is estimated, including those regulations
that may be implemented during such
year; and
‘‘(ii) the costs described in subpara-
graph (C).
‘‘(C) INCLUSION OF OTHER REGULATORY
COSTS.—The costs described in this subpara-
graph are per procedure costs incurred by phy-
sicians’ practices in complying with regulations
promulgated by the Secretary, regardless of
whether such regulation affects the fee schedule
established under subsection (b)(1).
‘‘(D) INCLUSION
OF
COSTS
IN
REGU-
LATORY
IMPACT
ANALYSES.—With respect to
any regulation promulgated that may impose a
regulatory cost described in subparagraph
(B)(i) or (C) on a physician, the Secretary shall
include in the regulatory impact analysis ac-
companying such regulation an estimate of any
such cost.
‘‘(E) INCLUSION OF ESTIMATED COST ON
RURAL
PHYSICIANS.—In promulgating regula-
tions, the Secretary shall specifically estimate
the costs to rural physicians and physicians
practices in rural areas and the estimated num-
ber of hours needed to comply with the regula-
tion.’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) shall apply with respect to any estimate
made (or regulation promulgated) by the Secretary of
Health and Human Services on or after 1 year after the
date of enactment of this Act.
TITLE 
V—POLICY 
DEVELOP-
MENT 
REGARDING 
E&M
GUIDELINES
SEC. 501. POLICY DEVELOPMENT REGARDING E&M DOCU-
MENTATION GUIDELINES.
(a) IN GENERAL.—HCFA may not implement any
new evaluation and management documentation guidelines
(in this section referred to as ‘‘E&M guidelines’’) under
the medicare program, unless HCFA—
(1) has provided for an assessment of the pro-
posed guidelines by organizations representing physi-
cians;
(2) has established a plan that contains specific
goals, including a schedule, for improving use of
such guidelines;
(3) has completed a minimum of 4 pilot
projects consistent with subsection (b) in at least 4
different HCFA regions administered by 4 different
carriers (to be specified by the Secretary) to test
such guidelines; and
(4) finds that the objectives described in sub-
section (c) will be met in the implementation of such
guidelines.
(b) PILOT PROJECTS.—
(1) LENGTH AND CONSULTATION.—Each pilot
project under this subsection shall—
(A) be of sufficient length to allow for pre-
paratory physician and carrier education, anal-
ysis, and use and assessment of potential E&M
guidelines; and
(B) be conducted, throughout the planning
and operational stages of the project, in con-
sultation with organizations representing physi-
cians.
(2) PEER
REVIEW
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
carrier) which evaluates medical record infor-
mation for claims submitted by physicians iden-
tified as statistical outliers relative to defini-
tions published in the CPT book;
(B) at least one shall be conducted for
services furnished in a rural area (as defined in
section 1886(d)(2)(D) of the Social Security
Act, 42 U.S.C. 1395ww(d)(2)(D)); and
(C) at least one shall be conducted in a
setting where physicians bill under physicians
services in teaching settings (described in sec-
tion 415.150 of title 42, Code of Federal Regu-
lations).
(3) 
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.
(4) STUDY
OF
IMPACT.—Each pilot project
shall examine the effect of the E&M guidelines on—
(A) different types of physician practices,
including those with fewer than 10 full-time
employees (including physicians); and
(B) the costs of physician compliance, in-
cluding education, implementation, auditing,
and monitoring.
(c) OBJECTIVES FOR E&M GUIDELINES.—The objec-
tives for E&M guidelines specified in this subsection are
as follows (relative to the E&M guidelines and review poli-
cies in effect as of the date of the enactment of this Act):
(1) Enhancing clinically relevant documentation
needed to code accurately and assess coding levels
accurately.
(2) Decreasing the level of non-clinically perti-
nent and burdensome documentation time and con-
tent in the record.
(3) Increased accuracy by carrier reviewers.
(4) Education of both physicians and reviewers.
(5) Promote appropriate use of E&M codes by
physicians and their staffs.
(6) The extent to which the tested E&M docu-
mentation guidelines substantially adhere to the
CPT coding definitions and rules.
(d) REPORT ON HOW MET PILOT PROJECT OBJEC-
TIVES.—HCFA shall submit a report to the Committees
on Energy and Commerce and Ways and Means of the
House of Representatives, the Committee on Finance of
the Senate, and the Practicing Physicians Advisory Coun-
cil, six months after the conclusion of the pilot projects.
Such report shall include the extent to which the pilot
projects met the objectives specified in subsections (b)(4)
and (c).
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