362
‘‘(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
363
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
364
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
365
‘‘(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
366
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
368
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;
369
‘‘(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
370
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
371
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.—
372
‘‘(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
374
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
375
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
376
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,
377
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-
378
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.—
379
‘‘(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.—
380
‘‘(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
381
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.
382
(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
383
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
384
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
386
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;
387
(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—
388
(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.—
389
(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.
390
(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.
391
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
392
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
393
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
394
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
395
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:
396
‘‘(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-
397
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.
398
‘‘(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
399
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
400
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.—
401
(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-
402
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
403
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
404
(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).
405
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.’’.
406
(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
407
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).
408
(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—
409
(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
410
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
411
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—
412
(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-
413
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;
414
(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-
415
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.
416
(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).
417
(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.—
418
(A) The Director of the Congressional
Budget Office or the Chief Actuary of the Cen-
ters for Medicare & Medicaid Services, or both,
shall provide to the Commission, upon the re-
quest of the Commission, such cost estimates as
the Commission determines to be necessary to
carry out its duties.
(B) The Commission shall reimburse the
Director of the Congressional Budget Office for
expenses relating to the employment in the of-
fice of the Director of such additional staff as
may be necessary for the Director to comply
with requests by the Commission under sub-
paragraph (A).
(4) DETAIL OF FEDERAL EMPLOYEES.—Upon
the request of the Commission, the head of any Fed-
eral agency is authorized to detail, without reim-
bursement, any of the personnel of such agency to
the Commission to assist the Commission in car-
rying out its duties. Any such detail shall not inter-
rupt or otherwise affect the civil service status or
privileges of the Federal employee.
(5) TECHNICAL
ASSISTANCE.—Upon the re-
quest of the Commission, the head of a Federal
agency shall provide such technical assistance to the
419
Commission as the Commission determines to be
necessary to carry out its duties.
(6) USE OF MAILS.—The Commission may use
the United States mails in the same manner and
under the same conditions as Federal agencies and
shall, for purposes of the frank, be considered a
commission of Congress as described in section 3215
of title 39, United States Code.
(7) OBTAINING
INFORMATION.—The Commis-
sion may secure directly from any Federal agency
information necessary to enable it to carry out its
duties, if the information may be disclosed under
section 552 of title 5, United States Code. Upon re-
quest of the Chairman of the Commission, the head
of such agency shall furnish such information to the
Commission.
(8) ADMINISTRATIVE
SUPPORT
SERVICES.—
Upon the request of the Commission, the Adminis-
trator of General Services shall provide to the Com-
mission on a reimbursable basis such administrative
support services as the Commission may request.
(9) PRINTING.—For purposes of costs relating
to printing and binding, including the cost of per-
sonnel detailed from the Government Printing Of-
420
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-
421
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
422
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
423
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
424
$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:
Clerk.