‘‘(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,
2002.
(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).’’.
(2) EFFECTIVE DATE.—The amendment made
by paragraph (1) shall take effect on October 1,
2002.
(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:
‘‘(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. 302. 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
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-
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
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
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 2003, $1,000,000, and
(2) for fiscal year 2004, $6,000,000.
SEC. 303. 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’’;
(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—
‘‘(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 is amended by inserting after section 1806 the fol-
lowing new section:
‘‘MEDICARE BENEFICIARY OMBUDSMAN
‘‘SEC. 1807. (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.
‘‘(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
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
1807 of such Act (relating to the Medicare Beneficiary
Ombudsman), as added by subsection (b), such sums as
are necessary for fiscal year 2002 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,
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. 304. 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.—
(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
referred 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-
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.
TITLE IV—APPEALS AND
RECOVERY
SEC. 401. TRANSFER OF RESPONSIBILITY FOR MEDICARE
APPEALS.
(a) TRANSITION PLAN.—
(1) IN GENERAL.—Not later than October 1,
2002, 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
and, not later than April 1, 2003, shall submit to
Congress a report on such evaluation.
(b) TRANSFER OF ADJUDICATION AUTHORITY.—
(1) IN
GENERAL.—Not earlier than July 1,
2003, and not later than October 1, 2003, 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.
(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-
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 2003 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. 402. 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—
(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
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
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
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-
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
(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, 2002.
(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.
(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 2003 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. 403. 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 402(a), is further amended by adding at the
end the following new paragraph:
‘‘(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,
2002.
(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
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.’’.
(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,
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:
‘‘(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
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
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
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
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