144
(2) REPORT.—The Secretary shall submit to 
Congress a report on the study conducted under para-
graph (1) by not later than 18 months after the date 
of the enactment of this Act. 
(d) CONSTRUCTION.—Nothing in this section shall be 
construed as preventing home health agencies from col-
lecting non-medicare/medicaid OASIS information for 
their own use. 
SEC. 515. MISCELLANEOUS REPORTS, STUDIES, AND PUBLI-
CATION REQUIREMENTS. 
(a) GAO REPORTS ON THE PHYSICIAN COMPENSA-
TION.—
(1) SUSTAINABLE
GROWTH
RATE
AND
UP-
DATES.—Not later than 6 months after the date of the 
enactment of this Act, the Comptroller General of the 
United States shall submit to Congress a report on 
the appropriateness of the updates in the conversion 
factor under subsection (d)(3) of section 1848 of the 
Social Security Act (42 U.S.C. 1395w–4), including 
the appropriateness of the sustainable growth rate for-
mula under subsection (f) of such section for 2002 
and succeeding years. Such report shall examine the 
stability and predictability of such updates and rate 
and alternatives for the use of such rate in the up-
dates.
145
(2) PHYSICIAN COMPENSATION GENERALLY.—Not 
later than 12 months after the date of the enactment 
of this Act, the Comptroller General shall submit to 
Congress a report on all aspects of physician com-
pensation for services furnished under title XVIII of 
the Social Security Act, and how those aspects inter-
act and the effect on appropriate compensation for 
physician services. Such report shall review alter-
natives for the physician fee schedule under section 
1848 of such title (42 U.S.C. 1395w–4). 
(b) ANNUAL PUBLICATION OF LIST OF NATIONAL COV-
ERAGE DETERMINATIONS.—The Secretary shall provide, in 
an appropriate annual publication available to the public, 
a list of national coverage determinations made under title 
XVIII of the Social Security Act in the previous year and 
information on how to get more information with respect 
to such determinations. 
(c) GAO REPORT ON FLEXIBILITY IN APPLYING HOME 
HEALTH CONDITIONS
OF PARTICIPATION
TO PATIENTS 
WHO ARE NOT MEDICARE BENEFICIARIES.—Not later than 
6 months after the date of the enactment of this Act, the 
Comptroller General of the United States shall submit to 
Congress a report on the implications if there were flexi-
bility in the application of the medicare conditions of par-
ticipation for home health agencies with respect to groups
146
or types of patients who are not medicare beneficiaries. The 
report shall include an analysis of the potential impact of 
such flexible application on clinical operations and the re-
cipients of such services and an analysis of methods for 
monitoring the quality of care provided to such recipients. 
(d) OIG REPORT ON NOTICES RELATING TO USE OF 
HOSPITAL LIFETIME RESERVE DAYS.—Not later than 1 
year after the date of the enactment of this Act, the Inspec-
tor General of the Department of Health and Human Serv-
ices shall submit a report to Congress on—
(1) the extent to which hospitals provide notice 
to medicare beneficiaries in accordance with applica-
ble requirements before they use the 60 lifetime reserve 
days described in section 1812(a)(1) of the Social Se-
curity Act (42 U.S.C. 1395d(a)(1)); and 
(2) the appropriateness and feasibility of hos-
pitals providing a notice to such beneficiaries before 
they completely exhaust such lifetime reserve days.
SECTION 1. SHORT TITLE; AMENDMENTS TO SOCIAL SECU-
RITY ACT; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as 
the ‘‘Medicare Regulatory and Contracting 
Reform Act of 2003’’. 
(b) 
AMENDMENTS
TO
SOCIAL
SECURITY 
ACT.—Except as otherwise specifically pro-
147
vided, whenever in this Act an amendment is 
expressed in terms of an amendment to or re-
peal of a section or other provision, the ref-
erence shall be considered to be made to that 
section or other provision of the Social Secu-
rity Act. 
(c) TABLE OF CONTENTS.—The table of con-
tents of 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 Bene-
ficiary Ombudsman. 
Sec. 304. Beneficiary outreach demonstration program. 
Sec. 305. Inclusion of additional information in notices to 
beneficiaries about skilled nursing facility bene-
fits. 
Sec. 306. Information on medicare-certified skilled nursing fa-
cilities in hospital discharge plans. 
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. 
Sec. 405. Recovery of overpayments. 
Sec. 406. Provider enrollment process; right of appeal.
148
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 man-
agement (E & M) documentation guidelines. 
Sec. 502. Improvement in oversight of technology and cov-
erage. 
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 to provide core hos-
pice 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. Enhancement of program integrity efforts in medicare 
provider enrollment. 
Sec. 512. Other provisions.
SEC. 2. FINDINGS AND CONSTRUCTION. 
(a) FINDINGS.—Congress finds the fol-
lowing: 
(1) The overwhelming majority of 
providers of services and suppliers in the 
United States are law-abiding persons 
who provide important health care serv-
ices to patients each day. 
(2) The Secretary of Health and 
Human Services should work to stream-
line paperwork requirements under the 
medicare 
program 
and 
communicate 
clearer instructions to providers of serv-
149
ices and suppliers so that they may spend 
more time caring for patients. 
(b) CONSTRUCTION.—Nothing in this Act 
shall be construed—
(1) to compromise or affect existing 
legal remedies for addressing fraud or 
abuse, whether it be criminal prosecu-
tion, civil enforcement, or administrative 
remedies, including under sections 3729 
through 3733 of title 31, United States 
Code (known as the False Claims Act); or 
(2) to prevent or impede the Depart-
ment of Health and Human Services in 
any way from its ongoing efforts to elimi-
nate waste, fraud, and abuse in the medi-
care program. 
Furthermore, the consolidation of medicare 
administrative contracting set forth in this 
Act does not constitute consolidation of the 
Federal Hospital Insurance Trust Fund and 
the Federal Supplementary Medical Insur-
ance Trust Fund or reflect any position on 
that issue.
150
SEC. 3. DEFINITIONS. 
(a) USE OF TERM SUPPLIER IN MEDICARE.—
Section 1861 (42 U.S.C. 1395x) is amended by 
inserting after subsection (c) the following 
new subsection: 
‘‘Supplier 
‘‘(d) The term ‘supplier’ means, unless the 
context otherwise requires, a physician or 
other practitioner, a facility, or other entity 
(other than a provider of services) that fur-
nishes items or services under this title.’’. 
(b) OTHER TERMS USED
IN ACT.—In this 
Act: 
(1) BIPA.—The term ‘‘BIPA’’ means 
the Medicare, Medicaid, and SCHIP Bene-
fits Improvement and Protection Act of 
2000, as enacted into law by section 
1(a)(6) of Public Law 106–554. 
(2) SECRETARY.—The term ‘‘Secretary’’ 
means 
the 
Secretary 
of 
Health 
and 
Human Services. 
TITLE I—REGULATORY REFORM 
SEC. 101. ISSUANCE OF REGULATIONS. 
(a) REGULAR TIMELINE FOR PUBLICATION OF 
FINAL RULES.—
151
(1) IN
GENERAL.—Section 1871(a) (42 
U.S.C. 1395hh(a)) is amended by adding 
at the end the following new paragraph: 
‘‘(3)(A) The Secretary, in consultation with 
the Director of the Office of Management and 
Budget, shall establish and publish a regular 
timeline for the publication of final regula-
tions based on the previous publication of a 
proposed regulation or an interim final regu-
lation. 
‘‘(B) Such timeline may vary among dif-
ferent regulations based on differences in the 
complexity of the regulation, the number and 
scope of comments received, and other rel-
evant factors, but shall not be longer than 3 
years 
except 
under 
exceptional 
cir-
cumstances. If the Secretary intends to vary 
such timeline with respect to the publication 
of a final regulation, the Secretary shall cause 
to have published in the Federal Register no-
tice of the different timeline by not later than 
the timeline previously established with re-
spect to such regulation. Such notice shall in-
clude a brief explanation of the justification 
for such variation.
152
‘‘(C) In the case of interim final regula-
tions, upon the expiration of the regular 
timeline established under this paragraph for 
the publication of a final regulation after op-
portunity for public comment, the interim 
final regulation shall not continue in effect 
unless the Secretary publishes (at the end of 
the regular timeline and, if applicable, at the 
end of each succeeding 1-year period) a notice 
of continuation of the regulation that in-
cludes an explanation of why the regular 
timeline (and any subsequent 1-year exten-
sion) was not complied with. If such a notice 
is published, the regular timeline (or such 
timeline as previously extended under this 
paragraph) for publication of the final regula-
tion shall be treated as having been extended 
for 1 additional year. 
‘‘(D) The Secretary shall annually submit 
to Congress a report that describes the in-
stances in which the Secretary failed to pub-
lish a final regulation within the applicable 
regular timeline under this paragraph and 
that provides an explanation for such fail-
ures.’’.
153
(2) EFFECTIVE DATE.—The amendment 
made by paragraph (1) shall take effect 
on the date of the enactment of this Act. 
The Secretary shall provide for an appro-
priate transition to take into account the 
backlog of previously published interim 
final regulations. 
(b) LIMITATIONS ON NEW MATTER IN FINAL 
REGULATIONS.—
(1) IN
GENERAL.—Section 1871(a) (42 
U.S.C. 1395hh(a)), as amended by sub-
section (a), is amended by adding at the 
end the following new paragraph: 
‘‘(4) If the Secretary publishes a final reg-
ulation that includes a provision that is not 
a logical outgrowth of a previously published 
notice of proposed rulemaking or interim 
final rule, such provision shall be treated as 
a proposed regulation and shall not take ef-
fect until there is the further opportunity for 
public comment and a publication of the pro-
vision again as a final regulation.’’. 
(2) EFFECTIVE DATE.—The amendment 
made by paragraph (1) shall apply to
154
final regulations published on or after 
the date of the enactment of this Act. 
SEC. 102. COMPLIANCE WITH CHANGES IN REGULATIONS 
AND POLICIES. 
(a) NO RETROACTIVE APPLICATION OF SUB-
STANTIVE CHANGES.—
(1) IN
GENERAL.—Section 1871 (42 
U.S.C. 1395hh), as amended by section 
101(a), is amended by adding at the end 
the following new subsection: 
‘‘(d)(1)(A) A substantive change in regula-
tions, 
manual 
instructions, 
interpretative 
rules, statements of policy, or guidelines of 
general applicability under this title shall not 
be applied (by extrapolation or otherwise) 
retroactively to items and services furnished 
before the effective date of the change, unless 
the Secretary determines that—
‘‘(i) such retroactive application is 
necessary to comply with statutory re-
quirements; or 
‘‘(ii) failure to apply the change retro-
actively would be contrary to the public 
interest.’’.
155
(2) EFFECTIVE DATE.—The amendment 
made by paragraph (1) shall apply to sub-
stantive changes issued on or after the 
date of the enactment of this Act. 
(b) TIMELINE FOR COMPLIANCE WITH SUB-
STANTIVE CHANGES AFTER NOTICE.—
(1) IN GENERAL.—Section 1871(d)(1), as 
added by subsection (a), is amended by 
adding at the end the following: 
‘‘(B)(i) Except as provided in clause (ii), a 
substantive change referred to in subpara-
graph (A) shall not become effective before 
the end of the 30-day period that begins on 
the date that the Secretary has issued or pub-
lished, as the case may be, the substantive 
change. 
‘‘(ii) The Secretary may provide for such 
a substantive change to take effect on a date 
that precedes the end of the 30-day period 
under clause (i) if the Secretary finds that 
waiver of such 30-day period is necessary to 
comply with statutory requirements or that 
the application of such 30-day period is con-
trary to the public interest. If the Secretary 
provides for an earlier effective date pursu-
156
ant to this clause, the Secretary shall include 
in the issuance or publication of the sub-
stantive change a finding described in the 
first sentence, and a brief statement of the 
reasons for such finding. 
‘‘(C) No action shall be taken against a 
provider of services or supplier with respect 
to noncompliance with such a substantive 
change for items and services furnished be-
fore the effective date of such a change.’’. 
(2) EFFECTIVE DATE.—The amendment 
made by paragraph (1) shall apply to 
compliance actions undertaken on or 
after the date of the enactment of this 
Act. 
(c) RELIANCE ON GUIDANCE.—
(1) IN
GENERAL.—Section 1871(d), as 
added 
by 
subsection 
(a), 
is 
further 
amended by adding at the end the fol-
lowing new paragraph: 
‘‘(2)(A) If—
‘‘(i) a provider of services or supplier 
follows the written guidance (which may 
be transmitted electronically) provided 
by the Secretary or by a medicare con-
157
tractor (as defined in section 1889(g)) act-
ing within the scope of the contractor’s 
contract authority, with respect to the 
furnishing of items or services and sub-
mission of a claim for benefits for such 
items or services with respect to such 
provider or supplier; 
‘‘(ii) the Secretary determines that 
the provider of services or supplier has 
accurately presented the circumstances 
relating to such items, services, and claim 
to the contractor in writing; and 
‘‘(iii) the guidance was in error; 
the provider of services or supplier shall not 
be subject to any sanction (including any pen-
alty or requirement for repayment of any 
amount) if the provider of services or supplier 
reasonably relied on such guidance. 
‘‘(B) Subparagraph (A) shall not be con-
strued as preventing the recoupment or re-
payment (without any additional penalty) re-
lating to an overpayment insofar as the over-
payment was solely the result of a clerical or 
technical operational error.’’.
158
(2) EFFECTIVE DATE.—The amendment 
made by paragraph (1) shall take effect 
on the date of the enactment of this Act 
but shall not apply to any sanction for 
which notice was provided on or before 
the date of the enactment of this Act. 
SEC. 103. REPORTS AND STUDIES RELATING TO REGU-
LATORY REFORM. 
(a) GAO STUDY ON ADVISORY OPINION AU-
THORITY.—
(1) STUDY.—The Comptroller General 
of the United States shall conduct a study 
to determine the feasibility and appro-
priateness of establishing in the Sec-
retary authority to provide legally bind-
ing advisory opinions on appropriate in-
terpretation and application of regula-
tions to carry out the medicare program 
under title XVIII of the Social Security 
Act. Such study shall examine the appro-
priate timeframe for issuing such advi-
sory opinions, as well as the need for ad-
ditional staff and funding to provide such 
opinions.
159
(2) REPORT.—The Comptroller Gen-
eral shall submit to Congress a report on 
the study conducted under paragraph (1) 
by not later than one year after the date 
of the enactment of this Act. 
(b) REPORT ON LEGAL AND REGULATORY IN-
CONSISTENCIES.—Section 
1871 
(42 
U.S.C. 
1395hh), as amended by section 2(a), is 
amended by adding at the end the following 
new subsection: 
‘‘(e)(1) Not later than 2 years after the 
date of the enactment of this subsection, and 
every 2 years thereafter, the Secretary shall 
submit to Congress a report with respect to 
the administration of this title and areas of in-
consistency or conflict among the various pro-
visions under law and regulation. 
‘‘(2) In preparing a report under para-
graph (1), the Secretary shall collect—
‘‘(A) information from individuals en-
titled to benefits under part A or enrolled 
under part B, or both, providers of serv-
ices, and suppliers and from the Medi-
care Beneficiary Ombudsman and the 
Medicare Provider Ombudsman with re-
160
spect to such areas of inconsistency and 
conflict; and 
‘‘(B) information from medicare con-
tractors that tracks the nature of written 
and telephone inquiries. 
‘‘(3) A report under paragraph (1) shall in-
clude a description of efforts by the Secretary 
to reduce such inconsistency or conflicts, and 
recommendations for legislation or adminis-
trative action that the Secretary determines 
appropriate to further reduce such inconsist-
ency or conflicts.’’. 
TITLE II—CONTRACTING 
REFORM 
SEC. 201. INCREASED FLEXIBILITY IN MEDICARE ADMINIS-
TRATION. 
(a) CONSOLIDATION
AND
FLEXIBILITY
IN 
MEDICARE ADMINISTRATION.—
(1) IN GENERAL.—Title XVIII is amend-
ed by inserting after section 1874 the fol-
lowing new section: 
‘‘CONTRACTS WITH MEDICARE ADMINISTRATIVE 
CONTRACTORS 
‘‘SEC. 1874A. (a) AUTHORITY.—
‘‘(1) AUTHORITY
TO
ENTER
INTO
CON-
TRACTS.—The Secretary may enter into
161
contracts with any eligible entity to serve 
as a medicare administrative contractor 
with respect to the performance of any or 
all of the functions described in para-
graph (4) or parts of those functions (or, 
to the extent provided in a contract, to 
secure performance thereof by other enti-
ties). 
‘‘(2) ELIGIBILITY OF ENTITIES.—An enti-
ty is eligible to enter into a contract with 
respect to the performance of a par-
ticular function described in paragraph 
(4) only if—
‘‘(A) the entity has demonstrated 
capability to carry out such function; 
‘‘(B) the entity complies with such 
conflict of interest standards as are 
generally applicable to Federal acqui-
sition and procurement; 
‘‘(C) the entity has sufficient as-
sets to financially support the per-
formance of such function; and 
‘‘(D) the entity meets such other 
requirements as the Secretary may 
impose.