ‘‘(iv) the least expensive amount that

23 the supplier of the item is paid by any

24 Federal health care program (as defined in

25 section 1128B(f)) for such item;’’; and
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•S 1451 IS

1 (2) by adding at the end the following:

2 ‘‘(E) ADMINISTRATIVE COSTS.—

3 ‘‘(i) IN GENERAL.—Except as pro4 vided in clause (ii), if—

5 ‘‘(I) the payment amount for an

6 item is covered under clauses (iii) or

7 (iv) of subparagraph (B); and

8 ‘‘(II) the Secretary determines

9 that the administrative costs associ10 ated with billing and receiving reim11 bursement from the Secretary for the

12 item exceeds the administrative costs

13 associated with providing such item to

14 a Medicare+Choice organization or

15 another Federal health care program

16 (as so defined);

17 then the Secretary shall adjust the pay18 ment rate for such item to reflect such ex19 cess.

20 ‘‘(ii) LIMITATION.—In no case may

21 the payment rate for an item that is ad22 justed under clause (i) exceed the payment

23 rate for such item determined in clauses (i)

24 and (ii) of subparagraph (B).
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1 ‘‘(iii) COLLECTION OF INFORMA2 TION.—The Secretary shall collect from

3 durable medical equipment suppliers that

4 receive reimbursement under Federal

5 health care programs (as so defined) such

6 information as the Secretary determines is

7 necessary in order to make the determina8 tion described in clause (i)(II).’’.

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

10 subsection (a) shall apply to items provided on or after

11 January 1, 2000.

12 SEC. 16. IMPLEMENTATION OF COMMERCIAL CLAIMS AU13 DITING SYSTEMS.

14 (a) COMMERCIAL CLAIMS AUDITING SYSTEMS.—

15 (1) IN GENERAL.—Not later than 90 days after

16 the date of enactment of this Act, the Secretary

17 shall require medicare carriers to use commercial

18 claims auditing systems in the processing of claims

19 under part B of the medicare program under title

20 XVIII of the Social Security Act (42 U.S.C. 1395j

21 et seq.) for the purpose of identifying billing errors

22 and abuses.

23 (2) SUPPLEMENT TO OTHER TECHNOLOGY.—

24 Commercial claims auditing systems required under

25 paragraph (1) shall be used as a supplement to any
36

•S 1451 IS

1 other information technology used by medicare car2 riers in processing claims under the medicare pro3 gram.

4 (3) UNIFORMITY.—In order to ensure uni5 formity in processing claims under the medicare pro6 gram, the Secretary may require that medicare car7 riers utilize 1 or more common commercial claims

8 auditing systems, provided that the selection of such

9 system or systems by the Secretary shall be—

10 (A) after due consideration of competing

11 alternative systems; but

12 (B) without regard to any provision of law

13 that requires the use of competitive procedures

14 (as defined in section 4 of the Office of Federal

15 Procurement Policy Act (41 U.S.C. 403)) or

16 the publication of notice of proposed procure17 ments.

18 (4) IMPLEMENTATION.—Commercial claims au19 diting systems required under paragraph (1) shall be

20 implemented by all medicare carriers by not later

21 than 180 days after the date of enactment of this

22 Act.

23 (b) MINIMUM SOFTWARE REQUIREMENTS.—Any

24 commercial claims auditing system required to be imple25 mented pursuant to subsection (a) shall, at a minimum—
37

•S 1451 IS

1 (1) be a commercial item;

2 (2) surpass the capability of systems currently

3 used in the processing of claims under part B of the

4 medicare program; and

5 (3) be modifiable to—

6 (A) satisfy pertinent statutory require7 ments of the medicare program; and

8 (B) conform to policies of the Secretary re9 garding claims processing under such program.

10 (c) DISCLOSURE.—

11 (1) IN GENERAL.—Except as provided in para12 graph (2), notwithstanding any other provision of

13 law, any information technology (or data related

14 thereto) utilized by medicare carriers in establishing

15 a commercial claims auditing system pursuant to

16 subsection (a) shall not be subject to public disclo17 sure.

18 (2) AUTHORIZED DISCLOSURE.—The Secretary

19 may authorize the public disclosure of the informa20 tion described in paragraph (1) if the Secretary de21 termines that—

22 (A) release of such information is in the

23 public interest; and
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•S 1451 IS

1 (B) the information to be released is not

2 protected from disclosure under section 552(b)

3 of title 5, United States Code.

4 (d) DEFINITIONS.—In this section—

5 (1) COMMERCIAL CLAIMS AUDITING SYSTEM.—

6 The term ‘‘commercial claims auditing system’’

7 means a commercial specialized auditing system that

8 includes edits which identify inappropriately coded

9 health care claims.

10 (2) COMMERCIAL ITEM.—The term ‘‘commer11 cial item’’ has the meaning given such term in sec12 tion 4 of the Office of Federal Procurement Policy

13 Act (41 U.S.C. 403).

14 (3) INFORMATION TECHNOLOGY.—The term

15 ‘‘information technology’’ has the meaning given

16 such term in subparagraphs (A) and (B) of section

17 5002(3) of the Information Technology Management

18 Reform Act of 1996 (40 U.S.C. 1401(3)), were such

19 information technology to be acquired by an execu20 tive agency.

21 (4) MEDICARE CARRIER.—The term ‘‘medicare

22 carrier’’ means an entity that has a contract with

23 the Secretary pursuant to section 1842(a) of the So24 cial Security Act (42 U.S.C. 1395u(a)).
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1 (5) SECRETARY.—The term ‘‘Secretary’’ means

2 the Secretary of Health and Human Services.

3 SEC. 17. PARTIAL HOSPITALIZATION PAYMENT REFORMS.

4 (a) LIMITATION ON LOCATION OF PROVISION OF

5 SERVICES.—

6 (1) IN GENERAL.—Section 1861(ff)(2) of the

7 Social Security Act (42 U.S.C. 1395x(ff)(2)) is

8 amended in the matter following subparagraph (I)—

9 (A) by striking ‘‘and furnished’’ and in10 serting ‘‘furnished’’; and

11 (B) by inserting ‘‘, and furnished other

12 than in a skilled nursing facility or in an indi13 vidual’s personal residence’’ before the period.

14 (2) EFFECTIVE DATE.—The amendments made

15 by paragraph (1) shall apply to partial hospitaliza16 tion services furnished on or after the first day of

17 the third month beginning after the date of enact18 ment of this Act.

19 (b) QUALIFICATIONS FOR COMMUNITY MENTAL

20 HEALTH CENTERS.—Section 1861(ff)(3)(B) of the Social

21 Security Act (42 U.S.C. 1395x(ff)(3)(B)) is amended by

22 striking ‘‘entity’’ and all that follows and inserting the fol23 lowing: ‘‘entity that—
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1 ‘‘(i) provides the mental health services de2 scribed in paragraph (1) of section 1913(c) of the

3 Public Health Service Act;

4 ‘‘(ii) meets applicable licensing or certification

5 requirements for community mental health centers

6 in the State in which it is located; and

7 ‘‘(iii) meets such additional standards or re8 quirements as the Secretary may specify to ensure—

9 ‘‘(I) the health and safety of individuals

10 being furnished such services;

11 ‘‘(II) the effective or efficient furnishing of

12 such services (including protecting against

13 fraud, waste, and abuse); and

14 ‘‘(III) the compliance of such entity with

15 the criteria described in such section.’’.

16 (c) REENROLLMENT OF PROVIDERS OF CMHC PAR17 TIAL HOSPITALIZATION SERVICES.—

18 (1) IN GENERAL.—With respect to each com19 munity mental health center that furnishes partial

20 hospitalization services for which payment is made

21 under title XVIII of the Social Security Act, the

22 Secretary of Health and Human Services shall pro23 vide for periodic recertification to ensure that the

24 provision of such services complies with section

25 1913(c) of the Public Health Service Act.
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1 (2) DEADLINE FOR FIRST RECERTIFICATION.—

2 The first recertification under paragraph (1) shall be

3 completed not later than 1 year after the date of en4 actment of this Act.

5 (d) PROSPECTIVE PAYMENT SYSTEM FOR PARTIAL

6 HOSPITALIZATION SERVICES.—

7 (1) ESTABLISHMENT OF SYSTEM.—Section

8 1833 of the Social Security Act (42 U.S.C. 1395l)

9 is amended by inserting after subsection (o) the fol10 lowing:

11 ‘‘(p)(1) The Secretary may establish by regulation a

12 prospective payment system for partial hospitalization

13 services provided by a community mental health center or

14 by a hospital to its outpatients. The system shall provide

15 for appropriate payment levels for efficient centers and

16 hospitals and take into account payment levels for similar

17 services furnished by other efficient entities.

18 ‘‘(2) A prospective payment system established pur19 suant to paragraph (1) shall provide for payment amounts

20 for—

21 ‘‘(A) the first year in which such system ap22 plies, at a level so that, as estimated by the Sec23 retary, the total aggregate payments under this part

24 (including payments attributable to deductibles and

25 coinsurance) for such year are not greater than the
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1 total aggregate payments that would have otherwise

2 been made under this part if such system had not

3 been implemented (assuming full implementation of

4 the provisions contained in subsections (a) through

5 (c) of section 17 of the Medicare Waste Tax Reduc6 tion Act of 1999); and

7 ‘‘(B) each subsequent year, in an amount equal

8 to the payment amount provided for under this

9 paragraph for the preceding year updated by the

10 percentage increase in the Consumer Price Index for

11 all urban consumers (all items; United States city

12 average) for the 12-month period ending with Sep13 tember of that preceding year.’’.

14 (2) COINSURANCE.—Section 1866(a)(2)(A) of

15 the Social Security Act (42 U.S.C. 1395cc(a)(2)(A))

16 is amended by adding at the end the following: ‘‘In

17 the case of services described in section

18 1832(a)(2)(J), clause (ii) of the first sentence of this

19 subparagraph shall be applied by substituting the

20 payment basis established under section 1833(p) for

21 the reasonable charges.’’.

22 (3) CONFORMING AMENDMENTS.—

23 (A) Section 1832(a)(2) of the Social Secu24 rity Act (42 U.S.C. 1395k(a)(2)) is amended—
43

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1 (i) in subparagraph (B), by striking

2 ‘‘or subparagraph (I)’’ and inserting ‘‘, (I),

3 or (J)’’; and

4 (ii) in subparagraph (J), by striking

5 ‘‘provided by a community mental health

6 center (as described in section

7 1861(ff)(2)(B))’’.

8 (B) Section 1833(a) of the Social Security

9 Act (42 U.S.C. 1395l(a)) is amended—

10 (i) in paragraph (2) in the matter pre11 ceding subparagraph (A), by striking ‘‘(H),

12 and (I)’’ and inserting ‘‘(H), (I), and (J)’’;

13 (ii) in paragraph (8), by striking

14 ‘‘and’’ at the end;

15 (iii) in paragraph (9), by striking the

16 period at the end and inserting ‘‘; and’’;

17 and

18 (iv) by adding at the end the fol19 lowing:

20 ‘‘(10) in the case of partial hospitalization serv21 ices, 80 percent of the payment basis under the pro22 spective payment system established under section

23 1833(p).’’.

24 (4) EFFECTIVE DATE.—The amendments made

25 by paragraphs (2) and (3) apply to services fur-
44

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1 nished on or after January 1 of the first year that

2 begins at least 6 months after the date on which

3 regulations are issued under section 1833(p) of the

4 Social Security Act (42 U.S.C. 1395l(p)) (as in5 serted by paragraph (1)).

6 SEC. 18. EXPANSION OF MEDICARE SENIOR WASTE PATROL

7 NATIONWIDE.

8 There are authorized to be appropriated $25,000,000

9 in fiscal year 2000, and such sums as are necessary for

10 fiscal years 2001 through 2003, for the purpose of car11 rying out, and expanding nationwide, the Health Care

12 Anti-Fraud, Waste and Abuse Community Volunteer

13 Demonstration Projects conducted by the Administration

14 on Aging pursuant to the Omnibus Consolidated Appro15 priations Act, 1997 (Public Law 104–208).

16 SEC. 19. APPLICATION OF INHERENT REASONABLENESS TO

17 ALL PART B SERVICES OTHER THAN PHYSI18 CIANS’ SERVICES.

19 (a) REPEAL OF CERTAIN PROVISIONS OF THE BAL20 ANCED BUDGET ACT OF 1997.—

21 (1) REPEAL.—Section 4316 of the Balanced

22 Budget Act of 1997 (Public Law 105–33; 111 Stat.

23 390), and the amendments made by such section,

24 are repealed effective August 5, 1997.
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1 (2) APPLICABILITY.—Effective August 5, 1997,

2 the Social Security Act shall be applied and adminis3 tered as if section 4316 of the Balanced Budget Act

4 of 1997 (Public Law 105–33; 111 Stat. 390), and

5 the amendments made by such section, had not been

6 enacted.

7 (b) APPLICATION OF INHERENT REASONABLENESS

8 TO ALL PART B SERVICES OTHER THAN PHYSICIANS’

9 SERVICES.—

10 (1) IN GENERAL.—Section 1842(b)(8) of the

11 Social Security Act (42 U.S.C. 1395u(b)(8)) is

12 amended to read as follows:

13 ‘‘(8) The Secretary shall describe by regulation the

14 factors to be used in determining the cases (of particular

15 items or services) in which the application of this part

16 (other than to physicians’ services paid under section

17 1848) results in the determination of an amount that, be18 cause of its being grossly excessive or grossly deficient,

19 is not inherently reasonable, and provide in those cases

20 for the factors to be considered in establishing an amount

21 that is realistic and equitable.’’.

22 (2) EFFECTIVE DATE.—The amendment made

23 by this subsection shall take effect August 5, 1997.
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1 SEC. 20. STANDARDS REGARDING PAYMENT FOR CERTAIN

2 ORTHOTICS AND PROSTHETICS.

3 (a) STANDARDS.—

4 (1) IN GENERAL.—Section 1834(h)(1) of the

5 Social Security Act (42 U.S.C. 1395m(h)(1)) is

6 amended by adding at the end the following:

7 ‘‘(F) ESTABLISHMENT OF STANDARDS FOR

8 CERTAIN ITEMS.—

9 ‘‘(i) IN GENERAL.—No payment shall

10 be made for an applicable item unless such

11 item is provided by a qualified practitioner

12 or a qualified supplier under the system es13 tablished by the Secretary under clause

14 (iii). For purposes of the preceding sen15 tence, if a qualified practitioner or a quali16 fied supplier contracts with an entity to

17 provide an applicable item, then no pay18 ment shall be made for such item unless

19 the entity is also a qualified supplier.

20 ‘‘(ii) DEFINITIONS.—In this

21 subparagraph—

22 ‘‘(I) APPLICABLE ITEM.—The

23 term ‘applicable item’ means orthotics

24 and prosthetics that require edu25 cation, training, and experience to

26 custom fabricate such item. Such
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1 term does not include shoes and shoe

2 inserts.

3 ‘‘(II) QUALIFIED PRACTI4 TIONER.—The term ‘qualified practi5 tioner’ means a physician or health

6 professional who—

7 ‘‘(aa) is specifically trained

8 and educated to provide or man9 age the provision of custom-de10 signed, fabricated, modified, and

11 fitted orthotics and prosthetics,

12 and is either certified by the

13 American Board for Certification

14 in Orthotics and Prosthetics,

15 Inc., or is credentialed and ap16 proved by a program that the

17 Secretary determines, in con18 sultation with appropriate ex19 perts in orthotics and prosthetics,

20 has training and education stand21 ards that are necessary to pro22 vide applicable items;

23 ‘‘(bb) is licensed in orthotics

24 or prosthetics by the State in
48

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1 which the applicable item is sup2 plied; or

3 ‘‘(cc) has completed at least

4 10 years practice in the provision

5 of applicable items.

6 ‘‘(III) QUALIFIED SUPPLIER.—

7 The term ‘qualified supplier’ means

8 any entity that is—

9 ‘‘(aa) accredited by the

10 American Board for Certification

11 in Orthotics and Prosthetics,

12 Inc.; or

13 ‘‘(bb) accredited and ap14 proved by a program that the

15 Secretary determines has accredi16 tation and approval standards

17 that are essentially equivalent to

18 those of such Board.

19 ‘‘(iii) SYSTEM.—The Secretary, in

20 consultation with appropriate experts in

21 orthotics and prosthetics, shall establish a

22 system under which the Secretary shall—

23 ‘‘(I) determine which items are

24 applicable items and formulate a list

25 of such items;
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•S 1451 IS

1 ‘‘(II) review the applicable items

2 billed under the coding system estab3 lished under this title; and

4 ‘‘(III) limit payment for applica5 ble items pursuant to clause (i).’’.

6 (2) EFFECTIVE DATE.—The amendment made

7 by paragraph (1) shall apply to items provided on or

8 after January 1, 2000.

9 (b) REVISION OF DEFINITION OF ORTHOTICS.—

10 (1) IN GENERAL.—Section 1861(s)(9) of the

11 Social Security Act (42 U.S.C. 1395x(s)(9)) is

12 amended by inserting ‘‘(including such braces that

13 are used in conjunction with, or as components of,

14 other medical or non-medical equipment when pro15 vided by a qualified practitioner (as defined in sub16 clause (II) of section 1834(h)(1)(F))) or a qualified

17 supplier (as defined in subclause (III) of such sec18 tion)’’ after ‘‘braces’’.

19 (2) EFFECTIVE DATE.—The amendment made

20 by paragraph (1) shall apply to items provided on or

21 after January 1, 2000.
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1 SEC. 21. INCREASED FLEXIBILITY IN CONTRACTING FOR

2 MEDICARE CLAIMS PROCESSING.

3 (a) CARRIERS TO INCLUDE ENTITIES THAT ARE

4 NOT INSURANCE COMPANIES.—Section 1842 of the Social

5 Security Act (42 U.S.C. 1395u) is amended—

6 (1) in subsection (a), in the matter preceding

7 paragraph (1), by striking ‘‘with carriers’’ and in8 serting ‘‘with agencies and organizations (in this

9 section referred to as ‘carriers’)’’; and

10 (2) by striking subsection (f).

11 (b) SECRETARIAL FLEXIBILITY IN CONTRACTING

12 FOR AND IN ASSIGNING FISCAL INTERMEDIARY AND CAR13 RIER FUNCTIONS.—

14 (1) IN GENERAL.—

15 (A) Section 1816(a) of the Social Security

16 Act (42 U.S.C. 1395h(a)) is amended to read

17 as follows:

18 ‘‘(a)(1) The Secretary may enter into contracts with

19 agencies or organizations to perform any or all of the fol20 lowing functions, or parts of those functions (or, to the

21 extent provided in a contract, to secure performance there22 of by other organizations) to—

23 ‘‘(A) determine (subject to the provisions of sec24 tion 1878 and to such review by the Secretary as

25 may be provided for by the contracts) the amount of
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1 the payments required pursuant to this part to be

2 made to providers of services;

3 ‘‘(B) make payments described in subparagraph

4 (A);

5 ‘‘(C) provide consultative services to institutions

6 or agencies to enable them to establish and maintain

7 fiscal records necessary for purposes of this part and

8 otherwise to qualify as providers of services;

9 ‘‘(D) serve as a center for, and communicate to

10 individuals entitled to benefits under this part and

11 to providers of services, any information or instruc12 tions furnished to the agency or organization by the

13 Secretary, and serve as a channel of communication

14 from individuals entitled to benefits under this part

15 and from providers of services to the Secretary;

16 ‘‘(E) make such audits of the records of pro17 viders of services as may be necessary to ensure that

18 proper payments are made under this part;

19 ‘‘(F) perform the functions described by sub20 section (d); and

21 ‘‘(G) perform such other functions as are nec22 essary to carry out the purposes of this part.

23 ‘‘(2) As used in this title and title XI, the term ‘fiscal

24 intermediary’ means an agency or organization with a con25 tract under this section.’’.
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1 (B) Section 1816(b)(1)(A) of the Social

2 Security Act (42 U.S.C. 1395h(b)(1)(A)) is

3 amended by striking ‘‘after applying the stand4 ards, criteria, and procedures’’ and inserting

5 ‘‘after evaluating the ability of the agency or

6 organization to fulfill the contract performance

7 requirements’’.

8 (C) Section 1816(d) of the Social Security

9 Act (42 U.S.C. 1395h(d)) is amended to read

10 as follows:

11 ‘‘(d) Each provider of services shall have a fiscal

12 intermediary that—

13 ‘‘(1) acts as a single point of contact for the

14 provider of services under this part;

15 ‘‘(2) makes its services sufficiently available to

16 meet the needs of the provider of services; and

17 ‘‘(3) is responsible and accountable for arrang18 ing the resolution of issues raised under this part by

19 the provider of services.’’.

20 (D) Section 1816(e) of the Social Security

21 Act (42 U.S.C. 1395h(d)) is amended to read

22 as follows:

23 ‘‘(e) The Secretary, in evaluating the performance of

24 a fiscal intermediary, may solicit comments from providers

25 of services.’’.
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1 (E) Section 1816(f)(1) of the Social Secu2 rity Act (42 U.S.C. 1395h(f)(1)) is amended to

3 read as follows:

4 ‘‘(f)(1) With respect to performance requirements

5 under subsection (a), the Secretary may consult with—

6 ‘‘(A) Medicare+Choice organizations under

7 part C of this title;

8 ‘‘(B) providers of services and other persons

9 who furnish items or services for which payment

10 may be made under this title; and

11 ‘‘(C) organizations and agencies performing

12 functions necessary to carry out the purposes of this

13 part.’’.

14 (F) Section 1842(b)(2) of the Social Secu15 rity Act (42 U.S.C. 1395u(b)(2)) is amended—

16 (i) in subparagraph (A)—

17 (I) by inserting ‘‘(i)’’ before ‘‘No

18 such contract’’;

19 (II) by striking the second sen20 tence and inserting the following:

21 ‘‘(ii) With respect to performance requirements for

22 contracts under subsection (a), the Secretary may consult

23 with—

24 ‘‘(I) Medicare+Choice organizations under part

25 C of this title;
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1 ‘‘(II) providers of services and other persons

2 who furnish items or services for which payment

3 may be made under this title; and

4 ‘‘(III) organizations and agencies performing

5 functions necessary to carry out the purposes of this

6 part.’’;

7 (III) by striking the third sen8 tence; and

9 (IV) by striking the fourth sen10 tence and inserting the following:

11 ‘‘(iii) The Secretary may not require, as a condition

12 of entering into a contract under this section or under sec13 tion 1871, that a carrier match data obtained other than

14 in its activities under this part with data used in the ad15 ministration of this part for purposes of identifying situa16 tions in which section 1862(b) may apply.’’;

17 (ii) in subparagraph (B), in the mat18 ter preceding clause (i), by striking ‘‘estab19 lish standards’’ and inserting ‘‘develop con20 tract performance requirements’’; and

21 (iii) in subparagraph (D), by striking

22 ‘‘standards and criteria’’ each place it ap23 pears and inserting ‘‘contract performance

24 requirements’’.

25 (2) CONFORMING AMENDMENTS.—
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1 (A) Section 1816(b) of the Social Security

2 Act (42 U.S.C. 1395h(b)) is amended—

3 (i) in the matter preceding paragraph

4 (1), by striking ‘‘an agreement’’ and in5 serting ‘‘a contract’’;

6 (ii) in paragraph (1)(B), by striking

7 ‘‘agreement’’ and inserting ‘‘contract’’; and

8 (iii) in paragraph (2)(A), by striking

9 ‘‘agreement’’ and inserting ‘‘contract’’.

10 (B) Section 1816(c) of the Social Security

11 Act (42 U.S.C. 1395h(c)) is amended—

12 (i) in paragraph (1)—

13 (I) in the first sentence, by strik14 ing ‘‘An agreement’’ and inserting ‘‘A

15 contract’’; and

16 (II) in the last sentence, by strik17 ing ‘‘an agreement’’ and inserting ‘‘a

18 contract’’;

19 (ii) in paragraph (2)(A), in the matter

20 preceding clause (i)—

21 (I) by striking ‘‘agreement’’ and

22 inserting ‘‘contract’’; and

23 (II) by inserting ‘‘that provides

24 for making payments under this part’’

25 after ‘‘this section’’;
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1 (iii) in paragraph (2)(C), by striking

2 ‘‘hospital, rural primary care hospital,

3 skilled nursing facility, home health agen4 cy, hospice program, comprehensive out5 patient rehabilitation facility, or rehabilita6 tion agency’’ and inserting ‘‘provider of

7 services (as defined in section 1861(u))’’;

8 and

9 (iv) in paragraph (3)(A)—

10 (I) by striking ‘‘agreement’’ and

11 inserting ‘‘contract’’; and

12 (II) by inserting ‘‘that provides

13 for making payments under this part’’

14 after ‘‘this section’’.

15 (C) Section 1816(h) of the Social Security

16 Act (42 U.S.C. 1395h(h)) is amended—

17 (i) by striking ‘‘An agreement’’ and

18 inserting ‘‘A contract’’; and

19 (ii) by striking ‘‘the agreement’’ each

20 place it appears and inserting ‘‘the con21 tract’’.

22 (D) Section 1816(i)(1) of the Social Secu23 rity Act (42 U.S.C. 1395h(i)(1)) is amended by

24 striking ‘‘an agreement’’ and inserting ‘‘a con25 tract’’.
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1 (E) Section 1816(j) of the Social Security

2 Act (42 U.S.C. 1395h(j)) is amended in the

3 matter preceding paragraph (1)—

4 (i) by striking ‘‘An agreement’’ and

5 inserting ‘‘A contract’’; and

6 (ii) by striking ‘‘for home health serv7 ices, extended care services, or post-hos8 pital extended care services’’.

9 (F) Section 1816(k) of the Social Security

10 Act (42 U.S.C. 1395h(k)) is amended—

11 (i) by striking ‘‘An agreement’’ and

12 inserting ‘‘A contract’’; and

13 (ii) by inserting ‘‘(as appropriate)’’

14 after ‘‘submit’’.

15 (G) Section 1816(l) of the Social Security

16 Act (42 U.S.C. 1395h(l)) is amended by strik17 ing ‘‘an agreement’’ and inserting ‘‘a contract’’.

18 (H) Section 1842(a) of the Social Security

19 Act (42 U.S.C. 1395u(a)) is amended—

20 (i) in the matter preceding paragraph

21 (1) (as amended by subsection (a)(1))—

22 (I) by striking ‘‘carriers with

23 which agreements’’ and inserting ‘‘sin24 gle contracts under section 1816 and

25 this section together, or separate con-
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1 tracts with eligible agencies and orga2 nizations with which contracts’’; and

3 (II) by striking ‘‘some or all of

4 the following functions’’ and inserting

5 ‘‘any or all of the following functions,

6 or parts of those functions’’; and

7 (ii) in paragraph (3), by inserting ‘‘(to

8 and from individuals enrolled under this

9 part and to and from physicians and other

10 entities that furnish items and services)’’

11 after ‘‘communication’’.

12 (I) Section 1842(b) of the Social Security

13 Act (42 U.S.C. 1395u(b)(2)(C)) is amended—

14 (i) in paragraph (2)(C), in the first

15 sentence, by inserting ‘‘(as appropriate)’’

16 after ‘‘carriers’’;

17 (ii) in paragraph (3), in the matter

18 preceding subparagraph (A), by inserting

19 ‘‘(as appropriate)’’ after ‘‘contract’’;

20 (iii) in paragraph (7)(A), in the mat21 ter preceding clause (i), by striking ‘‘the

22 carrier’’ and inserting ‘‘a carrier’’; and

23 (iv) in paragraph (11)(A), in the mat24 ter preceding clause (i), by inserting ‘‘(as

25 appropriate)’’ after ‘‘each carrier’’.
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1 (J) Section 1842(h) of the Social Security

2 Act (42 U.S.C. 1395u(h)) is amended—

3 (i) in paragraph (2), in the first

4 sentence—

5 (I) by striking ‘‘an agreement’’

6 and inserting ‘‘a contract’’; and

7 (II) by inserting ‘‘(as appro8 priate)’’ after ‘‘shall’’;

9 (ii) in paragraph (3)(A), by striking

10 ‘‘an agreement’’ and inserting ‘‘a con11 tract’’;

12 (iii) in paragraph (3)(B), in the third

13 sentence, by striking ‘‘agreements’’ and in14 serting ‘‘contracts’’;

15 (iv) in paragraph (5)(A), by inserting

16 ‘‘(as appropriate)’’ after ‘‘carriers’’; and

17 (v) in paragraph (8)—

18 (I) by striking ‘‘an agreement’’

19 and inserting ‘‘a contract’’; and

20 (II) by striking ‘‘such agree21 ment’’ and inserting ‘‘such contract’’.

22 (c) ELIMINATION OF SPECIAL PROVISIONS FOR TER23 MINATIONS OF CONTRACTS.—

24 (1) Section 1816 of the Social Security Act (42

25 U.S.C. 1395h) is amended—
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1 (A) in subsection (b), in the matter pre2 ceding paragraph (1), by striking ‘‘or renew’’;

3 (B) in subsection (c)(1), in the last sen4 tence, by striking ‘‘or renewing’’; and

5 (C) by striking subsection (g).

6 (2) Section 1842(b) of the Social Security Act

7 (42 U.S.C. 1395u(b)(2)) is amended by striking

8 paragraph (5).

9 (d) REPEAL OF FISCAL INTERMEDIARY REQUIRE10 MENTS THAT ARE NOT COST-EFFECTIVE.—Section

11 1816(f)(2) of the Social Security Act (42 U.S.C.

12 1395h(f)(2)) is amended to read as follows:

13 ‘‘(2) The contract performance requirements de14 scribed in paragraph (1) shall include—

15 ‘‘(A) with respect to claims for services fur16 nished under this part by any provider of services

17 (as defined in section 1861(u)) other than a hos18 pital, whether such agency or organization is able to

19 process 75 percent of reconsiderations within 60

20 days and 90 percent of reconsiderations within 90

21 days; and’’.

22 (e) REPEAL OF COST REIMBURSEMENT REQUIRE23 MENTS.—

24 (1) Section 1816(c)(1) of the Social Security

25 Act (42 U.S.C. 1395h(c)(1)) is amended—
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1 (A) in the first sentence—

2 (i) by striking the comma after ‘‘ap3 propriate’’ and inserting ‘‘and’’; and

4 (ii) by striking ‘‘, and shall provide

5 for payment’’ and all that follows before

6 the period; and

7 (B) by striking the second and third sen8 tences.

9 (2) Section 1842(c)(1) of the Social Security

10 Act (42 U.S.C. 1395h(c)(1)) is amended—

11 (A) in the first sentence—

12 (i) by striking ‘‘section shall provide’’

13 and inserting ‘‘section may provide’’; and

14 (ii) by striking ‘‘, and shall provide’’

15 and all that follows before the period; and

16 (B) by striking the second and third sen17 tences.

18 (3) Section 2326 of the Deficit Reduction Act

19 of 1984 (42 U.S.C. 1395h note) is amended by

20 striking subsection (a).

21 (f) SECRETARIAL FLEXIBILITY WITH RESPECT TO

22 RENEWING CONTRACTS AND TRANSFER OF FUNC23 TIONS.—
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1 (1) Section 1816(c) of the Social Security Act

2 (42 U.S.C. 1395h(c)) is amended by adding at the

3 end the following:

4 ‘‘(4)(A) Except as provided in laws with general ap5 plicability to Federal acquisition and procurement or in

6 subparagraph (B), the Secretary shall use competitive pro7 cedures when entering into contracts under this section.

8 ‘‘(B)(i) The Secretary may renew a contract with a

9 fiscal intermediary under this section from term to term

10 without regard to section 5 of title 41, United States Code,

11 or any other provision of law requiring competition, if the

12 fiscal intermediary has met or exceeded the performance

13 requirements established in the current contract.

14 ‘‘(ii) Functions may be transferred among fiscal

15 intermediaries without regard to any provision of law re16 quiring competition. However, the Secretary shall ensure

17 that performance quality is considered in such transfers.’’.

18 (2) Section 1842(b)(1) of the Social Security

19 Act (42 U.S.C. 1395u(b)(1)) is amended to read as

20 follows:

21 ‘‘(b)(1)(A) Except as provided in laws with general

22 applicability to Federal acquisition and procurement or in

23 subparagraph (B), the Secretary shall use competitive pro24 cedures when entering into contracts under this section.
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1 ‘‘(B)(i) The Secretary may renew a contract with a

2 carrier under subsection (a) from term to term without

3 regard to section 5 of title 41, United States Code, or any

4 other provision of law requiring competition, if the carrier

5 has met or exceeded the performance requirements estab6 lished in the current contract.

7 ‘‘(ii) Functions may be transferred among carriers

8 without regard to any provision of law requiring competi9 tion. However, the Secretary shall ensure that perform10 ance quality is considered in such transfers.’’.

11 (g) YEAR 2000 COMPLIANCE.—

12 (1) Section 1816(f)(2) of the Social Security

13 Act (42 U.S.C. 1395h(f)(2)) (as amended by sub14 section (d)) is amended by adding at the end the fol15 lowing:

16 ‘‘(B) a requirement that, by such time as the

17 Secretary considers reasonable, the information tech18 nology that is used or acquired by the agency or or19 ganization to carry out its responsibilities under this

20 title (to the extent that the Secretary finds such in21 formation technology is under the control of such

22 agency or organization)—

23 ‘‘(i) meets the definition of ‘Year 2000

24 compliant’ under the Federal Acquisition Regu25 lation (concerning accurate processing of date
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1 and time data (including calculating, com2 paring, and sequencing) from, into, and be3 tween the 20th and 21st centuries, and the

4 years 1999 and 2000 and leap year calcula5 tions) but without regard to whether the infor6 mation technology is being acquired; and

7 ‘‘(ii) meets such other criteria for Year

8 2000 compliance as the Secretary considers ap9 propriate.’’.

10 (2) Section 1842(b)(2)(A)(i) of the Social Secu11 rity Act (42 U.S.C. 1395u(b)(2)(A)(i)) (as amended

12 by subsection (b)(1)(F)) is amended by striking the

13 period and inserting ‘‘, including a requirement that,

14 by such time as the Secretary considers reasonable,

15 the information technology that is used or acquired

16 by such carrier to carry out its responsibilities under

17 this title (to the extent that the Secretary finds such

18 information technology is under the control of such

19 carrier) meets—

20 ‘‘(I) the definition of ‘Year 2000 compliant’

21 under the Federal Acquisition Regulation (con22 cerning accurate processing of date and time data

23 (including calculating, comparing, and sequencing)

24 from, into, and between the 20th and 21st centuries,

25 and the years 1999 and 2000 and leap year calcula-
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1 tions) but without regard to whether the information

2 technology is being acquired; and

3 ‘‘(II) such other criteria for Year 2000 compli4 ance as the Secretary considers appropriate.’’.

5 (h) WAIVER OF COMPETITIVE REQUIREMENTS FOR

6 INITIAL CONTRACTS.—Contracts that have periods that

7 begin before or during the 1-year period that begins on

8 the first day of the fourth calendar month that begins

9 after the date of enactment of this Act may be entered

10 into under section 1816(a) or 1842(a) of the Social Secu11 rity Act (42 U.S.C. 1395h(a) and 1395u(a)) without re12 gard to any provision of law requiring use of competitive

13 procedures.

14 (i) EFFECTIVE DATES.—

15 (1) The amendments made by subsection (c)

16 apply to contracts that have periods ending on or

17 after the end of the third calendar month that be18 gins after the date of enactment of this Act.

19 (2) The amendments made by subsections (a),

20 (b), (d), and (e) apply to contracts that have periods

21 beginning after the third calendar month that begins

22 after the date of enactment of this Act.

23 (3) The amendments made by subsection (f)

24 apply to contracts that have periods that begin after
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1 the end of the 1-year period specified in paragraph

2 (1) of this subsection.

3 (4) The amendment made by subsection (g)

4 shall take effect on the date of enactment of this

5 Act.

6 SEC. 22. EXEMPTION OF INSPECTORS GENERAL FROM PA7 PERWORK REDUCTION ACT REQUIREMENTS.

8 (a) IN GENERAL.—Chapter 35 of title 44, United

9 States Code, is amended by inserting after section 3502

10 the following:

11 ‘‘§ 3502a. Exemption of any Office of Inspector Gen12 eral

13 ‘‘This chapter shall not apply with respect to any Of14 fice of Inspector General established within an agency

15 under the Inspector General Act of 1978.’’.

16 (b) TABLE OF CONTENTS AMENDMENT.—The table

17 of contents of chapter 35 of title 44, United States Code,

18 is amended by adding after the item relating to section

19 3502 the following new item:

‘‘3502a. Exemption of any Office of Inspector General.’’.

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

21 this section shall take effect on the date of enactment of

22 this Act.

Æ