I
105TH CONGRESS
2D SESSION
H. R. 4186
To amend title XVIII of the Social Security Act to provide flexibility in
contracting for claims processing under the Medicare program.
IN THE HOUSE OF REPRESENTATIVES
JUNE 25, 1998
Mr. STARK introduced the following bill; which was referred to the Committee
on Ways and Means, and in addition to the Committee on 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
flexibility in contracting for claims processing under the
Medicare program.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Medicare Contracting
Flexibility Act of 1998’’.
SEC. 2. INCREASED FLEXIBILITY IN CONTRACTING FOR
MEDICARE CLAIMS PROCESSING.
(a) CARRIERS TO INCLUDE ENTITIES THAT ARE
NOT INSURANCE COMPANIES.—Section 1842 of the Social
Security Act (42 U.S.C. 1395u) is amended—
(1) in subsection (a), in the matter preceding
paragraph (1) by striking ‘‘with carriers’’ and in-
serting ‘‘with agencies and organizations (referred to
in this part as ‘carriers’)’’; and
(2) by striking subsection (f).
(b) CHOICE OF FISCAL INTERMEDIARIES BY PROVID-
ERS OF SERVICES; SECRETARIAL FLEXIBILITY IN ASSIGN-
ING FUNCTIONS TO INTERMEDIARIES AND CARRIERS.—
(1) Section 1816(a) of such Act (42 U.S.C. 1395h(a)) is
amended to read as follows:
‘‘(a)(1) The Secretary may enter into contracts with
agencies or organizations to perform any or all of the fol-
lowing functions, or parts of those functions (or, to the
extent provided in a contract, to secure performance there-
of by other organizations):
‘‘(A) Determine (subject to the provisions of
section 1878 and to such review by the Secretary as
may be provided for by the contracts) the amount of
the payments required pursuant to this part to be
made to providers of services.
‘‘(B) Make payments described in subparagraph
(A).
‘‘(C) Provide consultative services to institu-
tions or agencies to enable them to establish and
maintain fiscal records necessary for purposes of
this part and otherwise to qualify as providers of
services.
‘‘(D) Serve as a center for, and communicate to
individuals entitled to benefits under this part and
to providers of services, any information or instruc-
tions furnished to the agency or organization by the
Secretary, and serve as a channel of communication
from individuals entitled to benefits under this part
and from providers of services to the Secretary.
‘‘(E) Make such audits of the records of provid-
ers of services as may be necessary to insure that
proper payments are made under this part.
‘‘(F) Perform the functions described by sub-
section (d).
‘‘(G) Perform such other functions as are nec-
essary to carry out the purposes of this part.
‘‘(2) As used in this title and title XI, the term ‘fiscal
intermediary’ means an agency or organization with a con-
tract under this section.’’.
(2) Subsections (d) and (e) of section 1816 of such
Act (42 U.S.C. 1395h) are amended to read as follows:
‘‘(d) Each provider of services shall have a fiscal
intermediary that—
‘‘(1) acts as a single point of contact for the
provider of services under this part;
‘‘(2) makes its services sufficiently available to
meet the needs of the provider of services; and
‘‘(3) is responsible and accountable for arrang-
ing the resolution of issues raised under this part by
the provider of services.
‘‘(e)(1)(A) The Secretary, at least every five years,
shall permit each provider of services (other than a home
health agency or a hospice program) to choose an agency
or organization (from among those proposed by the Sec-
retary, of which at least one has an office in the geo-
graphic area of the provider of services, except as provided
by subparagraph (B)(ii)(II)) as the fiscal intermediary
under subsection (d) for that provider of services. If a con-
tract with that fiscal intermediary is discontinued, the
Secretary shall permit the provider of services to choose
under the same conditions from among other agencies or
organizations.
‘‘(B)(i) The Secretary, in carrying out subparagraph
(A), shall permit a group of hospitals or a group of an-
(B) The first sentence of section 1816(f)(1) of such
Act (42 U.S.C. 1395h(f)(1)) is amended—
(i) by striking ‘‘develop standards, criteria, and
procedures’’ and inserting ‘‘, after public notice and
opportunity for comment, develop contract perform-
ance requirements’’, and
(ii) by striking ‘‘, and the Secretary shall estab-
lish standards and criteria with respect to the effi-
cient and effective administration of this part’’.
(C) Section 1842(b)(2) of such Act (42 U.S.C.
1395u(b)(2)) is amended—
(i) in subparagraph (A)—
(I) in the second sentence to read as fol-
lows: ‘‘The Secretary shall, after public notice
and opportunity for comment, develop contract
performance requirements for the efficient and
effective performance of contract obligations
under this section.’’, and
(II) by striking the third sentence;
(ii) in subparagraph (B), in the matter preced-
ing clause (i), by striking ‘‘establish standards’’ and
inserting ‘‘develop contract performance require-
ments’’, and
(iii) in subparagraph (D), by striking ‘‘stand-
ards and criteria’’ each place it appears and insert-
ing ‘‘contract performance requirements’’.
(4)(A) The matter in section 1816(b) of such Act (42
U.S.C. 1395h(b)) preceding paragraph (1) is amended by
striking ‘‘an agreement’’ and inserting ‘‘a contract’’.
(B) Paragraphs (1)(B) and (2)(A) of section 1816(b)
of such Act (42 U.S.C. 1395h(b)) are each amended by
striking ‘‘agreement’’ and inserting ‘‘contract’’.
(C) The first sentence of section 1816(c)(1) of such
Act (42 U.S.C. 1395h(c)(1)) is amended by striking ‘‘An
agreement’’ and inserting ‘‘A contract’’.
(D) The last sentence of section 1816(c)(1) of such
Act (42 U.S.C. 1395h(c)(1)) is amended by striking ‘‘an
agreement’’ and inserting ‘‘a contract’’.
(E) The matter in section 1816(c)(2)(A) of such Act
(42 U.S.C. 1395h(c)(2)(A)) preceding clause (i) is amend-
ed by striking ‘‘agreement’’ and inserting ‘‘contract’’.
(F) Section 1816(c)(3)(A) of such Act (42 U.S.C.
1395h(c)(3)(A)) is amended by striking ‘‘agreement’’ and
inserting ‘‘contract’’.
(G) The first sentence of section 1816(f)(1) of such
Act (42 U.S.C. 1395h(f)(1)) is amended by striking ‘‘an
agreement’’ and inserting ‘‘a contract’’.
(H) Section 1816(h) of such Act (42 U.S.C.
1395h(h)) is amended—
(i) by striking ‘‘An agreement’’ and inserting
‘‘A contract’’; and
(ii) by striking ‘‘the agreement’’ each place it
occurs and inserting ‘‘the contract’’.
(I) Section 1816(i)(1) of such Act (42 U.S.C.
1395h(i)(1)) is amended by striking ‘‘an agreement’’ and
inserting ‘‘a contract’’.
(J) Section 1816(j) of such Act (42 U.S.C. 1395h(j))
is amended by striking ‘‘An agreement’’ and inserting ‘‘A
contract’’.
(K) Section 1816(k) of such Act (42 U.S.C.
1395h(k)) is amended by striking ‘‘An agreement’’ and
inserting ‘‘A contract’’.
(L) Section 1816(l) of such Act (42 U.S.C. 1395h(l))
is amended by striking ‘‘an agreement’’ and inserting ‘‘a
contract’’.
(M) The matter in section 1842(a) of such Act (42
U.S.C. 1395u(a)) preceding paragraph (1) is amended by
striking ‘‘agreements’’ and inserting ‘‘contracts’’.
(N) Section 1842(h)(3)(A) of such Act (42 U.S.C.
1395u(h)(3)(A)) is amended by striking ‘‘an agreement’’
and inserting ‘‘a contract’’.
(5) Section 1816(f)(1) of such Act (42 U.S.C.
1395h(f)(1)) is amended by striking the second sentence.
(6)(A) The matter in section 1816(c)(2)(A) of such
Act (42 U.S.C. 1395h(c)(2)(A)) preceding clause (i) is
amended by inserting ‘‘that provides for making payments
under this part’’ after ‘‘this section’’.
(B) Section 1816(c)(3)(A) of such Act (42 U.S.C.
1395h(c)(3)(A)) is amended by inserting ‘‘that provides
for making payments under this part’’ after ‘‘this sec-
tion’’.
(C) Section 1816(k) of such Act (42 U.S.C.
1395h(k)) is amended by inserting ‘‘(as appropriate)’’
after ‘‘submit’’.
(D) The matter in section 1842(a) of such Act (42
U.S.C. 1395u(a)) preceding paragraph (1) is amended by
striking ‘‘some or all of the following functions’’ and in-
serting ‘‘any or all of the following functions, or parts of
those functions’’.
(E) The first sentence of section 1842(b)(2)(C) of
such Act (42 U.S.C. 1395u(b)(2)(C)) is amended by in-
serting ‘‘(as appropriate)’’ after ‘‘carriers’’.
(F) The matter preceding subparagraphs (A) in the
first sentence of section 1842(b)(3) of such Act (42 U.S.C.
1395u(b)(3)) is amended by inserting ‘‘(as appropriate)’’
after ‘‘contract’’.