I 
114TH CONGRESS 
1ST SESSION H. R. 1526 
To amend title XVIII of the Social Security Act to modify policies relating 
to payment under the Medicare program for durable medical equipment, 
orthotics and prosthetics, and prosthetic devices, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 23, 2015 
Mr. MEADOWS introduced the following bill; which was referred to the Com-
mittee on Ways and Means, and in addition to the Committee on Energy 
and Commerce, for a period to be subsequently determined by the Speak-
er, in each case for consideration of such provisions as fall within the ju-
risdiction of the committee concerned 
A BILL 
To amend title XVIII of the Social Security Act to modify 
policies relating to payment under the Medicare program 
for durable medical equipment, orthotics and prosthetics, 
and prosthetic devices, and for other purposes. 
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 Audit Im-
provement Act of 2015’’. 
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SEC. 2. MEDICARE PAYMENT FOR DURABLE MEDICAL 
EQUIPMENT, ORTHOTICS AND PROSTHETICS, 
AND PROSTHETIC DEVICES. 
(a) USE OF PROSTHETIST AND ORTHOTIST NOTES 
FOR DETERMINATIONS OF MEDICAL NECESSITY.—Sec-
tion 1834(h)(1) of the Social Security Act (42 U.S.C. 
1395m(h)(1)) is amended by adding at the end the fol-
lowing new subparagraph: 
‘‘(I) 
USE
OF
PROSTHETIST
AND 
ORTHOTIST
NOTES
FOR
DETERMINATIONS
OF 
MEDICAL
NECESSITY.—In determining under 
section 1862(a)(1) whether an orthotic or pros-
thetic or prosthetic device furnished to an indi-
vidual on or after the date of the enactment of 
this subparagraph is reasonable and necessary, 
any records or documentation of an orthotist or 
prosthetist who furnished such orthotic or pros-
thetic or prosthetic device to such individual 
shall be considered part of the medical record 
of the individual.’’. 
(b) AUTHORIZING MAC AND RAC REVIEW FOR SUP-
PLIER LICENSE OR ACCREDITATION FOR DURABLE MED-
ICAL EQUIPMENT AND ORTHOTICS AND PROSTHETICS.— 
(1) MAC REVIEW.—Section 1874A(a)(4)(A) of 
the Social Security Act (42 U.S.C. 1395kk– 
1(a)(4)(A)) is amended by inserting ‘‘, including de-
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termining that payment shall not be made to a sup-
plier of durable medical equipment, or of orthotics 
and prosthetics, for which a claim for payment is 
made on or after the date of the enactment of the 
Medicare Audit Improvement Act of 2015 on ac-
count of the application of section 1834(h)(1)(F) 
(relating to supplier licensing or accreditation by a 
National Board)’’ before the period at the end. 
(2) RAC REVIEW.—Section 1893(h) of the So-
cial Security Act (42 U.S.C. 1395ddd(h)) is amend-
ed by adding at the end the following new para-
graph: 
‘‘(10) REVIEW OF SUPPLIER LICENSE OR AC-
CREDITATION FOR DURABLE MEDICAL EQUIPMENT 
AND ORTHOTICS AND PROSTHETICS.—For purposes 
of paragraph (1), with respect to durable medical 
equipment and orthotics and prosthetics for which a 
claim for payment was made by a supplier in 2011 
or a subsequent year, a payment that should not 
have been made to such supplier for such durable 
medical equipment or such orthotics and prosthetics 
on 
account 
of 
the 
application 
of 
section 
1834(h)(1)(F) (relating to supplier licensing or ac-
creditation by a National Board) shall be considered 
an overpayment under this title.’’. 
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(c) EXEMPTING SERVICES THAT RECEIVE PRIOR 
AUTHORIZATION FROM RAC REVIEW.—Section 1893(h) 
of the Social Security Act (42 U.S.C. 1395ddd(h)), as 
amended by subsection (b)(2), is further amended— 
(1) in paragraph (1), by inserting ‘‘subject to 
paragraph (11),’’ after ‘‘Program,’’; and 
(2) by adding at the end the following new 
paragraph: 
‘‘(11) SERVICES THAT RECEIVE PRIOR AUTHOR-
IZATION EXEMPTED FROM REVIEW.—Recovery audit 
contractors may not conduct reviews with respect to 
payments under this title for durable medical equip-
ment, orthotics or prosthetics, or prosthetic devices 
for which audits under this subsection have not been 
initiated before the date of the enactment of this 
paragraph and to which prior authorization under 
this title applies.’’. 
(d) ANNUAL REPORT ON OVERTURNED MAC AND 
RAC DENIALS.—Section 1874A of the Social Security Act 
(42 U.S.C. 1395kk–1) is amended by adding at the end 
the following new subsection: 
‘‘(h) ANNUAL REPORT ON OVERTURNED MAC AND 
RAC DENIALS.— 
‘‘(1) IN GENERAL.—Not later than March 1 of 
2016, and of each year thereafter, the Secretary 
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shall submit to Congress a report that includes the 
information described in paragraph (2). 
‘‘(2) INFORMATION DESCRIBED.—The informa-
tion described in this paragraph, with respect to de-
terminations by medicare administrative contractors 
that payment cannot be made, and by recovery audit 
contractors that payment should not have been 
made, under this title for items and services, is the 
following: 
‘‘(A) The number of such determinations 
that, in the prior year, were determined on ap-
peal to have been incorrect. 
‘‘(B) The HCPCS codes that, in the prior 
year, accounted for— 
‘‘(i) the greatest number of such de-
terminations; and 
‘‘(ii) the greatest total amount pay-
ment being at issue in such determina-
tions. 
‘‘(C) The number of such determinations 
that, in the prior year, were based upon a de-
termination— 
‘‘(i) that the items and services were 
furnished to an individual as an inpatient 
rather than as an outpatient; 
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‘‘(ii) regarding the application of the 
medical review activities described in the 
notice entitled ‘Selecting Hospital Claims 
for Patient Status Reviews: Admissions On 
or After October 1, 2013’, posted on the 
Internet website of the Centers for Medi-
care 
& 
Medicaid 
Services 
(commonly 
known as the ‘two-midnights rule’); 
‘‘(iii) that applied to a provider of 
outpatient services; and 
‘‘(iv) regarding a claim for payment 
for orthotics or prosthetics or prosthetic 
devices.’’. 
(e) TREATING ORTHOTICS AND PROSTHETICS SEPA-
RATELY FROM MEDICAL EQUIPMENT AND SUPPLIES.— 
(1) IN GENERAL.—Section 1834 of the Social 
Security Act (42 U.S.C. 1395m) is amended— 
(A) in subsection (j)(5)— 
(i) by striking subparagraph (C); and 
(ii) by redesignating subparagraphs 
(D) through (F) as subparagraphs (C) 
through (E), respectively; 
(B) by adding at the end the following new 
subsection: 
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‘‘(r) 
REQUIREMENTS
FOR
ORTHOTISTS
AND 
PROSTHETISTS.— 
‘‘(1) ISSUANCE
AND
RENEWAL
OF
SUPPLIER 
NUMBER.— 
‘‘(A) PAYMENT.—No payment may be 
made under this part for orthotics and pros-
thetics (as described in section 1861(s)(9)) fur-
nished by a supplier of orthotics and prosthetics 
unless such supplier obtains (and renews at 
such intervals as the Secretary may require) a 
supplier number. 
‘‘(B) STANDARDS FOR POSSESSING A SUP-
PLIER NUMBER.—A supplier of orthotics and 
prosthetics may not obtain a supplier number 
unless the supplier— 
‘‘(i) complies with all applicable State 
and Federal licensure and regulatory re-
quirements; 
‘‘(ii) acquires accreditation from the 
American 
Board 
for 
Certification 
in 
Orthotics, Prosthetics and Pedorthics, Inc., 
the Board of Certification/Accreditation, 
International, or such other accreditation 
entity that the Secretary determines to 
have accreditation standards that are 
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equivalent to the accreditation standards of 
such boards; 
‘‘(iii) maintains a physical facility on 
an appropriate site; 
‘‘(iv) has proof of appropriate liability 
insurance; and 
‘‘(v) meets such other requirements as 
the Secretary may specify. 
‘‘(C) PROHIBITION
AGAINST
MULTIPLE 
SUPPLIER NUMBERS.—The Secretary may not 
issue more than one supplier number to any 
supplier of orthotics and prosthetics unless the 
issuance of more than one number is appro-
priate to identify other entities under the sup-
plier’s ownership or control. 
‘‘(D) PROHIBITION AGAINST DELEGATION 
OF
SUPPLIER
DETERMINATIONS.—The Sec-
retary may not delegate (other than by contract 
under section 1842) the responsibility to deter-
mine whether suppliers meet the standards nec-
essary to obtain a supplier number. 
‘‘(E) CONSTRUCTION RELATING TO PRE-
VIOUSLY
ISSUED
AND
RENEWED
SUPPLIER 
NUMBERS.—Supplier numbers obtained under 
subsection (j)(1) prior to the enactment of this 
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subsection by suppliers of orthotics and pros-
thetics that meet the standards described in 
subparagraph (B) shall be considered to have 
obtained a supplier number for purposes of sub-
paragraph (A). 
‘‘(2) CERTIFICATES OF MEDICAL NECESSITY.— 
‘‘(A) INFORMATION
PROVIDED
BY
SUP-
PLIERS OF ORTHOTICS AND PROSTHETICS ON 
CERTIFICATES OF MEDICAL NECESSITY.— 
‘‘(i) IN
GENERAL.—A supplier of 
orthotics and prosthetics may distribute to 
physicians, or to individuals entitled to 
benefits under this part, a certificate of 
medical necessity for commercial purposes 
if the certificate contains the following in-
formation: 
‘‘(I) An identification of the sup-
plier and the beneficiary to whom 
such orthotics and prosthetics are fur-
nished. 
‘‘(II) An identification of the 
treating 
physician, 
including 
the 
name, Medicare provider number, ad-
dress, and telephone number of such 
physician. 
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‘‘(III) A description of such 
orthotics and prosthetics. 
‘‘(IV) Any billing code identifying 
such orthotics and prosthetics, includ-
ing the HCPCS codes, and summary 
descriptors of the items and services 
being recommended. 
‘‘(V) The codes used under this 
title for payment for such orthotics 
and prosthetics, a description of the 
medical and functional condition of 
the beneficiary, and information about 
the need of the beneficiary for the 
orthotics or prosthetics. 
‘‘(VI) Any other administrative 
information identified by the Sec-
retary. 
‘‘(ii) 
INFORMATION
ON
PAYMENT 
AMOUNT AND CHARGES.—If a supplier dis-
tributes a certificate of medical necessity 
for orthotics and prosthetics, the supplier 
shall also list on the certificate of medical 
necessity the fee schedule amount and the 
supplier’s charge for the orthotics and 
prosthetics being furnished prior to dis-
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tribution of such certificate to the physi-
cian. 
‘‘(iii) PENALTY.—Any supplier of 
orthotics and prosthetics who knowingly 
and willfully distributes a certificate of 
medical necessity in violation of clause (i) 
or fails to provide the information required 
under clause (ii) or (iii) is subject to a civil 
money penalty in an amount not to exceed 
$1,000 for each such certificate of medical 
necessity so distributed. The provisions of 
section 1128A (other than subsections (a) 
and (b)) shall apply to civil money pen-
alties under this subparagraph in the same 
manner as they apply to a penalty or pro-
ceeding under section 1128A(a). 
‘‘(B) SIGNATURE OF TREATING PHYSICIAN 
REQUIRED.—The Secretary shall require that, 
in order for a certificate of medical necessity 
submitted to the Secretary to be treated as 
showing that orthotics and prosthetics are rea-
sonable and necessary for the diagnosis or 
treatment of an illness or injury or to improve 
the functioning of a malformed body member, 
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the certificate of medical necessity be signed by 
the treating physician. 
‘‘(C) DEFINITION.—For purposes of this 
paragraph, the term ‘certificate of medical ne-
cessity’ means a form or other document, in-
cluding a detailed written order, containing in-
formation required by the Secretary to be sub-
mitted to show that orthotics and prosthetics 
are reasonable and necessary for the diagnosis 
or treatment of illness or injury or to improve 
the functioning of a malformed body member. 
‘‘(3) COVERAGE AND REVIEW CRITERIA.—The 
Secretary shall annually review the coverage and uti-
lization of orthotics and prosthetics to determine 
whether such orthotics and prosthetics should be 
made subject to coverage and utilization review cri-
teria, and if appropriate, shall develop and apply 
such criteria to such items. 
‘‘(4) LIMITATION ON PATIENT LIABILITY.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), if a supplier of orthotics and pros-
thetics furnishes orthotics and prosthetics to an 
individual for which no payment may be made 
under this part (including, subject to section 
1879, because the orthotics and prosthetics are 
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not reasonable and necessary for the diagnosis 
or treatment of illness or injury or to improve 
the functioning of a malformed body member, 
as required under section 1862(a)(1)), any ex-
penses incurred for such orthotics and pros-
thetics furnished to an individual by such a 
supplier not on an assigned basis shall be the 
responsibility of such supplier. The individual 
shall have no financial responsibility for such 
expenses and the supplier shall refund on a 
timely basis to the individual (and shall be lia-
ble to the individual for) any amounts collected 
from the individual for such items or services. 
The provisions of subsection (a)(18) shall apply 
to refunds required under the previous sentence 
in the same manner as such provisions apply to 
refunds under such subsection. 
‘‘(B) 
EXCEPTION.—If 
a 
supplier 
of 
orthotics and prosthetics furnishes orthotics 
and prosthetics to an individual for which pay-
ment is denied in advance under subsection 
(a)(15), expenses incurred for such orthotics 
and prosthetics shall be the responsibility of the 
individual.’’. 
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(2) 
CONFORMING
AMENDMENTS.—Section 
1865(a)(1) of the Social Security Act (42 U.S.C. 
1395bb(a)(1)) is amended by inserting ‘‘or section 
1834(r), as applicable,’’ after ‘‘section 1834(j)’’. 
(f) LIMITATION OF COMPETITIVE ACQUISITION FOR 
OFF-THE-SHELF ORTHOTICS.—Section 1847(a)(7)(A) of 
the Social Security Act (42 U.S.C. 1395w–3(a)(7)(A)) is 
amended— 
(1) in clause (i), by striking ‘‘or’’ at the end; 
(2) by redesignating clause (ii) as clause (iii); 
and 
(3) by inserting after clause (i) the following 
new clause: 
‘‘(ii) by an orthotist or prosthetist de-
scribed in subclause (II) or (III) of section 
1834(h)(1)(F)(iii) to the patients of the 
orthotist or prosthetist as part of the pro-
fessional service of the orthotist or pros-
thetist; or’’. 
(g) LIMITING RECOUPMENT FROM MEDICARE AP-
PELLANTS UNTIL COMPLETION OF ALJ APPEALS PROC-
ESS.—Section 1869 of the Social Security Act (42 U.S.C. 
1395ff) is amended by adding at the end the following 
new subsection: 
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‘‘(j) LIMITATION ON RECOUPMENT PRIOR TO COM-
PLETION OF ALJ APPEALS PROCESS.— 
‘‘(1) IN GENERAL.—Notwithstanding any other 
provision of this section, the Secretary may not re-
coup more than half of the amount of any payments 
made to a qualifying provider or supplier with re-
spect to a claim for items or services that is subject 
to a determination, reconsideration, or hearing 
under this subsection, before— 
‘‘(A) the date on which a decision has been 
rendered under subsection (d)(1) with respect 
to such claim; or 
‘‘(B) in the case of a determination or re-
consideration for such claim which is not eligi-
ble for a hearing under subsection (d)(1), the 
date on which the appeals process for such 
claim under this section (other than subsection 
(h)) is treated as exhausted. 
‘‘(2) QUALIFYING PROVIDER OR SUPPLIER DE-
FINED.—For purposes of paragraph (1), the term 
‘qualifying provider or supplier’ means a provider of 
services or supplier that— 
‘‘(A) has maintained a Medicare provider 
number for six years or longer; 
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‘‘(B) is not under investigation for any po-
tential violations of applicable Federal and 
State laws and regulations; 
‘‘(C) has a good record of submitting prop-
er claims for items or services under this title, 
as determined by the Secretary; and 
‘‘(D) furnished the items or services de-
scribed in paragraph (1) to an individual in 
person.’’. 
(h) ELIGIBILITY FOR PAYMENT FOR SUPPLIERS AND 
PROVIDERS BASED ON QUALIFICATIONS.— 
(1) IN GENERAL.—Title XVIII of the Social Se-
curity Act is amended by inserting after section 
1863 (42 U.S.C. 1395z) the following new section: 
‘‘SEC. 1863A. ELIGIBILITY FOR PAYMENT FOR SUPPLIERS 
AND PROVIDERS BASED ON QUALIFICATIONS. 
‘‘(a) IN GENERAL.—No payment may be made under 
this title for an item or service that is furnished— 
‘‘(1) in a State that requires a provider or sup-
plier to be licensed in order to furnish such item or 
service, unless the provider or supplier furnishing 
such item or service possesses all applicable licensure 
from the State; or 
‘‘(2) in a State that does not require a provider 
or supplier to be licensed in order to furnish such 
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item or service, unless the provider or supplier meets 
all applicable qualifications, as determined by the 
Secretary. 
‘‘(b) APPLICABLE QUALIFICATIONS DEFINED.—For 
purposes of subsection (a), the term ‘applicable qualifica-
tions’ means, with respect to a provider or supplier, all 
applicable accreditations, certifications, and credentials re-
quired of such provider or supplier under this title in order 
for such provider and supplier to receive payment under 
this title for items or services furnished by such provider 
or supplier, including the requirements described in the 
special payment rules for certain prosthetics and custom- 
fabricated orthotics under section 1834(h)(1)(F).’’. 
(2) EFFECTIVE DATE.—This section shall apply 
with respect to items and services furnished on or 
after the date of the enactment of this section. 
Æ 
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