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section (a)(1)(B),’’ and inserting ‘‘contract
under section 1874A that provides for making
payments under this part’’;
(C) in paragraph (3)(A), by striking ‘‘sub-
section 
(a)(1)(B)’’ 
and 
inserting 
‘‘section
1874A(a)(3)(B)’’;
(D) in paragraph (4), in the matter pre-
ceding subparagraph (A), by striking ‘‘carrier’’
and inserting ‘‘medicare administrative con-
tractor’’; and
(E) by striking paragraphs (5) and (6).
(5) Subsections (d), (e), and (f) are repealed.
(6) Subsection (g) is amended by striking ‘‘car-
rier or carriers’’ and inserting ‘‘medicare administra-
tive contractor or contractors’’.
(7) Subsection (h) is amended—
(A) in paragraph (2)—
(i) by striking ‘‘Each carrier having
an agreement with the Secretary under
subsection (a)’’ and inserting ‘‘The Sec-
retary’’; and
(ii) by striking ‘‘Each such carrier’’
and inserting ‘‘The Secretary’’;
(B) in paragraph (3)(A)—
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(i) by striking ‘‘a carrier having an
agreement with the Secretary under sub-
section (a)’’ and inserting ‘‘medicare ad-
ministrative contractor having a contract
under section 1874A that provides for
making payments under this part’’; and
(ii) by striking ‘‘such carrier’’ and in-
serting ‘‘such contractor’’;
(C) in paragraph (3)(B)—
(i) by striking ‘‘a carrier’’ and insert-
ing ‘‘a medicare administrative contractor’’
each place it appears; and
(ii) by striking ‘‘the carrier’’ and in-
serting ‘‘the contractor’’ each place it ap-
pears; and
(D) in paragraphs (5)(A) and (5)(B)(iii),
by striking ‘‘carriers’’ and inserting ‘‘medicare
administrative contractors’’ each place it ap-
pears.
(8) Subsection (l) is amended—
(A) in paragraph (1)(A)(iii), by striking
‘‘carrier’’ and inserting ‘‘medicare administra-
tive contractor’’; and
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(B) in paragraph (2), by striking ‘‘carrier’’
and inserting ‘‘medicare administrative con-
tractor’’.
(9) Subsection (p)(3)(A) is amended by striking
‘‘carrier’’ and inserting ‘‘medicare administrative
contractor’’.
(10) Subsection (q)(1)(A) is amended by strik-
ing ‘‘carrier’’.
(d) EFFECTIVE DATE; TRANSITION RULE.—
(1) EFFECTIVE DATE.—
(A) IN
GENERAL.—Except as otherwise
provided in this subsection, the amendments
made by this section shall take effect on Octo-
ber 1, 2004, and the Secretary is authorized to
take such steps before such date as may be nec-
essary to implement such amendments on a
timely basis.
(B) CONSTRUCTION
FOR
CURRENT
CON-
TRACTS.—Such amendments shall not apply to
contracts in effect before the date specified
under subparagraph (A) that continue to retain
the terms and conditions in effect on such date
(except as otherwise provided under this Act,
other than under this section) until such date
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as the contract is let out for competitive bid-
ding under such amendments.
(C) DEADLINE
FOR
COMPETITIVE
BID-
DING.—The Secretary shall provide for the let-
ting by competitive bidding of all contracts for
functions of medicare administrative contrac-
tors for annual contract periods that begin on
or after October 1, 2009.
(D) WAIVER
OF
PROVIDER
NOMINATION
PROVISIONS DURING TRANSITION.—During the
period beginning on the date of the enactment
of this Act and before the date specified under
subparagraph (A), the Secretary may enter into
new agreements under section 1816 of the So-
cial Security Act (42 U.S.C. 1395h) without re-
gard to any of the provider nomination provi-
sions of such section.
(2) GENERAL
TRANSITION
RULES.—The Sec-
retary shall take such steps, consistent with para-
graph (1)(B) and (1)(C), as are necessary to provide
for an appropriate transition from contracts under
section 1816 and section 1842 of the Social Security
Act (42 U.S.C. 1395h, 1395u) to contracts under
section 1874A, as added by subsection (a)(1).
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(3) AUTHORIZING
CONTINUATION
OF
MIP
FUNCTIONS
UNDER
CURRENT
CONTRACTS
AND
AGREEMENTS AND UNDER ROLLOVER CONTRACTS.—
The provisions contained in the exception in section
1893(d)(2) of the Social Security Act (42 U.S.C.
1395ddd(d)(2)) shall continue to apply notwith-
standing the amendments made by this section, and
any reference in such provisions to an agreement or
contract shall be deemed to include a contract under
section 1874A of such Act, as inserted by subsection
(a)(1), that continues the activities referred to in
such provisions.
(e) REFERENCES.—On and after the effective date
provided under subsection (d)(1), any reference to a fiscal
intermediary or carrier under title XI or XVIII of the So-
cial Security Act (or any regulation, manual instruction,
interpretative rule, statement of policy, or guideline issued
to carry out such titles) shall be deemed a reference to
an appropriate medicare administrative contractor (as
provided under section 1874A of the Social Security Act).
(f) REPORTS ON IMPLEMENTATION.—
(1) PLAN FOR IMPLEMENTATION.—By not later
than October 1, 2003, the Secretary shall submit a
report to Congress and the Comptroller General of
the United States that describes the plan for imple-
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SEC. 812. REQUIREMENTS FOR INFORMATION SECURITY
FOR MEDICARE ADMINISTRATIVE CONTRAC-
TORS.
(a) IN GENERAL.—Section 1874A, as added by sec-
tion 811(a)(1), is amended by adding at the end the fol-
lowing new subsection:
‘‘(e) REQUIREMENTS
FOR
INFORMATION
SECU-
RITY.—
‘‘(1) DEVELOPMENT
OF
INFORMATION
SECU-
RITY
PROGRAM.—A medicare administrative con-
tractor that performs the functions referred to in
subparagraphs (A) and (B) of subsection (a)(4) (re-
lating to determining and making payments) shall
implement a contractor-wide information security
program to provide information security for the op-
eration and assets of the contractor with respect to
such functions under this title. An information secu-
rity program under this paragraph shall meet the re-
quirements for information security programs im-
posed on Federal agencies under section 3534(b)(2)
of title 44, United States Code (other than require-
ments under subparagraphs (B)(ii), (F)(iii), and
(F)(iv) of such section).
‘‘(2) INDEPENDENT AUDITS.—
‘‘(A) PERFORMANCE OF ANNUAL EVALUA-
TIONS.—Each year a medicare administrative
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contractor that performs the functions referred
to in subparagraphs (A) and (B) of subsection
(a)(4) (relating to determining and making pay-
ments) shall undergo an evaluation of the infor-
mation security of the contractor with respect
to such functions under this title. The evalua-
tion shall—
‘‘(i) be performed by an entity that
meets such requirements for independence
as the Inspector General of the Depart-
ment of Health and Human Services may
establish; and
‘‘(ii) test the effectiveness of informa-
tion security control techniques for an ap-
propriate subset of the contractor’s infor-
mation systems (as defined in section
3502(8) of title 44, United States Code)
relating to such functions under this title
and an assessment of compliance with the
requirements of this subsection and related
information security policies, procedures,
standards and guidelines.
‘‘(B) DEADLINE
FOR
INITIAL
EVALUA-
TION.—
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‘‘(i) NEW CONTRACTORS.—In the case
of a medicare administrative contractor
covered by this subsection that has not
previously performed the functions referred
to in subparagraphs (A) and (B) of sub-
section (a)(4) (relating to determining and
making payments) as a fiscal intermediary
or carrier under section 1816 or 1842, the
first independent evaluation conducted
pursuant subparagraph (A) shall be com-
pleted prior to commencing such functions.
‘‘(ii) OTHER
CONTRACTORS.—In the
case of a medicare administrative con-
tractor covered by this subsection that is
not described in clause (i), the first inde-
pendent evaluation conducted pursuant
subparagraph (A) shall be completed with-
in 1 year after the date the contractor
commences functions referred to in clause
(i) under this section.
‘‘(C) REPORTS ON EVALUATIONS.—
‘‘(i) TO THE INSPECTOR GENERAL.—
The results of independent evaluations
under subparagraph (A) shall be submitted
promptly to the Inspector General of the
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Department of Health and Human Serv-
ices.
‘‘(ii) TO
CONGRESS.—The Inspector
General of Department of Health and
Human Services shall submit to Congress
annual reports on the results of such eval-
uations.’’.
(b) APPLICATION
OF REQUIREMENTS
TO FISCAL
INTERMEDIARIES AND CARRIERS.—
(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 pro-
visions.
(2) DEADLINE FOR INITIAL EVALUATION.—In
the case of such a fiscal intermediary or carrier with
an agreement or contract under such respective sec-
tion in effect as of the date of the enactment of this
Act, 
the 
first 
evaluation 
under 
section
1874A(e)(2)(A) of the Social Security Act (as added
by subsection (a)), pursuant to paragraph (1), shall
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be completed (and a report on the evaluation sub-
mitted to the Secretary) by not later than 1 year
after such date.
Subtitle C—Education and
Outreach
SEC. 821. PROVIDER EDUCATION AND TECHNICAL ASSIST-
ANCE.
(a) COORDINATION OF EDUCATION FUNDING.—
(1) IN GENERAL.—The Social Security Act is
amended by inserting after section 1888 the fol-
lowing new section:
‘‘PROVIDER EDUCATION AND TECHNICAL ASSISTANCE
‘‘SEC. 1889. (a) COORDINATION
OF EDUCATION
FUNDING.—The Secretary shall coordinate the edu-
cational activities provided through medicare contractors
(as defined in subsection (g), including under section
1893) in order to maximize the effectiveness of Federal
education efforts for providers of services 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, 2003,
the Secretary shall submit to Congress a report that
includes a description and evaluation of the steps
taken to coordinate the funding of provider edu-
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cation under section 1889(a) of the Social Security
Act, as added by paragraph (1).
(b) INCENTIVES TO IMPROVE CONTRACTOR PER-
FORMANCE.—
(1) IN GENERAL.—Section 1874A, as added by
section 811(a)(1) and as amended by section 812(a),
is amended by adding at the end the following new
subsection:
‘‘(f) INCENTIVES TO IMPROVE CONTRACTOR PER-
FORMANCE IN PROVIDER EDUCATION AND OUTREACH.—
In order to give medicare administrative contractors an
incentive to implement effective education and outreach
programs for providers of services and suppliers, the Sec-
retary shall develop and implement a methodology to
measure the specific claims payment error rates of such
contractors in the processing or reviewing of medicare
claims.’’.
(2) APPLICATION TO FISCAL INTERMEDIARIES
AND CARRIERS.—The provisions of section 1874A(f)
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 section 1842 of such
Act (42 U.S.C. 1395u) in the same manner as they
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apply to medicare administrative contractors under
such provisions.
(3) GAO REPORT ON ADEQUACY OF METHOD-
OLOGY.—Not later than October 1, 2003, the Comp-
troller 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 recommenda-
tions as the Comptroller General determines appro-
priate with respect to the methodology.
(4) REPORT ON USE OF METHODOLOGY IN AS-
SESSING
CONTRACTOR
PERFORMANCE.—Not later
than October 1, 2003, the Secretary shall submit to
Congress a report that describes how the Secretary
intends to use such methodology in assessing medi-
care contractor performance in implementing effec-
tive education and outreach programs, including
whether to use such methodology as a basis for per-
formance bonuses. The report shall include an anal-
ysis of the sources of identified errors and potential
changes in systems of contractors and rules of the
Secretary that could reduce claims error rates.
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(c) PROVISION OF ACCESS TO AND PROMPT RE-
SPONSES FROM MEDICARE ADMINISTRATIVE CONTRAC-
TORS.—
(1) IN GENERAL.—Section 1874A, as added by
section 811(a)(1) and as amended by section 812(a)
and subsection (b), is further amended by adding at
the end the following new subsection:
‘‘(g) COMMUNICATIONS WITH BENEFICIARIES, PRO-
VIDERS OF SERVICES AND SUPPLIERS.—
‘‘(1) COMMUNICATION
STRATEGY.—The Sec-
retary 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.
‘‘(2) RESPONSE TO WRITTEN INQUIRIES.—Each
medicare administrative contractor shall, for those
providers of services and suppliers which submit
claims to the contractor 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 inquiries of providers of
services, suppliers and individuals entitled to bene-
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fits under part A or enrolled under part B, or both,
concerning the programs under this title within 45
business days of the date of receipt of such inquiries.
‘‘(3) RESPONSE
TO
TOLL-FREE
LINES.—The
Secretary shall ensure that each medicare adminis-
trative contractor shall provide, for those providers
of services and suppliers which submit claims to the
contractor for claims processing and for those indi-
viduals entitled to benefits under part A or enrolled
under part B, or both, with respect to whom claims
are submitted for claims processing, a toll-free tele-
phone number at which such individuals, providers
of services and suppliers may obtain information re-
garding billing, coding, claims, coverage, and other
appropriate information under this title.
‘‘(4) 
MONITORING
OF
CONTRACTOR
RE-
SPONSES.—
‘‘(A) IN GENERAL.—Each medicare admin-
istrative contractor shall, consistent with stand-
ards developed by the Secretary under subpara-
graph (B)—
‘‘(i) maintain a system for identifying
who provides the information referred to in
paragraphs (2) and (3); and
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‘‘(ii) monitor the accuracy, consist-
ency, and timeliness of the information so
provided.
‘‘(B) DEVELOPMENT OF STANDARDS.—
‘‘(i) IN
GENERAL.—The Secretary
shall establish and make public standards
to monitor the accuracy, consistency, and
timeliness of the information provided in
response to written and telephone inquiries
under this subsection. Such standards shall
be consistent with the performance require-
ments established under subsection (b)(3).
‘‘(ii) 
EVALUATION.—In 
conducting
evaluations of individual medicare adminis-
trative contractors, the Secretary shall
take into account the results of the moni-
toring conducted under subparagraph (A)
taking into account as performance re-
quirements 
the 
standards 
established
under clause (i). The Secretary shall, in
consultation 
with 
organizations 
rep-
resenting providers of services, suppliers,
and individuals entitled to benefits under
part A or enrolled under part B, or both,
establish standards relating to the accu-
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racy, consistency, and timeliness of the in-
formation so provided.
‘‘(C) DIRECT
MONITORING.—Nothing in
this paragraph shall be construed as preventing
the Secretary from directly monitoring the ac-
curacy, consistency, and timeliness of the infor-
mation so provided.’’.
(2) EFFECTIVE DATE.—The amendment made
by paragraph (1) shall take effect October 1, 2003.
(3) APPLICATION TO FISCAL INTERMEDIARIES
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 section 1842 of such
Act (42 U.S.C. 1395u) in the same manner as they
apply to medicare administrative contractors under
such provisions.
(d) IMPROVED PROVIDER EDUCATION AND TRAIN-
ING.—
(1) IN GENERAL.—Section 1889, as added by
subsection (a), is amended by adding at the end the
following new subsections:
‘‘(b) ENHANCED EDUCATION AND TRAINING.—
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‘‘(1) ADDITIONAL RESOURCES.—There are au-
thorized to be appropriated to the Secretary (in ap-
propriate part from the Federal Hospital Insurance
Trust Fund and the Federal Supplementary Medical
Insurance Trust Fund) $25,000,000 for each of fis-
cal years 2004 and 2005 and such sums as may be
necessary for succeeding fiscal years.
‘‘(2) USE.—The funds made available under
paragraph (1) shall be used to increase the conduct
by medicare contractors of education and training of
providers of services and suppliers regarding billing,
coding, and other appropriate items and may also be
used to improve the accuracy, consistency, and time-
liness of contractor responses.
‘‘(c) TAILORING EDUCATION AND TRAINING ACTIVI-
TIES FOR SMALL PROVIDERS OR SUPPLIERS.—
‘‘(1) IN GENERAL.—Insofar as a medicare con-
tractor conducts education and training activities, it
shall tailor such activities to meet the special needs
of small providers of services or suppliers (as defined
in paragraph (2)).
‘‘(2) SMALL PROVIDER OF SERVICES OR SUP-
PLIER.—In this subsection, the term ‘small provider
of services or supplier’ means—
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‘‘(A) a provider of services with fewer than
25 full-time-equivalent employees; 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,
2003.
(e) 
REQUIREMENT
TO
MAINTAIN
INTERNET
SITES.—
(1) IN GENERAL.—Section 1889, as added by
subsection (a) and as amended by subsection (d), is
further amended by adding at the end the following
new subsection:
‘‘(d) INTERNET SITES; FAQS.—The Secretary, and
each medicare contractor insofar as it provides services
(including claims processing) for providers of services or
suppliers, shall maintain an Internet site which—
‘‘(1) provides answers in an easily accessible
format to frequently asked questions, and
‘‘(2) includes other published materials of the
contractor,
that relate to providers of services and suppliers under the
programs under this title (and title XI insofar as it relates
to such programs).’’.
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(2) EFFECTIVE DATE.—The amendment made
by paragraph (1) shall take effect on October 1,
2003.
(f) ADDITIONAL
PROVIDER
EDUCATION
PROVI-
SIONS.—
(1) IN GENERAL.—Section 1889, as added by
subsection (a) and as amended by subsections (d)
and (e), is further amended by adding at the end the
following new subsections:
‘‘(e) ENCOURAGEMENT OF PARTICIPATION IN EDU-
CATION PROGRAM ACTIVITIES.—A medicare contractor
may not use a record of attendance at (or failure to at-
tend) educational activities or other information gathered
during an educational program conducted under this sec-
tion or otherwise by the Secretary to select or track pro-
viders of services or suppliers for the purpose of con-
ducting any type of audit or prepayment review.
‘‘(f) CONSTRUCTION.—Nothing in this section or sec-
tion 1893(g) shall be construed as providing for disclosure
by a medicare contractor of information that would com-
promise pending law enforcement activities or reveal find-
ings of law enforcement-related audits.
‘‘(g) DEFINITIONS.—For purposes of this section, the
term ‘medicare contractor’ includes the following:
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‘‘(1) A medicare administrative contractor with
a contract under section 1874A, including a fiscal
intermediary with a contract under section 1816 and
a carrier with a contract under section 1842.
‘‘(2) An eligible entity with a contract under
section 1893.
Such term does not include, with respect to activities of
a specific provider of services or supplier an entity that
has no authority under this title or title IX with respect
to such activities and such provider of services or sup-
plier.’’.
(2) EFFECTIVE DATE.—The amendment made
by paragraph (1) shall take effect on the date of the
enactment of this Act.
SEC. 822. SMALL PROVIDER TECHNICAL ASSISTANCE DEM-
ONSTRATION PROGRAM.
(a) ESTABLISHMENT.—
(1) IN GENERAL.—The Secretary shall establish
a demonstration program (in this section referred to
as the ‘‘demonstration program’’) under which tech-
nical assistance described in paragraph (2) is made
available, upon request and on a voluntary basis, to
small providers of services or suppliers in order to
improve compliance with the applicable requirements
of the programs under medicare program under title
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XVIII of the Social Security Act (including provi-
sions of title XI of such Act insofar as they relate
to such title and are not administered by the Office
of the Inspector General of the Department of
Health and Human Services).
(2) FORMS OF TECHNICAL ASSISTANCE.—The
technical assistance described in this paragraph is—
(A) evaluation and recommendations re-
garding billing and related systems; and
(B) information and assistance regarding
policies and procedures under the medicare pro-
gram, including coding and reimbursement.
(3) SMALL PROVIDERS OF SERVICES OR SUP-
PLIERS.—In this section, the term ‘‘small providers
of services or suppliers’’ means—
(A) a provider of services with fewer than
25 full-time-equivalent employees; or
(B) a supplier with fewer than 10 full-
time-equivalent employees.
(b) QUALIFICATION
OF
CONTRACTORS.—In con-
ducting the demonstration program, the Secretary shall
enter into contracts with qualified organizations (such as
peer review organizations or entities described in section
1889(g)(2) of the Social Security Act, as inserted by sec-
tion 5(f)(1)) with appropriate expertise with billing sys-
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tems of the full range of providers of services and sup-
pliers to provide the technical assistance. In awarding such
contracts, the Secretary shall consider any prior investiga-
tions of the entity’s work by the Inspector General of De-
partment of Health and Human Services or the Comp-
troller General of the United States.
(c) DESCRIPTION OF TECHNICAL ASSISTANCE.—The
technical assistance provided under the demonstration
program shall include a direct and in-person examination
of billing systems and internal controls of small providers
of services or suppliers to determine program compliance
and to suggest more efficient or effective means of achiev-
ing such compliance.
(d) AVOIDANCE OF RECOVERY ACTIONS FOR PROB-
LEMS IDENTIFIED AS CORRECTED.—The Secretary shall
provide that, absent evidence of fraud and notwith-
standing any other provision of law, any errors found in
a compliance review for a small provider of services or sup-
plier that participates in the demonstration program shall
not be subject to recovery action if the technical assistance
personnel under the program determine that—
(1) the problem that is the subject of the com-
pliance review has been corrected to their satisfac-
tion within 30 days of the date of the visit by such
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personnel to the small provider of services or sup-
plier; and
(2) such problem remains corrected for such pe-
riod as is appropriate.
The previous sentence applies only to claims filed as part
of the demonstration program and lasts only for the dura-
tion of such program and only as long as the small pro-
vider of services or supplier is a participant in such pro-
gram.
(e) GAO EVALUATION.—Not later than 2 years after
the date of the date the demonstration program is first
implemented, the Comptroller General, in consultation
with the Inspector General of the Department of Health
and Human Services, shall conduct an evaluation of the
demonstration program. The evaluation shall include a de-
termination of whether claims error rates are reduced for
small providers of services or suppliers who participated
in the program and the extent of improper payments made
as a result of the demonstration program. The Comp-
troller General shall submit a report to the Secretary and
the Congress on such evaluation and shall include in such
report recommendations regarding the continuation or ex-
tension of the demonstration program.
(f) FINANCIAL PARTICIPATION BY PROVIDERS.—The
provision of technical assistance to a small provider of
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services or supplier under the demonstration program is
conditioned upon the small provider of services or supplier
paying an amount estimated (and disclosed in advance of
a provider’s or supplier’s participation in the program) to
be equal to 25 percent of the cost of the technical assist-
ance.
(g) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated to the Secretary (in ap-
propriate part from the Federal Hospital Insurance Trust
Fund and the Federal Supplementary Medical Insurance
Trust Fund) to carry out the demonstration program—
(1) for fiscal year 2004, $1,000,000, and
(2) for fiscal year 2005, $6,000,000.
SEC. 823. MEDICARE PROVIDER OMBUDSMAN; MEDICARE
BENEFICIARY OMBUDSMAN.
(a) MEDICARE
PROVIDER
OMBUDSMAN.—Section
1868 (42 U.S.C. 1395ee) is amended—
(1) by adding at the end of the heading the fol-
lowing: ‘‘; MEDICARE PROVIDER OMBUDSMAN’’;
(2) by inserting ‘‘PRACTICING PHYSICIANS AD-
VISORY COUNCIL.—(1)’’ after ‘‘(a)’’;
(3) in paragraph (1), as so redesignated under
paragraph (2), by striking ‘‘in this section’’ and in-
serting ‘‘in this subsection’’;
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(4) by redesignating subsections (b) and (c) as
paragraphs (2) and (3), respectively; and
(5) by adding at the end the following new sub-
section:
‘‘(b) MEDICARE PROVIDER OMBUDSMAN.—The Sec-
retary shall appoint within the Department of Health and
Human Services a Medicare Provider Ombudsman. The
Ombudsman shall—
‘‘(1) provide assistance, on a confidential basis,
to providers of services and suppliers with respect to
complaints, grievances, and requests for information
concerning the programs under this title (including
provisions of title XI insofar as they relate to this
title and are not administered by the Office of the
Inspector General of the Department of Health and
Human Services) and in the resolution of unclear or
conflicting guidance given by the Secretary and
medicare contractors to such providers of services
and suppliers regarding such programs and provi-
sions and requirements under this title and such
provisions; and
‘‘(2) submit recommendations to the Secretary
for improvement in the administration of this title
and such provisions, including—
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‘‘(A) recommendations to respond to recur-
ring patterns of confusion in this title and such
provisions (including recommendations regard-
ing suspending imposition of sanctions where
there is widespread confusion in program ad-
ministration), and
‘‘(B) recommendations to provide for an
appropriate and consistent response (including
not providing for audits) in cases of self-identi-
fied overpayments by providers of services and
suppliers.
The Ombudsman shall not serve as an advocate for any
increases in payments or new coverage of services, but
may identify issues and problems in payment or coverage
policies.’’.
(b) MEDICARE BENEFICIARY OMBUDSMAN.—Title
XVIII, as amended by sections 105 and 701, is amended
by inserting after section 1808 the following new section:
‘‘MEDICARE BENEFICIARY OMBUDSMAN
‘‘SEC. 1809. (a) IN GENERAL.—The Secretary shall
appoint within the Department of Health and Human
Services a Medicare Beneficiary Ombudsman who shall
have expertise and experience in the fields of health care
and education of (and assistance to) individuals entitled
to benefits under this title.
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‘‘(b) DUTIES.—The Medicare Beneficiary Ombuds-
man shall—
‘‘(1) receive complaints, grievances, and re-
quests for information submitted by individuals enti-
tled to benefits under part A or enrolled under part
B, or both, with respect to any aspect of the medi-
care program;
‘‘(2) provide assistance with respect to com-
plaints, grievances, and requests referred to in para-
graph (1), including—
‘‘(A) assistance in collecting relevant infor-
mation for such individuals, to seek an appeal
of a decision or determination made by a fiscal
intermediary, carrier, Medicare+Choice organi-
zation, or the Secretary; and
‘‘(B) assistance to such individuals with
any problems arising from disenrollment from a
Medicare+Choice plan under part C; and
‘‘(3) submit annual reports to Congress and the
Secretary that describe the activities of the Office
and that include such recommendations for improve-
ment in the administration of this title as the Om-
budsman determines appropriate.
The Ombudsman shall not serve as an advocate for any
increases in payments or new coverage of services, but
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may identify issues and problems in payment or coverage
policies.
‘‘(c) WORKING WITH HEALTH INSURANCE COUN-
SELING PROGRAMS.—To the extent possible, the Ombuds-
man shall work with health insurance counseling programs
(receiving funding under section 4360 of Omnibus Budget
Reconciliation Act of 1990) to facilitate the provision of
information to individuals entitled to benefits under part
A or enrolled under part B, or both regarding
Medicare+Choice plans and changes to those plans. Noth-
ing in this subsection shall preclude further collaboration
between the Ombudsman and such programs.’’.
(c) DEADLINE FOR APPOINTMENT.—The Secretary
shall appoint the Medicare Provider Ombudsman and the
Medicare Beneficiary Ombudsman, under the amendments
made by subsections (a) and (b), respectively, by not later
than 1 year after the date of the enactment of this Act.
(d) FUNDING.—There are authorized to be appro-
priated to the Secretary (in appropriate part from the
Federal Hospital Insurance Trust Fund and the Federal
Supplementary Medical Insurance Trust Fund) to carry
out the provisions of subsection (b) of section 1868 of the
Social Security Act (relating to the Medicare Provider
Ombudsman), as added by subsection (a)(5) and section
1809 of such Act (relating to the Medicare Beneficiary
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Ombudsman), as added by subsection (b), such sums as
are necessary for fiscal year 2003 and each succeeding fis-
cal year.
(e) USE OF CENTRAL, TOLL-FREE NUMBER (1-800-
MEDICARE).—
(1) PHONE TRIAGE SYSTEM; LISTING IN MEDI-
CARE HANDBOOK INSTEAD OF OTHER TOLL-FREE
NUMBERS.—Section 1804(b) (42 U.S.C. 1395b–
2(b)) is amended by adding at the end the following:
‘‘The Secretary shall provide, through the toll-free
number 1-800-MEDICARE, for a means by which
individuals seeking information about, or assistance
with, such programs who phone such toll-free num-
ber are transferred (without charge) to appropriate
entities for the provision of such information or as-
sistance. Such toll-free number shall be the toll-free
number listed for general information and assistance
in the annual notice under subsection (a) instead of
the listing of numbers of individual contractors.’’.
(2) MONITORING ACCURACY.—
(A) STUDY.—The Comptroller General of
the United States shall conduct a study to mon-
itor the accuracy and consistency of information
provided to individuals entitled to benefits
under part A or enrolled under part B, or both,
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through the toll-free number 1-800-MEDI-
CARE, including an assessment of whether the
information provided is sufficient to answer
questions of such individuals. In conducting the
study, the Comptroller General shall examine
the education and training of the individuals
providing information through such number.
(B) REPORT.—Not later than 1 year after
the date of the enactment of this Act, the
Comptroller General shall submit to Congress a
report on the study conducted under subpara-
graph (A).
SEC. 824. BENEFICIARY OUTREACH DEMONSTRATION PRO-
GRAM.
(a) IN GENERAL.—The Secretary shall establish a
demonstration program (in this section referred to as the
‘‘demonstration program’’) under which medicare special-
ists employed by the Department of Health and Human
Services provide advice and assistance to individuals enti-
tled to benefits under part A of title XVIII of the Social
Security Act, or enrolled under part B of such title, or
both, regarding the medicare program at the location of
existing local offices of the Social Security Administration.
(b) LOCATIONS.—
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(1) IN GENERAL.—The demonstration program
shall be conducted in at least 6 offices or areas.
Subject to paragraph (2), in selecting such offices
and areas, the Secretary shall provide preference for
offices with a high volume of visits by individuals re-
ferred to in subsection (a).
(2) ASSISTANCE FOR RURAL BENEFICIARIES.—
The Secretary shall provide for the selection of at
least 2 rural areas to participate in the demonstra-
tion program. In conducting the demonstration pro-
gram in such rural areas, the Secretary shall provide
for medicare specialists to travel among local offices
in a rural area on a scheduled basis.
(c) DURATION.—The demonstration program shall be
conducted over a 3-year period.
(d) EVALUATION AND REPORT.—
(1) EVALUATION.—The Secretary shall provide
for an evaluation of the demonstration program.
Such evaluation shall include an analysis of—
(A) utilization of, and satisfaction of those
individuals referred to in subsection (a) with,
the assistance provided under the program; and
(B) the cost-effectiveness of providing ben-
eficiary assistance through out-stationing medi-
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care specialists at local offices of the Social Se-
curity Administration.
(2) REPORT.—The Secretary shall submit to
Congress a report on such evaluation and shall in-
clude in such report recommendations regarding the
feasibility of permanently out-stationing medicare
specialists at local offices of the Social Security Ad-
ministration.
Subtitle D—Appeals and Recovery
SEC. 831. TRANSFER OF RESPONSIBILITY FOR MEDICARE
APPEALS.
(a) TRANSITION PLAN.—
(1) IN GENERAL.—Not later than October 1,
2003, the Commissioner of Social Security and the
Secretary shall develop and transmit to Congress
and the Comptroller General of the United States a
plan under which the functions of administrative law
judges responsible for hearing cases under title
XVIII of the Social Security Act (and related provi-
sions in title XI of such Act) are transferred from
the responsibility of the Commissioner and the So-
cial Security Administration to the Secretary and
the Department of Health and Human Services.
(2) GAO EVALUATION.—The Comptroller Gen-
eral of the United States shall evaluate the plan
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and, not later than the date that is 6 months after
the date on which the plan is received by the Comp-
troller General, shall submit to Congress a report on
such evaluation.
(b) TRANSFER OF ADJUDICATION AUTHORITY.—
(1) IN
GENERAL.—Not earlier than July 1,
2004, and not later than October 1, 2004, the Com-
missioner of Social Security and the Secretary shall
implement the transition plan under subsection (a)
and transfer the administrative law judge functions
described in such subsection from the Social Secu-
rity Administration to the Secretary.
(2) ASSURING INDEPENDENCE OF JUDGES.—
The Secretary shall assure the independence of ad-
ministrative law judges performing the administra-
tive law judge functions transferred under para-
graph (1) from the Centers for Medicare & Medicaid
Services and its contractors.
(3) GEOGRAPHIC
DISTRIBUTION.—The Sec-
retary shall provide for an appropriate geographic
distribution of administrative law judges performing
the administrative law judge functions transferred
under paragraph (1) throughout the United States
to ensure timely access to such judges.
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(4) 
HIRING
AUTHORITY.—Subject 
to 
the
amounts provided in advance in appropriations Act,
the Secretary shall have authority to hire adminis-
trative law judges to hear such cases, giving priority
to those judges with prior experience in handling
medicare appeals and in a manner consistent with
paragraph (3), and to hire support staff for such
judges.
(5) FINANCING.—Amounts payable under law
to the Commissioner for administrative law judges
performing the administrative law judge functions
transferred under paragraph (1) from the Federal
Hospital Insurance Trust Fund and the Federal
Supplementary Medical Insurance Trust Fund shall
become payable to the Secretary for the functions so
transferred.
(6) SHARED RESOURCES.—The Secretary shall
enter into such arrangements with the Commissioner
as may be appropriate with respect to transferred
functions of administrative law judges to share office
space, support staff, and other resources, with ap-
propriate reimbursement from the Trust Funds de-
scribed in paragraph (5).
(c) INCREASED FINANCIAL SUPPORT.—In addition to
any amounts otherwise appropriated, to ensure timely ac-
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tion on appeals before administrative law judges and the
Departmental Appeals Board consistent with section 1869
of the Social Security Act (as amended by section 521 of
BIPA, 114 Stat. 2763A–534), there are authorized to be
appropriated (in appropriate part from the Federal Hos-
pital Insurance Trust Fund and the Federal Supple-
mentary Medical Insurance Trust Fund) to the Secretary
such sums as are necessary for fiscal year 2004 and each
subsequent fiscal year to—
(1) increase the number of administrative law
judges (and their staffs) under subsection (b)(4);
(2) improve education and training opportuni-
ties for administrative law judges (and their staffs);
and
(3) increase the staff of the Departmental Ap-
peals Board.
(d) 
CONFORMING
AMENDMENT.—Section
1869(f)(2)(A)(i) (42 U.S.C. 1395ff(f)(2)(A)(i)), as added
by section 522(a) of BIPA (114 Stat. 2763A–543), is
amended by striking ‘‘of the Social Security Administra-
tion’’.
SEC. 832. PROCESS FOR EXPEDITED ACCESS TO REVIEW.
(a) EXPEDITED ACCESS TO JUDICIAL REVIEW.—Sec-
tion 1869(b) (42 U.S.C. 1395ff(b)) as amended by BIPA,
is amended—
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(1) in paragraph (1)(A), by inserting ‘‘, subject
to paragraph (2),’’ before ‘‘to judicial review of the
Secretary’s final decision’’;
(2) in paragraph (1)(F)—
(A) by striking clause (ii);
(B) by striking ‘‘PROCEEDING’’ and all
that follows through ‘‘DETERMINATION’’ and in-
serting ‘‘DETERMINATIONS
AND
RECONSIDER-
ATIONS’’; and
(C) by redesignating subclauses (I) and
(II) as clauses (i) and (ii) and by moving the
indentation of such subclauses (and the matter
that follows) 2 ems to the left; and
(3) by adding at the end the following new
paragraph:
‘‘(2) EXPEDITED
ACCESS
TO
JUDICIAL
RE-
VIEW.—
‘‘(A) IN
GENERAL.—The Secretary shall
establish a process under which a provider of
services or supplier that furnishes an item or
service or an individual entitled to benefits
under part A or enrolled under part B, or both,
who has filed an appeal under paragraph (1)
may obtain access to judicial review when a re-
view panel (described in subparagraph (D)), on
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its own motion or at the request of the appel-
lant, determines that no entity in the adminis-
trative appeals process has the authority to de-
cide the question of law or regulation relevant
to the matters in controversy and that there is
no material issue of fact in dispute. The appel-
lant may make such request only once with re-
spect to a question of law or regulation in a
case of an appeal.
‘‘(B) PROMPT DETERMINATIONS.—If, after
or coincident with appropriately filing a request
for an administrative hearing, the appellant re-
quests a determination by the appropriate re-
view panel that no review panel has the author-
ity to decide the question of law or regulations
relevant to the matters in controversy and that
there is no material issue of fact in dispute and
if such request is accompanied by the docu-
ments and materials as the appropriate review
panel shall require for purposes of making such
determination, such review panel shall make a
determination on the request in writing within
60 days after the date such review panel re-
ceives the request and such accompanying docu-
ments and materials. Such a determination by
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such review panel shall be considered a final de-
cision and not subject to review by the Sec-
retary.
‘‘(C) ACCESS TO JUDICIAL REVIEW.—
‘‘(i) IN GENERAL.—If the appropriate
review panel—
‘‘(I) determines that there are no
material issues of fact in dispute and
that the only issue is one of law or
regulation that no review panel has
the authority to decide; or
‘‘(II) fails to make such deter-
mination within the period provided
under subparagraph (B);
then the appellant may bring a civil action
as described in this subparagraph.
‘‘(ii) DEADLINE
FOR
FILING.—Such
action shall be filed, in the case described
in—
‘‘(I) clause (i)(I), within 60 days
of date of the determination described
in such subparagraph; or
‘‘(II) clause (i)(II), within 60
days of the end of the period provided
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under subparagraph (B) for the deter-
mination.
‘‘(iii) VENUE.—Such action shall be
brought in the district court of the United
States for the judicial district in which the
appellant is located (or, in the case of an
action brought jointly by more than one
applicant, the judicial district in which the
greatest number of applicants are located)
or in the district court for the District of
Columbia.
‘‘(iv) INTEREST ON AMOUNTS IN CON-
TROVERSY.—Where a provider of services
or supplier seeks judicial review pursuant
to this paragraph, the amount in con-
troversy shall be subject to annual interest
beginning on the first day of the first
month beginning after the 60-day period
as determined pursuant to clause (ii) and
equal to the rate of interest on obligations
issued for purchase by the Federal Hos-
pital Insurance Trust Fund and by the
Federal Supplementary Medical Insurance
Trust Fund for the month in which the
civil action authorized under this para-
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graph is commenced, to be awarded by the
reviewing court in favor of the prevailing
party. No interest awarded pursuant to the
preceding sentence shall be deemed income
or cost for the purposes of determining re-
imbursement due providers of services or
suppliers under this Act.
‘‘(D) REVIEW PANELS.—For purposes of
this subsection, a ‘review panel’ is a panel con-
sisting of 3 members (who shall be administra-
tive law judges, members of the Departmental
Appeals Board, or qualified individuals associ-
ated with a qualified independent contractor (as
defined in subsection (c)(2)) or with another
independent entity) designated by the Secretary
for purposes of making determinations under
this paragraph.’’.
(b) APPLICATION TO PROVIDER AGREEMENT DETER-
MINATIONS.—Section 
1866(h)(1) 
(42 
U.S.C.
1395cc(h)(1)) is amended—
(1) by inserting ‘‘(A)’’ after ‘‘(h)(1)’’; and
(2) by adding at the end the following new sub-
paragraph:
‘‘(B) An institution or agency described in subpara-
graph (A) that has filed for a hearing under subparagraph
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(A) shall have expedited access to judicial review under
this subparagraph in the same manner as providers of
services, suppliers, and individuals entitled to benefits
under part A or enrolled under part B, or both, may ob-
tain expedited access to judicial review under the process
established under section 1869(b)(2). Nothing in this sub-
paragraph shall be construed to affect the application of
any remedy imposed under section 1819 during the pend-
ency of an appeal under this subparagraph.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to appeals filed on or after October
1, 2003.
(d) EXPEDITED REVIEW
OF CERTAIN PROVIDER
AGREEMENT DETERMINATIONS.—
(1) TERMINATION AND CERTAIN OTHER IMME-
DIATE REMEDIES.—The Secretary shall develop and
implement a process to expedite proceedings under
sections 1866(h) of the Social Security Act (42
U.S.C. 1395cc(h)) in which the remedy of termi-
nation of participation, or a remedy described in
clause (i) or (iii) of section 1819(h)(2)(B) of such
Act (42 U.S.C. 1395i–3(h)(2)(B)) which is applied
on an immediate basis, has been imposed. Under
such process priority shall be provided in cases of
termination.
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(2) INCREASED FINANCIAL SUPPORT.—In addi-
tion to any amounts otherwise appropriated, to re-
duce by 50 percent the average time for administra-
tive determinations on appeals under section
1866(h) of the Social Security Act (42 U.S.C.
1395cc(h)), there are authorized to be appropriated
(in appropriate part from the Federal Hospital In-
surance Trust Fund and the Federal Supplementary
Medical Insurance Trust Fund) to the Secretary
such additional sums for fiscal year 2004 and each
subsequent fiscal year as may be necessary. The
purposes for which such amounts are available in-
clude increasing the number of administrative law
judges (and their staffs) and the appellate level staff
at the Departmental Appeals Board of the Depart-
ment of Health and Human Services and educating
such judges and staffs on long-term care issues.
SEC. 833. REVISIONS TO MEDICARE APPEALS PROCESS.
(a) REQUIRING FULL AND EARLY PRESENTATION OF
EVIDENCE.—
(1) IN GENERAL.—Section 1869(b) (42 U.S.C.
1395ff(b)), as amended by BIPA and as amended by
section 832(a), is further amended by adding at the
end the following new paragraph:
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‘‘(3) REQUIRING
FULL
AND
EARLY
PRESEN-
TATION OF EVIDENCE BY PROVIDERS.—A provider
of services or supplier may not introduce evidence in
any appeal under this section that was not presented
at the reconsideration conducted by the qualified
independent contractor under subsection (c), unless
there is good cause which precluded the introduction
of such evidence at or before that reconsideration.’’.
(2) EFFECTIVE DATE.—The amendment made
by paragraph (1) shall take effect on October 1,
2003.
(b) USE OF PATIENTS’ MEDICAL RECORDS.—Section
1869(c)(3)(B)(i) (42 U.S.C. 1395ff(c)(3)(B)(i)), as
amended by BIPA, is amended by inserting ‘‘(including
the medical records of the individual involved)’’ after
‘‘clinical experience’’.
(c) NOTICE REQUIREMENTS
FOR MEDICARE AP-
PEALS.—
(1) INITIAL DETERMINATIONS AND REDETER-
MINATIONS.—Section 
1869(a) 
(42 
U.S.C.
1395ff(a)), as amended by BIPA, is amended by
adding at the end the following new paragraph:
‘‘(4) REQUIREMENTS
OF
NOTICE
OF
DETER-
MINATIONS
AND
REDETERMINATIONS.—A written
notice of a determination on an initial determination
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or on a redetermination, insofar as such determina-
tion or redetermination results in a denial of a claim
for benefits, shall include—
‘‘(A) the specific reasons for the deter-
mination, including—
‘‘(i) upon request, the provision of the
policy, manual, or regulation used in mak-
ing the determination; and
‘‘(ii) as appropriate in the case of a
redetermination, a summary of the clinical
or scientific evidence used in making the
determination;
‘‘(B) the procedures for obtaining addi-
tional information concerning the determination
or redetermination; and
‘‘(C) notification of the right to seek a re-
determination or otherwise appeal the deter-
mination and instructions on how to initiate
such a redetermination or appeal under this
section.
The written notice on a redetermination shall be
provided in printed form and written in a manner
calculated to be understood by the individual entitled
to benefits under part A or enrolled under part B,
or both.’’.
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(2) 
RECONSIDERATIONS.—Section
1869(c)(3)(E) (42 U.S.C. 1395ff(c)(3)(E)), as
amended by BIPA, is amended—
(A) by inserting ‘‘be written in a manner
calculated to be understood by the individual
entitled to benefits under part A or enrolled
under part B, or both, and shall include (to the
extent appropriate)’’ after ‘‘in writing, ’’; and
(B) by inserting ‘‘and a notification of the
right to appeal such determination and instruc-
tions on how to initiate such appeal under this
section’’ after ‘‘such decision,’’.
(3) APPEALS.—Section 1869(d) (42 U.S.C.
1395ff(d)), as amended by BIPA, is amended—
(A) in the heading, by inserting ‘‘; NO-
TICE’’ after ‘‘SECRETARY’’; and
(B) by adding at the end the following new
paragraph:
‘‘(4) NOTICE.—Notice of the decision of an ad-
ministrative law judge shall be in writing in a man-
ner calculated to be understood by the individual en-
titled to benefits under part A or enrolled under part
B, or both, and shall include—
‘‘(A) the specific reasons for the deter-
mination (including, to the extent appropriate,
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a summary of the clinical or scientific evidence
used in making the determination);
‘‘(B) the procedures for obtaining addi-
tional information concerning the decision; and
‘‘(C) notification of the right to appeal the
decision and instructions on how to initiate
such an appeal under this section.’’.
(4) SUBMISSION
OF
RECORD
FOR
APPEAL.—
Section 
1869(c)(3)(J)(i) 
(42 
U.S.C.
1395ff(c)(3)(J)(i)) by striking ‘‘prepare’’ and insert-
ing ‘‘submit’’ and by striking ‘‘with respect to’’ and
all that follows through ‘‘and relevant policies’’.
(d) QUALIFIED INDEPENDENT CONTRACTORS.—
(1) ELIGIBILITY REQUIREMENTS OF QUALIFIED
INDEPENDENT
CONTRACTORS.—Section 1869(c)(3)
(42 U.S.C. 1395ff(c)(3)), as amended by BIPA, is
amended—
(A) in subparagraph (A), by striking ‘‘suf-
ficient training and expertise in medical science
and legal matters’’ and inserting ‘‘sufficient
medical, legal, and other expertise (including
knowledge of the program under this title) and
sufficient staffing’’; and
(B) by adding at the end the following new
subparagraph:
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‘‘(K) INDEPENDENCE REQUIREMENTS.—
‘‘(i) IN GENERAL.—Subject to clause
(ii), a qualified independent contractor
shall not conduct any activities in a case
unless the entity—
‘‘(I) is not a related party (as de-
fined in subsection (g)(5));
‘‘(II) does not have a material fa-
milial, financial, or professional rela-
tionship with such a party in relation
to such case; and
‘‘(III) does not otherwise have a
conflict of interest with such a party.
‘‘(ii) EXCEPTION
FOR
REASONABLE
COMPENSATION.—Nothing in clause (i)
shall be construed to prohibit receipt by a
qualified independent contractor of com-
pensation from the Secretary for the con-
duct of activities under this section if the
compensation is provided consistent with
clause (iii).
‘‘(iii) LIMITATIONS ON ENTITY COM-
PENSATION.—Compensation provided by
the Secretary to a qualified independent
contractor in connection with reviews
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under this section shall not be contingent
on any decision rendered by the contractor
or by any reviewing professional.’’.
(2) ELIGIBILITY REQUIREMENTS FOR REVIEW-
ERS.—Section 1869 (42 U.S.C. 1395ff), as amended
by BIPA, is amended—
(A) by amending subsection (c)(3)(D) to
read as follows:
‘‘(D) QUALIFICATIONS FOR REVIEWERS.—
The requirements of subsection (g) shall be met
(relating to qualifications of reviewing profes-
sionals).’’; and
(B) by adding at the end the following new
subsection:
‘‘(g) QUALIFICATIONS OF REVIEWERS.—
‘‘(1) IN
GENERAL.—In reviewing determina-
tions under this section, a qualified independent con-
tractor shall assure that—
‘‘(A) each individual conducting a review
shall meet the qualifications of paragraph (2);
‘‘(B) compensation provided by the con-
tractor to each such reviewer is consistent with
paragraph (3); and
‘‘(C) in the case of a review by a panel de-
scribed in subsection (c)(3)(B) composed of
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physicians or other health care professionals
(each in this subsection referred to as a ‘review-
ing professional’), each reviewing professional
meets the qualifications described in paragraph
(4) and, where a claim is regarding the fur-
nishing of treatment by a physician (allopathic
or osteopathic) or the provision of items or
services by a physician (allopathic or osteo-
pathic), each reviewing professional shall be a
physician (allopathic or osteopathic).
‘‘(2) INDEPENDENCE.—
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), each individual conducting a review
in a case shall—
‘‘(i) not be a related party (as defined
in paragraph (5));
‘‘(ii) not have a material familial, fi-
nancial, or professional relationship with
such a party in the case under review; and
‘‘(iii) not otherwise have a conflict of
interest with such a party.
‘‘(B) EXCEPTION.—Nothing in subpara-
graph (A) shall be construed to—
‘‘(i) prohibit an individual, solely on
the basis of a participation agreement with
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a fiscal intermediary, carrier, or other con-
tractor, from serving as a reviewing profes-
sional if—
‘‘(I) the individual is not involved
in the provision of items or services in
the case under review;
‘‘(II) the fact of such an agree-
ment is disclosed to the Secretary and
the individual entitled to benefits
under part A or enrolled under part
B, or both, (or authorized representa-
tive) and neither party objects; and
‘‘(III) the individual is not an
employee of the intermediary, carrier,
or contractor and does not provide
services exclusively or primarily to or
on behalf of such intermediary, car-
rier, or contractor;
‘‘(ii) prohibit an individual who has
staff privileges at the institution where the
treatment involved takes place from serv-
ing as a reviewer merely on the basis of
having such staff privileges if the existence
of such privileges is disclosed to the Sec-
retary and such individual (or authorized
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representative), and neither party objects;
or
‘‘(iii) prohibit receipt of compensation
by a reviewing professional from a con-
tractor if the compensation is provided
consistent with paragraph (3).
For purposes of this paragraph, the term ‘par-
ticipation agreement’ means an agreement re-
lating to the provision of health care services by
the individual and does not include the provi-
sion of services as a reviewer under this sub-
section.
‘‘(3) LIMITATIONS
ON
REVIEWER
COMPENSA-
TION.—Compensation provided by a qualified inde-
pendent contractor to a reviewer in connection with
a review under this section shall not be contingent
on the decision rendered by the reviewer.
‘‘(4) LICENSURE
AND
EXPERTISE.—Each re-
viewing professional shall be—
‘‘(A) a physician (allopathic or osteopathic)
who is appropriately credentialed or licensed in
one or more States to deliver health care serv-
ices and has medical expertise in the field of
practice that is appropriate for the items or
services at issue; or
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‘‘(B) a health care professional who is le-
gally authorized in one or more States (in ac-
cordance with State law or the State regulatory
mechanism provided by State law) to furnish
the health care items or services at issue and
has medical expertise in the field of practice
that is appropriate for such items or services.
‘‘(5) RELATED PARTY DEFINED.—For purposes
of this section, the term ‘related party’ means, with
respect to a case under this title involving a specific
individual entitled to benefits under part A or en-
rolled under part B, or both, any of the following:
‘‘(A) The Secretary, the medicare adminis-
trative contractor involved, or any fiduciary, of-
ficer, director, or employee of the Department
of Health and Human Services, or of such con-
tractor.
‘‘(B) The individual (or authorized rep-
resentative).
‘‘(C) The health care professional that pro-
vides the items or services involved in the case.
‘‘(D) The institution at which the items or
services (or treatment) involved in the case are
provided.
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‘‘(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. 834. PREPAYMENT REVIEW.
(a) IN GENERAL.—Section 1874A, as added by sec-
tion 811(a)(1) and as amended by sections 812(b),
821(b)(1), and 821(c)(1), is further amended by adding
at the end the following new subsection:
‘‘(h) CONDUCT OF PREPAYMENT REVIEW.—
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‘‘(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
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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)
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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.
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SEC. 835. 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
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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.
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‘‘(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
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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
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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
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‘‘(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
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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
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‘‘(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-
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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;
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‘‘(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
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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
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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. 836. 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.—
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‘‘(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
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821(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. 838. 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 833(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
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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
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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,
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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-
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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.—
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‘‘(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.—
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‘‘(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
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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.
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(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
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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
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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.
Subtitle E—Miscellaneous
Provisions
SEC. 841. 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
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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;
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(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—
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(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.—
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(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.
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(5) REPORT TO CONGRESS.—(A) Not later than
October 1, 2004, the Secretary shall submit to Con-
gress a report on the results of the study conducted
under paragraph (1).
(B) The Medicare Payment Advisory Commis-
sion shall conduct an analysis of the results of the
study included in the report under subparagraph (A)
and shall submit a report on such analysis to Con-
gress.
(e) STUDY ON APPROPRIATE CODING OF CERTAIN
EXTENDED OFFICE VISITS.—The Secretary shall conduct
a study of the appropriateness of coding in cases of ex-
tended office visits in which there is no diagnosis made.
Not later than October 1, 2004, the Secretary shall submit
a report to Congress on such study and shall include rec-
ommendations on how to code appropriately for such visits
in a manner that takes into account the amount of time
the physician spent with the patient.
(f) DEFINITIONS.—In this section—
(1) the term ‘‘rural area’’ has the meaning
given that term in section 1886(d)(2)(D) of the So-
cial Security Act, 42 U.S.C. 1395ww(d)(2)(D); and
(2) the term ‘‘teaching settings’’ are those set-
tings described in section 415.150 of title 42, Code
of Federal Regulations.
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SEC. 842. IMPROVEMENT IN OVERSIGHT OF TECHNOLOGY
AND COVERAGE.
(a) IMPROVED COORDINATION BETWEEN FDA AND
CMS ON COVERAGE OF BREAKTHROUGH MEDICAL DE-
VICES.—
(1) IN GENERAL.—Upon request by an appli-
cant and to the extent feasible (as determined by the
Secretary), the Secretary shall, in the case of a class
III medical device that is subject to premarket ap-
proval under section 515 of the Federal Food, Drug,
and Cosmetic Act, ensure the sharing of appropriate
information from the review for application for pre-
market approval conducted by the Food and Drug
Administration for coverage decisions under title
XVIII of the Social Security Act.
(2) PUBLICATION OF PLAN.—Not later than 6
months after the date of the enactment of this Act,
the Secretary shall submit to appropriate Commit-
tees of Congress a report that contains the plan for
improving such coordination and for shortening the
time lag between the premarket approval by the
Food and Drug Administration and coding and cov-
erage decisions by the Centers for Medicare & Med-
icaid Services.
(3) CONSTRUCTION.—Nothing in this sub-
section shall be construed as changing the criteria
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for coverage of a medical device under title XVIII of
the Social Security Act nor premarket approval by
the Food and Drug Administration and nothing in
this subsection shall be construed to increase pre-
market approval application requirements under the
Federal Food, Drug, and Cosmetic Act.
(b) COUNCIL FOR TECHNOLOGY AND INNOVATION.—
Section 1868 (42 U.S.C. 1395ee), as amended by section
823(a), is amended by adding at the end the following new
subsection:
‘‘(c) COUNCIL
FOR
TECHNOLOGY
AND
INNOVA-
TION.—
‘‘(1) ESTABLISHMENT.—The Secretary shall es-
tablish a Council for Technology and Innovation
within the Centers for Medicare & Medicaid Services
(in this section referred to as ‘CMS’).
‘‘(2) COMPOSITION.—The Council shall be com-
posed of senior CMS staff and clinicians and shall
be chaired by the Executive Coordinator for Tech-
nology and Innovation (appointed or designated
under paragraph (4)).
‘‘(3) DUTIES.—The Council shall coordinate the
activities of coverage, coding, and payment processes
under this title with respect to new technologies and
procedures, including new drug therapies, and shall
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coordinate the exchange of information on new tech-
nologies between CMS and other entities that make
similar decisions.
‘‘(4) EXECUTIVE
COORDINATOR
FOR
TECH-
NOLOGY AND INNOVATION.—The Secretary shall ap-
point (or designate) a noncareer appointee (as de-
fined in section 3132(a)(7) of title 5, United States
Code) who shall serve as the Executive Coordinator
for Technology and Innovation. Such executive coor-
dinator shall report to the Administrator of CMS,
shall chair the Council, shall oversee the execution of
its duties, and shall serve as a single point of con-
tact for outside groups and entities regarding the
coverage, coding, and payment processes under this
title.’’.
(c) GAO STUDY ON IMPROVEMENTS IN EXTERNAL
DATA COLLECTION FOR USE IN THE MEDICARE INPA-
TIENT PAYMENT SYSTEM.—
(1) STUDY.—The Comptroller General of the
United States shall conduct a study that analyzes
which external data can be collected in a shorter
time frame by the Centers for Medicare & Medicaid
Services for use in computing payments for inpatient
hospital services. The study may include an evalua-
tion of the feasibility and appropriateness of using
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of quarterly samples or special surveys or any other
methods. The study shall include an analysis of
whether other executive agencies, such as the Bu-
reau of Labor Statistics in the Department of Com-
merce, are best suited to collect this information.
(2) REPORT.—By not later than October 1,
2003, the Comptroller General shall submit a report
to Congress on the study under paragraph (1).
(d) IOM STUDY ON LOCAL COVERAGE DETERMINA-
TIONS.—
(1) STUDY.—The Secretary shall enter into an
arrangement with the Institute of Medicine of the
National Academy of Sciences under which the Insti-
tute shall conduct a study on local coverage deter-
minations (including the application of local medical
review policies) under the medicare program under
title XVIII of the Social Security Act. Such study
shall examine—
(A) the consistency of the definitions used
in such determinations;
(B) the types of evidence on which such
determinations are based, including medical and
scientific evidence;
(C) the advantages and disadvantages of
local coverage decisionmaking, including the
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flexibility it offers for ensuring timely patient
access to new medical technology for which data
are still be collected;
(D) the manner in which the local coverage
determination process is used to develop data
needed for a national coverage determination,
including the need for collection of such data
within a protocol and informed consent by indi-
viduals entitled to benefits under part A of title
XVIII of the Social Security Act, or enrolled
under part B of such title, or both; and
(E) the advantages and disadvantages of
maintaining local medicare contractor advisory
committees that can advise on local coverage
decisions based on an open, collaborative public
process.
(2) REPORT.—Such arrangement shall provide
that the Institute shall submit to the Secretary a re-
port on such study by not later than 3 years after
the date of the enactment of this Act. The Secretary
shall promptly transmit a copy of such report to
Congress.
(e) METHODS FOR DETERMINING PAYMENT BASIS
FOR NEW LAB TESTS.—Section 1833(h) (42 U.S.C.
1395l(h)) is amended by adding at the end the following:
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‘‘(8)(A) The Secretary shall establish by regulation
procedures for determining the basis for, and amount of,
payment under this subsection for any clinical diagnostic
laboratory test with respect to which a new or substan-
tially revised HCPCS code is assigned on or after January
1, 2004 (in this paragraph referred to as ‘new tests’).
‘‘(B) Determinations under subparagraph (A) shall
be made only after the Secretary—
‘‘(i) makes available to the public (through an
Internet site and other appropriate mechanisms) a
list that includes any such test for which establish-
ment of a payment amount under this subsection is
being considered for a year;
‘‘(ii) on the same day such list is made avail-
able, causes to have published in the Federal Reg-
ister notice of a meeting to receive comments and
recommendations (and data on which recommenda-
tions are based) from the public on the appropriate
basis under this subsection for establishing payment
amounts for the tests on such list;
‘‘(iii) not less than 30 days after publication of
such notice convenes a meeting, that includes rep-
resentatives of officials of the Centers for Medicare
& Medicaid Services involved in determining pay-
ment amounts, to receive such comments and rec-
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ommendations (and data on which the recommenda-
tions are based);
‘‘(iv) taking into account the comments and rec-
ommendations (and accompanying data) received at
such meeting, develops and makes available to the
public (through an Internet site and other appro-
priate mechanisms) a list of proposed determinations
with respect to the appropriate basis for establishing
a payment amount under this subsection for each
such code, together with an explanation of the rea-
sons for each such determination, the data on which
the determinations are based, and a request for pub-
lic written comments on the proposed determination;
and
‘‘(v) taking into account the comments received
during the public comment period, develops and
makes available to the public (through an Internet
site and other appropriate mechanisms) a list of
final determinations of the payment amounts for
such tests under this subsection, together with the
rationale for each such determination, the data on
which the determinations are based, and responses
to comments and suggestions received from the pub-
lic.
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‘‘(C) Under the procedures established pursuant to
subparagraph (A), the Secretary shall—
‘‘(i) set forth the criteria for making determina-
tions under subparagraph (A); and
‘‘(ii) make available to the public the data
(other than proprietary data) considered in making
such determinations.
‘‘(D) The Secretary may convene such further public
meetings to receive public comments on payment amounts
for new tests under this subsection as the Secretary deems
appropriate.
‘‘(E) For purposes of this paragraph:
‘‘(i) The term ‘HCPCS’ refers to the Health
Care Procedure Coding System.
‘‘(ii) A code shall be considered to be ‘substan-
tially revised’ if there is a substantive change to the
definition of the test or procedure to which the code
applies (such as a new analyte or a new methodology
for measuring an existing analyte-specific test).’’.
SEC. 843. TREATMENT OF HOSPITALS FOR CERTAIN SERV-
ICES UNDER MEDICARE SECONDARY PAYOR
(MSP) PROVISIONS.
(a) IN GENERAL.—The Secretary shall not require
a hospital (including a critical access hospital) to ask ques-
tions (or obtain information) relating to the application
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of section 1862(b) of the Social Security Act (relating to
medicare secondary payor provisions) in the case of ref-
erence laboratory services described in subsection (b), if
the Secretary does not impose such requirement in the
case of such services furnished by an independent labora-
tory.
(b) 
REFERENCE
LABORATORY
SERVICES
DE-
SCRIBED.—Reference laboratory services described in this
subsection are clinical laboratory diagnostic tests (or the
interpretation of such tests, or both) furnished without a
face-to-face encounter between the individual entitled to
benefits under part A or enrolled under part B, or both,
and the hospital involved and in which the hospital sub-
mits a claim only for such test or interpretation.
SEC. 844. EMTALA IMPROVEMENTS.
(a) PAYMENT FOR EMTALA-MANDATED SCREEN-
ING AND STABILIZATION SERVICES.—
(1) IN
GENERAL.—Section 1862 (42 U.S.C.
1395y) is amended by inserting after subsection (c)
the following new subsection:
‘‘(d) For purposes of subsection (a)(1)(A), in the case
of any item or service that is required to be provided pur-
suant to section 1867 to an individual who is entitled to
benefits under this title, determinations as to whether the
item or service is reasonable and necessary shall be made
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on the basis of the information available to the treating
physician or practitioner (including the patient’s pre-
senting symptoms or complaint) at the time the item or
service was ordered or furnished by the physician or prac-
titioner (and not on the patient’s principal diagnosis).
When making such determinations with respect to such
an item or service, the Secretary shall not consider the
frequency with which the item or service was provided to
the patient before or after the time of the admission or
visit.’’.
(2) EFFECTIVE DATE.—The amendment made
by paragraph (1) shall apply to items and services
furnished on or after January 1, 2003.
(b) NOTIFICATION OF PROVIDERS WHEN EMTALA
INVESTIGATION CLOSED.—Section 1867(d) (42 U.S.C. 42
U.S.C. 1395dd(d)) is amended by adding at the end the
following new paragraph:
‘‘(4) NOTICE
UPON
CLOSING
AN
INVESTIGA-
TION.—The Secretary shall establish a procedure to
notify hospitals and physicians when an investigation
under this section is closed.’’.
(c) PRIOR REVIEW BY PEER REVIEW ORGANIZA-
TIONS IN EMTALA CASES INVOLVING TERMINATION OF
PARTICIPATION.—
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(1) IN
GENERAL.—Section 1867(d)(3) (42
U.S.C. 1395dd(d)(3)) is amended—
(A) in the first sentence, by inserting ‘‘or
in terminating a hospital’s participation under
this title’’ after ‘‘in imposing sanctions under
paragraph (1)’’; and
(B) by adding at the end the following new
sentences: ‘‘Except in the case in which a delay
would jeopardize the health or safety of individ-
uals, the Secretary shall also request such a re-
view before making a compliance determination
as part of the process of terminating a hos-
pital’s participation under this title for viola-
tions related to the appropriateness of a med-
ical screening examination, stabilizing treat-
ment, or an appropriate transfer as required by
this section, and shall provide a period of 5
days for such review. The Secretary shall pro-
vide a copy of the organization’s report to the
hospital or physician consistent with confiden-
tiality requirements imposed on the organiza-
tion under such part B.’’.
(2) EFFECTIVE DATE.—The amendments made
by paragraph (1) shall apply to terminations of par-
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ticipation initiated on or after the date of the enact-
ment of this Act.
SEC. 845. EMERGENCY MEDICAL TREATMENT AND LABOR
ACT (EMTALA) TECHNICAL ADVISORY GROUP.
(a) ESTABLISHMENT.—The Secretary shall establish
a Technical Advisory Group (in this section referred to
as the ‘‘Advisory Group’’) to review issues related to the
Emergency 
Medical 
Treatment 
and 
Labor 
Act
(EMTALA) and its implementation. In this section, the
term ‘‘EMTALA’’ refers to the provisions of section 1867
of the Social Security Act (42 U.S.C. 1395dd).
(b) MEMBERSHIP.—The Advisory Group shall be
composed of 19 members, including the Administrator of
the Centers for Medicare & Medicaid Services and the In-
spector General of the Department of Health and Human
Services and of which—
(1) 4 shall be representatives of hospitals, in-
cluding at least one public hospital, that have experi-
ence with the application of EMTALA and at least
2 of which have not been cited for EMTALA viola-
tions;
(2) 7 shall be practicing physicians drawn from
the fields of emergency medicine, cardiology or
cardiothoracic surgery, orthopedic surgery, neuro-
surgery, obstetrics-gynecology, and psychiatry, with
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not more than one physician from any particular
field;
(3) 2 shall represent patients;
(4) 2 shall be staff involved in EMTALA inves-
tigations from different regional offices of the Cen-
ters for Medicare & Medicaid Services; and
(5) 1 shall be from a State survey office in-
volved in EMTALA investigations and 1 shall be
from a peer review organization, both of whom shall
be from areas other than the regions represented
under paragraph (4).
In selecting members described in paragraphs (1) through
(3), the Secretary shall consider qualified individuals nom-
inated by organizations representing providers and pa-
tients.
(c) GENERAL
RESPONSIBILITIES.—The Advisory
Group—
(1) shall review EMTALA regulations;
(2) may provide advice and recommendations to
the Secretary with respect to those regulations and
their application to hospitals and physicians;
(3) shall solicit comments and recommendations
from hospitals, physicians, and the public regarding
the implementation of such regulations; and
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(4) may disseminate information on the applica-
tion of such regulations to hospitals, physicians, and
the public.
(d) ADMINISTRATIVE MATTERS.—
(1) CHAIRPERSON.—The members of the Advi-
sory Group shall elect a member to serve as chair-
person of the Advisory Group for the life of the Ad-
visory Group.
(2) MEETINGS.—The Advisory Group shall first
meet at the direction of the Secretary. The Advisory
Group shall then meet twice per year and at such
other times as the Advisory Group may provide.
(e) TERMINATION.—The Advisory Group shall termi-
nate 30 months after the date of its first meeting.
(f) WAIVER OF ADMINISTRATIVE LIMITATION.—The
Secretary shall establish the Advisory Group notwith-
standing any limitation that may apply to the number of
advisory committees that may be established (within the
Department of Health and Human Services or otherwise).
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SEC. 846. AUTHORIZING USE OF ARRANGEMENTS WITH
OTHER HOSPICE PROGRAMS TO PROVIDE
CORE HOSPICE SERVICES IN CERTAIN CIR-
CUMSTANCES.
(a) IN GENERAL.—Section 1861(dd)(5) (42 U.S.C.
1395x(dd)(5)) is amended by adding at the end the fol-
lowing new subparagraph:
‘‘(D) In extraordinary, exigent, or other non-routine
circumstances, such as unanticipated periods of high pa-
tient loads, staffing shortages due to illness or other
events, or temporary travel of a patient outside a hospice
program’s service area, a hospice program may enter into
arrangements with another hospice program for the provi-
sion by that other program of services described in para-
graph 
(2)(A)(ii)(I). 
The 
provisions 
of 
paragraph
(2)(A)(ii)(II) shall apply with respect to the services pro-
vided under such arrangements.’’.
(b) CONFORMING
PAYMENT
PROVISION.—Section
1814(i) (42 U.S.C. 1395f(i)), as amended by section
421(b), is amended by adding at the end the following new
paragraph:
‘‘(5) In the case of hospice care provided by a hospice
program 
under 
arrangements 
under 
section
1861(dd)(5)(D) made by another hospice program, the
hospice program that made the arrangements shall bill
and be paid for the hospice care.’’.
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(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to hospice care provided on or after
the date of the enactment of this Act.
SEC. 847. APPLICATION OF OSHA BLOODBORNE PATHO-
GENS STANDARD TO CERTAIN HOSPITALS.
(a) IN GENERAL.—Section 1866 (42 U.S.C. 1395cc)
is amended—
(1) in subsection (a)(1)—
(A) in subparagraph (R), by striking
‘‘and’’ at the end;
(B) in subparagraph (S), by striking the
period at the end and inserting ‘‘, and’’; and
(C) by inserting after subparagraph (S)
the following new subparagraph:
‘‘(T) in the case of hospitals that are not other-
wise subject to the Occupational Safety and Health
Act of 1970, to comply with the Bloodborne Patho-
gens standard under section 1910.1030 of title 29 of
the Code of Federal Regulations (or as subsequently
redesignated).’’; and
(2) by adding at the end of subsection (b) the
following new paragraph:
‘‘(4)(A) A hospital that fails to comply with the re-
quirement of subsection (a)(1)(T) (relating to the
Bloodborne Pathogens standard) is subject to a civil
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money penalty in an amount described in subparagraph
(B), but is not subject to termination of an agreement
under this section.
‘‘(B) The amount referred to in subparagraph (A) is
an amount that is similar to the amount of civil penalties
that may be imposed under section 17 of the Occupational
Safety and Health Act of 1970 for a violation of the
Bloodborne Pathogens standard referred to in subsection
(a)(1)(T) by a hospital that is subject to the provisions
of such Act.
‘‘(C) A civil money penalty under this paragraph shall
be imposed and collected in the same manner as civil
money penalties under subsection (a) of section 1128A are
imposed and collected under that section.’’.
(b) EFFECTIVE DATE.—The amendments made by
this subsection (a) shall apply to hospitals as of July 1,
2003.
SEC. 848. BIPA-RELATED TECHNICAL AMENDMENTS AND
CORRECTIONS.
(a) TECHNICAL AMENDMENTS RELATING TO ADVI-
SORY COMMITTEE UNDER BIPA SECTION 522.—(1) Sub-
section (i) of section 1114 (42 U.S.C. 1314)—
(A) is transferred to section 1862 and added at
the end of such section; and
(B) is redesignated as subsection (j).
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(2) Section 1862 (42 U.S.C. 1395y) is amended—
(A) in the last sentence of subsection (a), by
striking ‘‘established under section 1114(f)’’; and
(B) in subsection (j), as so transferred and
redesignated—
(i) by striking ‘‘under subsection (f)’’; and
(ii) by striking ‘‘section 1862(a)(1)’’ and
inserting ‘‘subsection (a)(1)’’.
(b) 
TERMINOLOGY
CORRECTIONS.—(1) 
Section
1869(c)(3)(I)(ii) (42 U.S.C. 1395ff(c)(3)(I)(ii)), as
amended by section 521 of BIPA, is amended—
(A) in subclause (III), by striking ‘‘policy’’ and
inserting ‘‘determination’’; and
(B) in subclause (IV), by striking ‘‘medical re-
view policies’’ and inserting ‘‘coverage determina-
tions’’.
(2) Section 1852(a)(2)(C) (42 U.S.C. 1395w–
22(a)(2)(C)) is amended by striking ‘‘policy’’ and ‘‘POL-
ICY’’ and inserting ‘‘determination’’ each place it appears
and ‘‘DETERMINATION’’, respectively.
(c) REFERENCE CORRECTIONS.—Section 1869(f)(4)
(42 U.S.C. 1395ff(f)(4)), as added by section 522 of
BIPA, is amended—
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(1) in subparagraph (A)(iv), by striking ‘‘sub-
clause (I), (II), or (III)’’ and inserting ‘‘clause (i),
(ii), or (iii)’’;
(2) in subparagraph (B), by striking ‘‘clause
(i)(IV)’’ and ‘‘clause (i)(III)’’ and inserting ‘‘sub-
paragraph (A)(iv)’’ and ‘‘subparagraph (A)(iii)’’, re-
spectively; and
(3) in subparagraph (C), by striking ‘‘clause
(i)’’, ‘‘subclause (IV)’’ and ‘‘subparagraph (A)’’ and
inserting ‘‘subparagraph (A)’’, ‘‘clause (iv)’’ and
‘‘paragraph (1)(A)’’, respectively each place it ap-
pears.
(d) OTHER CORRECTIONS.—Effective as if included
in the enactment of section 521(c) of BIPA, section
1154(e) (42 U.S.C. 1320c–3(e)) is amended by striking
paragraph (5).
(e) EFFECTIVE DATE.—Except as otherwise pro-
vided, the amendments made by this section shall be effec-
tive as if included in the enactment of BIPA.
SEC. 849. CONFORMING AUTHORITY TO WAIVE A PROGRAM
EXCLUSION.
The first sentence of section 1128(c)(3)(B) (42
U.S.C. 1320a–7(c)(3)(B)) is amended to read as follows:
‘‘Subject to subparagraph (G), in the case of an exclusion
under subsection (a), the minimum period of exclusion
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shall be not less than five years, except that, upon the
request of the administrator of a Federal health care pro-
gram (as defined in section 1128B(f)) who determines
that the exclusion would impose a hardship on individuals
entitled to benefits under part A of title XVIII or enrolled
under part B of such title, or both, the Secretary may
waive the exclusion under subsection (a)(1), (a)(3), or
(a)(4) with respect to that program in the case of an indi-
vidual or entity that is the sole community physician or
sole source of essential specialized services in a commu-
nity.’’.
SEC. 850. TREATMENT OF CERTAIN DENTAL CLAIMS.
(a) IN GENERAL.—Section 1862 (42 U.S.C. 1395y)
is amended by adding after subsection (g) the following
new subsection:
‘‘(h)(1) Subject to paragraph (2), a group health plan
(as defined in subsection (a)(1)(A)(v)) providing supple-
mental or secondary coverage to individuals also entitled
to services under this title shall not require a medicare
claims determination under this title for dental benefits
specifically excluded under subsection (a)(12) as a condi-
tion of making a claims determination for such benefits
under the group health plan.
‘‘(2) A group health plan may require a claims deter-
mination under this title in cases involving or appearing
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to involve inpatient dental hospital services or dental serv-
ices expressly covered under this title pursuant to actions
taken by the Secretary.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall take effect on the date that is 60 days
after the date of the enactment of this Act.
SEC. 851. ANNUAL PUBLICATION OF LIST OF NATIONAL
COVERAGE DETERMINATIONS.
The Secretary shall provide, in an appropriate annual
publication available to the public, a list of national cov-
erage 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 determina-
tions.
TITLE IX—MEDICAID
PROVISIONS
SEC. 901. NATIONAL BIPARTISAN COMMISSION ON THE FU-
TURE OF MEDICAID.
(a) ESTABLISHMENT.—There is established a com-
mission to be known as the National Bipartisan Commis-
sion on the Future of Medicaid (in this section referred
to as the ‘‘Commission’’).
(b) DUTIES OF THE COMMISSION.—The Commission
shall—
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(1) review and analyze the long-term financial
condition of the medicaid program under title XIX
of the Social Security Act (42 U.S.C. 1396 et seq.);
(2) identify the factors that are causing, and
the consequences of, increases in costs under the
medicaid program, including—
(A) the impact of these cost increases upon
State budgets, funding for other State pro-
grams, and levels of State taxes necessary to
fund growing expenditures under the medicaid
program;
(B) the financial obligations of the Federal
government arising from the Federal matching
requirement for expenditures under the med-
icaid program; and
(C) the size and scope of the current pro-
gram and how the program has evolved over
time;
(3) analyze potential policies that will ensure
both the financial integrity of the medicaid program
and the provision of appropriate benefits under such
program;
(4) make recommendations for establishing in-
centives and structures to promote enhanced effi-
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ciencies and ways of encouraging innovative State
policies under the medicaid program;
(5) make recommendations for establishing the
appropriate balance between benefits covered, pay-
ments to providers, State and Federal contributions
and, where appropriate, recipient cost-sharing obli-
gations;
(6) make recommendations on the impact of
promoting increased utilization of competitive, pri-
vate enterprise models to contain program cost
growth, through enhanced utilization of private
plans, pharmacy benefit managers, and other meth-
ods currently being used to contain private sector
health-care costs;
(7) make recommendations on the financing of
prescription drug benefits currently covered under
medicaid programs, including analysis of the current
Federal manufacturer rebate program, its impact
upon both private market prices as well as those
paid by other government purchasers, recent State
efforts to negotiate additional supplemental manu-
facturer rebates and the ability of pharmacy benefit
managers to lower drug costs;
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(8) review and analyze such other matters relat-
ing to the medicaid program as the Commission
deems appropriate; and
(9) analyze the impact of impending demo-
graphic changes upon medicaid benefits, including
long term care services, and make recommendations
for how best to appropriately divide State and Fed-
eral responsibilities for funding these benefits.
(c) MEMBERSHIP.—
(1) NUMBER AND APPOINTMENT.—The Com-
mission shall be composed of 17 members, of
whom—
(A) four shall be appointed by the Presi-
dent;
(B) six shall be appointed by the Majority
Leader of the Senate, in consultation with the
Minority Leader of the Senate, of whom not
more than 4 shall be of the same political party;
(C) six shall be appointed by the Speaker
of the House of Representatives, in consultation
with the Minority Leader of the House of Rep-
resentatives, of whom not more than 4 shall be
of the same political party; and
(D) one, who shall serve as Chairman of
the Commission, appointed jointly by the Presi-
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dent, Majority Leader of the Senate, and the
Speaker of the House of Representatives.
(2) DEADLINE FOR APPOINTMENT.—Members
of the Commission shall be appointed by not later
than December 1, 2002.
(3) TERMS
OF
APPOINTMENT.—The term of
any appointment under paragraph (1) to the Com-
mission shall be for the life of the Commission.
(4) MEETINGS.—The Commission shall meet at
the call of its Chairman or a majority of its mem-
bers.
(5) QUORUM.—A quorum shall consist of 8
members of the Commission, except that 4 members
may conduct a hearing under subsection (e).
(6) VACANCIES.—A vacancy on the Commission
shall be filled in the same manner in which the origi-
nal appointment was made not later than 30 days
after the Commission is given notice of the vacancy
and shall not affect the power of the remaining
members to execute the duties of the Commission.
(7) COMPENSATION.—Members of the Commis-
sion shall receive no additional pay, allowances, or
benefits by reason of their service on the Commis-
sion.
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(8) EXPENSES.—Each member of the Commis-
sion shall receive travel expenses and per diem in
lieu of subsistence in accordance with sections 5702
and 5703 of title 5, United States Code.
(d) STAFF AND SUPPORT SERVICES.—
(1) EXECUTIVE DIRECTOR.—
(A) APPOINTMENT.—The Chairman shall
appoint an executive director of the Commis-
sion.
(B) COMPENSATION.—The executive direc-
tor shall be paid the rate of basic pay for level
V of the Executive Schedule.
(2) STAFF.—With the approval of the Commis-
sion, the executive director may appoint such per-
sonnel as the executive director considers appro-
priate.
(3) APPLICABILITY OF CIVIL SERVICE LAWS.—
The staff of the Commission shall be appointed with-
out regard to the provisions of title 5, United States
Code, governing appointments in the competitive
service, and shall be paid without regard to the pro-
visions of chapter 51 and subchapter III of chapter
53 of such title (relating to classification and Gen-
eral Schedule pay rates).
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(4) EXPERTS
AND
CONSULTANTS.—With the
approval of the Commission, the executive director
may procure temporary and intermittent services
under section 3109(b) of title 5, United States Code.
(5) PHYSICAL FACILITIES.—The Administrator
of the General Services Administration shall locate
suitable office space for the operation of the Com-
mission. The facilities shall serve as the head-
quarters of the Commission and shall include all
necessary equipment and incidentals required for the
proper functioning of the Commission.
(e) POWERS OF COMMISSION.—
(1) HEARINGS
AND
OTHER
ACTIVITIES.—For
the purpose of carrying out its duties, the Commis-
sion may hold such hearings and undertake such
other activities as the Commission determines to be
necessary to carry out its duties.
(2) STUDIES BY GAO.—Upon the request of the
Commission, the Comptroller General shall conduct
such studies or investigations as the Commission de-
termines to be necessary to carry out its duties.
(3) COST
ESTIMATES
BY
CONGRESSIONAL
BUDGET OFFICE AND OFFICE OF THE CHIEF ACTU-
ARY OF CMS.—
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fice, the Commission shall be deemed to be a com-
mittee of the Congress.
(f) REPORT.—Not later than March 1, 2004, the
Commission shall submit a report to the President and
Congress which shall contain a detailed statement of the
recommendations, findings, and conclusions of the Com-
mission.
(g) TERMINATION.—The Commission shall terminate
30 days after the date of submission of the report required
in subsection (f).
(h) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated $1,500,000 to carry out
this section.
SEC. 902. DISPROPORTIONATE SHARE HOSPITAL (DSH)
PAYMENTS.
Section 1923(f)(3) (42 U.S.C. 1396r–4(f)(3)) is
amended—
(1) in subparagraph (A), by amending subpara-
graph (A) to read as follows:
‘‘(A) IN GENERAL.—The DSH allotment
for any State—
‘‘(i) for fiscal year 2003 is equal to
the DSH allotment for the State for fiscal
year 2001 under the table in paragraph
(2), without regard to paragraph (4), in-
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creased, subject to subparagraph (B) and
paragraph (5), by the percentage change in
the consumer price index for all urban con-
sumers (all items; U.S. city average), for
fiscal year 2001; and
‘‘(ii) for each succeeding fiscal year is
equal to the DSH allotment for the State
for the previous fiscal year under this sub-
paragraph increased, subject to subpara-
graph (B) and paragraph (5), by 1.7 per-
cent or, in the case of fiscal years begin-
ning with the fiscal year specified in sub-
paragraph (C) for that State, the percent-
age change in the consumer price index for
all urban consumers (all items; U.S. city
average), for the previous fiscal year.’’; and
(2) by adding at the end the following new sub-
paragraph:
‘‘(C) FISCAL YEAR SPECIFIED.—For pur-
poses of subparagraph (A)(ii), the fiscal year
specified in this subparagraph for a State is the
first fiscal year for which the Secretary esti-
mates that the DSH allotment for that State
will equal (or no longer exceed) the DSH allot-
ment for that State under the law as in effect
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before the date of the enactment of this sub-
paragraph.’’.
SEC. 903. MEDICAID PHARMACY ASSISTANCE PROGRAM.
Title XIX is amended—
(1) by redesignating section 1935 as section
1936; and
(2) by inserting after section 1934 the following
new section:
‘‘PHARMACY ASSISTANCE PROGRAM
‘‘SEC. 1936. (a) IN GENERAL.—A State plan under
this title may provide assistance, consistent with this sec-
tion, to pharmacies in implementing the new prescription
drug benefit under part D of title XVIII.
‘‘(b) USE OF FUNDS.—Such grants may be provided
to assist pharmacies—
‘‘(1) in complying with requirements relating to
electronic prescribing;
‘‘(2) in prospective drug utilization review; and
‘‘(3) in developing innovative medication ther-
apy management programs using information tech-
nology.
‘‘(c) CONDITION FOR RECEIPT.—A pharmacy is not
eligible for a grant under this section unless the pharmacy
demonstrates how it will operate a program that will work
effectively with patients to reduce adverse drug reactions
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and medical errors. No grant shall be awarded under this
section before January 1, 2004.
(d) PRIORITIES.—In awarding grants under this sec-
tion, a State shall take into account and give priority to
the needs of small or rural pharmacies and to pharmacies
which service underserved areas.
‘‘(e) FUNDING.—
‘‘(1) TREATMENT AS MEDICAL ASSISTANCE.—
Subject to paragraph (2), amounts provided under
grants by a State under this section (and the rea-
sonable administrative expenses of a State in car-
rying out this section, not to exceed 10 percent of
the total amount awarded as grants by a State) shall
be treated as the provision of medical assistance for
purposes of section 1903. In applying section
1903(a)(1) with respect to such assistance, the Fed-
eral medical assistance percentage is deemed to be
100 percent.
‘‘(2) LIMITATION AND ALLOTMENT.—
‘‘(A) LIMITATION.—The total amount for
which Federal financial participation is avail-
able under section 1903(a) for grants and ad-
ministrative expenses under this section in cal-
endar quarters in any fiscal year is limited to
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$150,000,000 in each of fiscal years 2004
through 2007.
‘‘(B) ALLOCATION.—The Secretary shall
provide a method for the allocation of the
amount of funds described in subparagraph (A)
in each fiscal year among the States. Such
method shall take into account the distribution
among States of priority pharmacies specified
in subsection (d).
‘‘(3) REQUIREMENT
FOR
APPLICATION.—The
preceding provisions of this section shall only apply
to a State if the State has filed with the Secretary
an amendment to its State plan that provides for the
awarding of grants under this section that is con-
sistent with the requirements of this section.’’.
Passed the House of Representatives June 28 (legis-
lative day, June 27), 2002.
Attest:
JEFF TRANDAHL,
Clerk.