I 

108TH CONGRESS 

1ST SESSION H. R. 810

To amend title XVIII of the Social Security Act to provide regulatory relief 

and contracting flexibility under the Medicare Program. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 13, 2003

Mrs. JOHNSON of Connecticut (for herself, Mr. STARK, Mr. BILIRAKIS, Mr. 

BROWN of Ohio, Mr. THOMAS, Mr. RANGEL, Mr. TAUZIN, Mr. DINGELL, 

Mr. RYAN of Wisconsin, Mr. PORTMAN, Mr. CARDIN, Ms. DUNN, Mr. 

GREENWOOD, Mr. KLECZKA, Mr. LEWIS of Kentucky, Mr. CAMP, Mr. 

POMEROY, Mr. SHAW, Mr. BURR, Mr. MCNULTY, Mrs. JONES of Ohio, 

Mr. CRANE, Mr. MCINNIS, Mr. RAMSTAD, Mr. ENGLISH, Mr. 

MCDERMOTT, Mr. MCCRERY, Mr. HAYWORTH, Mr. HOUGHTON, Mr. 

NUSSLE, Mr. NORWOOD, Mr. GORDON, Mr. UPTON, Mr. ENGEL, Mr. 

BUYER, Mr. PICKERING, Mr. BARTON of Texas, Mr. DOYLE, Mrs. CAPPS, 

Mr. WAXMAN, Mr. PALLONE, Mr. HALL, Mr. SAM JOHNSON of Texas, 

Mr. CANTOR, Mr. FOLEY, Mr. WELLER, and Mr. DEUTSCH) 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 provide 

regulatory relief and contracting flexibility 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,
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1 SECTION 1. SHORT TITLE; AMENDMENTS TO SOCIAL SECU2 RITY ACT; TABLE OF CONTENTS. 

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

4 ‘‘Medicare Regulatory and Contracting Reform Act of 

5 2003’’. 

6 (b) AMENDMENTS TO SOCIAL SECURITY ACT.—Ex7 cept as otherwise specifically provided, whenever in this 

8 Act an amendment is expressed in terms of an amendment 

9 to or repeal of a section or other provision, the reference 

10 shall be considered to be made to that section or other 

11 provision of the Social Security Act. 

12 (c) TABLE OF CONTENTS.—The table of contents of 

13 this Act is as follows:

Sec. 1. Short title; amendments to Social Security Act; table of contents. 

Sec. 2. Findings and construction. 

Sec. 3. Definitions. 

TITLE I—REGULATORY REFORM 

Sec. 101. Issuance of regulations. 

Sec. 102. Compliance with changes in regulations and policies. 

Sec. 103. Reports and studies relating to regulatory reform. 

TITLE II—CONTRACTING REFORM 

Sec. 201. Increased flexibility in medicare administration. 

Sec. 202. Requirements for information security for medicare administrative 

contractors. 

TITLE III—EDUCATION AND OUTREACH 

Sec. 301. Provider education and technical assistance. 

Sec. 302. Small provider technical assistance demonstration program. 

Sec. 303. Medicare Provider Ombudsman; Medicare Beneficiary Ombudsman. 

Sec. 304. Beneficiary outreach demonstration program. 

TITLE IV—APPEALS AND RECOVERY 

Sec. 401. Transfer of responsibility for medicare appeals. 

Sec. 402. Process for expedited access to review. 

Sec. 403. Revisions to medicare appeals process. 

Sec. 404. Prepayment review. 
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Sec. 405. Recovery of overpayments. 

Sec. 406. Provider enrollment process; right of appeal. 

Sec. 407. Process for correction of minor errors and omissions on claims without 

pursuing appeals process. 

Sec. 408. Prior determination process for certain items and services; advance 

beneficiary notices. 

TITLE V—MISCELLANEOUS PROVISIONS 

Sec. 501. Policy development regarding evaluation and management (E & M) 

documentation guidelines. 

Sec. 502. Improvement in oversight of technology and coverage. 

Sec. 503. Treatment of hospitals for certain services under medicare secondary 

payor (MSP) provisions. 

Sec. 504. EMTALA improvements. 

Sec. 505. Emergency Medical Treatment and Active Labor Act (EMTALA) 

Technical Advisory Group. 

Sec. 506. Authorizing use of arrangements with other hospice programs to provide core hospice services in certain circumstances.

Sec. 507. Application of OSHA bloodborne pathogens standard to certain hospitals. 

Sec. 508. BIPA-related technical amendments and corrections. 

Sec. 509. Conforming authority to waive a program exclusion. 

Sec. 510. Treatment of certain dental claims. 

Sec. 511. Miscellaneous reports, studies, and publication requirements.

1 SEC. 2. FINDINGS AND CONSTRUCTION. 

2 (a) FINDINGS.—Congress finds the following: 

3 (1) The overwhelming majority of providers of 

4 services and suppliers in the United States are law5 abiding persons who provide important health care 

6 services to patients each day. 

7 (2) The Secretary of Health and Human Serv8 ices should work to streamline paperwork require9 ments under the medicare program and commu10 nicate clearer instructions to providers of services 

11 and suppliers so that they may spend more time car12 ing for patients. 

13 (b) CONSTRUCTION.—Nothing in this Act shall be 

14 construed—
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1 (1) to compromise or affect existing legal rem2 edies for addressing fraud or abuse, whether it be 

3 criminal prosecution, civil enforcement, or adminis4 trative remedies, including under sections 3729 

5 through 3733 of title 31, United States Code 

6 (known as the False Claims Act); or 

7 (2) to prevent or impede the Department of 

8 Health and Human Services in any way from its on9 going efforts to eliminate waste, fraud, and abuse in 

10 the medicare program. 

11 Furthermore, the consolidation of medicare administrative 

12 contracting set forth in this Act does not constitute con13 solidation of the Federal Hospital Insurance Trust Fund 

14 and the Federal Supplementary Medical Insurance Trust 

15 Fund or reflect any position on that issue. 

16 SEC. 3. DEFINITIONS. 

17 (a) USE OF TERM SUPPLIER IN MEDICARE.—Section 

18 1861 (42 U.S.C. 1395x) is amended by inserting after 

19 subsection (c) the following new subsection: 

20 ‘‘Supplier 

21 ‘‘(d) The term ‘supplier’ means, unless the context 

22 otherwise requires, a physician or other practitioner, a fa23 cility, or other entity (other than a provider of services) 

24 that furnishes items or services under this title.’’. 

25 (b) OTHER TERMS USED IN ACT.—In this Act: 
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1 (1) BIPA.—The term ‘‘BIPA’’ means the 

2 Medicare, Medicaid, and SCHIP Benefits Improve3 ment and Protection Act of 2000, as enacted into 

4 law by section 1(a)(6) of Public Law 106–554. 

5 (2) SECRETARY.—The term ‘‘Secretary’’ means 

6 the Secretary of Health and Human Services. 

7 TITLE I—REGULATORY REFORM 

8 SEC. 101. ISSUANCE OF REGULATIONS. 

9 (a) CONSOLIDATION OF PROMULGATION TO ONCE A

10 MONTH.—

11 (1) IN GENERAL.—Section 1871 (42 U.S.C. 

12 1395hh) is amended by adding at the end the fol13 lowing new subsection: 

14 ‘‘(d)(1) Subject to paragraph (2), the Secretary shall 

15 issue proposed or final (including interim final) regula16 tions to carry out this title only on one business day of 

17 every month. 

18 ‘‘(2) The Secretary may issue a proposed or final reg19 ulation described in paragraph (1) on any other day than 

20 the day described in paragraph (1) if the Secretary—

21 ‘‘(A) finds that issuance of such regulation on 

22 another day is necessary to comply with require23 ments under law; or 
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1 ‘‘(B) finds that with respect to that regulation 

2 the limitation of issuance on the date described in 

3 paragraph (1) is contrary to the public interest. 

4 If the Secretary makes a finding under this paragraph, 

5 the Secretary shall include such finding, and brief state6 ment of the reasons for such finding, in the issuance of 

7 such regulation. 

8 ‘‘(3) The Secretary shall coordinate issuance of new 

9 regulations described in paragraph (1) relating to a cat10 egory of provider of services or suppliers based on an anal11 ysis of the collective impact of regulatory changes on that 

12 category of providers or suppliers.’’. 

13 (2) GAO REPORT ON PUBLICATION OF REGULA14 TIONS ON A QUARTERLY BASIS.—Not later than 3 

15 years after the date of the enactment of this Act, the 

16 Comptroller General of the United States shall sub17 mit to Congress a report on the feasibility of requir18 ing that regulations described in section 1871(d) of 

19 the Social Security Act be promulgated on a quar20 terly basis rather than on a monthly basis. 

21 (3) EFFECTIVE DATE.—The amendment made 

22 by paragraph (1) shall apply to regulations promul23 gated on or after the date that is 30 days after the 

24 date of the enactment of this Act. 
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1 (b) REGULAR TIMELINE FOR PUBLICATION OF

2 FINAL RULES.—

3 (1) IN GENERAL.—Section 1871(a) (42 U.S.C. 

4 1395hh(a)) is amended by adding at the end the fol5 lowing new paragraph: 

6 ‘‘(3)(A) The Secretary, in consultation with the Di7 rector of the Office of Management and Budget, shall es8 tablish and publish a regular timeline for the publication 

9 of final regulations based on the previous publication of 

10 a proposed regulation or an interim final regulation. 

11 ‘‘(B) Such timeline may vary among different regula12 tions based on differences in the complexity of the regula13 tion, the number and scope of comments received, and 

14 other relevant factors, but shall not be longer than 3 years 

15 except under exceptional circumstances. If the Secretary 

16 intends to vary such timeline with respect to the publica17 tion of a final regulation, the Secretary shall cause to have 

18 published in the Federal Register notice of the different 

19 timeline by not later than the timeline previously estab20 lished with respect to such regulation. Such notice shall 

21 include a brief explanation of the justification for such 

22 variation. 

23 ‘‘(C) In the case of interim final regulations, upon 

24 the expiration of the regular timeline established under 

25 this paragraph for the publication of a final regulation 
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1 after opportunity for public comment, the interim final 

2 regulation shall not continue in effect unless the Secretary 

3 publishes (at the end of the regular timeline and, if appli4 cable, at the end of each succeeding 1-year period) a notice 

5 of continuation of the regulation that includes an expla6 nation of why the regular timeline (and any subsequent 

7 1-year extension) was not complied with. If such a notice 

8 is published, the regular timeline (or such timeline as pre9 viously extended under this paragraph) for publication of 

10 the final regulation shall be treated as having been ex11 tended for 1 additional year. 

12 ‘‘(D) The Secretary shall annually submit to Con13 gress a report that describes the instances in which the 

14 Secretary failed to publish a final regulation within the 

15 applicable regular timeline under this paragraph and that 

16 provides an explanation for such failures.’’. 

17 (2) EFFECTIVE DATE.—The amendment made 

18 by paragraph (1) shall take effect on the date of the 

19 enactment of this Act. The Secretary shall provide 

20 for an appropriate transition to take into account 

21 the backlog of previously published interim final reg22 ulations. 

23 (c) LIMITATIONS ON NEW MATTER IN FINAL REGU24 LATIONS.—
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1 (1) IN GENERAL.—Section 1871(a) (42 U.S.C. 

2 1395hh(a)), as amended by subsection (b), is further 

3 amended by adding at the end the following new 

4 paragraph: 

5 ‘‘(4) If the Secretary publishes notice of proposed 

6 rulemaking relating to a regulation (including an interim 

7 final regulation), insofar as such final regulation includes 

8 a provision that is not a logical outgrowth of such notice 

9 of proposed rulemaking, that provision shall be treated as 

10 a proposed regulation and shall not take effect until there 

11 is the further opportunity for public comment and a publi12 cation of the provision again as a final regulation.’’. 

13 (2) EFFECTIVE DATE.—The amendment made 

14 by paragraph (1) shall apply to final regulations 

15 published on or after the date of the enactment of 

16 this Act. 

17 SEC. 102. COMPLIANCE WITH CHANGES IN REGULATIONS 

18 AND POLICIES. 

19 (a) NO RETROACTIVE APPLICATION OF SUB20 STANTIVE CHANGES.—

21 (1) IN GENERAL.—Section 1871 (42 U.S.C. 

22 1395hh), as amended by section 101(a), is amended 

23 by adding at the end the following new subsection: 

24 ‘‘(e)(1)(A) A substantive change in regulations, man25 ual instructions, interpretative rules, statements of policy, 
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1 or guidelines of general applicability under this title shall 

2 not be applied (by extrapolation or otherwise) retroactively 

3 to items and services furnished before the effective date 

4 of the change, unless the Secretary determines that—

5 ‘‘(i) such retroactive application is necessary to 

6 comply with statutory requirements; or 

7 ‘‘(ii) failure to apply the change retroactively 

8 would be contrary to the public interest.’’. 

9 (2) EFFECTIVE DATE.—The amendment made 

10 by paragraph (1) shall apply to substantive changes 

11 issued on or after the date of the enactment of this 

12 Act. 

13 (b) TIMELINE FOR COMPLIANCE WITH SUBSTANTIVE

14 CHANGES AFTER NOTICE.—

15 (1) IN GENERAL.—Section 1871(e)(1), as 

16 added by subsection (a), is amended by adding at 

17 the end the following: 

18 ‘‘(B)(i) Except as provided in clause (ii), a sub19 stantive change referred to in subparagraph (A) shall not 

20 become effective before the end of the 30-day period that 

21 begins on the date that the Secretary has issued or pub22 lished, as the case may be, the substantive change. 

23 ‘‘(ii) The Secretary may provide for such a sub24 stantive change to take effect on a date that precedes the 

25 end of the 30-day period under clause (i) if the Secretary 
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1 finds that waiver of such 30-day period is necessary to 

2 comply with statutory requirements or that the application 

3 of such 30-day period is contrary to the public interest. 

4 If the Secretary provides for an earlier effective date pur5 suant to this clause, the Secretary shall include in the 

6 issuance or publication of the substantive change a finding 

7 described in the first sentence, and a brief statement of 

8 the reasons for such finding. 

9 ‘‘(C) No action shall be taken against a provider of 

10 services or supplier with respect to noncompliance with 

11 such a substantive change for items and services furnished 

12 before the effective date of such a change.’’. 

13 (2) EFFECTIVE DATE.—The amendment made 

14 by paragraph (1) shall apply to compliance actions 

15 undertaken on or after the date of the enactment of 

16 this Act. 

17 (c) RELIANCE ON GUIDANCE.—

18 (1) IN GENERAL.—Section 1871(e), as added 

19 by subsection (a), is further amended by adding at 

20 the end the following new paragraph: 

21 ‘‘(2)(A) If—

22 ‘‘(i) a provider of services or supplier follows 

23 the written guidance (which may be transmitted 

24 electronically) provided by the Secretary or by a 

25 medicare contractor (as defined in section 1889(g)) 
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1 acting within the scope of the contractor’s contract 

2 authority, with respect to the furnishing of items or 

3 services and submission of a claim for benefits for 

4 such items or services with respect to such provider 

5 or supplier; 

6 ‘‘(ii) the Secretary determines that the provider 

7 of services or supplier has accurately presented the 

8 circumstances relating to such items, services, and 

9 claim to the contractor in writing; and 

10 ‘‘(iii) the guidance was in error; 

11 the provider of services or supplier shall not be subject 

12 to any sanction (including any penalty or requirement for 

13 repayment of any amount) if the provider of services or 

14 supplier reasonably relied on such guidance. 

15 ‘‘(B) Subparagraph (A) shall not be construed as pre16 venting the recoupment or repayment (without any addi17 tional penalty) relating to an overpayment insofar as the 

18 overpayment was solely the result of a clerical or technical 

19 operational error.’’.

20 (2) EFFECTIVE DATE.—The amendment made 

21 by paragraph (1) shall take effect on the date of the 

22 enactment of this Act but shall not apply to any 

23 sanction for which notice was provided on or before 

24 the date of the enactment of this Act. 
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1 SEC. 103. REPORTS AND STUDIES RELATING TO REGU2 LATORY REFORM. 

3 (a) GAO STUDY ON ADVISORY OPINION AUTHOR4 ITY.—

5 (1) STUDY.—The Comptroller General of the 

6 United States shall conduct a study to determine the 

7 feasibility and appropriateness of establishing in the 

8 Secretary authority to provide legally binding advi9 sory opinions on appropriate interpretation and ap10 plication of regulations to carry out the medicare 

11 program under title XVIII of the Social Security 

12 Act. Such study shall examine the appropriate time13 frame for issuing such advisory opinions, as well as 

14 the need for additional staff and funding to provide 

15 such opinions. 

16 (2) REPORT.—The Comptroller General shall 

17 submit to Congress a report on the study conducted 

18 under paragraph (1) by not later than one year after 

19 the date of the enactment of this Act. 

20 (b) REPORT ON LEGAL AND REGULATORY INCON21 SISTENCIES.—Section 1871 (42 U.S.C. 1395hh), as 

22 amended by section 2(a), is amended by adding at the end 

23 the following new subsection: 

24 ‘‘(f)(1) Not later than 2 years after the date of the 

25 enactment of this subsection, and every 2 years thereafter, 

26 the Secretary shall submit to Congress a report with re-
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1 spect to the administration of this title and areas of incon2 sistency or conflict among the various provisions under 

3 law and regulation. 

4 ‘‘(2) In preparing a report under paragraph (1), the 

5 Secretary shall collect—

6 ‘‘(A) information from individuals entitled to 

7 benefits under part A or enrolled under part B, or 

8 both, providers of services, and suppliers and from 

9 the Medicare Beneficiary Ombudsman and the Medi10 care Provider Ombudsman with respect to such 

11 areas of inconsistency and conflict; and 

12 ‘‘(B) information from medicare contractors 

13 that tracks the nature of written and telephone in14 quiries. 

15 ‘‘(3) A report under paragraph (1) shall include a de16 scription of efforts by the Secretary to reduce such incon17 sistency or conflicts, and recommendations for legislation 

18 or administrative action that the Secretary determines ap19 propriate to further reduce such inconsistency or con20 flicts.’’. 
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1 TITLE II—CONTRACTING 

2 REFORM 

3 SEC. 201. INCREASED FLEXIBILITY IN MEDICARE ADMINIS4 TRATION. 

5 (a) CONSOLIDATION AND FLEXIBILITY IN MEDICARE

6 ADMINISTRATION.—

7 (1) IN GENERAL.—Title XVIII is amended by 

8 inserting after section 1874 the following new sec9 tion: 

10 ‘‘CONTRACTS WITH MEDICARE ADMINISTRATIVE

11 CONTRACTORS

12 ‘‘SEC. 1874A. (a) AUTHORITY.—

13 ‘‘(1) AUTHORITY TO ENTER INTO CON14 TRACTS.—The Secretary may enter into contracts 

15 with any eligible entity to serve as a medicare ad16 ministrative contractor with respect to the perform17 ance of any or all of the functions described in para18 graph (4) or parts of those functions (or, to the ex19 tent provided in a contract, to secure performance 

20 thereof by other entities). 

21 ‘‘(2) ELIGIBILITY OF ENTITIES.—An entity is 

22 eligible to enter into a contract with respect to the 

23 performance of a particular function described in 

24 paragraph (4) only if—
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1 ‘‘(A) the entity has demonstrated capa2 bility to carry out such function; 

3 ‘‘(B) the entity complies with such conflict 

4 of interest standards as are generally applicable 

5 to Federal acquisition and procurement; 

6 ‘‘(C) the entity has sufficient assets to fi7 nancially support the performance of such func8 tion; and 

9 ‘‘(D) the entity meets such other require10 ments as the Secretary may impose. 

11 ‘‘(3) MEDICARE ADMINISTRATIVE CONTRACTOR

12 DEFINED.—For purposes of this title and title XI—

13 ‘‘(A) IN GENERAL.—The term ‘medicare 

14 administrative contractor’ means an agency, or15 ganization, or other person with a contract 

16 under this section. 

17 ‘‘(B) APPROPRIATE MEDICARE ADMINIS18 TRATIVE CONTRACTOR.—With respect to the 

19 performance of a particular function in relation 

20 to an individual entitled to benefits under part 

21 A or enrolled under part B, or both, a specific 

22 provider of services or supplier (or class of such 

23 providers of services or suppliers), the ‘appro24 priate’ medicare administrative contractor is the 

25 medicare administrative contractor that has a 
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1 contract under this section with respect to the 

2 performance of that function in relation to that 

3 individual, provider of services or supplier or 

4 class of provider of services or supplier. 

5 ‘‘(4) FUNCTIONS DESCRIBED.—The functions 

6 referred to in paragraphs (1) and (2) are payment 

7 functions, provider services functions, and functions 

8 relating to services furnished to individuals entitled 

9 to benefits under part A or enrolled under part B, 

10 or both, as follows: 

11 ‘‘(A) DETERMINATION OF PAYMENT

12 AMOUNTS.—Determining (subject to the provi13 sions of section 1878 and to such review by the 

14 Secretary as may be provided for by the con15 tracts) the amount of the payments required 

16 pursuant to this title to be made to providers 

17 of services, suppliers and individuals. 

18 ‘‘(B) MAKING PAYMENTS.—Making pay19 ments described in subparagraph (A) (including 

20 receipt, disbursement, and accounting for funds 

21 in making such payments). 

22 ‘‘(C) BENEFICIARY EDUCATION AND AS23 SISTANCE.—Providing education and outreach 

24 to individuals entitled to benefits under part A 

25 or enrolled under part B, or both, and pro-
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1 viding assistance to those individuals with spe2 cific issues, concerns or problems.

3 ‘‘(D) PROVIDER CONSULTATIVE SERV4 ICES.—Providing consultative services to insti5 tutions, agencies, and other persons to enable 

6 them to establish and maintain fiscal records 

7 necessary for purposes of this title and other8 wise to qualify as providers of services or sup9 pliers. 

10 ‘‘(E) COMMUNICATION WITH PRO11 VIDERS.—Communicating to providers of serv12 ices and suppliers any information or instruc13 tions furnished to the medicare administrative 

14 contractor by the Secretary, and facilitating 

15 communication between such providers and sup16 pliers and the Secretary. 

17 ‘‘(F) PROVIDER EDUCATION AND TECH18 NICAL ASSISTANCE.—Performing the functions 

19 relating to provider education, training, and 

20 technical assistance. 

21 ‘‘(G) ADDITIONAL FUNCTIONS.—Per22 forming such other functions as are necessary 

23 to carry out the purposes of this title. 

24 ‘‘(5) RELATIONSHIP TO MIP CONTRACTS.—
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1 ‘‘(A) NONDUPLICATION OF DUTIES.—In 

2 entering into contracts under this section, the 

3 Secretary shall assure that functions of medi4 care administrative contractors in carrying out 

5 activities under parts A and B do not duplicate 

6 activities carried out under the Medicare Integ7 rity Program under section 1893. The previous 

8 sentence shall not apply with respect to the ac9 tivity described in section 1893(b)(5) (relating 

10 to prior authorization of certain items of dura11 ble medical equipment under section 

12 1834(a)(15)). 

13 ‘‘(B) CONSTRUCTION.—An entity shall not 

14 be treated as a medicare administrative con15 tractor merely by reason of having entered into 

16 a contract with the Secretary under section 

17 1893. 

18 ‘‘(6) APPLICATION OF FEDERAL ACQUISITION

19 REGULATION.—Except to the extent inconsistent 

20 with a specific requirement of this title, the Federal 

21 Acquisition Regulation applies to contracts under 

22 this title. 

23 ‘‘(b) CONTRACTING REQUIREMENTS.—

24 ‘‘(1) USE OF COMPETITIVE PROCEDURES.—
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1 ‘‘(A) IN GENERAL.—Except as provided in 

2 laws with general applicability to Federal acqui3 sition and procurement or in subparagraph (B), 

4 the Secretary shall use competitive procedures 

5 when entering into contracts with medicare ad6 ministrative contractors under this section, tak7 ing into account performance quality as well as 

8 price and other factors. 

9 ‘‘(B) RENEWAL OF CONTRACTS.—The Sec10 retary may renew a contract with a medicare 

11 administrative contractor under this section 

12 from term to term without regard to section 5 

13 of title 41, United States Code, or any other 

14 provision of law requiring competition, if the 

15 medicare administrative contractor has met or 

16 exceeded the performance requirements applica17 ble with respect to the contract and contractor, 

18 except that the Secretary shall provide for the 

19 application of competitive procedures under 

20 such a contract not less frequently than once 

21 every five years. 

22 ‘‘(C) TRANSFER OF FUNCTIONS.—The 

23 Secretary may transfer functions among medi24 care administrative contractors consistent with 

25 the provisions of this paragraph. The Secretary 
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1 shall ensure that performance quality is consid2 ered in such transfers. The Secretary shall pro3 vide public notice (whether in the Federal Reg4 ister or otherwise) of any such transfer (includ5 ing a description of the functions so trans6 ferred, a description of the providers of services 

7 and suppliers affected by such transfer, and 

8 contact information for the contractors in9 volved). 

10 ‘‘(D) INCENTIVES FOR QUALITY.—The 

11 Secretary shall provide incentives for medicare 

12 administrative contractors to provide quality 

13 service and to promote efficiency. 

14 ‘‘(2) COMPLIANCE WITH REQUIREMENTS.—No 

15 contract under this section shall be entered into with 

16 any medicare administrative contractor unless the 

17 Secretary finds that such medicare administrative 

18 contractor will perform its obligations under the con19 tract efficiently and effectively and will meet such 

20 requirements as to financial responsibility, legal au21 thority, quality of services provided, and other mat22 ters as the Secretary finds pertinent. 

23 ‘‘(3) PERFORMANCE REQUIREMENTS.—

24 ‘‘(A) DEVELOPMENT OF SPECIFIC PER25 FORMANCE REQUIREMENTS.—In developing 
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1 contract performance requirements, the Sec2 retary shall develop performance requirements 

3 applicable to functions described in subsection 

4 (a)(4). 

5 ‘‘(B) CONSULTATION.— In developing such 

6 requirements, the Secretary may consult with 

7 providers of services and suppliers, organiza8 tions representing individuals entitled to bene9 fits under part A or enrolled under part B, or 

10 both, and organizations and agencies per11 forming functions necessary to carry out the 

12 purposes of this section with respect to such 

13 performance requirements. 

14 ‘‘(C) INCLUSION IN CONTRACTS.—All con15 tractor performance requirements shall be set 

16 forth in the contract between the Secretary and 

17 the appropriate medicare administrative con18 tractor. Such performance requirements—

19 ‘‘(i) shall reflect the performance re20 quirements developed under subparagraph 

21 (A), but may include additional perform22 ance requirements; 

23 ‘‘(ii) shall be used for evaluating con24 tractor performance under the contract; 

25 and 
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1 ‘‘(iii) shall be consistent with the writ2 ten statement of work provided under the 

3 contract. 

4 ‘‘(4) INFORMATION REQUIREMENTS.—The Sec5 retary shall not enter into a contract with a medi6 care administrative contractor under this section un7 less the contractor agrees—

8 ‘‘(A) to furnish to the Secretary such time9 ly information and reports as the Secretary may 

10 find necessary in performing his functions 

11 under this title; and 

12 ‘‘(B) to maintain such records and afford 

13 such access thereto as the Secretary finds nec14 essary to assure the correctness and verification 

15 of the information and reports under subpara16 graph (A) and otherwise to carry out the pur17 poses of this title. 

18 ‘‘(5) SURETY BOND.—A contract with a medi19 care administrative contractor under this section 

20 may require the medicare administrative contractor, 

21 and any of its officers or employees certifying pay22 ments or disbursing funds pursuant to the contract, 

23 or otherwise participating in carrying out the con24 tract, to give surety bond to the United States in 
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1 such amount as the Secretary may deem appro2 priate. 

3 ‘‘(c) TERMS AND CONDITIONS.—

4 ‘‘(1) IN GENERAL.—A contract with any medi5 care administrative contractor under this section 

6 may contain such terms and conditions as the Sec7 retary finds necessary or appropriate and may pro8 vide for advances of funds to the medicare adminis9 trative contractor for the making of payments by it 

10 under subsection (a)(4)(B). 

11 ‘‘(2) PROHIBITION ON MANDATES FOR CERTAIN

12 DATA COLLECTION.—The Secretary may not require, 

13 as a condition of entering into, or renewing, a con14 tract under this section, that the medicare adminis15 trative contractor match data obtained other than in 

16 its activities under this title with data used in the 

17 administration of this title for purposes of identi18 fying situations in which the provisions of section 

19 1862(b) may apply. 

20 ‘‘(d) LIMITATION ON LIABILITY OF MEDICARE AD21 MINISTRATIVE CONTRACTORS AND CERTAIN OFFICERS.—

22 ‘‘(1) CERTIFYING OFFICER.—No individual des23 ignated pursuant to a contract under this section as 

24 a certifying officer shall, in the absence of gross neg25 ligence or intent to defraud the United States, be 
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1 liable with respect to any payments certified by the 

2 individual under this section. 

3 ‘‘(2) DISBURSING OFFICER.—No disbursing of4 ficer shall, in the absence of gross negligence or in5 tent to defraud the United States, be liable with re6 spect to any payment by such officer under this sec7 tion if it was based upon an authorization (which 

8 meets the applicable requirements for such internal 

9 controls established by the Comptroller General) of 

10 a certifying officer designated as provided in para11 graph (1) of this subsection. 

12 ‘‘(3) LIABILITY OF MEDICARE ADMINISTRATIVE

13 CONTRACTOR.—No medicare administrative con14 tractor shall be liable to the United States for a pay15 ment by a certifying or disbursing officer unless in 

16 connection with such payment or in the supervision 

17 of or selection of such officer the medicare adminis18 trative contractor acted with gross negligence. 

19 ‘‘(4) INDEMNIFICATION BY SECRETARY.—

20 ‘‘(A) IN GENERAL.—Subject to subpara21 graphs (B) and (D), in the case of a medicare 

22 administrative contractor (or a person who is a 

23 director, officer, or employee of such a con24 tractor or who is engaged by the contractor to 

25 participate directly in the claims administration 
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1 process) who is made a party to any judicial or 

2 administrative proceeding arising from or relat3 ing directly to the claims administration process 

4 under this title, the Secretary may, to the ex5 tent the Secretary determines to be appropriate 

6 and as specified in the contract with the con7 tractor, indemnify the contractor and such per8 sons. 

9 ‘‘(B) CONDITIONS.—The Secretary may 

10 not provide indemnification under subparagraph 

11 (A) insofar as the liability for such costs arises 

12 directly from conduct that is determined by the 

13 judicial proceeding or by the Secretary to be 

14 criminal in nature, fraudulent, or grossly neg15 ligent. If indemnification is provided by the Sec16 retary with respect to a contractor before a de17 termination that such costs arose directly from 

18 such conduct, the contractor shall reimburse the 

19 Secretary for costs of indemnification. 

20 ‘‘(C) SCOPE OF INDEMNIFICATION.—In21 demnification by the Secretary under subpara22 graph (A) may include payment of judgments, 

23 settlements (subject to subparagraph (D)), 

24 awards, and costs (including reasonable legal 

25 expenses). 
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1 ‘‘(D) WRITTEN APPROVAL FOR SETTLE2 MENTS.—A contractor or other person de3 scribed in subparagraph (A) may not propose to 

4 negotiate a settlement or compromise of a pro5 ceeding described in such subparagraph without 

6 the prior written approval of the Secretary to 

7 negotiate such settlement or compromise. Any 

8 indemnification under subparagraph (A) with 

9 respect to amounts paid under a settlement or 

10 compromise of a proceeding described in such 

11 subparagraph are conditioned upon prior writ12 ten approval by the Secretary of the final settle13 ment or compromise. 

14 ‘‘(E) CONSTRUCTION.—Nothing in this 

15 paragraph shall be construed—

16 ‘‘(i) to change any common law immu17 nity that may be available to a medicare 

18 administrative contractor or person de19 scribed in subparagraph (A); or 

20 ‘‘(ii) to permit the payment of costs 

21 not otherwise allowable, reasonable, or allo22 cable under the Federal Acquisition Regu23 lations.’’. 

24 (2) CONSIDERATION OF INCORPORATION OF

25 CURRENT LAW STANDARDS.—In developing contract 
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1 performance requirements under section 1874A(b) 

2 of the Social Security Act, as inserted by paragraph 

3 (1), the Secretary shall consider inclusion of the per4 formance standards described in sections 1816(f)(2) 

5 of such Act (relating to timely processing of recon6 siderations and applications for exemptions) and sec7 tion 1842(b)(2)(B) of such Act (relating to timely 

8 review of determinations and fair hearing requests), 

9 as such sections were in effect before the date of the 

10 enactment of this Act.

11 (b) CONFORMING AMENDMENTS TO SECTION 1816 

12 (RELATING TO FISCAL INTERMEDIARIES).—Section 1816 

13 (42 U.S.C. 1395h) is amended as follows: 

14 (1) The heading is amended to read as follows: 

15 ‘‘PROVISIONS RELATING TO THE ADMINISTRATION OF

16 PART A’’. 

17 (2) Subsection (a) is amended to read as fol18 lows: 

19 ‘‘(a) The administration of this part shall be con20 ducted through contracts with medicare administrative 

21 contractors under section 1874A.’’. 

22 (3) Subsection (b) is repealed. 

23 (4) Subsection (c) is amended—

24 (A) by striking paragraph (1); and 

25 (B) in each of paragraphs (2)(A) and 

26 (3)(A), by striking ‘‘agreement under this sec-
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1 tion’’ and inserting ‘‘contract under section 

2 1874A that provides for making payments 

3 under this part’’. 

4 (5) Subsections (d) through (i) are repealed. 

5 (6) Subsections (j) and (k) are each amended—

6 (A) by striking ‘‘An agreement with an 

7 agency or organization under this section’’ and 

8 inserting ‘‘A contract with a medicare adminis9 trative contractor under section 1874A with re10 spect to the administration of this part’’; and 

11 (B) by striking ‘‘such agency or organiza12 tion’’ and inserting ‘‘such medicare administra13 tive contractor’’ each place it appears. 

14 (7) Subsection (l) is repealed. 

15 (c) CONFORMING AMENDMENTS TO SECTION 1842 

16 (RELATING TO CARRIERS).—Section 1842 (42 U.S.C. 

17 1395u) is amended as follows: 

18 (1) The heading is amended to read as follows: 

19 ‘‘PROVISIONS RELATING TO THE ADMINISTRATION OF

20 PART B’’. 

21 (2) Subsection (a) is amended to read as fol22 lows: 

23 ‘‘(a) The administration of this part shall be con24 ducted through contracts with medicare administrative 

25 contractors under section 1874A.’’. 

26 (3) Subsection (b) is amended—
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1 (A) by striking paragraph (1); 

2 (B) in paragraph (2)—

3 (i) by striking subparagraphs (A) and 

4 (B); 

5 (ii) in subparagraph (C), by striking 

6 ‘‘carriers’’ and inserting ‘‘medicare admin7 istrative contractors’’; and 

8 (iii) by striking subparagraphs (D) 

9 and (E); 

10 (C) in paragraph (3)—

11 (i) in the matter before subparagraph 

12 (A), by striking ‘‘Each such contract shall 

13 provide that the carrier’’ and inserting 

14 ‘‘The Secretary’’; 

15 (ii) by striking ‘‘will’’ the first place it 

16 appears in each of subparagraphs (A), (B), 

17 (F), (G), (H), and (L) and inserting 

18 ‘‘shall’’; 

19 (iii) in subparagraph (B), in the mat20 ter before clause (i), by striking ‘‘to the 

21 policyholders and subscribers of the car22 rier’’ and inserting ‘‘to the policyholders 

23 and subscribers of the medicare adminis24 trative contractor’’; 
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•HR 810 IH 

1 (iv) by striking subparagraphs (C), 

2 (D), and (E); 

3 (v) in subparagraph (H)—

4 (I) by striking ‘‘if it makes deter5 minations or payments with respect to 

6 physicians’ services,’’ in the matter 

7 preceding clause (i); and 

8 (II) by striking ‘‘carrier’’ and in9 serting ‘‘medicare administrative con10 tractor’’ in clause (i); 

11 (vi) by striking subparagraph (I); 

12 (vii) in subparagraph (L), by striking 

13 the semicolon and inserting a period; 

14 (viii) in the first sentence, after sub15 paragraph (L), by striking ‘‘and shall con16 tain’’ and all that follows through the pe17 riod; and 

18 (ix) in the seventh sentence, by insert19 ing ‘‘medicare administrative contractor,’’ 

20 after ‘‘carrier,’’; and 

21 (D) by striking paragraph (5); 

22 (E) in paragraph (6)(D)(iv), by striking 

23 ‘‘carrier’’ and inserting ‘‘medicare administra24 tive contractor’’; and 
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1 (F) in paragraph (7), by striking ‘‘the car2 rier’’ and inserting ‘‘the Secretary’’ each place 

3 it appears. 

4 (4) Subsection (c) is amended—

5 (A) by striking paragraph (1); 

6 (B) in paragraph (2)(A), by striking ‘‘con7 tract under this section which provides for the 

8 disbursement of funds, as described in sub9 section (a)(1)(B),’’ and inserting ‘‘contract 

10 under section 1874A that provides for making 

11 payments under this part’’; 

12 (C) in paragraph (3)(A), by striking ‘‘sub13 section (a)(1)(B)’’ and inserting ‘‘section 

14 1874A(a)(3)(B)’’; 

15 (D) in paragraph (4), in the matter pre16 ceding subparagraph (A), by striking ‘‘carrier’’ 

17 and inserting ‘‘medicare administrative con18 tractor’’; and 

19 (E) by striking paragraphs (5) and (6). 

20 (5) Subsections (d), (e), and (f) are repealed. 

21 (6) Subsection (g) is amended by striking ‘‘car22 rier or carriers’’ and inserting ‘‘medicare administra23 tive contractor or contractors’’. 

24 (7) Subsection (h) is amended—

25 (A) in paragraph (2)—
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1 (i) by striking ‘‘Each carrier having 

2 an agreement with the Secretary under 

3 subsection (a)’’ and inserting ‘‘The Sec4 retary’’; and 

5 (ii) by striking ‘‘Each such carrier’’ 

6 and inserting ‘‘The Secretary’’; 

7 (B) in paragraph (3)(A)—

8 (i) by striking ‘‘a carrier having an 

9 agreement with the Secretary under sub10 section (a)’’ and inserting ‘‘medicare ad11 ministrative contractor having a contract 

12 under section 1874A that provides for 

13 making payments under this part’’; and

14 (ii) by striking ‘‘such carrier’’ and in15 serting ‘‘such contractor’’; 

16 (C) in paragraph (3)(B)—

17 (i) by striking ‘‘a carrier’’ and insert18 ing ‘‘a medicare administrative contractor’’ 

19 each place it appears; and 

20 (ii) by striking ‘‘the carrier’’ and in21 serting ‘‘the contractor’’ each place it ap22 pears; and 

23 (D) in paragraphs (5)(A) and (5)(B)(iii), 

24 by striking ‘‘carriers’’ and inserting ‘‘medicare 
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1 administrative contractors’’ each place it ap2 pears. 

3 (8) Subsection (l) is amended—

4 (A) in paragraph (1)(A)(iii), by striking 

5 ‘‘carrier’’ and inserting ‘‘medicare administra6 tive contractor’’; and 

7 (B) in paragraph (2), by striking ‘‘carrier’’ 

8 and inserting ‘‘medicare administrative con9 tractor’’. 

10 (9) Subsection (p)(3)(A) is amended by striking 

11 ‘‘carrier’’ and inserting ‘‘medicare administrative 

12 contractor’’. 

13 (10) Subsection (q)(1)(A) is amended by strik14 ing ‘‘carrier’’. 

15 (d) EFFECTIVE DATE; TRANSITION RULE.—

16 (1) EFFECTIVE DATE.—

17 (A) IN GENERAL.—Except as otherwise 

18 provided in this subsection, the amendments 

19 made by this section shall take effect on Octo20 ber 1, 2005, and the Secretary is authorized to 

21 take such steps before such date as may be nec22 essary to implement such amendments on a 

23 timely basis. 

24 (B) CONSTRUCTION FOR CURRENT CON25 TRACTS.—Such amendments shall not apply to 
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1 contracts in effect before the date specified 

2 under subparagraph (A) that continue to retain 

3 the terms and conditions in effect on such date 

4 (except as otherwise provided under this Act, 

5 other than under this section) until such date 

6 as the contract is let out for competitive bid7 ding under such amendments. 

8 (C) DEADLINE FOR COMPETITIVE BID9 DING.—The Secretary shall provide for the let10 ting by competitive bidding of all contracts for 

11 functions of medicare administrative contrac12 tors for annual contract periods that begin on 

13 or after October 1, 2010. 

14 (D) WAIVER OF PROVIDER NOMINATION

15 PROVISIONS DURING TRANSITION.—During the 

16 period beginning on the date of the enactment 

17 of this Act and before the date specified under 

18 subparagraph (A), the Secretary may enter into 

19 new agreements under section 1816 of the So20 cial Security Act (42 U.S.C. 1395h) without re21 gard to any of the provider nomination provi22 sions of such section. 

23 (2) GENERAL TRANSITION RULES.—The Sec24 retary shall take such steps, consistent with para25 graph (1)(B) and (1)(C), as are necessary to provide 
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•HR 810 IH 

1 for an appropriate transition from contracts under 

2 section 1816 and section 1842 of the Social Security 

3 Act (42 U.S.C. 1395h, 1395u) to contracts under 

4 section 1874A, as added by subsection (a)(1). 

5 (3) AUTHORIZING CONTINUATION OF MIP

6 FUNCTIONS UNDER CURRENT CONTRACTS AND

7 AGREEMENTS AND UNDER ROLLOVER CONTRACTS.—

8 The provisions contained in the exception in section 

9 1893(d)(2) of the Social Security Act (42 U.S.C. 

10 1395ddd(d)(2)) shall continue to apply notwith11 standing the amendments made by this section, and 

12 any reference in such provisions to an agreement or 

13 contract shall be deemed to include a contract under 

14 section 1874A of such Act, as inserted by subsection 

15 (a)(1), that continues the activities referred to in 

16 such provisions. 

17 (e) REFERENCES.—On and after the effective date 

18 provided under subsection (d)(1), any reference to a fiscal 

19 intermediary or carrier under title XI or XVIII of the So20 cial Security Act (or any regulation, manual instruction, 

21 interpretative rule, statement of policy, or guideline issued 

22 to carry out such titles) shall be deemed a reference to 

23 an appropriate medicare administrative contractor (as 

24 provided under section 1874A of the Social Security Act). 

25 (f) REPORTS ON IMPLEMENTATION.—
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1 (1) PLAN FOR IMPLEMENTATION.—By not later 

2 than October 1, 2004, the Secretary shall submit a 

3 report to Congress and the Comptroller General of 

4 the United States that describes the plan for imple5 mentation of the amendments made by this section. 

6 The Comptroller General shall conduct an evaluation 

7 of such plan and shall submit to Congress, not later 

8 than 6 months after the date the report is received, 

9 a report on such evaluation and shall include in such 

10 report such recommendations as the Comptroller 

11 General deems appropriate. 

12 (2) STATUS OF IMPLEMENTATION.—The Sec13 retary shall submit a report to Congress not later 

14 than October 1, 2008, that describes the status of 

15 implementation of such amendments and that in16 cludes a description of the following: 

17 (A) The number of contracts that have 

18 been competitively bid as of such date. 

19 (B) The distribution of functions among 

20 contracts and contractors. 

21 (C) A timeline for complete transition to 

22 full competition. 

23 (D) A detailed description of how the Sec24 retary has modified oversight and management 
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•HR 810 IH 

1 of medicare contractors to adapt to full com2 petition. 

3 SEC. 202. REQUIREMENTS FOR INFORMATION SECURITY 

4 FOR MEDICARE ADMINISTRATIVE CONTRAC5 TORS. 

6 (a) IN GENERAL.—Section 1874A, as added by sec7 tion 201(a)(1), is amended by adding at the end the fol8 lowing new subsection: 

9 ‘‘(e) REQUIREMENTS FOR INFORMATION SECU10 RITY.—

11 ‘‘(1) DEVELOPMENT OF INFORMATION SECU12 RITY PROGRAM.—A medicare administrative con13 tractor that performs the functions referred to in 

14 subparagraphs (A) and (B) of subsection (a)(4) (re15 lating to determining and making payments) shall 

16 implement a contractor-wide information security 

17 program to provide information security for the op18 eration and assets of the contractor with respect to 

19 such functions under this title. An information secu20 rity program under this paragraph shall meet the 

21 requirements for information security programs im22 posed on Federal agencies under section 3534(b)(2) 

23 of title 44, United States Code (other than require24 ments under subparagraphs (B)(ii), (F)(iii), and 

25 (F)(iv) of such section). 
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1 ‘‘(2) INDEPENDENT AUDITS.—

2 ‘‘(A) PERFORMANCE OF ANNUAL EVALUA3 TIONS.—Each year a medicare administrative 

4 contractor that performs the functions referred 

5 to in subparagraphs (A) and (B) of subsection 

6 (a)(4) (relating to determining and making pay7 ments) shall undergo an evaluation of the infor8 mation security of the contractor with respect 

9 to such functions under this title. The evalua10 tion shall—

11 ‘‘(i) be performed by an entity that 

12 meets such requirements for independence 

13 as the Inspector General of the Depart14 ment of Health and Human Services may 

15 establish; and 

16 ‘‘(ii) test the effectiveness of informa17 tion security control techniques for an ap18 propriate subset of the contractor’s infor19 mation systems (as defined in section 

20 3502(8) of title 44, United States Code) 

21 relating to such functions under this title 

22 and an assessment of compliance with the 

23 requirements of this subsection and related 

24 information security policies, procedures, 

25 standards and guidelines. 
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1 ‘‘(B) DEADLINE FOR INITIAL EVALUA2 TION.—

3 ‘‘(i) NEW CONTRACTORS.—In the case 

4 of a medicare administrative contractor 

5 covered by this subsection that has not 

6 previously performed the functions referred 

7 to in subparagraphs (A) and (B) of sub8 section (a)(4) (relating to determining and 

9 making payments) as a fiscal intermediary 

10 or carrier under section 1816 or 1842, the 

11 first independent evaluation conducted 

12 pursuant subparagraph (A) shall be com13 pleted prior to commencing such functions. 

14 ‘‘(ii) OTHER CONTRACTORS.—In the 

15 case of a medicare administrative con16 tractor covered by this subsection that is 

17 not described in clause (i), the first inde18 pendent evaluation conducted pursuant 

19 subparagraph (A) shall be completed with20 in 1 year after the date the contractor 

21 commences functions referred to in clause 

22 (i) under this section. 

23 ‘‘(C) REPORTS ON EVALUATIONS.—

24 ‘‘(i) TO THE INSPECTOR GENERAL.—

25 The results of independent evaluations 
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1 under subparagraph (A) shall be submitted 

2 promptly to the Inspector General of the 

3 Department of Health and Human Serv4 ices. 

5 ‘‘(ii) TO CONGRESS.—The Inspector 

6 General of Department of Health and 

7 Human Services shall submit to Congress 

8 annual reports on the results of such eval9 uations.’’. 

10 (b) APPLICATION OF REQUIREMENTS TO FISCAL

11 INTERMEDIARIES AND CARRIERS.—

12 (1) IN GENERAL.—The provisions of section 

13 1874A(e)(2) of the Social Security Act (other than 

14 subparagraph (B)), as added by subsection (a), shall 

15 apply to each fiscal intermediary under section 1816 

16 of the Social Security Act (42 U.S.C. 1395h) and 

17 each carrier under section 1842 of such Act (42 

18 U.S.C. 1395u) in the same manner as they apply to 

19 medicare administrative contractors under such pro20 visions. 

21 (2) DEADLINE FOR INITIAL EVALUATION.—In 

22 the case of such a fiscal intermediary or carrier with 

23 an agreement or contract under such respective sec24 tion in effect as of the date of the enactment of this 

25 Act, the first evaluation under section 
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•HR 810 IH 

1 1874A(e)(2)(A) of the Social Security Act (as added 

2 by subsection (a)), pursuant to paragraph (1), shall 

3 be completed (and a report on the evaluation sub4 mitted to the Secretary) by not later than 1 year 

5 after such date. 

6 TITLE III—EDUCATION AND 

7 OUTREACH 

8 SEC. 301. PROVIDER EDUCATION AND TECHNICAL ASSIST9 ANCE. 

10 (a) COORDINATION OF EDUCATION FUNDING.—

11 (1) IN GENERAL.—The Social Security Act is 

12 amended by inserting after section 1888 the fol13 lowing new section: 

14 ‘‘PROVIDER EDUCATION AND TECHNICAL ASSISTANCE

15 ‘‘SEC. 1889. (a) COORDINATION OF EDUCATION

16 FUNDING.—The Secretary shall coordinate the edu17 cational activities provided through medicare contractors 

18 (as defined in subsection (g), including under section 

19 1893) in order to maximize the effectiveness of Federal 

20 education efforts for providers of services and suppliers.’’. 

21 (2) EFFECTIVE DATE.—The amendment made 

22 by paragraph (1) shall take effect on the date of the 

23 enactment of this Act. 

24 (3) REPORT.—Not later than October 1, 2004, 

25 the Secretary shall submit to Congress a report that 

26 includes a description and evaluation of the steps 
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1 taken to coordinate the funding of provider edu2 cation under section 1889(a) of the Social Security 

3 Act, as added by paragraph (1). 

4 (b) INCENTIVES TO IMPROVE CONTRACTOR PER5 FORMANCE.—

6 (1) IN GENERAL.—Section 1874A, as added by 

7 section 201(a)(1) and as amended by section 202(a), 

8 is amended by adding at the end the following new 

9 subsection: 

10 ‘‘(f) INCENTIVES TO IMPROVE CONTRACTOR PER11 FORMANCE IN PROVIDER EDUCATION AND OUTREACH.—

12 In order to give medicare administrative contractors an 

13 incentive to implement effective education and outreach 

14 programs for providers of services and suppliers, the Sec15 retary shall develop and implement a methodology to 

16 measure the specific claims payment error rates of such 

17 contractors in the processing or reviewing of medicare 

18 claims.’’. 

19 (2) APPLICATION TO FISCAL INTERMEDIARIES

20 AND CARRIERS.—The provisions of section 1874A(f) 

21 of the Social Security Act, as added by paragraph 

22 (1), shall apply to each fiscal intermediary under 

23 section 1816 of the Social Security Act (42 U.S.C. 

24 1395h) and each carrier under section 1842 of such 

25 Act (42 U.S.C. 1395u) in the same manner as they 
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1 apply to medicare administrative contractors under 

2 such provisions. 

3 (3) GAO REPORT ON ADEQUACY OF METHOD4 OLOGY.—Not later than October 1, 2004, the Comp5 troller General of the United States shall submit to 

6 Congress and to the Secretary a report on the ade7 quacy of the methodology under section 1874A(f) of 

8 the Social Security Act, as added by paragraph (1), 

9 and shall include in the report such recommenda10 tions as the Comptroller General determines appro11 priate with respect to the methodology. 

12 (4) REPORT ON USE OF METHODOLOGY IN AS13 SESSING CONTRACTOR PERFORMANCE.—Not later 

14 than October 1, 2004, the Secretary shall submit to 

15 Congress a report that describes how the Secretary 

16 intends to use such methodology in assessing medi17 care contractor performance in implementing effec18 tive education and outreach programs, including 

19 whether to use such methodology as a basis for per20 formance bonuses. The report shall include an anal21 ysis of the sources of identified errors and potential 

22 changes in systems of contractors and rules of the 

23 Secretary that could reduce claims error rates. 
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1 (c) PROVISION OF ACCESS TO AND PROMPT RE2 SPONSES FROM MEDICARE ADMINISTRATIVE CONTRAC3 TORS.—

4 (1) IN GENERAL.—Section 1874A, as added by 

5 section 201(a)(1) and as amended by section 202(a) 

6 and subsection (b), is further amended by adding at 

7 the end the following new subsection:

8 ‘‘(g) COMMUNICATIONS WITH BENEFICIARIES, PRO9 VIDERS OF SERVICES AND SUPPLIERS.—

10 ‘‘(1) COMMUNICATION STRATEGY.—The Sec11 retary shall develop a strategy for communications 

12 with individuals entitled to benefits under part A or 

13 enrolled under part B, or both, and with providers 

14 of services and suppliers under this title. 

15 ‘‘(2) RESPONSE TO WRITTEN INQUIRIES.—Each 

16 medicare administrative contractor shall, for those 

17 providers of services and suppliers which submit 

18 claims to the contractor for claims processing and 

19 for those individuals entitled to benefits under part 

20 A or enrolled under part B, or both, with respect to 

21 whom claims are submitted for claims processing, 

22 provide general written responses (which may be 

23 through electronic transmission) in a clear, concise, 

24 and accurate manner to inquiries of providers of 

25 services, suppliers and individuals entitled to bene-
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1 fits under part A or enrolled under part B, or both, 

2 concerning the programs under this title within 45 

3 business days of the date of receipt of such inquiries. 

4 ‘‘(3) RESPONSE TO TOLL-FREE LINES.—The 

5 Secretary shall ensure that each medicare adminis6 trative contractor shall provide, for those providers 

7 of services and suppliers which submit claims to the 

8 contractor for claims processing and for those indi9 viduals entitled to benefits under part A or enrolled 

10 under part B, or both, with respect to whom claims 

11 are submitted for claims processing, a toll-free tele12 phone number at which such individuals, providers 

13 of services and suppliers may obtain information re14 garding billing, coding, claims, coverage, and other 

15 appropriate information under this title. 

16 ‘‘(4) MONITORING OF CONTRACTOR RE17 SPONSES.—

18 ‘‘(A) IN GENERAL.—Each medicare admin19 istrative contractor shall, consistent with stand20 ards developed by the Secretary under subpara21 graph (B)—

22 ‘‘(i) maintain a system for identifying 

23 who provides the information referred to in 

24 paragraphs (2) and (3); and 
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1 ‘‘(ii) monitor the accuracy, consist2 ency, and timeliness of the information so 

3 provided. 

4 ‘‘(B) DEVELOPMENT OF STANDARDS.—

5 ‘‘(i) IN GENERAL.—The Secretary 

6 shall establish and make public standards 

7 to monitor the accuracy, consistency, and 

8 timeliness of the information provided in 

9 response to written and telephone inquiries 

10 under this subsection. Such standards shall 

11 be consistent with the performance require12 ments established under subsection (b)(3). 

13 ‘‘(ii) EVALUATION.—In conducting 

14 evaluations of individual medicare adminis15 trative contractors, the Secretary shall 

16 take into account the results of the moni17 toring conducted under subparagraph (A) 

18 taking into account as performance re19 quirements the standards established 

20 under clause (i). The Secretary shall, in 

21 consultation with organizations rep22 resenting providers of services, suppliers, 

23 and individuals entitled to benefits under 

24 part A or enrolled under part B, or both, 

25 establish standards relating to the accu-
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1 racy, consistency, and timeliness of the in2 formation so provided. 

3 ‘‘(C) DIRECT MONITORING.—Nothing in 

4 this paragraph shall be construed as preventing 

5 the Secretary from directly monitoring the ac6 curacy, consistency, and timeliness of the infor7 mation so provided.’’. 

8 (2) EFFECTIVE DATE.—The amendment made 

9 by paragraph (1) shall take effect October 1, 2004. 

10 (3) APPLICATION TO FISCAL INTERMEDIARIES

11 AND CARRIERS.—The provisions of section 1874A(g) 

12 of the Social Security Act, as added by paragraph 

13 (1), shall apply to each fiscal intermediary under 

14 section 1816 of the Social Security Act (42 U.S.C. 

15 1395h) and each carrier under section 1842 of such 

16 Act (42 U.S.C. 1395u) in the same manner as they 

17 apply to medicare administrative contractors under 

18 such provisions. 

19 (d) IMPROVED PROVIDER EDUCATION AND TRAIN20 ING.—

21 (1) IN GENERAL.—Section 1889, as added by 

22 subsection (a), is amended by adding at the end the 

23 following new subsections: 

24 ‘‘(b) ENHANCED EDUCATION AND TRAINING.—
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1 ‘‘(1) ADDITIONAL RESOURCES.—There are au2 thorized to be appropriated to the Secretary (in ap3 propriate part from the Federal Hospital Insurance 

4 Trust Fund and the Federal Supplementary Medical 

5 Insurance Trust Fund) $25,000,000 for each of fis6 cal years 2005 and 2006 and such sums as may be 

7 necessary for succeeding fiscal years. 

8 ‘‘(2) USE.—The funds made available under 

9 paragraph (1) shall be used to increase the conduct 

10 by medicare contractors of education and training of 

11 providers of services and suppliers regarding billing, 

12 coding, and other appropriate items and may also be 

13 used to improve the accuracy, consistency, and time14 liness of contractor responses. 

15 ‘‘(c) TAILORING EDUCATION AND TRAINING ACTIVI16 TIES FOR SMALL PROVIDERS OR SUPPLIERS.—

17 ‘‘(1) IN GENERAL.—Insofar as a medicare con18 tractor conducts education and training activities, it 

19 shall tailor such activities to meet the special needs 

20 of small providers of services or suppliers (as defined 

21 in paragraph (2)). 

22 ‘‘(2) SMALL PROVIDER OF SERVICES OR SUP23 PLIER.—In this subsection, the term ‘small provider 

24 of services or supplier’ means—
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1 ‘‘(A) a provider of services with fewer than 

2 25 full-time-equivalent employees; or 

3 ‘‘(B) a supplier with fewer than 10 full4 time-equivalent employees.’’. 

5 (2) EFFECTIVE DATE.—The amendment made 

6 by paragraph (1) shall take effect on October 1, 

7 2004. 

8 (e) REQUIREMENT TO MAINTAIN INTERNET

9 SITES.—

10 (1) IN GENERAL.—Section 1889, as added by 

11 subsection (a) and as amended by subsection (d), is 

12 further amended by adding at the end the following 

13 new subsection: 

14 ‘‘(d) INTERNET SITES; FAQS.—The Secretary, and 

15 each medicare contractor insofar as it provides services 

16 (including claims processing) for providers of services or 

17 suppliers, shall maintain an Internet site which—

18 ‘‘(1) provides answers in an easily accessible 

19 format to frequently asked questions, and 

20 ‘‘(2) includes other published materials of the 

21 contractor, 

22 that relate to providers of services and suppliers under the 

23 programs under this title (and title XI insofar as it relates 

24 to such programs).’’. 
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1 (2) EFFECTIVE DATE.—The amendment made 

2 by paragraph (1) shall take effect on October 1, 

3 2004. 

4 (f) ADDITIONAL PROVIDER EDUCATION PROVI5 SIONS.—

6 (1) IN GENERAL.—Section 1889, as added by 

7 subsection (a) and as amended by subsections (d) 

8 and (e), is further amended by adding at the end the 

9 following new subsections: 

10 ‘‘(e) ENCOURAGEMENT OF PARTICIPATION IN EDU11 CATION PROGRAM ACTIVITIES.—A medicare contractor 

12 may not use a record of attendance at (or failure to at13 tend) educational activities or other information gathered 

14 during an educational program conducted under this sec15 tion or otherwise by the Secretary to select or track pro16 viders of services or suppliers for the purpose of con17 ducting any type of audit or prepayment review. 

18 ‘‘(f) CONSTRUCTION.—Nothing in this section or sec19 tion 1893(g) shall be construed as providing for disclosure 

20 by a medicare contractor of information that would com21 promise pending law enforcement activities or reveal find22 ings of law enforcement-related audits. 

23 ‘‘(g) DEFINITIONS.—For purposes of this section, the 

24 term ‘medicare contractor’ includes the following: 
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1 ‘‘(1) A medicare administrative contractor with 

2 a contract under section 1874A, including a fiscal 

3 intermediary with a contract under section 1816 and 

4 a carrier with a contract under section 1842. 

5 ‘‘(2) An eligible entity with a contract under 

6 section 1893. 

7 Such term does not include, with respect to activities of 

8 a specific provider of services or supplier an entity that 

9 has no authority under this title or title IX with respect 

10 to such activities and such provider of services or sup11 plier.’’. 

12 (2) EFFECTIVE DATE.—The amendment made 

13 by paragraph (1) shall take effect on the date of the 

14 enactment of this Act. 

15 SEC. 302. SMALL PROVIDER TECHNICAL ASSISTANCE DEM16 ONSTRATION PROGRAM. 

17 (a) ESTABLISHMENT.—

18 (1) IN GENERAL.—The Secretary shall establish 

19 a demonstration program (in this section referred to 

20 as the ‘‘demonstration program’’) under which tech21 nical assistance described in paragraph (2) is made 

22 available, upon request and on a voluntary basis, to 

23 small providers of services or suppliers in order to 

24 improve compliance with the applicable requirements 

25 of the programs under medicare program under title 
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1 XVIII of the Social Security Act (including provi2 sions of title XI of such Act insofar as they relate 

3 to such title and are not administered by the Office 

4 of the Inspector General of the Department of 

5 Health and Human Services). 

6 (2) FORMS OF TECHNICAL ASSISTANCE.—The 

7 technical assistance described in this paragraph is—

8 (A) evaluation and recommendations re9 garding billing and related systems; and 

10 (B) information and assistance regarding 

11 policies and procedures under the medicare pro12 gram, including coding and reimbursement. 

13 (3) SMALL PROVIDERS OF SERVICES OR SUP14 PLIERS.—In this section, the term ‘‘small providers 

15 of services or suppliers’’ means—

16 (A) a provider of services with fewer than 

17 25 full-time-equivalent employees; or 

18 (B) a supplier with fewer than 10 full19 time-equivalent employees. 

20 (b) QUALIFICATION OF CONTRACTORS.—In con21 ducting the demonstration program, the Secretary shall 

22 enter into contracts with qualified organizations (such as 

23 peer review organizations or entities described in section 

24 1889(g)(2) of the Social Security Act, as inserted by sec25 tion 5(f)(1)) with appropriate expertise with billing sys-
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1 tems of the full range of providers of services and sup2 pliers to provide the technical assistance. In awarding such 

3 contracts, the Secretary shall consider any prior investiga4 tions of the entity’s work by the Inspector General of De5 partment of Health and Human Services or the Comp6 troller General of the United States. 

7 (c) DESCRIPTION OF TECHNICAL ASSISTANCE.—The 

8 technical assistance provided under the demonstration 

9 program shall include a direct and in-person examination 

10 of billing systems and internal controls of small providers 

11 of services or suppliers to determine program compliance 

12 and to suggest more efficient or effective means of achiev13 ing such compliance. 

14 (d) AVOIDANCE OF RECOVERY ACTIONS FOR PROB15 LEMS IDENTIFIED AS CORRECTED.—The Secretary shall 

16 provide that, absent evidence of fraud and notwith17 standing any other provision of law, any errors found in 

18 a compliance review for a small provider of services or sup19 plier that participates in the demonstration program shall 

20 not be subject to recovery action if the technical assistance 

21 personnel under the program determine that—

22 (1) the problem that is the subject of the com23 pliance review has been corrected to their satisfac24 tion within 30 days of the date of the visit by such 
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1 personnel to the small provider of services or sup2 plier; and 

3 (2) such problem remains corrected for such pe4 riod as is appropriate. 

5 The previous sentence applies only to claims filed as part 

6 of the demonstration program and lasts only for the dura7 tion of such program and only as long as the small pro8 vider of services or supplier is a participant in such pro9 gram. 

10 (e) GAO EVALUATION.—Not later than 2 years after 

11 the date of the date the demonstration program is first 

12 implemented, the Comptroller General, in consultation 

13 with the Inspector General of the Department of Health 

14 and Human Services, shall conduct an evaluation of the 

15 demonstration program. The evaluation shall include a de16 termination of whether claims error rates are reduced for 

17 small providers of services or suppliers who participated 

18 in the program and the extent of improper payments made 

19 as a result of the demonstration program. The Comp20 troller General shall submit a report to the Secretary and 

21 the Congress on such evaluation and shall include in such 

22 report recommendations regarding the continuation or ex23 tension of the demonstration program. 

24 (f) FINANCIAL PARTICIPATION BY PROVIDERS.—The 

25 provision of technical assistance to a small provider of 
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1 services or supplier under the demonstration program is 

2 conditioned upon the small provider of services or supplier 

3 paying an amount estimated (and disclosed in advance of 

4 a provider’s or supplier’s participation in the program) to 

5 be equal to 25 percent of the cost of the technical assist6 ance. 

7 (g) AUTHORIZATION OF APPROPRIATIONS.—There 

8 are authorized to be appropriated to the Secretary (in ap9 propriate part from the Federal Hospital Insurance Trust 

10 Fund and the Federal Supplementary Medical Insurance 

11 Trust Fund) to carry out the demonstration program— 

12 (1) for fiscal year 2005, $1,000,000, and 

13 (2) for fiscal year 2006, $6,000,000. 

14 SEC. 303. MEDICARE PROVIDER OMBUDSMAN; MEDICARE 

15 BENEFICIARY OMBUDSMAN. 

16 (a) MEDICARE PROVIDER OMBUDSMAN.—Section 

17 1868 (42 U.S.C. 1395ee) is amended—

18 (1) by adding at the end of the heading the fol19 lowing: ‘‘; MEDICARE PROVIDER OMBUDSMAN’’; 

20 (2) by inserting ‘‘PRACTICING PHYSICIANS AD21 VISORY COUNCIL.—(1)’’ after ‘‘(a)’’; 

22 (3) in paragraph (1), as so redesignated under 

23 paragraph (2), by striking ‘‘in this section’’ and in24 serting ‘‘in this subsection’’; 
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1 (4) by redesignating subsections (b) and (c) as 

2 paragraphs (2) and (3), respectively; and 

3 (5) by adding at the end the following new sub4 section: 

5 ‘‘(b) MEDICARE PROVIDER OMBUDSMAN.—The Sec6 retary shall appoint within the Department of Health and 

7 Human Services a Medicare Provider Ombudsman. The 

8 Ombudsman shall—

9 ‘‘(1) provide assistance, on a confidential basis, 

10 to providers of services and suppliers with respect to 

11 complaints, grievances, and requests for information 

12 concerning the programs under this title (including 

13 provisions of title XI insofar as they relate to this 

14 title and are not administered by the Office of the 

15 Inspector General of the Department of Health and 

16 Human Services) and in the resolution of unclear or 

17 conflicting guidance given by the Secretary and 

18 medicare contractors to such providers of services 

19 and suppliers regarding such programs and provi20 sions and requirements under this title and such 

21 provisions; and 

22 ‘‘(2) submit recommendations to the Secretary 

23 for improvement in the administration of this title 

24 and such provisions, including—
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1 ‘‘(A) recommendations to respond to recur2 ring patterns of confusion in this title and such 

3 provisions (including recommendations regard4 ing suspending imposition of sanctions where 

5 there is widespread confusion in program ad6 ministration), and 

7 ‘‘(B) recommendations to provide for an 

8 appropriate and consistent response (including 

9 not providing for audits) in cases of self-identi10 fied overpayments by providers of services and 

11 suppliers. 

12 The Ombudsman shall not serve as an advocate for any 

13 increases in payments or new coverage of services, but 

14 may identify issues and problems in payment or coverage 

15 policies.’’. 

16 (b) MEDICARE BENEFICIARY OMBUDSMAN.—Title 

17 XVIII is amended by inserting after section 1806 the fol18 lowing new section: 

19 ‘‘MEDICARE BENEFICIARY OMBUDSMAN

20 ‘‘SEC. 1807. (a) IN GENERAL.—The Secretary shall 

21 appoint within the Department of Health and Human 

22 Services a Medicare Beneficiary Ombudsman who shall 

23 have expertise and experience in the fields of health care 

24 and education of (and assistance to) individuals entitled 

25 to benefits under this title. 
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1 ‘‘(b) DUTIES.—The Medicare Beneficiary Ombuds2 man shall—

3 ‘‘(1) receive complaints, grievances, and re4 quests for information submitted by individuals enti5 tled to benefits under part A or enrolled under part 

6 B, or both, with respect to any aspect of the medi7 care program; 

8 ‘‘(2) provide assistance with respect to com9 plaints, grievances, and requests referred to in para10 graph (1), including—

11 ‘‘(A) assistance in collecting relevant infor12 mation for such individuals, to seek an appeal 

13 of a decision or determination made by a fiscal 

14 intermediary, carrier, Medicare+Choice organi15 zation, or the Secretary; and 

16 ‘‘(B) assistance to such individuals with 

17 any problems arising from disenrollment from a 

18 Medicare+Choice plan under part C; and 

19 ‘‘(3) submit annual reports to Congress and the 

20 Secretary that describe the activities of the Office 

21 and that include such recommendations for improve22 ment in the administration of this title as the Om23 budsman determines appropriate. 

24 The Ombudsman shall not serve as an advocate for any 

25 increases in payments or new coverage of services, but 
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1 may identify issues and problems in payment or coverage 

2 policies. 

3 ‘‘(c) WORKING WITH HEALTH INSURANCE COUN4 SELING PROGRAMS.—To the extent possible, the Ombuds5 man shall work with health insurance counseling programs 

6 (receiving funding under section 4360 of Omnibus Budget 

7 Reconciliation Act of 1990) to facilitate the provision of 

8 information to individuals entitled to benefits under part 

9 A or enrolled under part B, or both regarding 

10 Medicare+Choice plans and changes to those plans. Noth11 ing in this subsection shall preclude further collaboration 

12 between the Ombudsman and such programs.’’. 

13 (c) DEADLINE FOR APPOINTMENT.—The Secretary 

14 shall appoint the Medicare Provider Ombudsman and the 

15 Medicare Beneficiary Ombudsman, under the amendments 

16 made by subsections (a) and (b), respectively, by not later 

17 than 1 year after the date of the enactment of this Act. 

18 (d) FUNDING.—There are authorized to be appro19 priated to the Secretary (in appropriate part from the 

20 Federal Hospital Insurance Trust Fund and the Federal 

21 Supplementary Medical Insurance Trust Fund) to carry 

22 out the provisions of subsection (b) of section 1868 of the 

23 Social Security Act (relating to the Medicare Provider 

24 Ombudsman), as added by subsection (a)(5) and section 

25 1807 of such Act (relating to the Medicare Beneficiary 
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1 Ombudsman), as added by subsection (b), such sums as 

2 are necessary for fiscal year 2004 and each succeeding fis3 cal year. 

4 (e) USE OF CENTRAL, TOLL-FREE NUMBER (1–800–

5 MEDICARE).—

6 (1) PHONE TRIAGE SYSTEM; LISTING IN MEDI7 CARE HANDBOOK INSTEAD OF OTHER TOLL-FREE

8 NUMBERS.—Section 1804(b) (42 U.S.C. 1395b–

9 2(b)) is amended by adding at the end the following: 

10 ‘‘The Secretary shall provide, through the toll-free 

11 number 1–800–MEDICARE, for a means by which 

12 individuals seeking information about, or assistance 

13 with, such programs who phone such toll-free num14 ber are transferred (without charge) to appropriate 

15 entities for the provision of such information or as16 sistance. Such toll-free number shall be the toll-free 

17 number listed for general information and assistance 

18 in the annual notice under subsection (a) instead of 

19 the listing of numbers of individual contractors.’’. 

20 (2) MONITORING ACCURACY.—

21 (A) STUDY.—The Comptroller General of 

22 the United States shall conduct a study to mon23 itor the accuracy and consistency of information 

24 provided to individuals entitled to benefits 

25 under part A or enrolled under part B, or both, 
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1 through the toll-free number 1–800–MEDI2 CARE, including an assessment of whether the 

3 information provided is sufficient to answer 

4 questions of such individuals. In conducting the 

5 study, the Comptroller General shall examine 

6 the education and training of the individuals 

7 providing information through such number. 

8 (B) REPORT.—Not later than 1 year after 

9 the date of the enactment of this Act, the 

10 Comptroller General shall submit to Congress a 

11 report on the study conducted under subpara12 graph (A). 

13 SEC. 304. BENEFICIARY OUTREACH DEMONSTRATION PRO14 GRAM. 

15 (a) IN GENERAL.—The Secretary shall establish a 

16 demonstration program (in this section referred to as the 

17 ‘‘demonstration program’’) under which medicare special18 ists employed by the Department of Health and Human 

19 Services provide advice and assistance to individuals enti20 tled to benefits under part A of title XVIII of the Social 

21 Security Act, or enrolled under part B of such title, or 

22 both, regarding the medicare program at the location of 

23 existing local offices of the Social Security Administration. 

24 (b) LOCATIONS.—
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1 (1) IN GENERAL.—The demonstration program 

2 shall be conducted in at least 6 offices or areas. 

3 Subject to paragraph (2), in selecting such offices 

4 and areas, the Secretary shall provide preference for 

5 offices with a high volume of visits by individuals re6 ferred to in subsection (a). 

7 (2) ASSISTANCE FOR RURAL BENEFICIARIES.—

8 The Secretary shall provide for the selection of at 

9 least 2 rural areas to participate in the demonstra10 tion program. In conducting the demonstration pro11 gram in such rural areas, the Secretary shall provide 

12 for medicare specialists to travel among local offices 

13 in a rural area on a scheduled basis. 

14 (c) DURATION.—The demonstration program shall be 

15 conducted over a 3-year period. 

16 (d) EVALUATION AND REPORT.—

17 (1) EVALUATION.—The Secretary shall provide 

18 for an evaluation of the demonstration program. 

19 Such evaluation shall include an analysis of—

20 (A) utilization of, and satisfaction of those 

21 individuals referred to in subsection (a) with, 

22 the assistance provided under the program; and 

23 (B) the cost-effectiveness of providing ben24 eficiary assistance through out-stationing medi-
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1 care specialists at local offices of the Social Se2 curity Administration. 

3 (2) REPORT.—The Secretary shall submit to 

4 Congress a report on such evaluation and shall in5 clude in such report recommendations regarding the 

6 feasibility of permanently out-stationing medicare 

7 specialists at local offices of the Social Security Ad8 ministration. 

9 TITLE IV—APPEALS AND 

10 RECOVERY 

11 SEC. 401. TRANSFER OF RESPONSIBILITY FOR MEDICARE 

12 APPEALS. 

13 (a) TRANSITION PLAN.—

14 (1) IN GENERAL.—Not later than October 1, 

15 2004, the Commissioner of Social Security and the 

16 Secretary shall develop and transmit to Congress 

17 and the Comptroller General of the United States a 

18 plan under which the functions of administrative law 

19 judges responsible for hearing cases under title 

20 XVIII of the Social Security Act (and related provi21 sions in title XI of such Act) are transferred from 

22 the responsibility of the Commissioner and the So23 cial Security Administration to the Secretary and 

24 the Department of Health and Human Services. 
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1 (2) GAO EVALUATION.—The Comptroller Gen2 eral of the United States shall evaluate the plan 

3 and, not later than the date that is 6 months after 

4 the date on which the plan is received by the Comp5 troller General, shall submit to Congress a report on 

6 such evaluation. 

7 (b) TRANSFER OF ADJUDICATION AUTHORITY.—

8 (1) IN GENERAL.—Not earlier than July 1, 

9 2005, and not later than October 1, 2005, the Com10 missioner of Social Security and the Secretary shall 

11 implement the transition plan under subsection (a) 

12 and transfer the administrative law judge functions 

13 described in such subsection from the Social Secu14 rity Administration to the Secretary. 

15 (2) ASSURING INDEPENDENCE OF JUDGES.—

16 The Secretary shall assure the independence of ad17 ministrative law judges performing the administra18 tive law judge functions transferred under para19 graph (1) from the Centers for Medicare & Medicaid 

20 Services and its contractors. 

21 (3) GEOGRAPHIC DISTRIBUTION.—The Sec22 retary shall provide for an appropriate geographic 

23 distribution of administrative law judges performing 

24 the administrative law judge functions transferred 
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1 under paragraph (1) throughout the United States 

2 to ensure timely access to such judges. 

3 (4) HIRING AUTHORITY.—Subject to the 

4 amounts provided in advance in appropriations Act, 

5 the Secretary shall have authority to hire adminis6 trative law judges to hear such cases, giving priority 

7 to those judges with prior experience in handling 

8 medicare appeals and in a manner consistent with 

9 paragraph (3), and to hire support staff for such 

10 judges. 

11 (5) FINANCING.—Amounts payable under law 

12 to the Commissioner for administrative law judges 

13 performing the administrative law judge functions 

14 transferred under paragraph (1) from the Federal 

15 Hospital Insurance Trust Fund and the Federal 

16 Supplementary Medical Insurance Trust Fund shall 

17 become payable to the Secretary for the functions so 

18 transferred. 

19 (6) SHARED RESOURCES.—The Secretary shall 

20 enter into such arrangements with the Commissioner 

21 as may be appropriate with respect to transferred 

22 functions of administrative law judges to share office 

23 space, support staff, and other resources, with ap24 propriate reimbursement from the Trust Funds de25 scribed in paragraph (5). 
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1 (c) INCREASED FINANCIAL SUPPORT.—In addition to 

2 any amounts otherwise appropriated, to ensure timely ac3 tion on appeals before administrative law judges and the 

4 Departmental Appeals Board consistent with section 1869 

5 of the Social Security Act (as amended by section 521 of 

6 BIPA, 114 Stat. 2763A–534), there are authorized to be 

7 appropriated (in appropriate part from the Federal Hos8 pital Insurance Trust Fund and the Federal Supple9 mentary Medical Insurance Trust Fund) to the Secretary 

10 such sums as are necessary for fiscal year 2005 and each 

11 subsequent fiscal year to—

12 (1) increase the number of administrative law 

13 judges (and their staffs) under subsection (b)(4); 

14 (2) improve education and training opportuni15 ties for administrative law judges (and their staffs); 

16 and 

17 (3) increase the staff of the Departmental Ap18 peals Board. 

19 (d) CONFORMING AMENDMENT.—Section 

20 1869(f)(2)(A)(i) (42 U.S.C. 1395ff(f)(2)(A)(i)), as added 

21 by section 522(a) of BIPA (114 Stat. 2763A–543), is 

22 amended by striking ‘‘of the Social Security Administra23 tion’’. 
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1 SEC. 402. PROCESS FOR EXPEDITED ACCESS TO REVIEW. 

2 (a) EXPEDITED ACCESS TO JUDICIAL REVIEW.—Sec3 tion 1869(b) (42 U.S.C. 1395ff(b)) as amended by BIPA, 

4 is amended—

5 (1) in paragraph (1)(A), by inserting ‘‘, subject 

6 to paragraph (2),’’ before ‘‘to judicial review of the 

7 Secretary’s final decision’’; 

8 (2) in paragraph (1)(F)—

9 (A) by striking clause (ii); 

10 (B) by striking ‘‘PROCEEDING’’ and all 

11 that follows through ‘‘DETERMINATION’’ and in12 serting ‘‘DETERMINATIONS AND RECONSIDER13 ATIONS’’; and 

14 (C) by redesignating subclauses (I) and 

15 (II) as clauses (i) and (ii) and by moving the 

16 indentation of such subclauses (and the matter 

17 that follows) 2 ems to the left; and 

18 (3) by adding at the end the following new 

19 paragraph: 

20 ‘‘(2) EXPEDITED ACCESS TO JUDICIAL RE21 VIEW.—

22 ‘‘(A) IN GENERAL.—The Secretary shall 

23 establish a process under which a provider of 

24 services or supplier that furnishes an item or 

25 service or an individual entitled to benefits 

26 under part A or enrolled under part B, or both, 
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1 who has filed an appeal under paragraph (1) 

2 may obtain access to judicial review when a re3 view panel (described in subparagraph (D)), on 

4 its own motion or at the request of the appel5 lant, determines that no entity in the adminis6 trative appeals process has the authority to de7 cide the question of law or regulation relevant 

8 to the matters in controversy and that there is 

9 no material issue of fact in dispute. The appel10 lant may make such request only once with re11 spect to a question of law or regulation in a 

12 case of an appeal. 

13 ‘‘(B) PROMPT DETERMINATIONS.—If, after 

14 or coincident with appropriately filing a request 

15 for an administrative hearing, the appellant re16 quests a determination by the appropriate re17 view panel that no review panel has the author18 ity to decide the question of law or regulations 

19 relevant to the matters in controversy and that 

20 there is no material issue of fact in dispute and 

21 if such request is accompanied by the docu22 ments and materials as the appropriate review 

23 panel shall require for purposes of making such 

24 determination, such review panel shall make a 

25 determination on the request in writing within 
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1 60 days after the date such review panel re2 ceives the request and such accompanying docu3 ments and materials. Such a determination by 

4 such review panel shall be considered a final de5 cision and not subject to review by the Sec6 retary. 

7 ‘‘(C) ACCESS TO JUDICIAL REVIEW.—

8 ‘‘(i) IN GENERAL.—If the appropriate 

9 review panel—

10 ‘‘(I) determines that there are no 

11 material issues of fact in dispute and 

12 that the only issue is one of law or 

13 regulation that no review panel has 

14 the authority to decide; or 

15 ‘‘(II) fails to make such deter16 mination within the period provided 

17 under subparagraph (B); 

18 then the appellant may bring a civil action 

19 as described in this subparagraph. 

20 ‘‘(ii) DEADLINE FOR FILING.—Such 

21 action shall be filed, in the case described 

22 in—

23 ‘‘(I) clause (i)(I), within 60 days 

24 of date of the determination described 

25 in such subparagraph; or 
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1 ‘‘(II) clause (i)(II), within 60 

2 days of the end of the period provided 

3 under subparagraph (B) for the deter4 mination. 

5 ‘‘(iii) VENUE.—Such action shall be 

6 brought in the district court of the United 

7 States for the judicial district in which the 

8 appellant is located (or, in the case of an 

9 action brought jointly by more than one 

10 applicant, the judicial district in which the 

11 greatest number of applicants are located) 

12 or in the district court for the District of 

13 Columbia. 

14 ‘‘(iv) INTEREST ON AMOUNTS IN CON15 TROVERSY.—Where a provider of services 

16 or supplier seeks judicial review pursuant 

17 to this paragraph, the amount in con18 troversy shall be subject to annual interest 

19 beginning on the first day of the first 

20 month beginning after the 60-day period 

21 as determined pursuant to clause (ii) and 

22 equal to the rate of interest on obligations 

23 issued for purchase by the Federal Hos24 pital Insurance Trust Fund and by the 

25 Federal Supplementary Medical Insurance 
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1 Trust Fund for the month in which the 

2 civil action authorized under this para3 graph is commenced, to be awarded by the 

4 reviewing court in favor of the prevailing 

5 party. No interest awarded pursuant to the 

6 preceding sentence shall be deemed income 

7 or cost for the purposes of determining re8 imbursement due providers of services or 

9 suppliers under this Act. 

10 ‘‘(D) REVIEW PANELS.—For purposes of 

11 this subsection, a ‘review panel’ is a panel con12 sisting of 3 members (who shall be administra13 tive law judges, members of the Departmental 

14 Appeals Board, or qualified individuals associ15 ated with a qualified independent contractor (as 

16 defined in subsection (c)(2)) or with another 

17 independent entity) designated by the Secretary 

18 for purposes of making determinations under 

19 this paragraph.’’. 

20 (b) APPLICATION TO PROVIDER AGREEMENT DETER21 MINATIONS.—Section 1866(h)(1) (42 U.S.C. 

22 1395cc(h)(1)) is amended—

23 (1) by inserting ‘‘(A)’’ after ‘‘(h)(1)’’; and 

24 (2) by adding at the end the following new sub25 paragraph: 
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1 ‘‘(B) An institution or agency described in subpara2 graph (A) that has filed for a hearing under subparagraph 

3 (A) shall have expedited access to judicial review under 

4 this subparagraph in the same manner as providers of 

5 services, suppliers, and individuals entitled to benefits 

6 under part A or enrolled under part B, or both, may ob7 tain expedited access to judicial review under the process 

8 established under section 1869(b)(2). Nothing in this sub9 paragraph shall be construed to affect the application of 

10 any remedy imposed under section 1819 during the pend11 ency of an appeal under this subparagraph.’’. 

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

13 this section shall apply to appeals filed on or after October 

14 1, 2004. 

15 (d) EXPEDITED REVIEW OF CERTAIN PROVIDER

16 AGREEMENT DETERMINATIONS.—

17 (1) TERMINATION AND CERTAIN OTHER IMME18 DIATE REMEDIES.—The Secretary shall develop and 

19 implement a process to expedite proceedings under 

20 sections 1866(h) of the Social Security Act (42 

21 U.S.C. 1395cc(h)) in which the remedy of termi22 nation of participation, or a remedy described in 

23 clause (i) or (iii) of section 1819(h)(2)(B) of such 

24 Act (42 U.S.C. 1395i–3(h)(2)(B)) which is applied 

25 on an immediate basis, has been imposed. Under 
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1 such process priority shall be provided in cases of 

2 termination. 

3 (2) INCREASED FINANCIAL SUPPORT.—In addi4 tion to any amounts otherwise appropriated, to re5 duce by 50 percent the average time for administra6 tive determinations on appeals under section 

7 1866(h) of the Social Security Act (42 U.S.C. 

8 1395cc(h)), there are authorized to be appropriated 

9 (in appropriate part from the Federal Hospital In10 surance Trust Fund and the Federal Supplementary 

11 Medical Insurance Trust Fund) to the Secretary 

12 such additional sums for fiscal year 2005 and each 

13 subsequent fiscal year as may be necessary. The 

14 purposes for which such amounts are available in15 clude increasing the number of administrative law 

16 judges (and their staffs) and the appellate level staff 

17 at the Departmental Appeals Board of the Depart18 ment of Health and Human Services and educating 

19 such judges and staffs on long-term care issues. 

20 SEC. 403. REVISIONS TO MEDICARE APPEALS PROCESS. 

21 (a) REQUIRING FULL AND EARLY PRESENTATION OF

22 EVIDENCE.—

23 (1) IN GENERAL.—Section 1869(b) (42 U.S.C. 

24 1395ff(b)), as amended by BIPA and as amended by 
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1 section 402(a), is further amended by adding at the 

2 end the following new paragraph: 

3 ‘‘(3) REQUIRING FULL AND EARLY PRESEN4 TATION OF EVIDENCE BY PROVIDERS.—A provider 

5 of services or supplier may not introduce evidence in 

6 any appeal under this section that was not presented 

7 at the reconsideration conducted by the qualified 

8 independent contractor under subsection (c), unless 

9 there is good cause which precluded the introduction 

10 of such evidence at or before that reconsideration.’’.

11 (2) EFFECTIVE DATE.—The amendment made 

12 by paragraph (1) shall take effect on October 1, 

13 2004. 

14 (b) USE OF PATIENTS’ MEDICAL RECORDS.—Section 

15 1869(c)(3)(B)(i) (42 U.S.C. 1395ff(c)(3)(B)(i)), as 

16 amended by BIPA, is amended by inserting ‘‘(including 

17 the medical records of the individual involved)’’ after 

18 ‘‘clinical experience’’. 

19 (c) NOTICE REQUIREMENTS FOR MEDICARE AP20 PEALS.— 

21 (1) INITIAL DETERMINATIONS AND REDETER22 MINATIONS.—Section 1869(a) (42 U.S.C. 

23 1395ff(a)), as amended by BIPA, is amended by 

24 adding at the end the following new paragraph: 
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1 ‘‘(4) REQUIREMENTS OF NOTICE OF DETER2 MINATIONS AND REDETERMINATIONS.—A written 

3 notice of a determination on an initial determination 

4 or on a redetermination, insofar as such determina5 tion or redetermination results in a denial of a claim 

6 for benefits, shall include—

7 ‘‘(A) the specific reasons for the deter8 mination, including—

9 ‘‘(i) upon request, the provision of the 

10 policy, manual, or regulation used in mak11 ing the determination; and 

12 ‘‘(ii) as appropriate in the case of a 

13 redetermination, a summary of the clinical 

14 or scientific evidence used in making the 

15 determination; 

16 ‘‘(B) the procedures for obtaining addi17 tional information concerning the determination 

18 or redetermination; and 

19 ‘‘(C) notification of the right to seek a re20 determination or otherwise appeal the deter21 mination and instructions on how to initiate 

22 such a redetermination or appeal under this 

23 section. 

24 The written notice on a redetermination shall be 

25 provided in printed form and written in a manner 
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1 calculated to be understood by the individual entitled 

2 to benefits under part A or enrolled under part B, 

3 or both.’’. 

4 (2) RECONSIDERATIONS.—Section 

5 1869(c)(3)(E) (42 U.S.C. 1395ff(c)(3)(E)), as 

6 amended by BIPA, is amended—

7 (A) by inserting ‘‘be written in a manner 

8 calculated to be understood by the individual 

9 entitled to benefits under part A or enrolled 

10 under part B, or both, and shall include (to the 

11 extent appropriate)’’ after ‘‘in writing, ’’; and 

12 (B) by inserting ‘‘and a notification of the 

13 right to appeal such determination and instruc14 tions on how to initiate such appeal under this 

15 section’’ after ‘‘such decision,’’. 

16 (3) APPEALS.—Section 1869(d) (42 U.S.C. 

17 1395ff(d)), as amended by BIPA, is amended—

18 (A) in the heading, by inserting ‘‘; NO19 TICE’’ after ‘‘SECRETARY’’; and 

20 (B) by adding at the end the following new 

21 paragraph: 

22 ‘‘(4) NOTICE.—Notice of the decision of an ad23 ministrative law judge shall be in writing in a man24 ner calculated to be understood by the individual en-
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1 titled to benefits under part A or enrolled under part 

2 B, or both, and shall include—

3 ‘‘(A) the specific reasons for the deter4 mination (including, to the extent appropriate, 

5 a summary of the clinical or scientific evidence 

6 used in making the determination); 

7 ‘‘(B) the procedures for obtaining addi8 tional information concerning the decision; and 

9 ‘‘(C) notification of the right to appeal the 

10 decision and instructions on how to initiate 

11 such an appeal under this section.’’. 

12 (4) SUBMISSION OF RECORD FOR APPEAL.—

13 Section 1869(c)(3)(J)(i) (42 U.S.C. 

14 1395ff(c)(3)(J)(i)) by striking ‘‘prepare’’ and insert15 ing ‘‘submit’’ and by striking ‘‘with respect to’’ and 

16 all that follows through ‘‘and relevant policies’’. 

17 (d) QUALIFIED INDEPENDENT CONTRACTORS.—

18 (1) ELIGIBILITY REQUIREMENTS OF QUALIFIED

19 INDEPENDENT CONTRACTORS.—Section 1869(c)(3) 

20 (42 U.S.C. 1395ff(c)(3)), as amended by BIPA, is 

21 amended—

22 (A) in subparagraph (A), by striking ‘‘suf23 ficient training and expertise in medical science 

24 and legal matters’’ and inserting ‘‘sufficient 

25 medical, legal, and other expertise (including 
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1 knowledge of the program under this title) and 

2 sufficient staffing’’; and 

3 (B) by adding at the end the following new 

4 subparagraph: 

5 ‘‘(K) INDEPENDENCE REQUIREMENTS.—

6 ‘‘(i) IN GENERAL.—Subject to clause 

7 (ii), a qualified independent contractor 

8 shall not conduct any activities in a case 

9 unless the entity—

10 ‘‘(I) is not a related party (as de11 fined in subsection (g)(5)); 

12 ‘‘(II) does not have a material fa13 milial, financial, or professional rela14 tionship with such a party in relation 

15 to such case; and 

16 ‘‘(III) does not otherwise have a 

17 conflict of interest with such a party. 

18 ‘‘(ii) EXCEPTION FOR REASONABLE

19 COMPENSATION.—Nothing in clause (i) 

20 shall be construed to prohibit receipt by a 

21 qualified independent contractor of com22 pensation from the Secretary for the con23 duct of activities under this section if the 

24 compensation is provided consistent with 

25 clause (iii). 
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1 ‘‘(iii) LIMITATIONS ON ENTITY COM2 PENSATION.—Compensation provided by 

3 the Secretary to a qualified independent 

4 contractor in connection with reviews 

5 under this section shall not be contingent 

6 on any decision rendered by the contractor 

7 or by any reviewing professional.’’.

8 (2) ELIGIBILITY REQUIREMENTS FOR REVIEW9 ERS.—Section 1869 (42 U.S.C. 1395ff), as amended 

10 by BIPA, is amended—

11 (A) by amending subsection (c)(3)(D) to 

12 read as follows: 

13 ‘‘(D) QUALIFICATIONS FOR REVIEWERS.—

14 The requirements of subsection (g) shall be met 

15 (relating to qualifications of reviewing profes16 sionals).’’; and 

17 (B) by adding at the end the following new 

18 subsection: 

19 ‘‘(g) QUALIFICATIONS OF REVIEWERS.—

20 ‘‘(1) IN GENERAL.—In reviewing determina21 tions under this section, a qualified independent con22 tractor shall assure that—

23 ‘‘(A) each individual conducting a review 

24 shall meet the qualifications of paragraph (2); 
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1 ‘‘(B) compensation provided by the con2 tractor to each such reviewer is consistent with 

3 paragraph (3); and 

4 ‘‘(C) in the case of a review by a panel de5 scribed in subsection (c)(3)(B) composed of 

6 physicians or other health care professionals 

7 (each in this subsection referred to as a ‘review8 ing professional’), each reviewing professional 

9 meets the qualifications described in paragraph 

10 (4) and, where a claim is regarding the fur11 nishing of treatment by a physician (allopathic 

12 or osteopathic) or the provision of items or 

13 services by a physician (allopathic or osteo14 pathic), each reviewing professional shall be a 

15 physician (allopathic or osteopathic). 

16 ‘‘(2) INDEPENDENCE.—

17 ‘‘(A) IN GENERAL.—Subject to subpara18 graph (B), each individual conducting a review 

19 in a case shall—

20 ‘‘(i) not be a related party (as defined 

21 in paragraph (5)); 

22 ‘‘(ii) not have a material familial, fi23 nancial, or professional relationship with 

24 such a party in the case under review; and 
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1 ‘‘(iii) not otherwise have a conflict of 

2 interest with such a party. 

3 ‘‘(B) EXCEPTION.—Nothing in subpara4 graph (A) shall be construed to—

5 ‘‘(i) prohibit an individual, solely on 

6 the basis of a participation agreement with 

7 a fiscal intermediary, carrier, or other con8 tractor, from serving as a reviewing profes9 sional if—

10 ‘‘(I) the individual is not involved 

11 in the provision of items or services in 

12 the case under review; 

13 ‘‘(II) the fact of such an agree14 ment is disclosed to the Secretary and 

15 the individual entitled to benefits 

16 under part A or enrolled under part 

17 B, or both, (or authorized representa18 tive) and neither party objects; and 

19 ‘‘(III) the individual is not an 

20 employee of the intermediary, carrier, 

21 or contractor and does not provide 

22 services exclusively or primarily to or 

23 on behalf of such intermediary, car24 rier, or contractor; 
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1 ‘‘(ii) prohibit an individual who has 

2 staff privileges at the institution where the 

3 treatment involved takes place from serv4 ing as a reviewer merely on the basis of 

5 having such staff privileges if the existence 

6 of such privileges is disclosed to the Sec7 retary and such individual (or authorized 

8 representative), and neither party objects; 

9 or 

10 ‘‘(iii) prohibit receipt of compensation 

11 by a reviewing professional from a con12 tractor if the compensation is provided 

13 consistent with paragraph (3). 

14 For purposes of this paragraph, the term ‘par15 ticipation agreement’ means an agreement re16 lating to the provision of health care services by 

17 the individual and does not include the provi18 sion of services as a reviewer under this sub19 section. 

20 ‘‘(3) LIMITATIONS ON REVIEWER COMPENSA21 TION.—Compensation provided by a qualified inde22 pendent contractor to a reviewer in connection with 

23 a review under this section shall not be contingent 

24 on the decision rendered by the reviewer. 
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1 ‘‘(4) LICENSURE AND EXPERTISE.—Each re2 viewing professional shall be—

3 ‘‘(A) a physician (allopathic or osteopathic) 

4 who is appropriately credentialed or licensed in 

5 one or more States to deliver health care serv6 ices and has medical expertise in the field of 

7 practice that is appropriate for the items or 

8 services at issue; or 

9 ‘‘(B) a health care professional who is le10 gally authorized in one or more States (in ac11 cordance with State law or the State regulatory 

12 mechanism provided by State law) to furnish 

13 the health care items or services at issue and 

14 has medical expertise in the field of practice 

15 that is appropriate for such items or services. 

16 ‘‘(5) RELATED PARTY DEFINED.—For purposes 

17 of this section, the term ‘related party’ means, with 

18 respect to a case under this title involving a specific 

19 individual entitled to benefits under part A or en20 rolled under part B, or both, any of the following: 

21 ‘‘(A) The Secretary, the medicare adminis22 trative contractor involved, or any fiduciary, of23 ficer, director, or employee of the Department 

24 of Health and Human Services, or of such con25 tractor. 
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1 ‘‘(B) The individual (or authorized rep2 resentative). 

3 ‘‘(C) The health care professional that pro4 vides the items or services involved in the case. 

5 ‘‘(D) The institution at which the items or 

6 services (or treatment) involved in the case are 

7 provided.

8 ‘‘(E) The manufacturer of any drug or 

9 other item that is included in the items or serv10 ices involved in the case. 

11 ‘‘(F) Any other party determined under 

12 any regulations to have a substantial interest in 

13 the case involved.’’. 

14 (3) EFFECTIVE DATE.—The amendments made 

15 by paragraphs (1) and (2) shall be effective as if in16 cluded in the enactment of the respective provisions 

17 of subtitle C of title V of BIPA, (114 Stat. 2763A–

18 534). 

19 (4) TRANSITION.—In applying section 1869(g) 

20 of the Social Security Act (as added by paragraph 

21 (2)), any reference to a medicare administrative con22 tractor shall be deemed to include a reference to a 

23 fiscal intermediary under section 1816 of the Social 

24 Security Act (42 U.S.C. 1395h) and a carrier under 

25 section 1842 of such Act (42 U.S.C. 1395u). 
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1 SEC. 404. PREPAYMENT REVIEW. 

2 (a) IN GENERAL.—Section 1874A, as added by sec3 tion 201(a)(1) and as amended by sections 202(b), 

4 301(b)(1), and 301(c)(1), is further amended by adding 

5 at the end the following new subsection: 

6 ‘‘(h) CONDUCT OF PREPAYMENT REVIEW.—

7 ‘‘(1) CONDUCT OF RANDOM PREPAYMENT RE8 VIEW.—

9 ‘‘(A) IN GENERAL.—A medicare adminis10 trative contractor may conduct random prepay11 ment review only to develop a contractor-wide 

12 or program-wide claims payment error rates or 

13 under such additional circumstances as may be 

14 provided under regulations, developed in con15 sultation with providers of services and sup16 pliers. 

17 ‘‘(B) USE OF STANDARD PROTOCOLS

18 WHEN CONDUCTING PREPAYMENT REVIEWS.—

19 When a medicare administrative contractor con20 ducts a random prepayment review, the con21 tractor may conduct such review only in accord22 ance with a standard protocol for random pre23 payment audits developed by the Secretary. 

24 ‘‘(C) CONSTRUCTION.—Nothing in this 

25 paragraph shall be construed as preventing the 
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1 denial of payments for claims actually reviewed 

2 under a random prepayment review. 

3 ‘‘(D) RANDOM PREPAYMENT REVIEW.—

4 For purposes of this subsection, the term ‘ran5 dom prepayment review’ means a demand for 

6 the production of records or documentation ab7 sent cause with respect to a claim. 

8 ‘‘(2) LIMITATIONS ON NON-RANDOM PREPAY9 MENT REVIEW.—

10 ‘‘(A) LIMITATIONS ON INITIATION OF NON11 RANDOM PREPAYMENT REVIEW.—A medicare 

12 administrative contractor may not initiate non13 random prepayment review of a provider of 

14 services or supplier based on the initial identi15 fication by that provider of services or supplier 

16 of an improper billing practice unless there is a 

17 likelihood of sustained or high level of payment 

18 error (as defined in subsection (i)(3)(A)). 

19 ‘‘(B) TERMINATION OF NON-RANDOM PRE20 PAYMENT REVIEW.—The Secretary shall issue 

21 regulations relating to the termination, includ22 ing termination dates, of non-random prepay23 ment review. Such regulations may vary such a 

24 termination date based upon the differences in 
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1 the circumstances triggering prepayment re2 view.’’. 

3 (b) EFFECTIVE DATE.—

4 (1) IN GENERAL.—Except as provided in this 

5 subsection, the amendment made by subsection (a) 

6 shall take effect 1 year after the date of the enact7 ment of this Act. 

8 (2) DEADLINE FOR PROMULGATION OF CER9 TAIN REGULATIONS.—The Secretary shall first issue 

10 regulations under section 1874A(h) of the Social Se11 curity Act, as added by subsection (a), by not later 

12 than 1 year after the date of the enactment of this 

13 Act. 

14 (3) APPLICATION OF STANDARD PROTOCOLS

15 FOR RANDOM PREPAYMENT REVIEW.—Section 

16 1874A(h)(1)(B) of the Social Security Act, as added 

17 by subsection (a), shall apply to random prepayment 

18 reviews conducted on or after such date (not later 

19 than 1 year after the date of the enactment of this 

20 Act) as the Secretary shall specify. 

21 (c) APPLICATION TO FISCAL INTERMEDIARIES AND

22 CARRIERS.—The provisions of section 1874A(h) of the So23 cial Security Act, as added by subsection (a), shall apply 

24 to each fiscal intermediary under section 1816 of the So25 cial Security Act (42 U.S.C. 1395h) and each carrier 
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1 under section 1842 of such Act (42 U.S.C. 1395u) in the 

2 same manner as they apply to medicare administrative 

3 contractors under such provisions. 

4 SEC. 405. RECOVERY OF OVERPAYMENTS. 

5 (a) IN GENERAL.—Section 1893 (42 U.S.C. 

6 1395ddd) is amended by adding at the end the following 

7 new subsection: 

8 ‘‘(f) RECOVERY OF OVERPAYMENTS.—

9 ‘‘(1) USE OF REPAYMENT PLANS.—

10 ‘‘(A) IN GENERAL.—If the repayment, 

11 within 30 days by a provider of services or sup12 plier, of an overpayment under this title would 

13 constitute a hardship (as defined in subpara14 graph (B)), subject to subparagraph (C), upon 

15 request of the provider of services or supplier 

16 the Secretary shall enter into a plan with the 

17 provider of services or supplier for the repay18 ment (through offset or otherwise) of such over19 payment over a period of at least 6 months but 

20 not longer than 3 years (or not longer than 5 

21 years in the case of extreme hardship, as deter22 mined by the Secretary). Interest shall accrue 

23 on the balance through the period of repay24 ment. Such plan shall meet terms and condi-
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1 tions determined to be appropriate by the Sec2 retary. 

3 ‘‘(B) HARDSHIP.—

4 ‘‘(i) IN GENERAL.—For purposes of 

5 subparagraph (A), the repayment of an 

6 overpayment (or overpayments) within 30 

7 days is deemed to constitute a hardship 

8 if—

9 ‘‘(I) in the case of a provider of 

10 services that files cost reports, the ag11 gregate amount of the overpayments 

12 exceeds 10 percent of the amount paid 

13 under this title to the provider of 

14 services for the cost reporting period 

15 covered by the most recently sub16 mitted cost report; or 

17 ‘‘(II) in the case of another pro18 vider of services or supplier, the ag19 gregate amount of the overpayments 

20 exceeds 10 percent of the amount paid 

21 under this title to the provider of 

22 services or supplier for the previous 

23 calendar year. 

24 ‘‘(ii) RULE OF APPLICATION.—The 

25 Secretary shall establish rules for the ap-
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1 plication of this subparagraph in the case 

2 of a provider of services or supplier that 

3 was not paid under this title during the 

4 previous year or was paid under this title 

5 only during a portion of that year. 

6 ‘‘(iii) TREATMENT OF PREVIOUS

7 OVERPAYMENTS.—If a provider of services 

8 or supplier has entered into a repayment 

9 plan under subparagraph (A) with respect 

10 to a specific overpayment amount, such 

11 payment amount under the repayment plan 

12 shall not be taken into account under 

13 clause (i) with respect to subsequent over14 payment amounts. 

15 ‘‘(C) EXCEPTIONS.—Subparagraph (A) 

16 shall not apply if—

17 ‘‘(i) the Secretary has reason to sus18 pect that the provider of services or sup19 plier may file for bankruptcy or otherwise 

20 cease to do business or discontinue partici21 pation in the program under this title; or 

22 ‘‘(ii) there is an indication of fraud or 

23 abuse committed against the program. 

24 ‘‘(D) IMMEDIATE COLLECTION IF VIOLA25 TION OF REPAYMENT PLAN.—If a provider of 
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1 services or supplier fails to make a payment in 

2 accordance with a repayment plan under this 

3 paragraph, the Secretary may immediately seek 

4 to offset or otherwise recover the total balance 

5 outstanding (including applicable interest) 

6 under the repayment plan. 

7 ‘‘(E) RELATION TO NO FAULT PROVI8 SION.—Nothing in this paragraph shall be con9 strued as affecting the application of section 

10 1870(c) (relating to no adjustment in the cases 

11 of certain overpayments). 

12 ‘‘(2) LIMITATION ON RECOUPMENT.—

13 ‘‘(A) IN GENERAL.—In the case of a pro14 vider of services or supplier that is determined 

15 to have received an overpayment under this title 

16 and that seeks a reconsideration by a qualified 

17 independent contractor on such determination 

18 under section 1869(b)(1), the Secretary may 

19 not take any action (or authorize any other per20 son, including any medicare contractor, as de21 fined in subparagraph (C)) to recoup the over22 payment until the date the decision on the re23 consideration has been rendered. If the provi24 sions of section 1869(b)(1) (providing for such 

25 a reconsideration by a qualified independent 
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1 contractor) are not in effect, in applying the 

2 previous sentence any reference to such a recon3 sideration shall be treated as a reference to a 

4 redetermination by the fiscal intermediary or 

5 carrier involved. 

6 ‘‘(B) COLLECTION WITH INTEREST.—Inso7 far as the determination on such appeal is 

8 against the provider of services or supplier, in9 terest on the overpayment shall accrue on and 

10 after the date of the original notice of overpay11 ment. Insofar as such determination against the 

12 provider of services or supplier is later reversed, 

13 the Secretary shall provide for repayment of the 

14 amount recouped plus interest at the same rate 

15 as would apply under the previous sentence for 

16 the period in which the amount was recouped. 

17 ‘‘(C) MEDICARE CONTRACTOR DEFINED.—

18 For purposes of this subsection, the term ‘medi19 care contractor’ has the meaning given such 

20 term in section 1889(g). 

21 ‘‘(3) LIMITATION ON USE OF EXTRAPO22 LATION.—A medicare contractor may not use ex23 trapolation to determine overpayment amounts to be 

24 recovered by recoupment, offset, or otherwise un25 less—
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1 ‘‘(A) there is a sustained or high level of 

2 payment error (as defined by the Secretary by 

3 regulation); or 

4 ‘‘(B) documented educational intervention 

5 has failed to correct the payment error (as de6 termined by the Secretary). 

7 ‘‘(4) PROVISION OF SUPPORTING DOCUMENTA8 TION.—In the case of a provider of services or sup9 plier with respect to which amounts were previously 

10 overpaid, a medicare contractor may request the 

11 periodic production of records or supporting docu12 mentation for a limited sample of submitted claims 

13 to ensure that the previous practice is not con14 tinuing. 

15 ‘‘(5) CONSENT SETTLEMENT REFORMS.—

16 ‘‘(A) IN GENERAL.—The Secretary may 

17 use a consent settlement (as defined in sub18 paragraph (D)) to settle a projected overpay19 ment. 

20 ‘‘(B) OPPORTUNITY TO SUBMIT ADDI21 TIONAL INFORMATION BEFORE CONSENT SET22 TLEMENT OFFER.—Before offering a provider 

23 of services or supplier a consent settlement, the 

24 Secretary shall—
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1 ‘‘(i) communicate to the provider of 

2 services or supplier—

3 ‘‘(I) that, based on a review of 

4 the medical records requested by the 

5 Secretary, a preliminary evaluation of 

6 those records indicates that there 

7 would be an overpayment; 

8 ‘‘(II) the nature of the problems 

9 identified in such evaluation; and 

10 ‘‘(III) the steps that the provider 

11 of services or supplier should take to 

12 address the problems; and 

13 ‘‘(ii) provide for a 45-day period dur14 ing which the provider of services or sup15 plier may furnish additional information 

16 concerning the medical records for the 

17 claims that had been reviewed. 

18 ‘‘(C) CONSENT SETTLEMENT OFFER.—The 

19 Secretary shall review any additional informa20 tion furnished by the provider of services or 

21 supplier under subparagraph (B)(ii). Taking 

22 into consideration such information, the Sec23 retary shall determine if there still appears to 

24 be an overpayment. If so, the Secretary—
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1 ‘‘(i) shall provide notice of such deter2 mination to the provider of services or sup3 plier, including an explanation of the rea4 son for such determination; and 

5 ‘‘(ii) in order to resolve the overpay6 ment, may offer the provider of services or 

7 supplier—

8 ‘‘(I) the opportunity for a statis9 tically valid random sample; or 

10 ‘‘(II) a consent settlement. 

11 The opportunity provided under clause (ii)(I) 

12 does not waive any appeal rights with respect to 

13 the alleged overpayment involved. 

14 ‘‘(D) CONSENT SETTLEMENT DEFINED.—

15 For purposes of this paragraph, the term ‘con16 sent settlement’ means an agreement between 

17 the Secretary and a provider of services or sup18 plier whereby both parties agree to settle a pro19 jected overpayment based on less than a statis20 tically valid sample of claims and the provider 

21 of services or supplier agrees not to appeal the 

22 claims involved. 

23 ‘‘(6) NOTICE OF OVER-UTILIZATION OF

24 CODES.—The Secretary shall establish, in consulta25 tion with organizations representing the classes of 
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1 providers of services and suppliers, a process under 

2 which the Secretary provides for notice to classes of 

3 providers of services and suppliers served by the con4 tractor in cases in which the contractor has identi5 fied that particular billing codes may be overutilized 

6 by that class of providers of services or suppliers 

7 under the programs under this title (or provisions 

8 of title XI insofar as they relate to such programs). 

9 ‘‘(7) PAYMENT AUDITS.—

10 ‘‘(A) WRITTEN NOTICE FOR POST-PAY11 MENT AUDITS.—Subject to subparagraph (C), if 

12 a medicare contractor decides to conduct a 

13 post-payment audit of a provider of services or 

14 supplier under this title, the contractor shall 

15 provide the provider of services or supplier with 

16 written notice (which may be in electronic form) 

17 of the intent to conduct such an audit. 

18 ‘‘(B) EXPLANATION OF FINDINGS FOR ALL

19 AUDITS.—Subject to subparagraph (C), if a 

20 medicare contractor audits a provider of serv21 ices or supplier under this title, the contractor 

22 shall—

23 ‘‘(i) give the provider of services or 

24 supplier a full review and explanation of 

25 the findings of the audit in a manner that 
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1 is understandable to the provider of serv2 ices or supplier and permits the develop3 ment of an appropriate corrective action 

4 plan; 

5 ‘‘(ii) inform the provider of services or 

6 supplier of the appeal rights under this 

7 title as well as consent settlement options 

8 (which are at the discretion of the Sec9 retary); 

10 ‘‘(iii) give the provider of services or 

11 supplier an opportunity to provide addi12 tional information to the contractor; and 

13 ‘‘(iv) take into account information 

14 provided, on a timely basis, by the provider 

15 of services or supplier under clause (iii). 

16 ‘‘(C) EXCEPTION.—Subparagraphs (A) 

17 and (B) shall not apply if the provision of no18 tice or findings would compromise pending law 

19 enforcement activities, whether civil or criminal, 

20 or reveal findings of law enforcement-related 

21 audits. 

22 ‘‘(8) STANDARD METHODOLOGY FOR PROBE

23 SAMPLING.—The Secretary shall establish a stand24 ard methodology for medicare contractors to use in 
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1 selecting a sample of claims for review in the case 

2 of an abnormal billing pattern.’’. 

3 (b) EFFECTIVE DATES AND DEADLINES.—

4 (1) USE OF REPAYMENT PLANS.—Section 

5 1893(f)(1) of the Social Security Act, as added by 

6 subsection (a), shall apply to requests for repayment 

7 plans made after the date of the enactment of this 

8 Act. 

9 (2) LIMITATION ON RECOUPMENT.—Section 

10 1893(f)(2) of the Social Security Act, as added by 

11 subsection (a), shall apply to actions taken after the 

12 date of the enactment of this Act. 

13 (3) USE OF EXTRAPOLATION.—Section 

14 1893(f)(3) of the Social Security Act, as added by 

15 subsection (a), shall apply to statistically valid ran16 dom samples initiated after the date that is 1 year 

17 after the date of the enactment of this Act. 

18 (4) PROVISION OF SUPPORTING DOCUMENTA19 TION.—Section 1893(f)(4) of the Social Security 

20 Act, as added by subsection (a), shall take effect on 

21 the date of the enactment of this Act. 

22 (5) CONSENT SETTLEMENT.—Section 

23 1893(f)(5) of the Social Security Act, as added by 

24 subsection (a), shall apply to consent settlements en-
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1 tered into after the date of the enactment of this 

2 Act. 

3 (6) NOTICE OF OVERUTILIZATION.—Not later 

4 than 1 year after the date of the enactment of this 

5 Act, the Secretary shall first establish the process 

6 for notice of overutilization of billing codes under 

7 section 1893A(f)(6) of the Social Security Act, as 

8 added by subsection (a). 

9 (7) PAYMENT AUDITS.—Section 1893A(f)(7) of 

10 the Social Security Act, as added by subsection (a), 

11 shall apply to audits initiated after the date of the 

12 enactment of this Act. 

13 (8) STANDARD FOR ABNORMAL BILLING PAT14 TERNS.—Not later than 1 year after the date of the 

15 enactment of this Act, the Secretary shall first es16 tablish a standard methodology for selection of sam17 ple claims for abnormal billing patterns under sec18 tion 1893(f)(8) of the Social Security Act, as added 

19 by subsection (a). 

20 SEC. 406. PROVIDER ENROLLMENT PROCESS; RIGHT OF AP21 PEAL. 

22 (a) IN GENERAL.—Section 1866 (42 U.S.C. 1395cc) 

23 is amended—

24 (1) by adding at the end of the heading the fol25 lowing: ‘‘; ENROLLMENT PROCESSES’’; and 
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1 (2) by adding at the end the following new sub2 section: 

3 ‘‘(j) ENROLLMENT PROCESS FOR PROVIDERS OF

4 SERVICES AND SUPPLIERS.—

5 ‘‘(1) ENROLLMENT PROCESS.—

6 ‘‘(A) IN GENERAL.—The Secretary shall 

7 establish by regulation a process for the enroll8 ment of providers of services and suppliers 

9 under this title. 

10 ‘‘(B) DEADLINES.—The Secretary shall es11 tablish by regulation procedures under which 

12 there are deadlines for actions on applications 

13 for enrollment (and, if applicable, renewal of 

14 enrollment). The Secretary shall monitor the 

15 performance of medicare administrative con16 tractors in meeting the deadlines established 

17 under this subparagraph. 

18 ‘‘(C) CONSULTATION BEFORE CHANGING

19 PROVIDER ENROLLMENT FORMS.—The Sec20 retary shall consult with providers of services 

21 and suppliers before making changes in the pro22 vider enrollment forms required of such pro23 viders and suppliers to be eligible to submit 

24 claims for which payment may be made under 

25 this title. 
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1 ‘‘(2) HEARING RIGHTS IN CASES OF DENIAL OR

2 NON-RENEWAL.—A provider of services or supplier 

3 whose application to enroll (or, if applicable, to 

4 renew enrollment) under this title is denied may 

5 have a hearing and judicial review of such denial 

6 under the procedures that apply under subsection 

7 (h)(1)(A) to a provider of services that is dissatisfied 

8 with a determination by the Secretary.’’. 

9 (b) EFFECTIVE DATES.—

10 (1) ENROLLMENT PROCESS.—The Secretary 

11 shall provide for the establishment of the enrollment 

12 process under section 1866(j)(1) of the Social Secu13 rity Act, as added by subsection (a)(2), within 6 

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

15 (2) CONSULTATION.—Section 1866(j)(1)(C) of 

16 the Social Security Act, as added by subsection 

17 (a)(2), shall apply with respect to changes in pro18 vider enrollment forms made on or after January 1, 

19 2004. 

20 (3) HEARING RIGHTS.—Section 1866(j)(2) of 

21 the Social Security Act, as added by subsection 

22 (a)(2), shall apply to denials occurring on or after 

23 such date (not later than 1 year after the date of 

24 the enactment of this Act) as the Secretary specifies. 
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1 SEC. 407. PROCESS FOR CORRECTION OF MINOR ERRORS 

2 AND OMISSIONS ON CLAIMS WITHOUT PUR3 SUING APPEALS PROCESS. 

4 The Secretary shall develop, in consultation with ap5 propriate medicare contractors (as defined in section 

6 1889(g) of the Social Security Act, as inserted by section 

7 301(a)(1)) and representatives of providers of services and 

8 suppliers, a process whereby, in the case of minor errors 

9 or omissions (as defined by the Secretary) that are de10 tected in the submission of claims under the programs 

11 under title XVIII of such Act, a provider of services or 

12 supplier is given an opportunity to correct such an error 

13 or omission without the need to initiate an appeal. Such 

14 process shall include the ability to resubmit corrected 

15 claims. 

16 SEC. 408. PRIOR DETERMINATION PROCESS FOR CERTAIN 

17 ITEMS AND SERVICES; ADVANCE BENE18 FICIARY NOTICES. 

19 (a) IN GENERAL.—Section 1869 (42 U.S.C. 

20 1395ff(b)), as amended by sections 521 and 522 of BIPA 

21 and section 403(d)(2)(B), is further amended by adding 

22 at the end the following new subsection: 

23 ‘‘(h) PRIOR DETERMINATION PROCESS FOR CERTAIN

24 ITEMS AND SERVICES.—

25 ‘‘(1) ESTABLISHMENT OF PROCESS.—
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1 ‘‘(A) IN GENERAL.—With respect to a 

2 medicare administrative contractor that has a 

3 contract under section 1874A that provides for 

4 making payments under this title with respect 

5 to eligible items and services described in sub6 paragraph (C), the Secretary shall establish a 

7 prior determination process that meets the re8 quirements of this subsection and that shall be 

9 applied by such contractor in the case of eligible 

10 requesters. 

11 ‘‘(B) ELIGIBLE REQUESTER.—For pur12 poses of this subsection, each of the following 

13 shall be an eligible requester: 

14 ‘‘(i) A physician, but only with respect 

15 to eligible items and services for which the 

16 physician may be paid directly. 

17 ‘‘(ii) An individual entitled to benefits 

18 under this title, but only with respect to an 

19 item or service for which the individual re20 ceives, from the physician who may be paid 

21 directly for the item or service, an advance 

22 beneficiary notice under section 1879(a) 

23 that payment may not be made (or may no 

24 longer be made) for the item or service 

25 under this title. 
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1 ‘‘(C) ELIGIBLE ITEMS AND SERVICES.—

2 For purposes of this subsection and subject to 

3 paragraph (2), eligible items and services are 

4 items and services which are physicians’ serv5 ices (as defined in paragraph (4)(A) of section 

6 1848(f) for purposes of calculating the sustain7 able growth rate under such section). 

8 ‘‘(2) SECRETARIAL FLEXIBILITY.—The Sec9 retary shall establish by regulation reasonable limits 

10 on the categories of eligible items and services for 

11 which a prior determination of coverage may be re12 quested under this subsection. In establishing such 

13 limits, the Secretary may consider the dollar amount 

14 involved with respect to the item or service, adminis15 trative costs and burdens, and other relevant factors. 

16 ‘‘(3) REQUEST FOR PRIOR DETERMINATION.—

17 ‘‘(A) IN GENERAL.—Subject to paragraph 

18 (2), under the process established under this 

19 subsection an eligible requester may submit to 

20 the contractor a request for a determination, 

21 before the furnishing of an eligible item or serv22 ice involved as to whether the item or service is 

23 covered under this title consistent with the ap24 plicable requirements of section 1862(a)(1)(A) 

25 (relating to medical necessity). 
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1 ‘‘(B) ACCOMPANYING DOCUMENTATION.—

2 The Secretary may require that the request be 

3 accompanied by a description of the item or 

4 service, supporting documentation relating to 

5 the medical necessity for the item or service, 

6 and any other appropriate documentation. In 

7 the case of a request submitted by an eligible 

8 requester who is described in paragraph 

9 (1)(B)(ii), the Secretary may require that the 

10 request also be accompanied by a copy of the 

11 advance beneficiary notice involved. 

12 ‘‘(4) RESPONSE TO REQUEST.—

13 ‘‘(A) IN GENERAL.—Under such process, 

14 the contractor shall provide the eligible re15 quester with written notice of a determination 

16 as to whether—

17 ‘‘(i) the item or service is so covered; 

18 ‘‘(ii) the item or service is not so cov19 ered; or 

20 ‘‘(iii) the contractor lacks sufficient 

21 information to make a coverage determina22 tion. 

23 If the contractor makes the determination de24 scribed in clause (iii), the contractor shall in25 clude in the notice a description of the addi-
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1 tional information required to make the cov2 erage determination. 

3 ‘‘(B) DEADLINE TO RESPOND.—Such no4 tice shall be provided within the same time pe5 riod as the time period applicable to the con6 tractor providing notice of initial determinations 

7 on a claim for benefits under subsection 

8 (a)(2)(A).

9 ‘‘(C) INFORMING BENEFICIARY IN CASE OF

10 PHYSICIAN REQUEST.—In the case of a request 

11 in which an eligible requester is not the indi12 vidual described in paragraph (1)(B)(ii), the 

13 process shall provide that the individual to 

14 whom the item or service is proposed to be fur15 nished shall be informed of any determination 

16 described in clause (ii) (relating to a determina17 tion of non-coverage) and the right (referred to 

18 in paragraph (6)(B)) to obtain the item or serv19 ice and have a claim submitted for the item or 

20 service. 

21 ‘‘(5) EFFECT OF DETERMINATIONS.—

22 ‘‘(A) BINDING NATURE OF POSITIVE DE23 TERMINATION.—If the contractor makes the de24 termination described in paragraph (4)(A)(i), 

25 such determination shall be binding on the con-
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1 tractor in the absence of fraud or evidence of 

2 misrepresentation of facts presented to the con3 tractor. 

4 ‘‘(B) NOTICE AND RIGHT TO REDETER5 MINATION IN CASE OF A DENIAL.—

6 ‘‘(i) IN GENERAL.—If the contractor 

7 makes the determination described in para8 graph (4)(A)(ii)—

9 ‘‘(I) the eligible requester has the 

10 right to a redetermination by the con11 tractor on the determination that the 

12 item or service is not so covered; and 

13 ‘‘(II) the contractor shall include 

14 in notice under paragraph (4)(A) a 

15 brief explanation of the basis for the 

16 determination, including on what na17 tional or local coverage or noncov18 erage determination (if any) the de19 termination is based, and the right to 

20 such a redetermination. 

21 ‘‘(ii) DEADLINE FOR REDETERMINA22 TIONS.—The contractor shall complete and 

23 provide notice of such redetermination 

24 within the same time period as the time 

25 period applicable to the contractor pro-
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1 viding notice of redeterminations relating 

2 to a claim for benefits under subsection 

3 (a)(3)(C)(ii). 

4 ‘‘(6) LIMITATION ON FURTHER REVIEW.—

5 ‘‘(A) IN GENERAL.—Contractor determina6 tions described in paragraph (4)(A)(ii) or 

7 (4)(A)(iii) (and redeterminations made under 

8 paragraph (5)(B)), relating to pre-service 

9 claims are not subject to further administrative 

10 appeal or judicial review under this section or 

11 otherwise. 

12 ‘‘(B) DECISION NOT TO SEEK PRIOR DE13 TERMINATION OR NEGATIVE DETERMINATION

14 DOES NOT IMPACT RIGHT TO OBTAIN SERVICES, 

15 SEEK REIMBURSEMENT, OR APPEAL RIGHTS.—

16 Nothing in this subsection shall be construed as 

17 affecting the right of an individual who—

18 ‘‘(i) decides not to seek a prior deter19 mination under this subsection with re20 spect to items or services; or 

21 ‘‘(ii) seeks such a determination and 

22 has received a determination described in 

23 paragraph (4)(A)(ii), 

24 from receiving (and submitting a claim for) 

25 such items services and from obtaining adminis-
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1 trative or judicial review respecting such claim 

2 under the other applicable provisions of this 

3 section. Failure to seek a prior determination 

4 under this subsection with respect to items and 

5 services shall not be taken into account in such 

6 administrative or judicial review. 

7 ‘‘(C) NO PRIOR DETERMINATION AFTER

8 RECEIPT OF SERVICES.—Once an individual is 

9 provided items and services, there shall be no 

10 prior determination under this subsection with 

11 respect to such items or services.’’. 

12 (b) EFFECTIVE DATE; TRANSITION.—

13 (1) EFFECTIVE DATE.—The Secretary shall es14 tablish the prior determination process under the 

15 amendment made by subsection (a) in such a man16 ner as to provide for the acceptance of requests for 

17 determinations under such process filed not later 

18 than 18 months after the date of the enactment of 

19 this Act. 

20 (2) TRANSITION.—During the period in which 

21 the amendment made by subsection (a) has become 

22 effective but contracts are not provided under sec23 tion 1874A of the Social Security Act with medicare 

24 administrative contractors, any reference in section 

25 1869(g) of such Act (as added by such amendment) 
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1 to such a contractor is deemed a reference to a fiscal 

2 intermediary or carrier with an agreement under 

3 section 1816, or contract under section 1842, re4 spectively, of such Act. 

5 (3) LIMITATION ON APPLICATION TO SGR.—For 

6 purposes of applying section 1848(f)(2)(D) of the 

7 Social Security Act (42 U.S.C. 1395w–4(f)(2)(D)), 

8 the amendment made by subsection (a) shall not be 

9 considered to be a change in law or regulation. 

10 (c) PROVISIONS RELATING TO ADVANCE BENE11 FICIARY NOTICES; REPORT ON PRIOR DETERMINATION

12 PROCESS.—

13 (1) DATA COLLECTION.—The Secretary shall 

14 establish a process for the collection of information 

15 on the instances in which an advance beneficiary no16 tice (as defined in paragraph (4)) has been provided 

17 and on instances in which a beneficiary indicates on 

18 such a notice that the beneficiary does not intend to 

19 seek to have the item or service that is the subject 

20 of the notice furnished. 

21 (2) OUTREACH AND EDUCATION.—The Sec22 retary shall establish a program of outreach and 

23 education for beneficiaries and providers of services 

24 and other persons on the appropriate use of advance 
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1 beneficiary notices and coverage policies under the 

2 medicare program. 

3 (3) GAO REPORT REPORT ON USE OF ADVANCE

4 BENEFICIARY NOTICES.—Not later than 18 months 

5 after the date on which section 1869(g) of the Social 

6 Security Act (as added by subsection (a)) takes ef7 fect, the Comptroller General of the United States 

8 shall submit to Congress a report on the use of ad9 vance beneficiary notices under title XVIII of such 

10 Act. Such report shall include information con11 cerning the providers of services and other persons 

12 that have provided such notices and the response of 

13 beneficiaries to such notices. 

14 (4) GAO REPORT ON USE OF PRIOR DETER15 MINATION PROCESS.—Not later than 18 months 

16 after the date on which section 1869(g) of the Social 

17 Security Act (as added by subsection (a)) takes ef18 fect, the Comptroller General of the United States 

19 shall submit to Congress a report on the use of the 

20 prior determination process under such section. Such 

21 report shall include—

22 (A) information concerning the types of 

23 procedures for which a prior determination has 

24 been sought, determinations made under the 

25 process, and changes in receipt of services re-
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1 sulting from the application of such process; 

2 and 

3 (B) an evaluation of whether the process 

4 was useful for physicians (and other suppliers) 

5 and beneficiaries, whether it was timely, and 

6 whether the amount of information required 

7 was burdensome to physicians and beneficiaries. 

8 (5) ADVANCE BENEFICIARY NOTICE DE9 FINED.—In this subsection, the term ‘‘advance bene10 ficiary notice’’ means a written notice provided 

11 under section 1879(a) of the Social Security Act (42 

12 U.S.C. 1395pp(a)) to an individual entitled to bene13 fits under part A or B of title XVIII of such Act 

14 before items or services are furnished under such 

15 part in cases where a provider of services or other 

16 person that would furnish the item or service be17 lieves that payment will not be made for some or all 

18 of such items or services under such title.

19 TITLE V—MISCELLANEOUS 

20 PROVISIONS 

21 SEC. 501. POLICY DEVELOPMENT REGARDING EVALUATION 

22 AND MANAGEMENT (E & M) DOCUMENTATION 

23 GUIDELINES. 

24 (a) IN GENERAL.—The Secretary may not implement 

25 any new documentation guidelines for evaluation and man-
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1 agement physician services under the title XVIII of the 

2 Social Security Act on or after the date of the enactment 

3 of this Act unless the Secretary—

4 (1) has developed the guidelines in collaboration 

5 with practicing physicians (including both generalists 

6 and specialists) and provided for an assessment of 

7 the proposed guidelines by the physician community; 

8 (2) has established a plan that contains specific 

9 goals, including a schedule, for improving the use of 

10 such guidelines; 

11 (3) has conducted appropriate and representa12 tive pilot projects under subsection (b) to test modi13 fications to the evaluation and management docu14 mentation guidelines; 

15 (4) finds that the objectives described in sub16 section (c) will be met in the implementation of such 

17 guidelines; and 

18 (5) has established, and is implementing, a pro19 gram to educate physicians on the use of such guide20 lines and that includes appropriate outreach. 

21 The Secretary shall make changes to the manner in which 

22 existing evaluation and management documentation guide23 lines are implemented to reduce paperwork burdens on 

24 physicians. 
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1 (b) PILOT PROJECTS TO TEST EVALUATION AND

2 MANAGEMENT DOCUMENTATION GUIDELINES.—

3 (1) IN GENERAL.—The Secretary shall conduct 

4 under this subsection appropriate and representative 

5 pilot projects to test new evaluation and manage6 ment documentation guidelines referred to in sub7 section (a). 

8 (2) LENGTH AND CONSULTATION.—Each pilot 

9 project under this subsection shall—

10 (A) be voluntary; 

11 (B) be of sufficient length as determined 

12 by the Secretary to allow for preparatory physi13 cian and medicare contractor education, anal14 ysis, and use and assessment of potential eval15 uation and management guidelines; and 

16 (C) be conducted, in development and 

17 throughout the planning and operational stages 

18 of the project, in consultation with practicing 

19 physicians (including both generalists and spe20 cialists). 

21 (3) RANGE OF PILOT PROJECTS.—Of the pilot 

22 projects conducted under this subsection—

23 (A) at least one shall focus on a peer re24 view method by physicians (not employed by a 

25 medicare contractor) which evaluates medical 
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1 record information for claims submitted by phy2 sicians identified as statistical outliers relative 

3 to definitions published in the Current Proce4 dures Terminology (CPT) code book of the 

5 American Medical Association; 

6 (B) at least one shall focus on an alter7 native method to detailed guidelines based on 

8 physician documentation of face to face encoun9 ter time with a patient; 

10 (C) at least one shall be conducted for 

11 services furnished in a rural area and at least 

12 one for services furnished outside such an area; 

13 and 

14 (D) at least one shall be conducted in a 

15 setting where physicians bill under physicians’ 

16 services in teaching settings and at least one 

17 shall be conducted in a setting other than a 

18 teaching setting. 

19 (4) BANNING OF TARGETING OF PILOT

20 PROJECT PARTICIPANTS.—Data collected under this 

21 subsection shall not be used as the basis for overpay22 ment demands or post-payment audits. Such limita23 tion applies only to claims filed as part of the pilot 

24 project and lasts only for the duration of the pilot 
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1 project and only as long as the provider is a partici2 pant in the pilot project. 

3 (5) STUDY OF IMPACT.—Each pilot project 

4 shall examine the effect of the new evaluation and 

5 management documentation guidelines on—

6 (A) different types of physician practices, 

7 including those with fewer than 10 full-time8 equivalent employees (including physicians); 

9 and 

10 (B) the costs of physician compliance, in11 cluding education, implementation, auditing, 

12 and monitoring. 

13 (6) PERIODIC REPORTS.—The Secretary shall 

14 submit to Congress periodic reports on the pilot 

15 projects under this subsection. 

16 (c) OBJECTIVES FOR EVALUATION AND MANAGE17 MENT GUIDELINES.—The objectives for modified evalua18 tion and management documentation guidelines developed 

19 by the Secretary shall be to—

20 (1) identify clinically relevant documentation 

21 needed to code accurately and assess coding levels 

22 accurately; 

23 (2) decrease the level of non-clinically pertinent 

24 and burdensome documentation time and content in 

25 the physician’s medical record; 
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1 (3) increase accuracy by reviewers; and 

2 (4) educate both physicians and reviewers. 

3 (d) STUDY OF SIMPLER, ALTERNATIVE SYSTEMS OF

4 DOCUMENTATION FOR PHYSICIAN CLAIMS.—

5 (1) STUDY.—The Secretary shall carry out a 

6 study of the matters described in paragraph (2). 

7 (2) MATTERS DESCRIBED.—The matters re8 ferred to in paragraph (1) are—

9 (A) the development of a simpler, alter10 native system of requirements for documenta11 tion accompanying claims for evaluation and 

12 management physician services for which pay13 ment is made under title XVIII of the Social 

14 Security Act; and 

15 (B) consideration of systems other than 

16 current coding and documentation requirements 

17 for payment for such physician services.

18 (3) CONSULTATION WITH PRACTICING PHYSI19 CIANS.—In designing and carrying out the study 

20 under paragraph (1), the Secretary shall consult 

21 with practicing physicians, including physicians who 

22 are part of group practices and including both gen23 eralists and specialists. 

24 (4) APPLICATION OF HIPAA UNIFORM CODING

25 REQUIREMENTS.—In developing an alternative sys-
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1 tem under paragraph (2), the Secretary shall con2 sider requirements of administrative simplification 

3 under part C of title XI of the Social Security Act. 

4 (5) REPORT TO CONGRESS.—(A) Not later than 

5 October 1, 2005, the Secretary shall submit to Con6 gress a report on the results of the study conducted 

7 under paragraph (1). 

8 (B) The Medicare Payment Advisory Commis9 sion shall conduct an analysis of the results of the 

10 study included in the report under subparagraph (A) 

11 and shall submit a report on such analysis to Con12 gress. 

13 (e) STUDY ON APPROPRIATE CODING OF CERTAIN

14 EXTENDED OFFICE VISITS.—The Secretary shall conduct 

15 a study of the appropriateness of coding in cases of ex16 tended office visits in which there is no diagnosis made. 

17 Not later than October 1, 2005, the Secretary shall submit 

18 a report to Congress on such study and shall include rec19 ommendations on how to code appropriately for such visits 

20 in a manner that takes into account the amount of time 

21 the physician spent with the patient. 

22 (f) DEFINITIONS.—In this section—

23 (1) the term ‘‘rural area’’ has the meaning 

24 given that term in section 1886(d)(2)(D) of the So25 cial Security Act, 42 U.S.C. 1395ww(d)(2)(D); and 
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1 (2) the term ‘‘teaching settings’’ are those set2 tings described in section 415.150 of title 42, Code 

3 of Federal Regulations. 

4 SEC. 502. IMPROVEMENT IN OVERSIGHT OF TECHNOLOGY 

5 AND COVERAGE. 

6 (a) IMPROVED COORDINATION BETWEEN FDA AND

7 CMS ON COVERAGE OF BREAKTHROUGH MEDICAL DE8 VICES.—

9 (1) IN GENERAL.—Upon request by an appli10 cant and to the extent feasible (as determined by the 

11 Secretary), the Secretary shall, in the case of a class 

12 III medical device that is subject to premarket ap13 proval under section 515 of the Federal Food, Drug, 

14 and Cosmetic Act, ensure the sharing of appropriate 

15 information from the review for application for pre16 market approval conducted by the Food and Drug 

17 Administration for coverage decisions under title 

18 XVIII of the Social Security Act. 

19 (2) PUBLICATION OF PLAN.—Not later than 6 

20 months after the date of the enactment of this Act, 

21 the Secretary shall submit to appropriate Commit22 tees of Congress a report that contains the plan for 

23 improving such coordination and for shortening the 

24 time lag between the premarket approval by the 

25 Food and Drug Administration and coding and cov-
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1 erage decisions by the Centers for Medicare & Med2 icaid Services. 

3 (3) CONSTRUCTION.—Nothing in this sub4 section shall be construed as changing the criteria 

5 for coverage of a medical device under title XVIII of 

6 the Social Security Act nor premarket approval by 

7 the Food and Drug Administration and nothing in 

8 this subsection shall be construed to increase pre9 market approval application requirements under the 

10 Federal Food, Drug, and Cosmetic Act. 

11 (b) COUNCIL FOR TECHNOLOGY AND INNOVATION.—

12 Section 1868 (42 U.S.C. 1395ee), as amended by section 

13 301(a), is amended by adding at the end the following new 

14 subsection: 

15 ‘‘(c) COUNCIL FOR TECHNOLOGY AND INNOVA16 TION.—

17 ‘‘(1) ESTABLISHMENT.—The Secretary shall es18 tablish a Council for Technology and Innovation 

19 within the Centers for Medicare & Medicaid Services 

20 (in this section referred to as ‘CMS’). 

21 ‘‘(2) COMPOSITION.—The Council shall be com22 posed of senior CMS staff and clinicians and shall 

23 be chaired by the Executive Coordinator for Tech24 nology and Innovation (appointed or designated 

25 under paragraph (4)). 
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1 ‘‘(3) DUTIES.—The Council shall coordinate the 

2 activities of coverage, coding, and payment processes 

3 under this title with respect to new technologies and 

4 procedures, including new drug therapies, and shall 

5 coordinate the exchange of information on new tech6 nologies between CMS and other entities that make 

7 similar decisions. 

8 ‘‘(4) EXECUTIVE COORDINATOR FOR TECH9 NOLOGY AND INNOVATION.—The Secretary shall ap10 point (or designate) a noncareer appointee (as de11 fined in section 3132(a)(7) of title 5, United States 

12 Code) who shall serve as the Executive Coordinator 

13 for Technology and Innovation. Such executive coor14 dinator shall report to the Administrator of CMS, 

15 shall chair the Council, shall oversee the execution of 

16 its duties, and shall serve as a single point of con17 tact for outside groups and entities regarding the 

18 coverage, coding, and payment processes under this 

19 title.’’. 

20 (c) GAO STUDY ON IMPROVEMENTS IN EXTERNAL

21 DATA COLLECTION FOR USE IN THE MEDICARE INPA22 TIENT PAYMENT SYSTEM.—

23 (1) STUDY.—The Comptroller General of the 

24 United States shall conduct a study that analyzes 

25 which external data can be collected in a shorter 
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1 time frame by the Centers for Medicare & Medicaid 

2 Services for use in computing payments for inpatient 

3 hospital services. The study may include an evalua4 tion of the feasibility and appropriateness of using 

5 of quarterly samples or special surveys or any other 

6 methods. The study shall include an analysis of 

7 whether other executive agencies, such as the Bu8 reau of Labor Statistics in the Department of Com9 merce, are best suited to collect this information. 

10 (2) REPORT.—By not later than October 1, 

11 2004, the Comptroller General shall submit a report 

12 to Congress on the study under paragraph (1). 

13 (d) IOM STUDY ON LOCAL COVERAGE DETERMINA14 TIONS.—

15 (1) STUDY.—The Secretary shall enter into an 

16 arrangement with the Institute of Medicine of the 

17 National Academy of Sciences under which the Insti18 tute shall conduct a study on local coverage deter19 minations (including the application of local medical 

20 review policies) under the medicare program under 

21 title XVIII of the Social Security Act. Such study 

22 shall examine—

23 (A) the consistency of the definitions used 

24 in such determinations; 
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1 (B) the types of evidence on which such 

2 determinations are based, including medical and 

3 scientific evidence; 

4 (C) the advantages and disadvantages of 

5 local coverage decisionmaking, including the 

6 flexibility it offers for ensuring timely patient 

7 access to new medical technology for which data 

8 are still to be collected; 

9 (D) the manner in which the local coverage 

10 determination process is used to develop data 

11 needed for a national coverage determination, 

12 including the need for collection of such data 

13 within a protocol and informed consent by indi14 viduals entitled to benefits under part A of title 

15 XVIII of the Social Security Act, or enrolled 

16 under part B of such title, or both; and 

17 (E) the advantages and disadvantages of 

18 maintaining local medicare contractor advisory 

19 committees that can advise on local coverage 

20 decisions based on an open, collaborative public 

21 process. 

22 (2) REPORT.—Such arrangement shall provide 

23 that the Institute shall submit to the Secretary a re24 port on such study by not later than 3 years after 

25 the date of the enactment of this Act. The Secretary 
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1 shall promptly transmit a copy of such report to 

2 Congress. 

3 (e) METHODS FOR DETERMINING PAYMENT BASIS

4 FOR NEW LAB TESTS.—Section 1833(h) (42 U.S.C. 

5 1395l(h)) is amended by adding at the end the following: 

6 ‘‘(8)(A) The Secretary shall establish by regulation 

7 procedures for determining the basis for, and amount of, 

8 payment under this subsection for any clinical diagnostic 

9 laboratory test with respect to which a new or substan10 tially revised HCPCS code is assigned on or after January 

11 1, 2005 (in this paragraph referred to as ‘new tests’). 

12 ‘‘(B) Determinations under subparagraph (A) shall 

13 be made only after the Secretary—

14 ‘‘(i) makes available to the public (through an 

15 Internet site and other appropriate mechanisms) a 

16 list that includes any such test for which establish17 ment of a payment amount under this subsection is 

18 being considered for a year; 

19 ‘‘(ii) on the same day such list is made avail20 able, causes to have published in the Federal Reg21 ister notice of a meeting to receive comments and 

22 recommendations (and data on which recommenda23 tions are based) from the public on the appropriate 

24 basis under this subsection for establishing payment 

25 amounts for the tests on such list; 
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1 ‘‘(iii) not less than 30 days after publication of 

2 such notice convenes a meeting, that includes rep3 resentatives of officials of the Centers for Medicare 

4 & Medicaid Services involved in determining pay5 ment amounts, to receive such comments and rec6 ommendations (and data on which the recommenda7 tions are based); 

8 ‘‘(iv) taking into account the comments and rec9 ommendations (and accompanying data) received at 

10 such meeting, develops and makes available to the 

11 public (through an Internet site and other appro12 priate mechanisms) a list of proposed determinations 

13 with respect to the appropriate basis for establishing 

14 a payment amount under this subsection for each 

15 such code, together with an explanation of the rea16 sons for each such determination, the data on which 

17 the determinations are based, and a request for pub18 lic written comments on the proposed determination; 

19 and 

20 ‘‘(v) taking into account the comments received 

21 during the public comment period, develops and 

22 makes available to the public (through an Internet 

23 site and other appropriate mechanisms) a list of 

24 final determinations of the payment amounts for 

25 such tests under this subsection, together with the 
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1 rationale for each such determination, the data on 

2 which the determinations are based, and responses 

3 to comments and suggestions received from the pub4 lic. 

5 ‘‘(C) Under the procedures established pursuant to 

6 subparagraph (A), the Secretary shall—

7 ‘‘(i) set forth the criteria for making determina8 tions under subparagraph (A); and 

9 ‘‘(ii) make available to the public the data 

10 (other than proprietary data) considered in making 

11 such determinations. 

12 ‘‘(D) The Secretary may convene such further public 

13 meetings to receive public comments on payment amounts 

14 for new tests under this subsection as the Secretary deems 

15 appropriate. 

16 ‘‘(E) For purposes of this paragraph: 

17 ‘‘(i) The term ‘HCPCS’ refers to the Health 

18 Care Procedure Coding System. 

19 ‘‘(ii) A code shall be considered to be ‘substan20 tially revised’ if there is a substantive change to the 

21 definition of the test or procedure to which the code 

22 applies (such as a new analyte or a new methodology 

23 for measuring an existing analyte-specific test).’’. 
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1 SEC. 503. TREATMENT OF HOSPITALS FOR CERTAIN SERV2 ICES UNDER MEDICARE SECONDARY PAYOR 

3 (MSP) PROVISIONS. 

4 (a) IN GENERAL.—The Secretary shall not require 

5 a hospital (including a critical access hospital) to ask ques6 tions (or obtain information) relating to the application 

7 of section 1862(b) of the Social Security Act (relating to 

8 medicare secondary payor provisions) in the case of ref9 erence laboratory services described in subsection (b), if 

10 the Secretary does not impose such requirement in the 

11 case of such services furnished by an independent labora12 tory. 

13 (b) REFERENCE LABORATORY SERVICES DE14 SCRIBED.—Reference laboratory services described in this 

15 subsection are clinical laboratory diagnostic tests (or the 

16 interpretation of such tests, or both) furnished without a 

17 face-to-face encounter between the individual entitled to 

18 benefits under part A or enrolled under part B, or both, 

19 and the hospital involved and in which the hospital sub20 mits a claim only for such test or interpretation. 

21 SEC. 504. EMTALA IMPROVEMENTS. 

22 (a) PAYMENT FOR EMTALA-MANDATED SCREEN23 ING AND STABILIZATION SERVICES.—

24 (1) IN GENERAL.—Section 1862 (42 U.S.C. 

25 1395y) is amended by inserting after subsection (c) 

26 the following new subsection: 
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1 ‘‘(d) For purposes of subsection (a)(1)(A), in the case 

2 of any item or service that is required to be provided pur3 suant to section 1867 to an individual who is entitled to 

4 benefits under this title, determinations as to whether the 

5 item or service is reasonable and necessary shall be made 

6 on the basis of the information available to the treating 

7 physician or practitioner (including the patient’s pre8 senting symptoms or complaint) at the time the item or 

9 service was ordered or furnished by the physician or prac10 titioner (and not on the patient’s principal diagnosis). 

11 When making such determinations with respect to such 

12 an item or service, the Secretary shall not consider the 

13 frequency with which the item or service was provided to 

14 the patient before or after the time of the admission or 

15 visit.’’. 

16 (2) EFFECTIVE DATE.—The amendment made 

17 by paragraph (1) shall apply to items and services 

18 furnished on or after January 1, 2004. 

19 (b) NOTIFICATION OF PROVIDERS WHEN EMTALA 

20 INVESTIGATION CLOSED.—Section 1867(d) (42 U.S.C. 42 

21 U.S.C. 1395dd(d)) is amended by adding at the end the 

22 following new paragraph: 

23 ‘‘(4) NOTICE UPON CLOSING AN INVESTIGA24 TION.—The Secretary shall establish a procedure to 
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1 notify hospitals and physicians when an investigation 

2 under this section is closed.’’. 

3 (c) PRIOR REVIEW BY PEER REVIEW ORGANIZA4 TIONS IN EMTALA CASES INVOLVING TERMINATION OF

5 PARTICIPATION.—

6 (1) IN GENERAL.—Section 1867(d)(3) (42 

7 U.S.C. 1395dd(d)(3)) is amended—

8 (A) in the first sentence, by inserting ‘‘or 

9 in terminating a hospital’s participation under 

10 this title’’ after ‘‘in imposing sanctions under 

11 paragraph (1)’’; and 

12 (B) by adding at the end the following new 

13 sentences: ‘‘Except in the case in which a delay 

14 would jeopardize the health or safety of individ15 uals, the Secretary shall also request such a re16 view before making a compliance determination 

17 as part of the process of terminating a hos18 pital’s participation under this title for viola19 tions related to the appropriateness of a med20 ical screening examination, stabilizing treat21 ment, or an appropriate transfer as required by 

22 this section, and shall provide a period of 5 

23 days for such review. The Secretary shall pro24 vide a copy of the organization’s report to the 

25 hospital or physician consistent with confiden-
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1 tiality requirements imposed on the organiza2 tion under such part B.’’. 

3 (2) EFFECTIVE DATE.—The amendments made 

4 by paragraph (1) shall apply to terminations of par5 ticipation initiated on or after the date of the enact6 ment of this Act. 

7 SEC. 505. EMERGENCY MEDICAL TREATMENT AND ACTIVE 

8 LABOR ACT (EMTALA) TECHNICAL ADVISORY 

9 GROUP. 

10 (a) ESTABLISHMENT.—The Secretary shall establish 

11 a Technical Advisory Group (in this section referred to 

12 as the ‘‘Advisory Group’’) to review issues related to the 

13 Emergency Medical Treatment and Labor Act 

14 (EMTALA) and its implementation. In this section, the 

15 term ‘‘EMTALA’’ refers to the provisions of section 1867 

16 of the Social Security Act (42 U.S.C. 1395dd). 

17 (b) MEMBERSHIP.—The Advisory Group shall be 

18 composed of 19 members, including the Administrator of 

19 the Centers for Medicare & Medicaid Services and the In20 spector General of the Department of Health and Human 

21 Services and of which—

22 (1) 4 shall be representatives of hospitals, in23 cluding at least one public hospital, that have experi24 ence with the application of EMTALA and at least 
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1 2 of which have not been cited for EMTALA viola2 tions; 

3 (2) 7 shall be practicing physicians drawn from 

4 the fields of emergency medicine, cardiology or 

5 cardiothoracic surgery, orthopedic surgery, neuro6 surgery, pediatrics or a pediatric subspecialty, ob7 stetrics-gynecology, and psychiatry, with not more 

8 than one physician from any particular field; 

9 (3) 2 shall represent patients; 

10 (4) 2 shall be staff involved in EMTALA inves11 tigations from different regional offices of the Cen12 ters for Medicare & Medicaid Services; and 

13 (5) 1 shall be from a State survey office in14 volved in EMTALA investigations and 1 shall be 

15 from a peer review organization, both of whom shall 

16 be from areas other than the regions represented 

17 under paragraph (4). 

18 In selecting members described in paragraphs (1) through 

19 (3), the Secretary shall consider qualified individuals nom20 inated by organizations representing providers and pa21 tients. 

22 (c) GENERAL RESPONSIBILITIES.—The Advisory 

23 Group—

24 (1) shall review EMTALA regulations; 
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1 (2) may provide advice and recommendations to 

2 the Secretary with respect to those regulations and 

3 their application to hospitals and physicians; 

4 (3) shall solicit comments and recommendations 

5 from hospitals, physicians, and the public regarding 

6 the implementation of such regulations; and 

7 (4) may disseminate information on the applica8 tion of such regulations to hospitals, physicians, and 

9 the public. 

10 (d) ADMINISTRATIVE MATTERS.—

11 (1) CHAIRPERSON.—The members of the Advi12 sory Group shall elect a member to serve as chair13 person of the Advisory Group for the life of the Ad14 visory Group. 

15 (2) MEETINGS.—The Advisory Group shall first 

16 meet at the direction of the Secretary. The Advisory 

17 Group shall then meet twice per year and at such 

18 other times as the Advisory Group may provide.

19 (e) TERMINATION.—The Advisory Group shall termi20 nate 30 months after the date of its first meeting. 

21 (f) WAIVER OF ADMINISTRATIVE LIMITATION.—The 

22 Secretary shall establish the Advisory Group notwith23 standing any limitation that may apply to the number of 

24 advisory committees that may be established (within the 

25 Department of Health and Human Services or otherwise). 
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1 SEC. 506. AUTHORIZING USE OF ARRANGEMENTS WITH 

2 OTHER HOSPICE PROGRAMS TO PROVIDE 

3 CORE HOSPICE SERVICES IN CERTAIN CIR4 CUMSTANCES. 

5 (a) IN GENERAL.—Section 1861(dd)(5) (42 U.S.C. 

6 1395x(dd)(5)) is amended by adding at the end the fol7 lowing new subparagraph: 

8 ‘‘(D) In extraordinary, exigent, or other non-routine 

9 circumstances, such as unanticipated periods of high pa10 tient loads, staffing shortages due to illness or other 

11 events, or temporary travel of a patient outside a hospice 

12 program’s service area, a hospice program may enter into 

13 arrangements with another hospice program for the provi14 sion by that other program of services described in para15 graph (2)(A)(ii)(I). The provisions of paragraph 

16 (2)(A)(ii)(II) shall apply with respect to the services pro17 vided under such arrangements.’’. 

18 (b) CONFORMING PAYMENT PROVISION.—Section 

19 1814(i) (42 U.S.C. 1395f(i)) is amended by adding at the 

20 end the following new paragraph: 

21 ‘‘(4) In the case of hospice care provided by a hospice 

22 program under arrangements under section 

23 1861(dd)(5)(D) made by another hospice program, the 

24 hospice program that made the arrangements shall bill 

25 and be paid for the hospice care.’’. 
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1 (c) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to hospice care provided on or after 

3 the date of the enactment of this Act. 

4 SEC. 507. APPLICATION OF OSHA BLOODBORNE PATHO5 GENS STANDARD TO CERTAIN HOSPITALS. 

6 (a) IN GENERAL.—Section 1866 (42 U.S.C. 1395cc) 

7 is amended—

8 (1) in subsection (a)(1)—

9 (A) in subparagraph (R), by striking 

10 ‘‘and’’ at the end; 

11 (B) in subparagraph (S), by striking the 

12 period at the end and inserting ‘‘, and’’; and 

13 (C) by inserting after subparagraph (S) 

14 the following new subparagraph: 

15 ‘‘(T) in the case of hospitals that are not other16 wise subject to the Occupational Safety and Health 

17 Act of 1970, to comply with the Bloodborne Patho18 gens standard under section 1910.1030 of title 29 of 

19 the Code of Federal Regulations (or as subsequently 

20 redesignated).’’; and 

21 (2) by adding at the end of subsection (b) the 

22 following new paragraph: 

23 ‘‘(4)(A) A hospital that fails to comply with the re24 quirement of subsection (a)(1)(T) (relating to the 

25 Bloodborne Pathogens standard) is subject to a civil 
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1 money penalty in an amount described in subparagraph 

2 (B), but is not subject to termination of an agreement 

3 under this section. 

4 ‘‘(B) The amount referred to in subparagraph (A) is 

5 an amount that is similar to the amount of civil penalties 

6 that may be imposed under section 17 of the Occupational 

7 Safety and Health Act of 1970 for a violation of the 

8 Bloodborne Pathogens standard referred to in subsection 

9 (a)(1)(T) by a hospital that is subject to the provisions 

10 of such Act. 

11 ‘‘(C) A civil money penalty under this paragraph shall 

12 be imposed and collected in the same manner as civil 

13 money penalties under subsection (a) of section 1128A are 

14 imposed and collected under that section.’’. 

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

16 this subsection (a) shall apply to hospitals as of July 1, 

17 2004. 

18 SEC. 508. BIPA-RELATED TECHNICAL AMENDMENTS AND 

19 CORRECTIONS. 

20 (a) TECHNICAL AMENDMENTS RELATING TO ADVI21 SORY COMMITTEE UNDER BIPA SECTION 522.—(1) Sub22 section (i) of section 1114 (42 U.S.C. 1314)—

23 (A) is transferred to section 1862 and added at 

24 the end of such section; and 

25 (B) is redesignated as subsection (j). 
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1 (2) Section 1862 (42 U.S.C. 1395y) is amended—

2 (A) in the last sentence of subsection (a), by 

3 striking ‘‘established under section 1114(f)’’; and 

4 (B) in subsection (j), as so transferred and re5 designated—

6 (i) by striking ‘‘under subsection (f)’’; and 

7 (ii) by striking ‘‘section 1862(a)(1)’’ and 

8 inserting ‘‘subsection (a)(1)’’. 

9 (b) TERMINOLOGY CORRECTIONS.—(1) Section 

10 1869(c)(3)(I)(ii) (42 U.S.C. 1395ff(c)(3)(I)(ii)), as 

11 amended by section 521 of BIPA, is amended—

12 (A) in subclause (III), by striking ‘‘policy’’ and 

13 inserting ‘‘determination’’; and 

14 (B) in subclause (IV), by striking ‘‘medical re15 view policies’’ and inserting ‘‘coverage determina16 tions’’. 

17 (2) Section 1852(a)(2)(C) (42 U.S.C. 1395w–

18 22(a)(2)(C)) is amended by striking ‘‘policy’’ and ‘‘POL19 ICY’’ and inserting ‘‘determination’’ each place it appears 

20 and ‘‘DETERMINATION’’, respectively. 

21 (c) REFERENCE CORRECTIONS.—Section 1869(f)(4) 

22 (42 U.S.C. 1395ff(f)(4)), as added by section 522 of 

23 BIPA, is amended—
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1 (1) in subparagraph (A)(iv), by striking ‘‘sub2 clause (I), (II), or (III)’’ and inserting ‘‘clause (i), 

3 (ii), or (iii)’’; 

4 (2) in subparagraph (B), by striking ‘‘clause 

5 (i)(IV)’’ and ‘‘clause (i)(III)’’ and inserting ‘‘sub6 paragraph (A)(iv)’’ and ‘‘subparagraph (A)(iii)’’, re7 spectively; and 

8 (3) in subparagraph (C), by striking ‘‘clause 

9 (i)’’, ‘‘subclause (IV)’’ and ‘‘subparagraph (A)’’ and 

10 inserting ‘‘subparagraph (A)’’, ‘‘clause (iv)’’ and 

11 ‘‘paragraph (1)(A)’’, respectively each place it ap12 pears. 

13 (d) OTHER CORRECTIONS.—Effective as if included 

14 in the enactment of section 521(c) of BIPA, section 

15 1154(e) (42 U.S.C. 1320c–3(e)) is amended by striking 

16 paragraph (5).

17 (e) EFFECTIVE DATE.—Except as otherwise pro18 vided, the amendments made by this section shall be effec19 tive as if included in the enactment of BIPA. 

20 SEC. 509. CONFORMING AUTHORITY TO WAIVE A PROGRAM 

21 EXCLUSION. 

22 The first sentence of section 1128(c)(3)(B) (42 

23 U.S.C. 1320a–7(c)(3)(B)) is amended to read as follows: 

24 ‘‘Subject to subparagraph (G), in the case of an exclusion 

25 under subsection (a), the minimum period of exclusion 
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1 shall be not less than five years, except that, upon the 

2 request of the administrator of a Federal health care pro3 gram (as defined in section 1128B(f)) who determines 

4 that the exclusion would impose a hardship on individuals 

5 entitled to benefits under part A of title XVIII or enrolled 

6 under part B of such title, or both, the Secretary may 

7 waive the exclusion under subsection (a)(1), (a)(3), or 

8 (a)(4) with respect to that program in the case of an indi9 vidual or entity that is the sole community physician or 

10 sole source of essential specialized services in a commu11 nity.’’. 

12 SEC. 510. TREATMENT OF CERTAIN DENTAL CLAIMS. 

13 (a) IN GENERAL.—Section 1862 (42 U.S.C. 1395y) 

14 is amended by adding after subsection (g) the following 

15 new subsection: 

16 ‘‘(h)(1) Subject to paragraph (2), a group health plan 

17 (as defined in subsection (a)(1)(A)(v)) providing supple18 mental or secondary coverage to individuals also entitled 

19 to services under this title shall not require a medicare 

20 claims determination under this title for dental benefits 

21 specifically excluded under subsection (a)(12) as a condi22 tion of making a claims determination for such benefits 

23 under the group health plan. 

24 ‘‘(2) A group health plan may require a claims deter25 mination under this title in cases involving or appearing 
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1 to involve inpatient dental hospital services or dental serv2 ices expressly covered under this title pursuant to actions 

3 taken by the Secretary.’’. 

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

5 subsection (a) shall take effect on the date that is 60 days 

6 after the date of the enactment of this Act. 

7 SEC. 511. MISCELLANEOUS REPORTS, STUDIES, AND PUBLI8 CATION REQUIREMENTS. 

9 (a) GAO REPORTS ON THE PHYSICIAN COMPENSA10 TION.—

11 (1) SUSTAINABLE GROWTH RATE AND UP12 DATES.—Not later than 6 months after the date of 

13 the enactment of this Act, the Comptroller General 

14 of the United States shall submit to Congress a re15 port on the appropriateness of the updates in the 

16 conversion factor under subsection (d)(3) of section 

17 1848 of the Social Security Act (42 U.S.C. 1395w–

18 4), including the appropriateness of the sustainable 

19 growth rate formula under subsection (f) of such 

20 section for 2002 and succeeding years. Such report 

21 shall examine the stability and predictability of such 

22 updates and rate and alternatives for the use of such 

23 rate in the updates. 

24 (2) PHYSICIAN COMPENSATION GENERALLY.—

25 Not later than 12 months after the date of the en-
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1 actment of this Act, the Comptroller General shall 

2 submit to Congress a report on all aspects of physi3 cian compensation for services furnished under title 

4 XVIII of the Social Security Act, and how those as5 pects interact and the effect on appropriate com6 pensation for physician services. Such report shall 

7 review alternatives for the physician fee schedule 

8 under section 1848 of such title (42 U.S.C. 1395w–

9 4). 

10 (b) PROMPT SUBMISSION OF OVERDUE REPORTS ON

11 PAYMENT AND UTILIZATION OF OUTPATIENT THERAPY

12 SERVICES.—Not later than January 1, 2004, the Sec13 retary shall submit to Congress the reports required under 

14 section 4541(d)(2) of the Balanced Budget Act of 1997 

15 (relating to alternatives to a single annual dollar cap on 

16 outpatient therapy) and under section 221(d) of the Medi17 care, Medicaid, and SCHIP Balanced Budget Refinement 

18 Act of 1999 (relating to utilization patterns for outpatient 

19 therapy). 

20 (c) ANNUAL PUBLICATION OF LIST OF NATIONAL

21 COVERAGE DETERMINATIONS.—The Secretary shall pro22 vide, in an appropriate annual publication available to the 

23 public, a list of national coverage determinations made 

24 under title XVIII of the Social Security Act in the pre-
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1 vious year and information on how to get more informa2 tion with respect to such determinations.

Æ