‘‘(E) The manufacturer of any drug or
other item that is included in the items or serv-
ices involved in the case.
‘‘(F) Any other party determined under
any regulations to have a substantial interest in
the case involved.’’.
(3) EFFECTIVE DATE.—The amendments made
by paragraphs (1) and (2) shall be effective as if in-
cluded in the enactment of the respective provisions
of subtitle C of title V of BIPA, (114 Stat. 2763A–
534).
(4) TRANSITION.—In applying section 1869(g)
of the Social Security Act (as added by paragraph
(2)), any reference to a medicare administrative con-
tractor shall be deemed to include a reference to a
fiscal intermediary under section 1816 of the Social
Security Act (42 U.S.C. 1395h) and a carrier under
section 1842 of such Act (42 U.S.C. 1395u).
SEC. 404. PREPAYMENT REVIEW.
(a) IN GENERAL.—Section 1874A, as added by sec-
tion 201(a)(1) and as amended by sections 202(b),
301(b)(1), and 301(c)(1), is further amended by adding
at the end the following new subsection:
‘‘(h) CONDUCT OF PREPAYMENT REVIEW.—
‘‘(1) CONDUCT OF RANDOM PREPAYMENT RE-
VIEW.—
‘‘(A) IN GENERAL.—A medicare adminis-
trative contractor may conduct random prepay-
ment review only to develop a contractor-wide
or program-wide claims payment error rates or
under such additional circumstances as may be
provided under regulations, developed in con-
sultation with providers of services and sup-
pliers.
‘‘(B) USE
OF
STANDARD
PROTOCOLS
WHEN CONDUCTING PREPAYMENT REVIEWS.—
When a medicare administrative contractor con-
ducts a random prepayment review, the con-
tractor may conduct such review only in accord-
ance with a standard protocol for random pre-
payment audits developed by the Secretary.
‘‘(C) CONSTRUCTION.—Nothing in this
paragraph shall be construed as preventing the
denial of payments for claims actually reviewed
under a random prepayment review.
‘‘(D) RANDOM
PREPAYMENT
REVIEW.—
For purposes of this subsection, the term ‘ran-
dom prepayment review’ means a demand for
the production of records or documentation ab-
sent cause with respect to a claim.
‘‘(2) LIMITATIONS
ON
NON-RANDOM
PREPAY-
MENT REVIEW.—
‘‘(A) LIMITATIONS ON INITIATION OF NON-
RANDOM
PREPAYMENT
REVIEW.—A medicare
administrative contractor may not initiate non-
random prepayment review of a provider of
services or supplier based on the initial identi-
fication by that provider of services or supplier
of an improper billing practice unless there is a
likelihood of sustained or high level of payment
error (as defined in subsection (i)(3)(A)).
‘‘(B) TERMINATION OF NON-RANDOM PRE-
PAYMENT REVIEW.—The Secretary shall issue
regulations relating to the termination, includ-
ing termination dates, of non-random prepay-
ment review. Such regulations may vary such a
termination date based upon the differences in
the circumstances triggering prepayment re-
view.’’.
(b) EFFECTIVE DATE.—
(1) IN GENERAL.—Except as provided in this
subsection, the amendment made by subsection (a)
shall take effect 1 year after the date of the enact-
ment of this Act.
(2) DEADLINE
FOR
PROMULGATION
OF
CER-
TAIN REGULATIONS.—The Secretary shall first issue
regulations under section 1874A(h) of the Social Se-
curity Act, as added by subsection (a), by not later
than 1 year after the date of the enactment of this
Act.
(3) APPLICATION
OF
STANDARD
PROTOCOLS
FOR
RANDOM
PREPAYMENT
REVIEW.—Section
1874A(h)(1)(B) of the Social Security Act, as added
by subsection (a), shall apply to random prepayment
reviews conducted on or after such date (not later
than 1 year after the date of the enactment of this
Act) as the Secretary shall specify.
(c) APPLICATION TO FISCAL INTERMEDIARIES AND
CARRIERS.—The provisions of section 1874A(h) of the So-
cial Security Act, as added by subsection (a), shall apply
to each fiscal intermediary under section 1816 of the So-
cial 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.
SEC. 405. RECOVERY OF OVERPAYMENTS.
(a) 
IN
GENERAL.—Section 
1893 
(42 
U.S.C.
1395ddd) is amended by adding at the end the following
new subsection:
‘‘(f) RECOVERY OF OVERPAYMENTS.—
‘‘(1) USE OF REPAYMENT PLANS.—
‘‘(A) IN
GENERAL.—If the repayment,
within 30 days by a provider of services or sup-
plier, of an overpayment under this title would
constitute a hardship (as defined in subpara-
graph (B)), subject to subparagraph (C), upon
request of the provider of services or supplier
the Secretary shall enter into a plan with the
provider of services or supplier for the repay-
ment (through offset or otherwise) of such over-
payment over a period of at least 6 months but
not longer than 3 years (or not longer than 5
years in the case of extreme hardship, as deter-
mined by the Secretary). Interest shall accrue
on the balance through the period of repay-
ment. Such plan shall meet terms and condi-
tions determined to be appropriate by the Sec-
retary.
‘‘(B) HARDSHIP.—
‘‘(i) IN
GENERAL.—For purposes of
subparagraph (A), the repayment of an
overpayment (or overpayments) within 30
days is deemed to constitute a hardship
if—
‘‘(I) in the case of a provider of
services that files cost reports, the ag-
gregate amount of the overpayments
exceeds 10 percent of the amount paid
under this title to the provider of
services for the cost reporting period
covered by the most recently sub-
mitted cost report; or
‘‘(II) in the case of another pro-
vider of services or supplier, the ag-
gregate amount of the overpayments
exceeds 10 percent of the amount paid
under this title to the provider of
services or supplier for the previous
calendar year.
‘‘(ii) RULE
OF
APPLICATION.—The
Secretary shall establish rules for the ap-
plication of this subparagraph in the case
of a provider of services or supplier that
was not paid under this title during the
previous year or was paid under this title
only during a portion of that year.
‘‘(iii) 
TREATMENT
OF
PREVIOUS
OVERPAYMENTS.—If a provider of services
or supplier has entered into a repayment
plan under subparagraph (A) with respect
to a specific overpayment amount, such
payment amount under the repayment plan
shall not be taken into account under
clause (i) with respect to subsequent over-
payment amounts.
‘‘(C) 
EXCEPTIONS.—Subparagraph 
(A)
shall not apply if—
‘‘(i) the Secretary has reason to sus-
pect that the provider of services or sup-
plier may file for bankruptcy or otherwise
cease to do business or discontinue partici-
pation in the program under this title; or
‘‘(ii) there is an indication of fraud or
abuse committed against the program.
‘‘(D) IMMEDIATE COLLECTION IF VIOLA-
TION OF REPAYMENT PLAN.—If a provider of
services or supplier fails to make a payment in
accordance with a repayment plan under this
paragraph, the Secretary may immediately seek
to offset or otherwise recover the total balance
outstanding 
(including 
applicable 
interest)
under the repayment plan.
‘‘(E) RELATION
TO
NO
FAULT
PROVI-
SION.—Nothing in this paragraph shall be con-
strued as affecting the application of section
1870(c) (relating to no adjustment in the cases
of certain overpayments).
‘‘(2) LIMITATION ON RECOUPMENT.—
‘‘(A) IN GENERAL.—In the case of a pro-
vider of services or supplier that is determined
to have received an overpayment under this title
and that seeks a reconsideration by a qualified
independent contractor on such determination
under section 1869(b)(1), the Secretary may
not take any action (or authorize any other per-
son, including any medicare contractor, as de-
fined in subparagraph (C) to recoup the over-
payment until the date the decision on the re-
consideration has been rendered. If the provi-
sions of section 1869(b)(1) (providing for such
a reconsideration by a qualified independent
contractor) are not in effect, in applying the
previous sentence any reference to such a recon-
sideration shall be treated as a reference to a
redetermination by the fiscal intermediary or
carrier involved.
‘‘(B) COLLECTION WITH INTEREST.—Inso-
far as the determination on such appeal is
against the provider of services or supplier, in-
terest on the overpayment shall accrue on and
after the date of the original notice of overpay-
ment. Insofar as such determination against the
provider of services or supplier is later reversed,
the Secretary shall provide for repayment of the
amount recouped plus interest at the same rate
as would apply under the previous sentence for
the period in which the amount was recouped.
‘‘(C) MEDICARE CONTRACTOR DEFINED.—
For purposes of this subsection, the term ‘medi-
care contractor’ has the meaning given such
term in section 1889(g).
‘‘(3) LIMITATION
ON
USE
OF
EXTRAPO-
LATION.—A medicare contractor may not use ex-
trapolation to determine overpayment amounts to be
recovered by recoupment, offset, or otherwise
unless—
‘‘(A) there is a sustained or high level of
payment error (as defined by the Secretary by
regulation); or
‘‘(B) documented educational intervention
has failed to correct the payment error (as de-
termined by the Secretary).
‘‘(4) PROVISION OF SUPPORTING DOCUMENTA-
TION.—In the case of a provider of services or sup-
plier with respect to which amounts were previously
overpaid, a medicare contractor may request the
periodic production of records or supporting docu-
mentation for a limited sample of submitted claims
to ensure that the previous practice is not con-
tinuing.
‘‘(5) CONSENT SETTLEMENT REFORMS.—
‘‘(A) IN
GENERAL.—The Secretary may
use a consent settlement (as defined in sub-
paragraph (D)) to settle a projected overpay-
ment.
‘‘(B) OPPORTUNITY
TO
SUBMIT
ADDI-
TIONAL INFORMATION BEFORE CONSENT SET-
TLEMENT OFFER.—Before offering a provider
of services or supplier a consent settlement, the
Secretary shall—
‘‘(i) communicate to the provider of
services or supplier—
‘‘(I) that, based on a review of
the medical records requested by the
Secretary, a preliminary evaluation of
those records indicates that there
would be an overpayment;
‘‘(II) the nature of the problems
identified in such evaluation; and
‘‘(III) the steps that the provider
of services or supplier should take to
address the problems; and
‘‘(ii) provide for a 45-day period dur-
ing which the provider of services or sup-
plier may furnish additional information
concerning the medical records for the
claims that had been reviewed.
‘‘(C) CONSENT SETTLEMENT OFFER.—The
Secretary shall review any additional informa-
tion furnished by the provider of services or
supplier under subparagraph (B)(ii). Taking
into consideration such information, the Sec-
retary shall determine if there still appears to
be an overpayment. If so, the Secretary—
‘‘(i) shall provide notice of such deter-
mination to the provider of services or sup-
plier, including an explanation of the rea-
son for such determination; and
‘‘(ii) in order to resolve the overpay-
ment, may offer the provider of services or
supplier—
‘‘(I) the opportunity for a statis-
tically valid random sample; or
‘‘(II) a consent settlement.
The opportunity provided under clause (ii)(I)
does not waive any appeal rights with respect to
the alleged overpayment involved.
‘‘(D) CONSENT SETTLEMENT DEFINED.—
For purposes of this paragraph, the term ‘con-
sent settlement’ means an agreement between
the Secretary and a provider of services or sup-
plier whereby both parties agree to settle a pro-
jected overpayment based on less than a statis-
tically valid sample of claims and the provider
of services or supplier agrees not to appeal the
claims involved.
‘‘(6) 
NOTICE
OF
OVER-UTILIZATION
OF
CODES.—The Secretary shall establish, in consulta-
tion with organizations representing the classes of
providers of services and suppliers, a process under
which the Secretary provides for notice to classes of
providers of services and suppliers served by the con-
tractor in cases in which the contractor has identi-
fied that particular billing codes may be overutilized
by that class of providers of services or suppliers
under the programs under this title (or provisions of
title XI insofar as they relate to such programs).
‘‘(7) PAYMENT AUDITS.—
‘‘(A) WRITTEN
NOTICE
FOR
POST-PAY-
MENT AUDITS.—Subject to subparagraph (C), if
a medicare contractor decides to conduct a
post-payment audit of a provider of services or
supplier under this title, the contractor shall
provide the provider of services or supplier with
written notice (which may be in electronic form)
of the intent to conduct such an audit.
‘‘(B) EXPLANATION OF FINDINGS FOR ALL
AUDITS.—Subject to subparagraph (C), if a
medicare contractor audits a provider of serv-
ices or supplier under this title, the contractor
shall—
‘‘(i) give the provider of services or
supplier a full review and explanation of
the findings of the audit in a manner that
is understandable to the provider of serv-
ices or supplier and permits the develop-
ment of an appropriate corrective action
plan;
‘‘(ii) inform the provider of services or
supplier of the appeal rights under this
title as well as consent settlement options
(which are at the discretion of the Sec-
retary);
‘‘(iii) give the provider of services or
supplier an opportunity to provide addi-
tional information to the contractor; and
‘‘(iv) take into account information
provided, on a timely basis, by the provider
of services or supplier under clause (iii).
‘‘(C) 
EXCEPTION.—Subparagraphs 
(A)
and (B) shall not apply if the provision of no-
tice or findings would compromise pending law
enforcement activities, whether civil or criminal,
or reveal findings of law enforcement-related
audits.
‘‘(8) STANDARD
METHODOLOGY
FOR
PROBE
SAMPLING.—The Secretary shall establish a stand-
ard methodology for medicare contractors to use in
selecting a sample of claims for review in the case
of an abnormal billing pattern.’’.
(b) EFFECTIVE DATES AND DEADLINES.—
(1) USE
OF
REPAYMENT
PLANS.—Section
1893(f)(1) of the Social Security Act, as added by
subsection (a), shall apply to requests for repayment
plans made after the date of the enactment of this
Act.
(2) LIMITATION
ON
RECOUPMENT.—Section
1893(f)(2) of the Social Security Act, as added by
subsection (a), shall apply to actions taken after the
date of the enactment of this Act.
(3) 
USE
OF
EXTRAPOLATION.—Section
1893(f)(3) of the Social Security Act, as added by
subsection (a), shall apply to statistically valid ran-
dom samples initiated after the date that is 1 year
after the date of the enactment of this Act.
(4) PROVISION
OF
SUPPORTING
DOCUMENTA-
TION.—Section 1893(f)(4) of the Social Security
Act, as added by subsection (a), shall take effect on
the date of the enactment of this Act.
(5) 
CONSENT
SETTLEMENT.—Section
1893(f)(5) of the Social Security Act, as added by
subsection (a), shall apply to consent settlements en-
tered into after the date of the enactment of this
Act.
(6) NOTICE OF OVERUTILIZATION.—Not later
than 1 year after the date of the enactment of this
Act, the Secretary shall first establish the process
for notice of overutilization of billing codes under
100
section 1893A(f)(6) of the Social Security Act, as
added by subsection (a).
(7) PAYMENT AUDITS.—Section 1893A(f)(7) of
the Social Security Act, as added by subsection (a),
shall apply to audits initiated after the date of the
enactment of this Act.
(8) STANDARD FOR ABNORMAL BILLING PAT-
TERNS.—Not later than 1 year after the date of the
enactment of this Act, the Secretary shall first es-
tablish a standard methodology for selection of sam-
ple claims for abnormal billing patterns under sec-
tion 1893(f)(8) of the Social Security Act, as added
by subsection (a).
SEC. 406. PROVIDER ENROLLMENT PROCESS; RIGHT OF AP-
PEAL.
(a) IN GENERAL.—Section 1866 (42 U.S.C. 1395cc)
is amended—
(1) by adding at the end of the heading the fol-
lowing: ‘‘; ENROLLMENT PROCESSES’’; and
(2) by adding at the end the following new sub-
section:
‘‘(j) ENROLLMENT PROCESS
FOR PROVIDERS
OF
SERVICES AND SUPPLIERS.—
‘‘(1) ENROLLMENT PROCESS.—
101
‘‘(A) IN
GENERAL.—The Secretary shall
establish by regulation a process for the enroll-
ment of providers of services and suppliers
under this title.
‘‘(B) DEADLINES.—The Secretary shall es-
tablish by regulation procedures under which
there are deadlines for actions on applications
for enrollment (and, if applicable, renewal of
enrollment). The Secretary shall monitor the
performance of medicare administrative con-
tractors in meeting the deadlines established
under this subparagraph.
‘‘(C) CONSULTATION
BEFORE
CHANGING
PROVIDER
ENROLLMENT
FORMS.—The Sec-
retary shall consult with providers of services
and suppliers before making changes in the pro-
vider enrollment forms required of such pro-
viders and suppliers to be eligible to submit
claims for which payment may be made under
this title.
‘‘(2) HEARING RIGHTS IN CASES OF DENIAL OR
NON-RENEWAL.—A provider of services or supplier
whose application to enroll (or, if applicable, to
renew enrollment) under this title is denied may
have a hearing and judicial review of such denial
102
under the procedures that apply under subsection
(h)(1)(A) to a provider of services that is dissatisfied
with a determination by the Secretary.’’.
(b) EFFECTIVE DATES.—
(1) ENROLLMENT
PROCESS.—The Secretary
shall provide for the establishment of the enrollment
process under section 1866(j)(1) of the Social Secu-
rity Act, as added by subsection (a)(2), within 6
months after the date of the enactment of this Act.
(2) CONSULTATION.—Section 1866(j)(1)(C) of
the Social Security Act, as added by subsection
(a)(2), shall apply with respect to changes in pro-
vider enrollment forms made on or after January 1,
2002.
(3) HEARING RIGHTS.—Section 1866(j)(2) of
the Social Security Act, as added by subsection
(a)(2), shall apply to denials occurring on or after
such date (not later than 1 year after the date of
the enactment of this Act) as the Secretary specifies.
SEC. 407. PROCESS FOR CORRECTION OF MINOR ERRORS
AND OMISSIONS ON CLAIMS WITHOUT PUR-
SUING APPEALS PROCESS.
The Secretary shall develop, in consultation with ap-
propriate medicare contractors (as defined in section
1889(g) of the Social Security Act, as inserted by section
103
301(a)(1)) and representatives of providers of services and
suppliers, a process whereby, in the case of minor errors
or omissions (as defined by the Secretary) that are de-
tected in the submission of claims under the programs
under title XVIII of such Act, a provider of services or
supplier is given an opportunity to correct such an error
or omission without the need to initiate an appeal. Such
process shall include the ability to resubmit corrected
claims.
SEC. 408. PRIOR DETERMINATION PROCESS FOR CERTAIN
ITEMS 
AND 
SERVICES; 
ADVANCE 
BENE-
FICIARY NOTICES.
(a) 
IN
GENERAL.—Section 
1869 
(42 
U.S.C.
1395ff(b)), as amended by sections 521 and 522 of BIPA
and section 403(d)(2)(B), is further amended by adding
at the end the following new subsection:
‘‘(h) PRIOR DETERMINATION PROCESS FOR CERTAIN
ITEMS AND SERVICES.—
‘‘(1) ESTABLISHMENT OF PROCESS.—
‘‘(A) IN
GENERAL.—With respect to a
medicare administrative contractor that has a
contract under section 1874A that provides for
making payments under this title with respect
to eligible items and services described in sub-
paragraph (C), the Secretary shall establish a
104
prior determination process that meets the re-
quirements of this subsection and that shall be
applied by such contractor in the case of eligible
requesters.
‘‘(B) ELIGIBLE
REQUESTER.—For pur-
poses of this subsection, each of the following
shall be an eligible requester:
‘‘(i) A physician, but only with respect
to eligible items and services for which the
physician may be paid directly.
‘‘(ii) An individual entitled to benefits
under this title, but only with respect to an
item or service for which the individual re-
ceives, from the physician who may be paid
directly for the item or service, an advance
beneficiary notice under section 1879(a)
that payment may not be made (or may no
longer be made) for the item or service
under this title.
‘‘(C) ELIGIBLE
ITEMS
AND
SERVICES.—
For purposes of this subsection and subject to
paragraph (2), eligible items and services are
items and services which are physicians’ serv-
ices (as defined in paragraph (4)(A) of section
105
1848(f) for purposes of calculating the sustain-
able growth rate under such section).
‘‘(2) SECRETARIAL
FLEXIBILITY.—The Sec-
retary shall establish by regulation reasonable limits
on the categories of eligible items and services for
which a prior determination of coverage may be re-
quested under this subsection. In establishing such
limits, the Secretary may consider the dollar amount
involved with respect to the item or service, adminis-
trative costs and burdens, and other relevant factors.
‘‘(3) REQUEST FOR PRIOR DETERMINATION.—
‘‘(A) IN GENERAL.—Subject to paragraph
(2), under the process established under this
subsection an eligible requester may submit to
the contractor a request for a determination,
before the furnishing of an eligible item or serv-
ice involved as to whether the item or service is
covered under this title consistent with the ap-
plicable requirements of section 1862(a)(1)(A)
(relating to medical necessity).
‘‘(B) ACCOMPANYING DOCUMENTATION.—
The Secretary may require that the request be
accompanied by a description of the item or
service, supporting documentation relating to
the medical necessity for the item or service,
106
and any other appropriate documentation. In
the case of a request submitted by an eligible
requester who is described in paragraph
(1)(B)(ii), the Secretary may require that the
request also be accompanied by a copy of the
advance beneficiary notice involved.
‘‘(4) RESPONSE TO REQUEST.—
‘‘(A) IN GENERAL.—Under such process,
the contractor shall provide the eligible re-
quester with written notice of a determination
as to whether—
‘‘(i) the item or service is so covered;
‘‘(ii) the item or service is not so cov-
ered; or
‘‘(iii) the contractor lacks sufficient
information to make a coverage determina-
tion.
If the contractor makes the determination de-
scribed in clause (iii), the contractor shall in-
clude in the notice a description of the addi-
tional information required to make the cov-
erage determination.
‘‘(B) DEADLINE TO RESPOND.—Such no-
tice shall be provided within the same time pe-
riod as the time period applicable to the con-
107
tractor providing notice of initial determinations
on a claim for benefits under subsection
(a)(2)(A).
‘‘(C) INFORMING BENEFICIARY IN CASE OF
PHYSICIAN REQUEST.—In the case of a request
in which an eligible requester is not the indi-
vidual described in paragraph (1)(B)(ii), the
process shall provide that the individual to
whom the item or service is proposed to be fur-
nished shall be informed of any determination
described in clause (ii) (relating to a determina-
tion of non-coverage) and the right (referred to
in paragraph (6)(B)) to obtain the item or serv-
ice and have a claim submitted for the item or
service.
‘‘(5) EFFECT OF DETERMINATIONS.—
‘‘(A) BINDING NATURE OF POSITIVE DE-
TERMINATION.—If the contractor makes the de-
termination described in paragraph (4)(A)(i),
such determination shall be binding on the con-
tractor in the absence of fraud or evidence of
misrepresentation of facts presented to the con-
tractor.
‘‘(B) NOTICE
AND
RIGHT
TO
REDETER-
MINATION IN CASE OF A DENIAL.—
108
‘‘(i) IN GENERAL.—If the contractor
makes the determination described in para-
graph (4)(A)(ii)—
‘‘(I) the eligible requester has the
right to a redetermination by the con-
tractor on the determination that the
item or service is not so covered; and
‘‘(II) the contractor shall include
in notice under paragraph (4)(A) a
brief explanation of the basis for the
determination, including on what na-
tional or local coverage or noncov-
erage determination (if any) the de-
termination is based, and the right to
such a redetermination.
‘‘(ii) DEADLINE
FOR
REDETERMINA-
TIONS.—The contractor shall complete and
provide notice of such redetermination
within the same time period as the time
period applicable to the contractor pro-
viding notice of redeterminations relating
to a claim for benefits under subsection
(a)(3)(C)(ii).
‘‘(6) LIMITATION ON FURTHER REVIEW.—
109
‘‘(A) IN GENERAL.—Contractor determina-
tions described in paragraph (4)(A)(ii) or
(4)(A)(iii) (and redeterminations made under
paragraph (5)(B)), relating to pre-service
claims are not subject to further administrative
appeal or judicial review under this section or
otherwise.
‘‘(B) DECISION NOT TO SEEK PRIOR DE-
TERMINATION
OR
NEGATIVE
DETERMINATION
DOES NOT IMPACT RIGHT TO OBTAIN SERVICES,
SEEK REIMBURSEMENT, OR APPEAL RIGHTS.—
Nothing in this subsection shall be construed as
affecting the right of an individual who—
‘‘(i) decides not to seek a prior deter-
mination under this subsection with re-
spect to items or services; or
‘‘(ii) seeks such a determination and
has received a determination described in
paragraph (4)(A)(ii)),
from receiving (and submitting a claim for)
such items services and from obtaining adminis-
trative or judicial review respecting such claim
under the other applicable provisions of this
section. Failure to seek a prior determination
under this subsection with respect to items and
110
services shall not be taken into account in such
administrative or judicial review.
‘‘(C) NO
PRIOR
DETERMINATION
AFTER
RECEIPT OF SERVICES.—Once an individual is
provided items and services, there shall be no
prior determination under this subsection with
respect to such items or services.’’.
(b) EFFECTIVE DATE; TRANSITION.—
(1) EFFECTIVE DATE.—The Secretary shall es-
tablish the prior determination process under the
amendment made by subsection (a) in such a man-
ner as to provide for the acceptance of requests for
determinations under such process filed not later
than 18 months after the date of the enactment of
this Act.
(2) TRANSITION.—During the period in which
the amendment made by subsection (a) has become
effective but contracts are not provided under sec-
tion 1874A of the Social Security Act with medicare
administrative contractors, any reference in section
1869(g) of such Act (as added by such amendment)
to such a contractor is deemed a reference to a fiscal
intermediary or carrier with an agreement under
section 1816, or contract under section 1842, re-
spectively, of such Act.
111
(3) LIMITATION ON APPLICATION TO SGR.—For
purposes of applying section 1848(f)(2)(D) of the
Social Security Act (42 U.S.C. 1395w–4(f)(2)(D)),
the amendment made by subsection (a) shall not be
considered to be a change in law or regulation.
(c) PROVISIONS RELATING
TO ADVANCE BENE-
FICIARY NOTICES; REPORT ON PRIOR DETERMINATION
PROCESS.—
(1) DATA
COLLECTION.—The Secretary shall
establish a process for the collection of information
on the instances in which an advance beneficiary no-
tice (as defined in paragraph (4)) has been provided
and on instances in which a beneficiary indicates on
such a notice that the beneficiary does not intend to
seek to have the item or service that is the subject
of the notice furnished.
(2) OUTREACH
AND
EDUCATION.—The Sec-
retary shall establish a program of outreach and
education for beneficiaries and providers of services
and other persons on the appropriate use of advance
beneficiary notices and coverage policies under the
medicare program.
(3) GAO REPORT REPORT ON USE OF ADVANCE
BENEFICIARY NOTICES.—Not later than 18 months
after the date on which section 1869(g) of the Social
112
Security Act (as added by subsection (a)) takes ef-
fect, the Comptroller General of the United States
shall submit to Congress a report on the use of ad-
vance beneficiary notices under title XVIII of such
Act. Such report shall include information con-
cerning the providers of services and other persons
that have provided such notices and the response of
beneficiaries to such notices.
(4) GAO REPORT ON USE OF PRIOR DETER-
MINATION
PROCESS.—Not later than 18 months
after the date on which section 1869(g) of the Social
Security Act (as added by subsection (a)) takes ef-
fect, the Comptroller General of the United States
shall submit to Congress a report on the use of the
prior determination process under such section. Such
report shall include—
(A) information concerning the types of
procedures for which a prior determination has
been sought, determinations made under the
process, and changes in receipt of services re-
sulting from the application of such process;
and
(B) an evaluation of whether the process
was useful for physicians (and other suppliers)
and beneficiaries, whether it was timely, and
113
whether the amount of information required
was burdensome to physicians and beneficiaries.
(5) 
ADVANCE
BENEFICIARY
NOTICE
DE-
FINED.—In this subsection, the term ‘‘advance bene-
ficiary notice’’ means a written notice provided
under section 1879(a) of the Social Security Act (42
U.S.C. 1395pp(a)) to an individual entitled to bene-
fits under part A or B of title XVIII of such Act
before items or services are furnished under such
part in cases where a provider of services or other
person that would furnish the item or service be-
lieves that payment will not be made for some or all
of such items or services under such title.
TITLE V—MISCELLANEOUS
PROVISIONS
SEC. 501. POLICY DEVELOPMENT REGARDING EVALUATION
AND MANAGEMENT (E & M) DOCUMENTATION
GUIDELINES.
(a) IN GENERAL.—The Secretary may not implement
any new documentation guidelines for evaluation and man-
agement physician services under the title XVIII of the
Social Security Act on or after the date of the enactment
of this Act unless the Secretary—
(1) has developed the guidelines in collaboration
with practicing physicians (including both generalists
114
and specialists) and provided for an assessment of
the proposed guidelines by the physician community;
(2) has established a plan that contains specific
goals, including a schedule, for improving the use of
such guidelines;
(3) has conducted appropriate and representa-
tive pilot projects under subsection (b) to test modi-
fications to the evaluation and management docu-
mentation guidelines;
(4) finds that the objectives described in sub-
section (c) will be met in the implementation of such
guidelines; and
(5) has established, and is implementing, a pro-
gram to educate physicians on the use of such guide-
lines and that includes appropriate outreach.
The Secretary shall make changes to the manner in which
existing evaluation and management documentation guide-
lines are implemented to reduce paperwork burdens on
physicians.
(b) PILOT PROJECTS TO TEST EVALUATION AND
MANAGEMENT DOCUMENTATION GUIDELINES.—
(1) IN GENERAL.—The Secretary shall conduct
under this subsection appropriate and representative
pilot projects to test new evaluation and manage-
115
ment documentation guidelines referred to in sub-
section (a).
(2) LENGTH AND CONSULTATION.—Each pilot
project under this subsection shall—
(A) be voluntary;
(B) be of sufficient length as determined
by the Secretary to allow for preparatory physi-
cian and medicare contractor education, anal-
ysis, and use and assessment of potential eval-
uation and management guidelines; and
(C) be conducted, in development and
throughout the planning and operational stages
of the project, in consultation with practicing
physicians (including both generalists and spe-
cialists).
(3) RANGE OF PILOT PROJECTS.—Of the pilot
projects conducted under this subsection—
(A) at least one shall focus on a peer re-
view method by physicians (not employed by a
medicare contractor) which evaluates medical
record information for claims submitted by phy-
sicians identified as statistical outliers relative
to definitions published in the Current Proce-
dures Terminology (CPT) code book of the
American Medical Association;
116
(B) at least one shall focus on an alter-
native method to detailed guidelines based on
physician documentation of face to face encoun-
ter time with a patient;
(C) at least one shall be conducted for
services furnished in a rural area and at least
one for services furnished outside such an area;
and
(D) at least one shall be conducted in a
setting where physicians bill under physicians’
services in teaching settings and at least one
shall be conducted in a setting other than a
teaching setting.
(4) 
BANNING
OF
TARGETING
OF
PILOT
PROJECT PARTICIPANTS.—Data collected under this
subsection shall not be used as the basis for overpay-
ment demands or post-payment audits. Such limita-
tion applies only to claims filed as part of the pilot
project and lasts only for the duration of the pilot
project and only as long as the provider is a partici-
pant in the pilot project.
(5) STUDY
OF
IMPACT.—Each pilot project
shall examine the effect of the new evaluation and
management documentation guidelines on—
117
(A) different types of physician practices,
including those with fewer than 10 full-time-
equivalent employees (including physicians);
and
(B) the costs of physician compliance, in-
cluding education, implementation, auditing,
and monitoring.
(6) PERIODIC REPORTS.—The Secretary shall
submit to Congress periodic reports on the pilot
projects under this subsection.
(c) OBJECTIVES FOR EVALUATION AND MANAGE-
MENT GUIDELINES.—The objectives for modified evalua-
tion and management documentation guidelines developed
by the Secretary shall be to—
(1) identify clinically relevant documentation
needed to code accurately and assess coding levels
accurately;
(2) decrease the level of non-clinically pertinent
and burdensome documentation time and content in
the physician’s medical record;
(3) increase accuracy by reviewers; and
(4) educate both physicians and reviewers.
(d) STUDY OF SIMPLER, ALTERNATIVE SYSTEMS OF
DOCUMENTATION FOR PHYSICIAN CLAIMS.—
118
(1) STUDY.—The Secretary shall carry out a
study of the matters described in paragraph (2).
(2) MATTERS
DESCRIBED.—The matters re-
ferred to in paragraph (1) are—
(A) the development of a simpler, alter-
native system of requirements for documenta-
tion accompanying claims for evaluation and
management physician services for which pay-
ment is made under title XVIII of the Social
Security Act; and
(B) consideration of systems other than
current coding and documentation requirements
for payment for such physician services.
(3) CONSULTATION
WITH
PRACTICING
PHYSI-
CIANS.—In designing and carrying out the study
under paragraph (1), the Secretary shall consult
with practicing physicians, including physicians who
are part of group practices and including both gen-
eralists and specialists.
(4) APPLICATION OF HIPAA UNIFORM CODING
REQUIREMENTS.—In developing an alternative sys-
tem under paragraph (2), the Secretary shall con-
sider requirements of administrative simplification
under part C of title XI of the Social Security Act.