I
107TH CONGRESS
1ST SESSION
H. R. 868
To amend title XVIII of the Social Security Act to ensure that the Secretary
of Health and Human Services provides appropriate guidance to physi-
cians, providers of services, and ambulance providers that are attempting
to properly submit claims under the Medicare Program and to ensure
that the Secretary does not target inadvertent billing errors.
IN THE HOUSE OF REPRESENTATIVES
MARCH 6, 2001
Mr. TOOMEY (for himself, Ms. BERKLEY, Mr. PAUL, Mr. SCHAFFER, Mr.
DEMINT, Mr. VITTER, Mr. SESSIONS, Mr. MCHUGH, Mr. SAXTON, Mrs.
MYRICK, Mr. GOODE, Mr. MILLER of Florida, Mr. PITTS, Mr. HILLEARY,
Mr. CRAMER, Mr. ISTOOK, Mr. HILLIARD, Mr. SOUDER, Mr. TANCREDO,
Mr. JONES of North Carolina, Mr. HASTINGS of Washington, Mr. SHAW,
Mr. TIAHRT, Mr. STENHOLM, Mrs. JO ANN DAVIS of Virginia, Mr.
SMITH of New Jersey, Mrs. KELLY, Mr. FLETCHER, Mr. MCGOVERN,
Mr. GORDON, Mr. BAKER, Mr. SHOWS, Mr. GOODLATTE, Mr.
CUNNINGHAM, Mr. SIMMONS, Mr. NEY, Mr. REYNOLDS, Mr. CAPUANO,
Mr. RYUN of Kansas, Mr. TIBERI, Mr. FOLEY, and Mr. SHADEGG) intro-
duced the following bill; which was referred to the Committee on Energy
and Commerce, and in addition to the Committee on Ways and Means,
for a period to be subsequently determined by the Speaker, in each case
for consideration of such provisions as fall within the jurisdiction of the
committee concerned
A BILL
To amend title XVIII of the Social Security Act to ensure
that the Secretary of Health and Human Services pro-
vides appropriate guidance to physicians, providers of
services, and ambulance providers that are attempting
to properly submit claims under the Medicare Program
and to ensure that the Secretary does not target inad-
vertent billing errors.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Medicare Education and Regulatory Fairness Act of
2001’’.
(b) TABLE OF CONTENTS.—The table of contents of
this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Definitions.
TITLE I—REGULATORY REFORM
Sec. 101. Prospective application of certain regulations.
Sec. 102. Requirements for judicial and regulatory challenges of regulations.
Sec. 103. Prohibition of recovering past overpayments by certain means.
Sec. 104. Prohibition of recovering past overpayments if appeal pending.
Sec. 105. Prohibition of random prepayment audits.
Sec. 106. Exception on prohibition of waiving medicare copayment.
Sec. 107. Effective date.
TITLE II—APPEALS PROCESS REFORMS
Sec. 201. Construction of hearing rights related to decisions to deny or not
renew a physician enrollment agreement.
Sec. 202. Reform of post-payment audit process.
Sec. 203. Definitions relating to physicians, providers of services, and providers
of ambulance services.
Sec. 204. Right to appeal on behalf of deceased beneficiaries.
Sec. 205. Effective date.
TITLE III—EDUCATION COMPONENTS
Sec. 301. Designated funding levels for physician and provider education.
Sec. 302. Information requests.
TITLE IV—SUSTAINABLE GROWTH RATE REFORMS
Sec. 401. Inclusion of regulatory costs in the calculation of the sustainable
growth rate.
TITLE V—POLICY DEVELOPMENT REGARDING E&M GUIDELINES
Sec. 501. Policy development regarding E&M Documentation Guidelines.
SEC. 2. FINDINGS.
Congress finds the following:
(1) Congress should focus more resources on
and work with physicians and health care providers
to combat fraud in the medicare program.
(2) The overwhelming majority of physicians
and other providers in the United States are law-
abiding citizens who provide important services and
care to patients each day.
(3) Physicians and other providers of services
that participate in the medicare program often have
trouble wading through a confusing and sometimes
even contradictory maze of medicare regulations.
Keeping track of the morass of medicare regulations
detracts from the time that physicians have to treat
patients.
(4) Due to the overly complex nature of medi-
care regulations and the risk of being the subject of
an aggressive government investigation, many physi-
cians are leaving the medicare program, limiting the
number of medicare patients they see, or refusing to
accept new medicare patients at all. If this trend
continues, health care for the millions of patients na-
tionwide who depend on medicare will be seriously
compromised. Congress has an obligation to prevent
this from happening.
(5) Regulatory fairness for physicians and pro-
viders as well as increased access to education about
medicare regulations are necessary to preserve the
integrity of our health care system and provide for
the health of our population.
SEC. 3. DEFINITIONS.
In this Act:
(1) BILLING.—The term ‘‘billing’’ includes any
requirement related to the content and timing of an
order for care or a plan of treatment by a physician,
a provider of service, or a provider of ambulance
services.
(2) CARRIER.—The term ‘‘carrier’’ means a
carrier (as defined in section 1842(f) of the Social
Security Act (42 U.S.C. 1395u(f))) with a contract
under title XVIII of such Act to administer benefits
under part B of such title.
(3) EXTRAPOLATION.—The term ‘‘extrapo-
lation’’ has the meaning given such term in section
1861(ww)(1) of the Social Security Act (as added by
section 203(a)).
(4) FISCAL INTERMEDIARY.—The term ‘‘fiscal
intermediary’’ means a fiscal intermediary (as de-
fined in section 1816(a) of the Social Security Act
(42 U.S.C. 1395h(a))) with an agreement under sec-
tion 1816 of such Act to administer benefits under
part A or B of such title.
(5) HCFA.—The term ‘‘HCFA’’ means the
Health Care Financing Administration.
(6) MEDICARE PROGRAM.—The term ‘‘medicare
program’’ means the health benefits program under
title XVIII of the Social Security Act (42 U.S.C.
1395 et seq.).
(7) PHYSICIAN.—The term ‘‘physician’’ has the
meaning given such term in section 1861(r) of the
Social Security Act (42 U.S.C. 1395x(r)).
(8) PREPAYMENT REVIEW.—The term ‘‘prepay-
ment review’’ has the meaning given such term in
section 1861(ww)(2) of the Social Security Act (as
added by section 203(a)).
(9) PROVIDER OF SERVICES.—The term ‘‘pro-
vider of services’’ has the meaning given such term
in section 1861(u) of the Social Security Act (42
U.S.C. 1395x(u)).
(10) PROVIDER
OF
AMBULANCE
SERVICES.—
The term ‘‘provider of ambulance services’’ means a
provider of ambulance services described in section
1861(s)(7) of the Social Security Act (42 U.S.C.
1395x(s)(7)).
(11) 
SECRETARY.—The 
term 
‘‘Secretary’’
means the Secretary of Health and Human Services.
TITLE I—REGULATORY REFORM
SEC. 101. PROSPECTIVE APPLICATION OF CERTAIN REGU-
LATIONS.
Section 1871(a) of the Social Security Act (42 U.S.C.
1395hh(a)) is amended by adding at the end the following
new paragraphs:
‘‘(3) Any regulation described under paragraph
(2) shall not take effect earlier than the effective
date of the final regulation. Any regulation described
under such paragraph that applies to an agency ac-
tion, including any agency determination, shall only
apply as that regulation is in effect at the time that
agency action is taken.
‘‘(4) The Secretary shall issue a final rule with-
in 12 months of the date of publication of an interim
final rule. Such final rule shall provide responses to
comments submitted in response to the interim final
rule. Such final rule shall not establish or change a
legal standard not raised in the interim final rule
unless a new 60-day comment period is provided.
‘‘(5) Carriers, fiscal intermediaries, and States
pursuant to an agreement under section 1864 shall
not apply new policy guidances or policy changes
retroactively to services provided before the date the
new policy was issued.’’.
SEC. 102. REQUIREMENTS FOR JUDICIAL AND REGU-
LATORY CHALLENGES OF REGULATIONS.
(a) RIGHT TO CHALLENGE CONSTITUTIONALITY AND
STATUTORY AUTHORITY OF HCFA REGULATIONS.—Sec-
tion 1872 of the Social Security Act (42 U.S.C. 1395ii)
is amended to read as follows:
‘‘APPLICATION OF CERTAIN PROVISIONS OF TITLE II
‘‘SEC. 1872. Subject to subparagraphs (A), (B), (D),
and (E) of section 1848(i)(1), the provisions of sections
206 and 216(j), and of subsections (a), (d), (e), (h), (i),
(j), (k), and (l) of section 205, shall also apply with respect
to this title to the same extent as they are applicable with
respect to title II, except that—
‘‘(1) in applying such provisions with respect to
this title, any reference therein to the Commissioner
of Social Security or the Social Security Administra-
tion shall be considered a reference to the Secretary
or the Department of Health and Human Services,
respectively; and
‘‘(2) section 205(h) shall not apply with respect
to any action brought against the Secretary under
section 1331, 1346, 1361, or 2201 of title 28,
United States Code, regardless of whether such ac-
tion is unrelated to a specific determination of the
Secretary, that challenges—
‘‘(A) the constitutionality of any provision
of this title;
‘‘(B) the constitutionality of substantive or
interpretive rules of general applicability issued
by the Secretary to carry out this title’’;
‘‘(C) the Secretary’s statutory authority to
promulgate such substantive or interpretive
rules of general applicability; or
‘‘(D) a finding of good cause under sub-
paragraph (B) of the third sentence of section
553(b)(3) of title 5, United States Code, if used
in the promulgation of such substantive or in-
terpretive rules of general applicability.’’.
(b) ADMINISTRATIVE
AND JUDICIAL REVIEW
OF
SECRETARY DETERMINATIONS.—Section 1866(h) of the
Act (42 U.S.C. 1395cc(h)) is amended—
(1) in paragraph (1), by striking ‘‘(1)’’ and all
that follows and inserting the following: ‘‘(1) Except
as provided in paragraph (3), an institution or agen-
cy dissatisfied with a determination by the Secretary
that it is not a provider of services or with a deter-
mination described in subsection (b)(2) (regardless
of whether such determination has been made by the
Secretary or by a State pursuant to an agreement
entered into with the Secretary under section 1864
and regardless of whether the Secretary has imposed
or may impose a remedy, penalty, or other sanction
on the institution or agency in connection with such
determination) shall be entitled to a hearing thereon
by the Secretary (after reasonable notice) to the
same extent as is provided in section 205(b), and to
judicial review of the Secretary’s final decision after
such hearing as is provided in section 205(g), except
that, in so applying such sections and in applying
section 205(l) thereto, any reference therein to the
Commissioner of Social Security or the Social Secu-
rity Administration shall be considered a reference
to the Secretary or the Department of Health and
Human Services, respectively, and such hearings are
subject to the deadlines specified in paragraph
(2)f.’’;
(2) by redesignating paragraph (2) as para-
graph (3);
(3) by inserting after paragraph (1) the fol-
lowing new paragraph:
‘‘(2)(A)(i) Except as provided in clause (ii), an ad-
ministrative law judge shall conduct and conclude a hear-
ing on a determination described in subsection (b)(2) and
render a decision on such hearing by not later than the
end of the 90-day period beginning on the date a request
for hearing has been timely filed.
‘‘(ii) The 90-day period under clause (i) shall not
apply in the case of a motion or stipulation by the party
requesting the hearing to waive such period.
‘‘(B) The Department Appeals Board of the Depart-
ment of Health and Human Services shall conduct and
conclude a review of the decision on a hearing described
in subparagraph (A) and make a decision or remand the
case to the administrative law judge for reconsideration
by not later than the end of the 90-day period beginning
on the date a request for review has been timely filed.
‘‘(C) In the case of a failure by an administrative law
judge to render a decision by the end of the period de-
scribed in subparagraph (A)(i), the party requesting the
hearing may request a review by the Departmental Ap-
peals Board of the Departmental of Health and Human
Services, notwithstanding any requirements for a hearing
for purposes of the party’s right to such a review.
‘‘(D) In the case of a request described in subpara-
graph (D), the Departmental Appeals Board shall review
the case de novo. In the case of the failure of the Depart-
mental Appeals Board to render a decision on such hear-
ing by not later than the end of the 60-day period begin-
ning on the date a request for such a Department Appeals
Board hearing has been filed, the party requesting the
hearing may seek judicial review of the Secretary’s deci-
sion, notwithstanding any requirements for a hearing for
purposes of the party’s right to such review.
‘‘(E) In the case of a request described in subpara-
graph (D), the court shall review the case de novo.’’; and
(4) by adding at the end the following new
paragraph:
‘‘(4) An institution or agency dissatisfied with a find-
ing or determination by the Secretary, or by a State pur-
suant to an agreement under section 1864, that the insti-
tution or agency if out of compliance with any standard
or condition of participation under this title (except a de-
termination described in subsection (b)(2)) shall be enti-
tled to a formal review or reconsideration of the finding
or determination, in accordance with the regulations pre-
scribed by the Secretary, prior to the imposition of any
remedy, penalty, corrective action, or other sanction in
connection with the finding or determination.’’.
SEC. 103. PROHIBITION OF RECOVERING PAST OVERPAY-
MENTS BY CERTAIN MEANS.
(a) IN GENERAL.—Subject to section 104 and except
as provided in subsection (b) and notwithstanding sections
1815(a), 1842(b), and 1861(v)(1)(A)(ii) of the Social Se-
curity 
Act 
(42 
U.S.C. 
1395g(a), 
1395u(a), 
and
1395x(v)(1)(A)(ii)), or any other provision of law, for pur-
poses 
of 
applying 
sections 
1842(b)(3)(B)(ii),
1866(a)(1)(B)(ii), 1870, and 1893 of such Act (42 U.S.C.
1395u(b)(3)(B)(ii), 1395cc(a)(1)(B)(ii), 1395gg, and
1395ddd) to pending and future audits, the Secretary
shall give a physician, provider of services, or provider of
ambulance services the option of entering into an arrange-
ment to offset alleged overpayments against future pay-
ments or entering into a repayment plan with its carrier
or fiscal intermediary to recoup such an overpayment.
Under such an arrangement or plan, a physician, provider
of services, or provider of ambulance services shall have
up to 3 years to offset or repay the overpayment if the
amount of such overpayment exceeds $5,000.
(b) EXCEPTION.—This section shall not apply to
cases in which the Secretary finds clear and convincing
evidence of fraud or similar fault on the part of the physi-
cian, provider of services, or provider of ambulance serv-
ices or in the case of overpayments for which an offset
arrangement is in place as of the date of the enactment
of this Act.
SEC. 104. PROHIBITION OF RECOVERING PAST OVERPAY-
MENTS IF APPEAL PENDING.
Notwithstanding any provision of law, for purposes
of applying sections 1842(b)(3)(B)(ii), 1866(a)(1)(B)(ii),
1870, and 1893 of the Social Security Act (42 U.S.C.
1395u(b)(3)(B)(ii), 1395cc(a)(1)(B)(ii), 1395gg, and
1395ddd), the Secretary may not take any action (or au-
thorize any other person, including any fiscal inter-
mediary, carrier, and contractor under section 1893 of
such Act (42 U.S.C. 1395ddd)) to recoup an overpayment
or to impose a penalty during the period in which a physi-
cian, provider of services, or provider of ambulance serv-
ices is appealing a determination that such an overpay-
ment has been made or the amount of the overpayment.
SEC. 105. PROHIBITION OF RANDOM PREPAYMENT AUDITS.
Carriers may not, prior to paying a claim under the
medicare program, demand the production of records or
documentation absent cause.
SEC. 106. EXCEPTION ON PROHIBITION OF WAIVING MEDI-
CARE COPAYMENT.
(a) IN GENERAL.—Section 1128A(i)(6)(A) of the So-
cial Security Act (42 U.S.C. 1320a–7a(i)(6)(A)) is amend-
ed by inserting ‘‘, except for written, mailed communica-
tion with existing patients,’’ before ‘‘waiver is not’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to communications made on or
after the date of the enactment of this Act.
SEC. 107. EFFECTIVE DATE.
Except as otherwise provided in section 106(b), the
amendments made by this title shall take effect 60 days
after the date of enactment of this Act.
TITLE II—APPEALS PROCESS
REFORMS
SEC. 201. CONSTRUCTION OF HEARING RIGHTS RELATED
TO DECISIONS TO DENY OR NOT RENEW A
PHYSICIAN ENROLLMENT AGREEMENT.
Section 1842 of the Social Security Act (42 U.S.C.
1395u) is amended by adding at the end the following new
subsection:
‘‘(u) A carrier decision to deny an initial physician
enrollment application and a carrier decision not to renew
a physician enrollment agreement shall be treated as an
initial determination subject to the same course of appeals
as other initial determinations under section 1869.’’.
SEC. 202. REFORM OF POST-PAYMENT AUDIT PROCESS.
(a) CARRIERS.—Section 1842 of the Social Security
Act (42 U.S.C. 1395u), as amended by section 201, is fur-
ther amended by adding at the end the following new sub-
section:
‘‘(v) In carrying out its contract under subsection
(b)(3), with respect to physicians’ services or ambulance
services, the carrier shall provide for the recoupment of
overpayments in the following manner:
‘‘(1)(A) During the 1-year period (or 18-month
period in the case of a physician who is in a practice
with fewer than 10 full-time equivalent employees,
including physicians) beginning on the date on which
a physician or provider of ambulance services re-
ceives an overpayment, the physician or provider of
ambulance services may return the overpayment
without penalty or interest to the carrier making
such overpayment if—
‘‘(i) the carrier has not requested any rel-
evant record or file; or
‘‘(ii) the case has not been referred before
the date of repayment to the Department of
Justice or the Office of Inspector General.
‘‘(B) If a physician or provider of ambulance
services returns an overpayment under subpara-
graph (A), neither the carrier, contractor under sec-
tion 1893, nor any law enforcement agency may
begin an investigation or target such physician or
provider of ambulance services based on any claim
associated with the amount the physician or provider
of ambulance services has repaid.
‘‘(2) If a carrier has decided to conduct a post-
payment audit of the physician or provider of ambu-
lance services, the carrier shall send written notice
to the physician or provider of ambulance services.
If the physician or provider of ambulance services
practices in a rural area (as defined in section
1886(d)(2)(D)), such notice must be sent by reg-
istered mail.
‘‘(3) The carrier or a contractor under section
1893 may not recoup or offset payment amounts
based on extrapolation (as defined in section
1861(ww)(1)) for the first time that the physician or
provider of ambulance services is alleged as a result
of a post-payment audit to have received an overpay-
ment.
‘‘(4) As part of any written consent settlement
communication, the carrier or a contractor under
section 1893 shall clearly state that the physician or
provider of ambulance services may submit addi-
tional information (including evidence other than
medical records) to dispute the overpayment amount
without waiving any administrative remedy or right
to appeal the amount of the overpayment.
‘‘(5)(A) Each consent settlement communica-
tion from the carrier or a contractor under section
1893 shall clearly state that prepayment review (as
defined in section 1861(ww)(2)) may be imposed
where the physician or provider of ambulance serv-
ices submits an actual or projected repayment to the
carrier or a contractor under section 1893. Subject
to subparagraph (D), any prepayment review shall
cease when the physician or provider of ambulance
services has submitted claims, found by carrier to be
covered services and coded properly for the same
services that were the basis for instituting the pre-
payment review, in a 180-day period or after proc-
essing claims of at least 75 percent of the volume of
the claims (whichever occurs first) received by the
carrier in the full month preceding the start of the
prepayment review. The 180-day period begins with
the date of the carrier’s written notification that the
physician or provider of ambulance services is being
placed on prepayment review.
‘‘(B) Prepayment review may not be applied
under this part as a result of the voluntary submis-
sion of a claim or record under section 1897(b)(2)
or as a result of information provided pursuant to
a request under section 302(b) of the Medicare Edu-
cation and Regulatory Fairness Act of 2001.
‘‘(C) Carrier prepayment and coverage policies
and claims processing screens used to identify claims
for medical review must be incorporated as part of
the education programs on medicare policy and
proper coding made available to physicians and pro-
viders of ambulance services.
‘‘(D) The time and percentage claim limitations
in paragraph (5)(A) shall not apply to cases that
have been referred to the Department of Justice or
the Office of the Inspector General.’’.
(b) FISCAL INTERMEDIARIES.—Section 1816 of such
Act (42 U.S.C. 1395h) is amended by adding at the end
the following new subsection:
‘‘(m) In carrying out its agreement under this sec-
tion, with respect to payment for items and services fur-
nished under this part, the fiscal intermediary shall pro-
vide for the recoupment of overpayments in the following
manner:
‘‘(1)(A) During the 1-year period beginning on
the date on which a provider of services receives an
overpayment, the provider of services may return the
overpayment without penalty or interest to the fiscal
intermediary making such overpayment if—
‘‘(i) the fiscal intermediary has not re-
quested any relevant record or file; or
‘‘(ii) the case has not been referred before
the date of repayment to the Department of
Justice or the Office of Inspector General.
‘‘(B) If a provider of services returns an over-
payment under subparagraph (A), neither the fiscal
intermediary, contractor under section 1893, nor
any law enforcement agency may begin an investiga-
tion or target such provider of services based on any
claim associated with the amount the provider of
services has repaid.
‘‘(2) If a fiscal intermediary has decided to con-
duct a post-payment audit of the provider of serv-
ices, the fiscal intermediary shall send written notice
to the provider of services. If the provider of services
practices in a rural area (as defined in section
1886(d)(2)(D)), such notice must be sent by reg-
istered mail.
‘‘(3) The fiscal intermediary or a contractor
under section 1893 may not recoup or offset pay-
ment amounts based on extrapolation (as defined in
section 1861(ww)(1)) for the first time that the pro-
vider of services is alleged as a result of a post-pay-
ment audit to have received an overpayment.
‘‘(4) As part of any written consent settlement
communication, the fiscal intermediary or a con-
tractor under section 1893 shall clearly state that
the provider of services may submit additional infor-
mation (including evidence other than medical
records) to dispute the overpayment amount without
waiving any administrative remedy or right to appeal
the amount of the overpayment.
‘‘(5)(A) Each consent settlement communica-
tion from the fiscal intermediary or a contractor
under section 1893 shall clearly state that prepay-
ment review (as defined in section 1861(ww)(2))
may be imposed where the provider of services sub-
mits an actual or projected repayment to the fiscal
intermediary or a contractor under section 1893.
Subject to subparagraph (D), any prepayment re-
view shall cease when the provider of services has
submitted claims, found by the fiscal intermediary to
be covered services and coded properly for the same
services that were the basis for instituting the pre-
payment review, in a 180-day period or after proc-
essing claims of at least 75 percent of the volume of
the claims (whichever occurs first) received by the
fiscal intermediary in the full month preceding the
start of the prepayment review. The 180-day period
begins with the date of the fiscal intermediary’s
written notification that the provider of services is
being placed on prepayment review.
‘‘(B) Prepayment review may not be applied
under this part as a result of the voluntary submis-
sion of a claim, cost report, or record under section
1897(b)(2) or as a result of information provided
pursuant to a request under section 302(b) of the
Medicare Education and Regulatory Fairness Act of
2001.
‘‘(C) Fiscal intermediary prepayment and cov-
erage policies and claims processing screens used to
identify claims for medical review must be incor-
porated as part of the education programs on medi-
care policy and proper coding made available to pro-
viders of services.
‘‘(D) The time and percentage claim limitations
in paragraph (5)(A) shall not apply to cases that
have been referred to the Department of Justice or
the Office of the Inspector General.’’.
SEC. 203. DEFINITIONS RELATING TO PHYSICIANS, PRO-
VIDERS OF SERVICES, AND PROVIDERS OF
AMBULANCE SERVICES.
(a) IN GENERAL.—Section 1861 of the Social Secu-
rity Act (42 U.S.C. 1395 et seq.), as amended by section
102(b) and 105(b) of the Medicare, Medicaid, and SCHIP
Benefits Improvement and Protection Act of 2000 (as en-
acted into law by section 1(a)(6) of Public Law 106–554),
is amended by adding at the end the following new sub-
section:
‘‘Definitions Relating to Physicians, Providers of
Services, and Providers of Ambulance Services
‘‘(ww) For purposes of provisions of this title relating
to physicians, providers of services, and providers of am-
bulance services:
‘‘(1) EXTRAPOLATION.—The term ‘extrapo-
lation’ means the application of an overpayment dol-
lar amount to a larger grouping of claims than those
in the audited sample to calculate a projected over-
payment figure.
‘‘(2) PREPAYMENT
REVIEW.—The term ‘pre-
payment review’ means a carrier’s and fiscal
intermediary’s practice of withholding claim reim-
bursements from physicians, providers of services,
and providers of ambulance services pending review
of a claim even if the claims have been properly sub-
mitted and reflect medical services provided.’’.
SEC. 204. RIGHT TO APPEAL ON BEHALF OF DECEASED
BENEFICIARIES.
Notwithstanding section 1870 of the Social Security
Act (42 U.S.C. 1395gg) or any other provision of law, the
Secretary shall permit any physician, provider of services,
and provider of ambulance services to appeal any deter-
mination of the Secretary under the medicare program on
behalf of a deceased beneficiary where no substitute party
is available.
SEC. 205. EFFECTIVE DATE.
The amendments made by this title shall take effect
at the end of the 180-day period beginning on the date
of the enactment of this Act.
TITLE III—EDUCATION
COMPONENTS
SEC. 301. DESIGNATED FUNDING LEVELS FOR PHYSICIAN
AND PROVIDER EDUCATION.
(a) EDUCATION PROGRAMS FOR PHYSICIANS, PRO-
VIDERS OF SERVICES, AND PROVIDERS OF AMBULANCE
SERVICES.—Title XVIII of the Social Security Act (42
U.S.C. 1395 et seq.) is amended by adding at the end
the following new section:
‘‘EDUCATION PROGRAMS FOR PHYSICIANS, PROVIDERS OF
SERVICES, AND PROVIDERS OF AMBULANCE SERVICES
‘‘SEC. 1897. (a) EDUCATION PROGRAM DEFINED.—
In this section, the term ‘education programs’ means pro-
grams undertaken in conjunction with health care associa-
tions that focus on current billing, coding, cost reporting,
and documentation laws, regulations, program memo-
randa, instructions to regional offices, and fiscal inter-
mediary and carrier manual instructions that place special
emphasis on billing, coding, cost reporting, and docu-
mentation errors that the Secretary has found occur fre-
quently and remedies for these improper billing, coding,
cost reporting, and documentation practices.
‘‘(b) CONDUCT OF EDUCATION PROGRAMS.—
‘‘(1) IN
GENERAL.—Carriers, fiscal inter-
mediaries, and contractors under section 1893 shall
conduct education programs for any physician (or a
designee), provider of services, or provider of ambu-
lance services that submits a claim or cost report
under paragraph (2)(A). Such carriers, inter-
mediaries, and contractors under section 1893 shall
conduct outreach to specifically contact physicians
and their designees, providers of services, and pro-
viders of ambulance services with fewer than 10 full-
time-equivalent employees (including physicians) to
implement education programs tailored to their edu-
cation needs and in proximity to their practices.
‘‘(2) PROVIDER EDUCATION.—
‘‘(A) SUBMISSION
OF
CLAIMS, COST
RE-
PORTS, AND
RECORDS.—Any physician, pro-
vider of services, or provider of ambulance serv-
ices may voluntarily submit any present or prior
claim, cost report, or medical record to the car-
rier or fiscal intermediary to determine whether
the billing, coding, and documentation associ-
ated with the claim or cost report is appro-
priate.
‘‘(B) PROHIBITION OF EXTRAPOLATION.—
No claim submitted under subparagraph (A) is
subject to any type of extrapolation (as defined
in section 1861(ww)(1)).
‘‘(C) SAFE HARBOR.—No submission of a
claim, cost report, or record under this section
shall result in the carrier, fiscal intermediary, a
contractor under section 1893, or any law en-
forcement agency beginning an investigation or
targeting an investigation based on any claim,
cost report, or record submitted under such
subparagraph.
‘‘(3) TREATMENT OF CLAIMS.—If the carrier or
fiscal intermediary finds a claim or cost report under
paragraph (2) to be improper, the physician, pro-
vider of services, or provider of ambulance services
shall have the following options:
‘‘(A) CORRECTION
OF
PROBLEMS.—To
correct the documentation, coding, or billing
problem to appropriately substantiate the claim
or cost report and either—
‘‘(i) remit the actual overpayment; or
‘‘(ii) receive the appropriate additional
payment from the carrier or fiscal inter-
mediary.
‘‘(B) REPAYMENT.—To repay the actual
overpayment amount if the service is excluded
from medicare coverage under this title or if
adequate documentation does not exist.
‘‘(4) PROHIBITION
OF
PHYSICIAN
AND
PRO-
VIDER
OF
SERVICES
TRACKING.—Carriers, fiscal
intermediaries, and contractors under section 1893
may not use the record of attendance or information
gathered during an education program conducted
under this section or the inquiry regarding claims or
cost reports under paragraph (2)(A) to select, iden-
tify, or track such physician, provider of services, or
provider of ambulance services for the purpose of
conducting any type of audit or prepayment re-
view.’’.
(b) FUNDING OF EDUCATION PROGRAMS.—
(1) MEDICARE INTEGRITY PROGRAM.—Section
1893(b)(4) of such Act (42 U.S.C. 1395ddd(b)(4))
is amended by adding at the end the following new
sentence: ‘‘No less than 10 percent of the program
funds shall be devoted to the education programs for
physicians, providers of services, and providers of
ambulance services under section 1897.’’.
(2) CARRIERS.—Section 1842(b)(3)(H) of such
Act (42 U.S.C. 1395u(b)(3)(H)) is amended by add-
ing at the end the following new clause:
‘‘(iii) No less than 2 percent of carrier
funds shall be devoted to the education
programs for physicians under section
1897.’’.
(3) 
FISCAL
INTERMEDIARIES.—Section
1816(b)(1) of such Act (42 U.S.C. 1395h(b)(1)) is
amended—
(A) in subparagraph (A), by striking
‘‘and’’ at the end;
(B) in subparagraph (B), by striking ‘‘;
and’’ and inserting a comma; and
(C) by adding at the end the following new
subparagraph:
‘‘(C) that such agency or organization is
using no less than 1 percent of its funding for
education programs for providers of services
and providers of ambulance services under sec-
tion 1897.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to fiscal years beginning after the
date of the enactment of this Act.
SEC. 302. INFORMATION REQUESTS.
(a) CLEAR, CONCISE, AND ACCURATE ANSWERS.—
Fiscal intermediaries and carriers shall do their utmost
to provide physicians, providers of services, and providers
of ambulance services with a clear, concise, and accurate
answer regarding billing and cost reporting questions
under the medicare program, and will give their true first
and last names to such physicians, providers of services,
and providers of ambulance services.
(b) WRITTEN REQUESTS.—
(1) IN GENERAL.—The Secretary shall establish
a process under which a physician, provider of serv-
ices, or provider of ambulance services may request,
free of charge and in writing from a fiscal inter-
mediary or carrier, assistance in addressing ques-
tions regarding coverage, billing, documentation,
coding, and cost reporting procedures under the
medicare program and then the fiscal intermediary
or carrier shall respond in writing within 30 busi-
ness days with the correct substantive or procedural
answer.
(2) USE OF WRITTEN STATEMENT.—
(A) IN
GENERAL.—Subject to subpara-
graph (C), a written statement under para-
graph (1) may be used by the physician, pro-
vider of services, or provider of ambulance serv-
ices who submitted the information request and
submitted claims in conformance with the an-
swer of the carrier or fiscal intermediary as
proof against a future audit or overpayment al-
legation under the medicare program.
(B) EXTRAPOLATION PROHIBITION.—Sub-
ject to subparagraph (C), no claim submitted
under this section shall be subject to extrapo-
lation, if the claim adheres to the conditions set
forth in the information response.
(C) LIMITATION
ON
APPLICATION.—Sub-
paragraphs (A) and (B) shall not apply to cases
of fraudulent billing.
(3) SAFE HARBOR.—If a physician, provider of
services, or provider of ambulance services requests
information under this subsection, neither the fiscal
intermediary, the carrier, a contractor under section
1893 of the Social Security Act (42 U.S.C.
1395ddd), nor any law enforcement agency may
begin an investigation or target such physician or
provider based on the request.
(c) BROAD
POLICY
GUIDANCE
BY
THE
SEC-
RETARY.—The Secretary shall develop a mechanism to ad-
dress written questions regarding medicare policy and reg-
ulations, which are submitted by health care associations.
The Secretary shall issue such answers within 90 calendar
days from the date of the receipt of the question and shall
make the responses available to the public in an indexed,
easily accessible format.
(d) NOTICE OF CHANGES IN POLICY.—Carriers and
fiscal intermediaries shall provide written, mailed notice
within 30 calendar days to physicians, providers of serv-
ices, and providers of ambulance services of all policy or
operational changes to the medicare program. Physicians,
providers of services, and providers of ambulance services
shall have not less than 30 days to comply with such policy
changes.
(e) EFFECTIVE DATE.—This section shall take effect
180 days after the date of the enactment of this Act.
TITLE IV—SUSTAINABLE
GROWTH RATE REFORMS
SEC. 401. INCLUSION OF REGULATORY COSTS IN THE CAL-
CULATION OF THE SUSTAINABLE GROWTH
RATE.
(a) IN GENERAL.—Section 1848(f)(2) of the Social
Security Act (42 U.S.C. 1395w–4(f)(2)) is amended—
(1) by redesignating subparagraphs (A) through
(D) as clauses (i) through (iv), respectively;
(2) by striking ‘‘SPECIFICATION
OF
GROWTH
RATE.—The sustainable growth rate’’ and inserting
‘‘SPECIFICATION OF GROWTH RATE.—
‘‘(A) 
IN
GENERAL.—The 
sustainable
growth rate’’; and
(3) by adding at the end the following new sub-
paragraphs:
‘‘(B) INCLUSION
OF
SGR
REGULATORY
COSTS.—The estimate established under clause
(iv) or any successor thereto shall include—
‘‘(i) the impact on costs for physi-
cians’ services resulting from regulations
implemented by the Secretary during the
year for which the sustainable growth rate