191
Health and Human Services may 
establish; and 
‘‘(ii) test the effectiveness of 
information security control tech-
niques of an appropriate subset of 
the contractor’s information sys-
tems (as defined in section 3502(8) 
of title 44, United States Code) re-
lating to such functions under 
this title and an assessment of 
compliance 
with 
the 
require-
ments of this subsection and re-
lated information security poli-
cies, procedures, standards and 
guidelines, including policies and 
procedures as may be prescribed 
by the Director of the Office of 
Management and Budget and ap-
plicable 
information 
security 
standards promulgated under sec-
tion 11331 of title 40, United 
States Code. 
‘‘(B) DEADLINE FOR INITIAL EVALUA-
TION.—
192
‘‘(i) NEW CONTRACTORS.—In the 
case of a medicare administrative 
contractor covered by this sub-
section that has not previously 
performed the functions referred 
to in subparagraphs (A) and (B) of 
subsection (a)(4) (relating to de-
termining and making payments)
as a fiscal intermediary or carrier 
under section 1816 or 1842, the 
first independent evaluation con-
ducted 
pursuant 
subparagraph 
(A) shall be completed prior to 
commencing such functions. 
‘‘(ii) OTHER
CONTRACTORS.—In 
the case of a medicare adminis-
trative contractor covered by this 
subsection that is not described 
in clause (i), the first independent 
evaluation 
conducted 
pursuant 
subparagraph (A) shall be com-
pleted within 1 year after the 
date the contractor commences 
functions referred to in clause (i) 
under this section.
193
‘‘(C) REPORTS ON EVALUATIONS.—
‘‘(i) TO
THE
DEPARTMENT
OF 
HEALTH AND HUMAN SERVICES.—The 
results of independent evalua-
tions 
under 
subparagraph 
(A) 
shall be submitted promptly to 
the Inspector General of the De-
partment of Health and Human 
Services and to the Secretary. 
‘‘(ii) TO
CONGRESS.—The In-
spector General of Department of 
Health and Human Services shall 
submit to Congress annual re-
ports on the results of such eval-
uations, including assessments of 
the scope and sufficiency of such 
evaluations. 
‘‘(iii) AGENCY REPORTING.—The 
Secretary shall address the re-
sults of such evaluations in re-
ports 
required 
under 
section 
3544(c) of title 44, United States 
Code.’’. 
(b) APPLICATION OF REQUIREMENTS TO FIS-
CAL INTERMEDIARIES AND CARRIERS.—
194
(1) IN
GENERAL.—The provisions of 
section 1874A(e)(2) of the Social Security 
Act (other than subparagraph (B)), as 
added by subsection (a), shall apply to 
each fiscal intermediary under section 
1816 of the Social Security Act (42 U.S.C. 
1395h) and each carrier under section 
1842 of such Act (42 U.S.C. 1395u) in the 
same manner as they apply to medicare 
administrative contractors under such 
provisions. 
(2) DEADLINE
FOR
INITIAL
EVALUA-
TION.—In the case of such a fiscal inter-
mediary or carrier with an agreement or 
contract under such respective section in 
effect as of the date of the enactment of 
this Act, the first evaluation under sec-
tion 1874A(e)(2)(A) of the Social Security 
Act (as added by subsection (a)), pursu-
ant to paragraph (1), shall be completed 
(and a report on the evaluation sub-
mitted to the Secretary) by not later than 
1 year after such date.
195
TITLE III—EDUCATION AND 
OUTREACH 
SEC. 301. PROVIDER EDUCATION AND TECHNICAL ASSIST-
ANCE. 
(a) COORDINATION
OF
EDUCATION
FUND-
ING.—
(1) IN GENERAL.—The Social Security 
Act is amended by inserting after section 
1888 the following new section: 
‘‘PROVIDER EDUCATION AND TECHNICAL 
ASSISTANCE 
‘‘SEC. 1889. (a) COORDINATION
OF
EDU-
CATION FUNDING.—The Secretary shall coordi-
nate 
the 
educational 
activities 
provided 
through medicare contractors (as defined in 
subsection (g), including under section 1893) 
in order to maximize the effectiveness of Fed-
eral education efforts for providers of serv-
ices and suppliers.’’. 
(2) EFFECTIVE DATE.—The amendment 
made by paragraph (1) shall take effect 
on the date of the enactment of this Act. 
(3) REPORT.—Not later than October 1, 
2004, the Secretary shall submit to Con-
gress a report that includes a description
196
and evaluation of the steps taken to co-
ordinate the funding of provider edu-
cation under section 1889(a) of the Social 
Security Act, as added by paragraph (1). 
(b) INCENTIVES TO IMPROVE CONTRACTOR 
PERFORMANCE.—
(1) IN
GENERAL.—Section 1874A, as 
added by section 201(a)(1) and as amend-
ed by section 202(a), is amended by add-
ing at the end the following new sub-
section: 
‘‘(f) INCENTIVES TO IMPROVE CONTRACTOR 
PERFORMANCE
IN
PROVIDER
EDUCATION
AND 
OUTREACH.—The Secretary shall use specific 
claims payment error rates or similar method-
ology of medicare administrative contractors 
in the processing or reviewing of medicare 
claims in order to give such contractors an in-
centive to implement effective education and 
outreach programs for providers of services 
and suppliers.’’. 
(2) 
APPLICATION
TO
FISCAL
INTER-
MEDIARIES AND CARRIERS.—The provisions 
of section 1874A(f) of the Social Security 
Act, as added by paragraph (1), shall
197
apply to each fiscal intermediary under 
section 1816 of the Social Security Act (42 
U.S.C. 1395h) and each carrier under sec-
tion 1842 of such Act (42 U.S.C. 1395u) in 
the same manner as they apply to medi-
care administrative contractors under 
such provisions. 
(3) GAO 
REPORT
ON
ADEQUACY
OF 
METHODOLOGY.—Not later than October 1,
2004, the Comptroller General of the 
United States shall submit to Congress 
and to the Secretary a report on the ade-
quacy of the methodology under section 
1874A(f) of the Social Security Act, as 
added by paragraph (1), and shall include 
in the report such recommendations as 
the Comptroller General determines ap-
propriate with respect to the method-
ology. 
(4) REPORT ON USE OF METHODOLOGY IN 
ASSESSING
CONTRACTOR
PERFORMANCE.—
Not later than October 1, 2004, the Sec-
retary shall submit to Congress a report 
that describes how the Secretary intends 
to use such methodology in assessing
198
medicare contractor performance in im-
plementing effective education and out-
reach programs, including whether to use 
such methodology as a basis for perform-
ance bonuses. The report shall include an 
analysis of the sources of identified er-
rors and potential changes in systems of 
contractors and rules of the Secretary 
that could reduce claims error rates. 
(c) PROVISION OF ACCESS TO AND PROMPT 
RESPONSES
FROM
MEDICARE
ADMINISTRATIVE 
CONTRACTORS.—
(1) IN
GENERAL.—Section 1874A, as 
added by section 201(a)(1) and as amend-
ed by section 202(a) and subsection (b), is 
further amended by adding at the end 
the following new subsection: 
‘‘(g) COMMUNICATIONS WITH BENEFICIARIES, 
PROVIDERS OF SERVICES AND SUPPLIERS.—
‘‘(1) COMMUNICATION
STRATEGY.—The 
Secretary shall develop a strategy for 
communications with individuals entitled 
to benefits under part A or enrolled 
under part B, or both, and with providers 
of services and suppliers under this title.
199
‘‘(2) RESPONSE TO WRITTEN INQUIRIES.—
Each medicare administrative contractor 
shall, for those providers of services and 
suppliers which submit claims to the con-
tractor for claims processing and for 
those individuals entitled to benefits 
under part A or enrolled under part B, or 
both, with respect to whom claims are 
submitted for claims processing, provide 
general written responses (which may be 
through electronic transmission) in a 
clear, concise, and accurate manner to in-
quiries of providers of services, suppliers 
and individuals entitled to benefits under 
part A or enrolled under part B, or both, 
concerning the programs under this title 
within 45 business days of the date of re-
ceipt of such inquiries. 
‘‘(3) RESPONSE
TO
TOLL-FREE
LINES.—
The Secretary shall ensure that each 
medicare administrative contractor shall 
provide, for those providers of services 
and suppliers which submit claims to the 
contractor for claims processing and for 
those individuals entitled to benefits
200
under part A or enrolled under part B, or 
both, with respect to whom claims are 
submitted for claims processing, a toll-
free telephone number at which such in-
dividuals, providers of services and sup-
pliers may obtain information regarding 
billing, coding, claims, coverage, and 
other appropriate information under this 
title. 
‘‘(4) MONITORING
OF
CONTRACTOR
RE-
SPONSES.—
‘‘(A) IN GENERAL.—Each medicare 
administrative contractor shall, con-
sistent with standards developed by 
the Secretary under subparagraph 
(B)—
‘‘(i) maintain a system for 
identifying who provides the in-
formation referred to in para-
graphs (2) and (3); and 
‘‘(ii) monitor the accuracy, 
consistency, and timeliness of the 
information so provided. 
‘‘(B) 
DEVELOPMENT
OF
STAND-
ARDS.—
201
‘‘(i) 
IN
GENERAL.—The 
Sec-
retary shall establish and make 
public standards to monitor the 
accuracy, consistency, and timeli-
ness of the information provided 
in response to written and tele-
phone inquiries under this sub-
section. Such standards shall be 
consistent with the performance
requirements established under 
subsection (b)(3). 
‘‘(ii) 
EVALUATION.—In 
con-
ducting evaluations of individual 
medicare administrative contrac-
tors, the Secretary shall take into 
account the results of the moni-
toring conducted under subpara-
graph (A) taking into account as 
performance 
requirements 
the 
standards 
established 
under 
clause (i). The Secretary shall, in 
consultation with organizations 
representing providers of serv-
ices, suppliers, and individuals 
entitled to benefits under part A
202
or enrolled under part B, or both, 
establish standards relating to 
the accuracy, consistency, and 
timeliness of the information so 
provided. 
‘‘(C) DIRECT MONITORING.—Nothing 
in this paragraph shall be construed 
as preventing the Secretary from di-
rectly monitoring the accuracy, con-
sistency, and timeliness of the infor-
mation so provided.’’. 
(2) EFFECTIVE DATE.—The amendment 
made by paragraph (1) shall take effect 
October 1, 2004. 
(3) 
APPLICATION
TO
FISCAL
INTER-
MEDIARIES AND CARRIERS.—The provisions 
of section 1874A(g) of the Social Security 
Act, as added by paragraph (1), shall 
apply to each fiscal intermediary under 
section 1816 of the Social Security Act (42 
U.S.C. 1395h) and each carrier under sec-
tion 1842 of such Act (42 U.S.C. 1395u) in 
the same manner as they apply to medi-
care administrative contractors under 
such provisions.
203
(d) IMPROVED PROVIDER EDUCATION
AND 
TRAINING.—
(1) IN
GENERAL.—Section 1889, as 
added by subsection (a), is amended by 
adding at the end the following new sub-
sections: 
‘‘(b) ENHANCED EDUCATION AND TRAINING.—
‘‘(1) 
ADDITIONAL
RESOURCES.—There 
are authorized to be appropriated to the 
Secretary (in appropriate part from the 
Federal Hospital Insurance Trust Fund 
and the Federal Supplementary Medical 
Insurance Trust Fund) $25,000,000 for 
each of fiscal years 2005 and 2006 and 
such sums as may be necessary for suc-
ceeding fiscal years. 
‘‘(2) USE.—The funds made available 
under paragraph (1) shall be used to in-
crease the conduct by medicare contrac-
tors of education and training of pro-
viders of services and suppliers regard-
ing billing, coding, and other appropriate 
items and may also be used to improve 
the accuracy, consistency, and timeliness 
of contractor responses.
204
‘‘(c) TAILORING EDUCATION
AND TRAINING 
ACTIVITIES
FOR
SMALL
PROVIDERS
OR
SUP-
PLIERS.—
‘‘(1) IN GENERAL.—Insofar as a medi-
care contractor conducts education and 
training activities, it shall tailor such ac-
tivities to meet the special needs of small 
providers of services or suppliers (as de-
fined in paragraph (2)). 
‘‘(2) SMALL PROVIDER OF SERVICES OR 
SUPPLIER.—In this subsection, the term 
‘small provider of services or supplier’ 
means—
‘‘(A) a provider of services with 
fewer than 25 full-time-equivalent em-
ployees; or 
‘‘(B) a supplier with fewer than 10 
full-time-equivalent employees.’’. 
(2) EFFECTIVE DATE.—The amendment 
made by paragraph (1) shall take effect 
on October 1, 2004. 
(e) REQUIREMENT TO MAINTAIN INTERNET 
SITES.—
(1) IN
GENERAL.—Section 1889, as 
added by subsection (a) and as amended
205
by subsection (d), is further amended by 
adding at the end the following new sub-
section: 
‘‘(d) INTERNET
SITES; FAQS.—The Sec-
retary, and each medicare contractor insofar 
as it provides services (including claims proc-
essing) for providers of services or suppliers, 
shall maintain an Internet site which—
‘‘(1) provides answers in an easily ac-
cessible format to frequently asked ques-
tions, and 
‘‘(2) includes other published mate-
rials of the contractor, 
that relate to providers of services and sup-
pliers under the programs under this title 
(and title XI insofar as it relates to such pro-
grams).’’. 
(2) EFFECTIVE DATE.—The amendment 
made by paragraph (1) shall take effect 
on October 1, 2004. 
(f) ADDITIONAL PROVIDER EDUCATION PRO-
VISIONS.—
(1) IN
GENERAL.—Section 1889, as 
added by subsection (a) and as amended 
by subsections (d) and (e), is further
206
amended by adding at the end the fol-
lowing new subsections: 
‘‘(e) ENCOURAGEMENT OF PARTICIPATION IN 
EDUCATION PROGRAM ACTIVITIES.—A medicare 
contractor may not use a record of attendance 
at (or failure to attend) educational activities 
or other information gathered during an edu-
cational program conducted under this sec-
tion or otherwise by the Secretary to select or 
track providers of services or suppliers for 
the purpose of conducting any type of audit 
or prepayment review. 
‘‘(f) CONSTRUCTION.—Nothing in this sec-
tion or section 1893(g) shall be construed as 
providing for disclosure by a medicare con-
tractor of information that would compromise 
pending law enforcement activities or reveal 
findings of law enforcement-related audits. 
‘‘(g) DEFINITIONS.—For purposes of this 
section, the term ‘medicare contractor’ in-
cludes the following: 
‘‘(1) A medicare administrative con-
tractor with a contract under section 
1874A, including a fiscal intermediary 
with a contract under section 1816 and a