no material issue of fact in dispute and if such 
request is accompanied by the documents and 
materials as the appropriate review panel shall 
require for purposes of making such determina-
tion, such review panel shall make a determina-
tion on the request in writing within 60 days 
after the date such review panel receives the re-
quest and such accompanying documents and 
materials. Such a determination by such review 
panel shall be considered a final decision and 
not subject to review by the Secretary. 
‘‘(C) ACCESS TO JUDICIAL REVIEW.—
‘‘(i) IN GENERAL.—If the appropriate 
review panel—
‘‘(I) determines that there are no 
material issues of fact in dispute and 
that the only issue is one of law or reg-
ulation that no review panel has the 
authority to decide; or 
‘‘(II) fails to make such deter-
mination within the period provided 
under subparagraph (B); 
then the appellant may bring a civil action 
as described in this subparagraph.
‘‘(ii) DEADLINE
FOR
FILING.—Such 
action shall be filed, in the case described 
in—
‘‘(I) clause (i)(I), within 60 days 
of date of the determination described 
in such subparagraph; or 
‘‘(II) clause (i)(II), within 60 
days of the end of the period provided 
under subparagraph (B) for the deter-
mination. 
‘‘(iii) VENUE.—Such action shall be 
brought in the district court of the United 
States for the judicial district in which the 
appellant is located (or, in the case of an 
action brought jointly by more than one ap-
plicant, the judicial district in which the 
greatest number of applicants are located) 
or in the district court for the District of 
Columbia. 
‘‘(iv) INTEREST ON AMOUNTS IN CON-
TROVERSY.—Where a provider of services or 
supplier seeks judicial review pursuant to 
this paragraph, the amount in controversy 
shall be subject to annual interest beginning 
on the first day of the first month beginning
after the 60-day period as determined pur-
suant to clause (ii) and equal to the rate of 
interest on obligations issued for purchase 
by the Federal Hospital Insurance Trust 
Fund and by the Federal Supplementary 
Medical Insurance Trust Fund for the 
month in which the civil action authorized 
under this paragraph is commenced, to be 
awarded by the reviewing court in favor of 
the prevailing party. No interest awarded 
pursuant to the preceding sentence shall be 
deemed income or cost for the purposes of 
determining reimbursement due providers of 
services or suppliers under this Act. 
‘‘(D) REVIEW
PANELS.—For purposes of 
this subsection, a ‘review panel’ is a panel con-
sisting of 3 members (who shall be administra-
tive law judges, members of the Departmental 
Appeals Board, or qualified individuals associ-
ated with a qualified independent contractor (as 
defined in subsection (c)(2)) or with another 
independent entity) designated by the Secretary 
for purposes of making determinations under 
this paragraph.’’.
(b) APPLICATION TO PROVIDER AGREEMENT DETER-
MINATIONS.—Section 1866(h)(1) (42 U.S.C. 1395cc(h)(1)) 
is amended—
(1) by inserting ‘‘(A)’’ after ‘‘(h)(1)’’; and 
(2) by adding at the end the following new sub-
paragraph: 
‘‘(B) An institution or agency described in subpara-
graph (A) that has filed for a hearing under subparagraph 
(A) shall have expedited access to judicial review under this 
subparagraph in the same manner as providers of services, 
suppliers, and individuals entitled to benefits under part 
A or enrolled under part B, or both, may obtain expedited 
access to judicial review under the process established under 
section 1869(b)(2). Nothing in this subparagraph shall be 
construed to affect the application of any remedy imposed 
under section 1819 during the pendency of an appeal under 
this subparagraph.’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to appeals filed on or after October 1, 
2004. 
(d) EXPEDITED
REVIEW
OF
CERTAIN
PROVIDER 
AGREEMENT DETERMINATIONS.—
(1) TERMINATION AND CERTAIN OTHER IMME-
DIATE REMEDIES.—The Secretary shall develop and 
implement a process to expedite proceedings under
sections 1866(h) of the Social Security Act (42 U.S.C. 
1395cc(h)) in which the remedy of termination of 
participation, or a remedy described in clause (i) or 
(iii) of section 1819(h)(2)(B) of such Act (42 U.S.C. 
1395i–3(h)(2)(B)) which is applied on an immediate 
basis, has been imposed. Under such process priority 
shall be provided in cases of termination. 
(2) INCREASED FINANCIAL SUPPORT.—In addi-
tion to any amounts otherwise appropriated, to re-
duce by 50 percent the average time for administra-
tive determinations on appeals under section 1866(h) 
of the Social Security Act (42 U.S.C. 1395cc(h)), 
there are authorized to be appropriated (in appro-
priate part from the Federal Hospital Insurance 
Trust Fund and the Federal Supplementary Medical 
Insurance Trust Fund) to the Secretary such addi-
tional sums for fiscal year 2005 and each subsequent 
fiscal year as may be necessary. The purposes for 
which such amounts are available include increasing 
the number of administrative law judges (and their 
staffs) and the appellate level staff at the Depart-
mental Appeals Board of the Department of Health 
and Human Services and educating such judges and 
staffs on long-term care issues.
(e) PROCESS FOR REINSTATEMENT OF APPROVAL OF 
CERTAIN SNF TRAINING PROGRAMS.—
(1) IN GENERAL.—In the case of a termination 
of approval of a nurse aide training program de-
scribed in paragraph (2) of a skilled nursing facility, 
the Secretary shall develop and implement a process 
for the reinstatement of approval of such program be-
fore the end of the mandatory 2 year disapproval pe-
riod if the facility and program is certified by the 
Secretary, in coordination with the applicable State 
survey and certification agency and after public no-
tice, as being in compliance with applicable require-
ments and as having remedied any deficiencies in the 
facility or program that resulted in noncompliance. 
(2) TERMINATION OF APPROVAL DESCRIBED.—A 
termination of approval of a training program de-
scribed in this paragraph is a mandatory 2-year dis-
approval provided for under section 1819(f)(2)(B)(iii) 
of the Social Security Act (42 U.S.C. 1395i–
3(f)(2)(B)(iii)) if the only basis for the mandatory 
disapproval was the assessment of a civil money pen-
alty of not less than $5,000. 
SEC. 403. REVISIONS TO MEDICARE APPEALS PROCESS. 
(a) REQUIRING FULL AND EARLY PRESENTATION OF 
EVIDENCE.—
(1) IN GENERAL.—Section 1869(b) (42 U.S.C. 
1395ff(b)), as amended by BIPA and as amended by 
section 402(a), is further amended by adding at the 
end the following new paragraph: 
‘‘(3) REQUIRING
FULL
AND
EARLY
PRESEN-
TATION OF EVIDENCE BY PROVIDERS.—A provider of 
services or supplier may not introduce evidence in 
any appeal under this section that was not presented 
at the reconsideration conducted by the qualified 
independent contractor under subsection (c), unless 
there is good cause which precluded the introduction 
of such evidence at or before that reconsideration.’’. 
(2) EFFECTIVE DATE.—The amendment made by 
paragraph (1) shall take effect on October 1, 2004. 
(b) USE OF PATIENTS’ MEDICAL RECORDS.—Section 
1869(c)(3)(B)(i) (42 U.S.C. 1395ff(c)(3)(B)(i)), as amended 
by BIPA, is amended by inserting ‘‘(including the medical 
records of the individual involved)’’ after ‘‘clinical experi-
ence’’. 
(c) NOTICE
REQUIREMENTS
FOR
MEDICARE
AP-
PEALS.— 
(1) INITIAL
DETERMINATIONS
AND
REDETER-
MINATIONS.—Section 1869(a) (42 U.S.C. 1395ff(a)), 
as amended by BIPA, is amended by adding at the 
end the following new paragraphs:
‘‘(4) REQUIREMENTS OF NOTICE OF DETERMINA-
TIONS.—With respect to an initial determination in-
sofar as it results in a denial of a claim for benefits—
‘‘(A) the written notice on the determina-
tion shall include—
‘‘(i) the reasons for the determination, 
including whether a local medical review 
policy or a local coverage determination 
was used; 
‘‘(ii) the procedures for obtaining addi-
tional information concerning the deter-
mination, including the information de-
scribed in subparagraph (B); and 
‘‘(iii) notification of the right to seek a 
redetermination or otherwise appeal the de-
termination and instructions on how to ini-
tiate such a redetermination under this sec-
tion; and 
‘‘(B) the person provided such notice may 
obtain, upon request, the specific provision of the 
policy, manual, or regulation used in making 
the determination. 
‘‘(5) REQUIREMENTS OF NOTICE OF REDETER-
MINATIONS.—With respect to a redetermination inso-
far as it results in a denial of a claim for benefits—
‘‘(A) the written notice on the redetermina-
tion shall include—
‘‘(i) the specific reasons for the redeter-
mination; 
‘‘(ii) as appropriate, a summary of the 
clinical or scientific evidence used in mak-
ing the redetermination; 
‘‘(iii) a description of the procedures 
for obtaining additional information con-
cerning the redetermination; and 
‘‘(iv) notification of the right to appeal 
the redetermination and instructions on 
how to initiate such an appeal under this 
section; 
‘‘(B) such written notice shall be provided 
in printed form and written in a manner cal-
culated to be understood by the individual enti-
tled to benefits under part A or enrolled under 
part B, or both; and 
‘‘(C) the person provided such notice may 
obtain, upon request, information on the specific 
provision of the policy, manual, or regulation 
used in making the redetermination.’’.
(2) RECONSIDERATIONS.—Section 1869(c)(3)(E) 
(42 U.S.C. 1395ff(c)(3)(E)), as amended by BIPA, is 
amended—
(A) by inserting ‘‘be written in a manner 
calculated to be understood by the individual en-
titled to benefits under part A or enrolled under 
part B, or both, and shall include (to the extent 
appropriate)’’ after ‘‘in writing, ’’; and 
(B) by inserting ‘‘and a notification of the 
right to appeal such determination and instruc-
tions on how to initiate such appeal under this 
section’’ after ‘‘such decision,’’. 
(3) APPEALS.—Section 1869(d) (42 U.S.C. 
1395ff(d)), as amended by BIPA, is amended—
(A) in the heading, by inserting ‘‘; NOTICE’’ 
after ‘‘SECRETARY’’; and 
(B) by adding at the end the following new 
paragraph: 
‘‘(4) NOTICE.—Notice of the decision of an ad-
ministrative law judge shall be in writing in a man-
ner calculated to be understood by the individual en-
titled to benefits under part A or enrolled under part 
B, or both, and shall include—
‘‘(A) the specific reasons for the determina-
tion (including, to the extent appropriate, a
summary of the clinical or scientific evidence 
used in making the determination); 
‘‘(B) the procedures for obtaining addi-
tional information concerning the decision; and 
‘‘(C) notification of the right to appeal the 
decision and instructions on how to initiate such 
an appeal under this section.’’. 
(4) SUBMISSION OF RECORD FOR APPEAL.—Sec-
tion 1869(c)(3)(J)(i) (42 U.S.C. 1395ff(c)(3)(J)(i)) by 
striking ‘‘prepare’’ and inserting ‘‘submit’’ and by 
striking ‘‘with respect to’’ and all that follows through 
‘‘and relevant policies’’. 
(d) QUALIFIED INDEPENDENT CONTRACTORS.—
(1) ELIGIBILITY REQUIREMENTS OF QUALIFIED 
INDEPENDENT CONTRACTORS.—Section 1869(c)(3) (42 
U.S.C. 1395ff(c)(3)), as amended by BIPA, is amend-
ed—
(A) in subparagraph (A), by striking ‘‘suffi-
cient training and expertise in medical science 
and legal matters’’ and inserting ‘‘sufficient 
medical, legal, and other expertise (including 
knowledge of the program under this title) and 
sufficient staffing’’; and 
(B) by adding at the end the following new 
subparagraph:
‘‘(K) INDEPENDENCE REQUIREMENTS.—
‘‘(i) IN
GENERAL.—Subject to clause 
(ii), a qualified independent contractor 
shall not conduct any activities in a case 
unless the entity—
‘‘(I) is not a related party (as de-
fined in subsection (g)(5)); 
‘‘(II) does not have a material fa-
milial, financial, or professional rela-
tionship with such a party in relation 
to such case; and 
‘‘(III) does not otherwise have a 
conflict of interest with such a party. 
‘‘(ii) EXCEPTION
FOR
REASONABLE 
COMPENSATION.—Nothing in clause (i) shall 
be construed to prohibit receipt by a quali-
fied independent contractor of compensation 
from the Secretary for the conduct of activi-
ties under this section if the compensation 
is provided consistent with clause (iii). 
‘‘(iii) LIMITATIONS
ON
ENTITY
COM-
PENSATION.—Compensation provided by the 
Secretary to a qualified independent con-
tractor in connection with reviews under 
this section shall not be contingent on any
decision rendered by the contractor or by 
any reviewing professional.’’. 
(2) ELIGIBILITY
REQUIREMENTS
FOR
REVIEW-
ERS.—Section 1869 (42 U.S.C. 1395ff), as amended 
by BIPA, is amended—
(A) by amending subsection (c)(3)(D) to 
read as follows: 
‘‘(D) QUALIFICATIONS
FOR
REVIEWERS.—
The requirements of subsection (g) shall be met 
(relating to qualifications of reviewing profes-
sionals).’’; and 
(B) by adding at the end the following new 
subsection: 
‘‘(g) QUALIFICATIONS OF REVIEWERS.—
‘‘(1) IN GENERAL.—In reviewing determinations 
under this section, a qualified independent contractor 
shall assure that—
‘‘(A) each individual conducting a review 
shall meet the qualifications of paragraph (2); 
‘‘(B) compensation provided by the con-
tractor to each such reviewer is consistent with 
paragraph (3); and 
‘‘(C) in the case of a review by a panel de-
scribed in subsection (c)(3)(B) composed of phy-
sicians or other health care professionals (each in
this subsection referred to as a ‘reviewing profes-
sional’), a reviewing professional meets the 
qualifications described in paragraph (4) and, 
where a claim is regarding the furnishing of 
treatment by a physician (allopathic or osteo-
pathic) or the provision of items or services by 
a physician (allopathic or osteopathic), a review-
ing professional shall be a physician (allopathic 
or osteopathic). 
‘‘(2) INDEPENDENCE.—
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), each individual conducting a review 
in a case shall—
‘‘(i) not be a related party (as defined 
in paragraph (5)); 
‘‘(ii) not have a material familial, fi-
nancial, or professional relationship with 
such a party in the case under review; and 
‘‘(iii) not otherwise have a conflict of 
interest with such a party. 
‘‘(B) EXCEPTION.—Nothing in subpara-
graph (A) shall be construed to—
‘‘(i) prohibit an individual, solely on 
the basis of a participation agreement with 
a fiscal intermediary, carrier, or other con-
tractor, from serving as a reviewing profes-
sional if—
‘‘(I) the individual is not involved 
in the provision of items or services in 
the case under review; 
‘‘(II) the fact of such an agree-
ment is disclosed to the Secretary and 
the individual entitled to benefits 
under part A or enrolled under part B, 
or both, (or authorized representative) 
and neither party objects; and 
‘‘(III) the individual is not an 
employee of the intermediary, carrier, 
or contractor and does not provide 
services exclusively or primarily to or 
on behalf of such intermediary, carrier, 
or contractor; 
‘‘(ii) prohibit an individual who has 
staff privileges at the institution where the 
treatment involved takes place from serving 
as a reviewer merely on the basis of having 
such staff privileges if the existence of such 
privileges is disclosed to the Secretary and 
such individual (or authorized representa-
tive), and neither party objects; or
‘‘(iii) prohibit receipt of compensation 
by a reviewing professional from a con-
tractor if the compensation is provided con-
sistent with paragraph (3). 
For purposes of this paragraph, the term ‘par-
ticipation agreement’ means an agreement relat-
ing to the provision of health care services by the 
individual and does not include the provision of 
services as a reviewer under this subsection. 
‘‘(3) LIMITATIONS
ON
REVIEWER
COMPENSA-
TION.—Compensation provided by a qualified inde-
pendent contractor to a reviewer in connection with 
a review under this section shall not be contingent on 
the decision rendered by the reviewer. 
‘‘(4) LICENSURE AND EXPERTISE.—Each review-
ing professional shall be—
‘‘(A) a physician (allopathic or osteopathic) 
who is appropriately credentialed or licensed in 
one or more States to deliver health care services 
and has medical expertise in the field of practice 
that is appropriate for the items or services at 
issue; or 
‘‘(B) a health care professional who is le-
gally authorized in one or more States (in ac-
cordance with State law or the State regulatory
mechanism provided by State law) to furnish the 
health care items or services at issue and has 
medical expertise in the field of practice that is 
appropriate for such items or services. 
‘‘(5) RELATED PARTY DEFINED.—For purposes 
of this section, the term ‘related party’ means, with 
respect to a case under this title involving a specific 
individual entitled to benefits under part A or en-
rolled under part B, or both, any of the following: 
‘‘(A) The Secretary, the medicare adminis-
trative contractor involved, or any fiduciary, of-
ficer, director, or employee of the Department of 
Health and Human Services, or of such con-
tractor. 
‘‘(B) The individual (or authorized rep-
resentative). 
‘‘(C) The health care professional that pro-
vides the items or services involved in the case. 
‘‘(D) The institution at which the items or 
services (or treatment) involved in the case are 
provided. 
‘‘(E) The manufacturer of any drug or 
other item that is included in the items or serv-
ices involved in the case.
‘‘(F) Any other party determined under any 
regulations to have a substantial interest in the 
case involved.’’. 
(3) REDUCING MINIMUM NUMBER OF QUALIFIED 
INDEPENDENT CONTRACTORS.—Section 1869(c)(4) (42 
U.S.C. 1395ff(c)(4)) is amended by striking ‘‘not 
fewer than 12 qualified independent contractors under 
this subsection’’ and inserting ‘‘a sufficient number of 
qualified independent contractors (but not fewer than 
4 such contractors) to conduct reconsiderations con-
sistent with the timeframes applicable under this sub-
section’’. 
(4) EFFECTIVE DATE.—The amendments made 
by paragraphs (1) and (2) shall be effective as if in-
cluded in the enactment of the respective provisions of 
subtitle C of title V of BIPA, (114 Stat. 2763A–534). 
(5) TRANSITION.—In applying section 1869(g) of 
the Social Security Act (as added by paragraph (2)), 
any reference to a medicare administrative contractor 
shall be deemed to include a reference to a fiscal 
intermediary under section 1816 of the Social Secu-
rity Act (42 U.S.C. 1395h) and a carrier under sec-
tion 1842 of such Act (42 U.S.C. 1395u).
SEC. 404. PREPAYMENT REVIEW. 
(a) IN GENERAL.—Section 1874A, as added by section 
201(a)(1) and as amended by sections 202(b), 301(b)(1), 
and 301(c)(1), is further amended by adding at the end the 
following new subsection: 
‘‘(h) CONDUCT OF PREPAYMENT REVIEW.—
‘‘(1) CONDUCT
OF
RANDOM
PREPAYMENT
RE-
VIEW.—
‘‘(A) IN GENERAL.—A medicare adminis-
trative contractor may conduct random prepay-
ment review only to develop a contractor-wide or 
program-wide claims payment error rates or 
under such additional circumstances as may be 
provided under regulations, developed in con-
sultation with providers of services and sup-
pliers. 
‘‘(B) USE OF STANDARD PROTOCOLS WHEN 
CONDUCTING
PREPAYMENT
REVIEWS.—When a 
medicare administrative contractor conducts a 
random prepayment review, the contractor may 
conduct such review only in accordance with a 
standard protocol for random prepayment audits 
developed by the Secretary. 
‘‘(C) 
CONSTRUCTION.—Nothing 
in 
this 
paragraph shall be construed as preventing the
denial of payments for claims actually reviewed 
under a random prepayment review. 
‘‘(D) RANDOM PREPAYMENT REVIEW.—For 
purposes of this subsection, the term ‘random 
prepayment review’ means a demand for the 
production of records or documentation absent 
cause with respect to a claim. 
‘‘(2) LIMITATIONS ON NON-RANDOM PREPAYMENT 
REVIEW.—
‘‘(A) LIMITATIONS ON INITIATION OF NON-
RANDOM PREPAYMENT REVIEW.—A medicare ad-
ministrative contractor may not initiate non-
random prepayment review of a provider of serv-
ices or supplier based on the initial identifica-
tion by that provider of services or supplier of 
an improper billing practice unless there is a 
likelihood of sustained or high level of payment 
error (as defined in subsection (i)(3)(A)). 
‘‘(B) TERMINATION OF NON-RANDOM PRE-
PAYMENT
REVIEW.—The Secretary shall issue 
regulations relating to the termination, includ-
ing termination dates, of non-random prepay-
ment review. Such regulations may vary such a 
termination date based upon the differences in
the circumstances triggering prepayment re-
view.’’. 
(b) EFFECTIVE DATE.—
(1) IN GENERAL.—Except as provided in this 
subsection, the amendment made by subsection (a) 
shall take effect 1 year after the date of the enactment 
of this Act. 
(2) DEADLINE FOR PROMULGATION OF CERTAIN 
REGULATIONS.—The Secretary shall first issue regula-
tions under section 1874A(h) of the Social Security 
Act, as added by subsection (a), by not later than 1 
year after the date of the enactment of this Act. 
(3) APPLICATION OF STANDARD PROTOCOLS FOR 
RANDOM
PREPAYMENT
REVIEW.—Section 
1874A(h)(1)(B) of the Social Security Act, as added 
by subsection (a), shall apply to random prepayment 
reviews conducted on or after such date (not later 
than 1 year after the date of the enactment of this 
Act) as the Secretary shall specify. 
(c) APPLICATION TO FISCAL INTERMEDIARIES AND 
CARRIERS.—The provisions of section 1874A(h) of the So-
cial Security Act, as added by subsection (a), shall apply 
to each fiscal intermediary under section 1816 of the Social 
Security Act (42 U.S.C. 1395h) and each carrier under sec-
tion 1842 of such Act (42 U.S.C. 1395u) in the same man-
ner as they apply to medicare administrative contractors 
under such provisions. 
SEC. 405. RECOVERY OF OVERPAYMENTS. 
(a) IN GENERAL.—Section 1893 (42 U.S.C. 1395ddd) 
is amended by adding at the end the following new sub-
section: 
‘‘(f) RECOVERY OF OVERPAYMENTS.—
‘‘(1) USE OF REPAYMENT PLANS.—
‘‘(A) IN GENERAL.—If the repayment, with-
in 30 days by a provider of services or supplier, 
of an overpayment under this title would con-
stitute a hardship (as defined in subparagraph 
(B)), subject to subparagraph (C), upon request 
of the provider of services or supplier the Sec-
retary shall enter into a plan with the provider 
of services or supplier for the repayment 
(through offset or otherwise) of such overpayment 
over a period of at least 6 months but not longer 
than 3 years (or not longer than 5 years in the 
case of extreme hardship, as determined by the 
Secretary). Interest shall accrue on the balance 
through the period of repayment. Such plan shall 
meet terms and conditions determined to be ap-
propriate by the Secretary. 
‘‘(B) HARDSHIP.—
‘‘(i) IN
GENERAL.—For purposes of 
subparagraph (A), the repayment of an 
overpayment (or overpayments) within 30 
days is deemed to constitute a hardship if—
‘‘(I) in the case of a provider of 
services that files cost reports, the ag-
gregate amount of the overpayments 
exceeds 10 percent of the amount paid 
under this title to the provider of serv-
ices for the cost reporting period cov-
ered by the most recently submitted 
cost report; or 
‘‘(II) in the case of another pro-
vider of services or supplier, the aggre-
gate amount of the overpayments ex-
ceeds 10 percent of the amount paid 
under this title to the provider of serv-
ices or supplier for the previous cal-
endar year. 
‘‘(ii) RULE
OF
APPLICATION.—The 
Secretary shall establish rules for the appli-
cation of this subparagraph in the case of a 
provider of services or supplier that was not 
paid under this title during the previous
year or was paid under this title only dur-
ing a portion of that year. 
‘‘(iii) TREATMENT OF PREVIOUS OVER-
PAYMENTS.—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 overpayment amounts. 
‘‘(C) 
EXCEPTIONS.—Subparagraph 
(A) 
shall not apply if—
‘‘(i) the Secretary has reason to suspect 
that the provider of services or supplier 
may file for bankruptcy or otherwise cease 
to do business or discontinue participation 
in the program under this title; or 
‘‘(ii) there is an indication of fraud or 
abuse committed against the program. 
‘‘(D) IMMEDIATE COLLECTION IF VIOLATION 
OF REPAYMENT PLAN.—If a provider of services 
or supplier fails to make a payment in accord-
ance with a repayment plan under this para-
graph, the Secretary may immediately seek to 
offset or otherwise recover the total balance out-
standing (including applicable interest) under 
the repayment plan. 
‘‘(E) RELATION TO NO FAULT PROVISION.—
Nothing in this paragraph shall be construed as 
affecting the application of section 1870(c) (re-
lating 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 person, 
including any medicare contractor, as defined in 
subparagraph (C)) to recoup the overpayment 
until the date the decision on the reconsideration 
has been rendered. If the provisions 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 ref-
erence to such a reconsideration shall be treated 
as a reference to a 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 EXTRAPOLATION.—
A medicare contractor may not use extrapolation 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 
‘‘(B) documented educational intervention 
has failed to correct the payment error (as deter-
mined 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 peri-
odic production of records or supporting documenta-
tion for a limited sample of submitted claims to en-
sure that the previous practice is not continuing. 
‘‘(5) CONSENT SETTLEMENT REFORMS.—
‘‘(A) IN GENERAL.—The Secretary may use 
a consent settlement (as defined in subparagraph 
(D)) to settle a projected overpayment. 
‘‘(B) OPPORTUNITY TO SUBMIT ADDITIONAL 
INFORMATION
BEFORE
CONSENT
SETTLEMENT 
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 Sec-
retary, 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 sup-
plier under subparagraph (B)(ii). Taking into 
consideration such information, the Secretary 
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 
‘‘(ii) in order to resolve the overpay-
ment, may offer the provider of services or 
supplier—
‘‘(I) the opportunity for a statis-
tically valid random sample; or 
‘‘(II) a consent settlement.
The opportunity provided under clause (ii)(I) 
does not waive any appeal rights with respect to 
the alleged overpayment involved. 
‘‘(D) CONSENT
SETTLEMENT
DEFINED.—
For purposes of this paragraph, the term ‘con-
sent settlement’ means an agreement between the 
Secretary and a provider of services or supplier 
whereby both parties agree to settle a projected 
overpayment based on less than a statistically 
valid sample of claims and the provider of serv-
ices or supplier agrees not to appeal the claims 
involved. 
‘‘(6) NOTICE OF OVER-UTILIZATION OF CODES.—
The Secretary shall establish, in consultation with or-
ganizations representing the classes of providers of 
services and suppliers, a process under which the Sec-
retary provides for notice to classes of providers of 
services and suppliers served by the contractor in 
cases in which the contractor has identified that par-
ticular billing codes may be overutilized by that class 
of providers of services or suppliers under the pro-
grams under this title (or provisions of title XI inso-
far as they relate to such programs). 
‘‘(7) PAYMENT AUDITS.—
‘‘(A) WRITTEN NOTICE FOR POST-PAYMENT 
AUDITS.—Subject to subparagraph (C), if a 
medicare contractor decides to conduct a post-
payment audit of a provider of services or sup-
plier 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 services 
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 services 
or supplier and permits the development of 
an appropriate corrective action plan; 
‘‘(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 Secretary);
‘‘(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 notice or 
findings would compromise pending law enforce-
ment activities, whether civil or criminal, or re-
veal findings of law enforcement-related audits. 
‘‘(8) STANDARD METHODOLOGY FOR PROBE SAM-
PLING.—The Secretary shall establish a standard 
methodology for medicare contractors to use in select-
ing 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 
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 entered 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 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
100
enactment of this Act, the Secretary shall first estab-
lish a standard methodology for selection of sample 
claims for abnormal billing patterns under section 
1893(f)(8) of the Social Security Act, as added by 
subsection (a). 
SEC. 406. 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 SERV-
ICES AND SUPPLIERS.—
‘‘(1) ENROLLMENT PROCESS.—
‘‘(A) IN GENERAL.—The Secretary shall es-
tablish by regulation a process for the enrollment 
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 en-
rollment). The Secretary shall monitor the per-
101
formance of medicare administrative contractors 
in meeting the deadlines established under this 
subparagraph. 
‘‘(C) CONSULTATION
BEFORE
CHANGING 
PROVIDER ENROLLMENT FORMS.—The Secretary 
shall consult with providers of services and sup-
pliers before making changes in the provider en-
rollment forms required of such providers 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 under the 
procedures that apply under subsection (h)(1)(A) to a 
provider of services that is dissatisfied with a deter-
mination by the Secretary.’’. 
(b) EFFECTIVE DATES.—
(1) ENROLLMENT PROCESS.—The Secretary shall 
provide for the establishment of the enrollment process 
under section 1866(j)(1) of the Social Security Act, as 
added by subsection (a)(2), within 6 months after the 
date of the enactment of this Act.
102
(2) CONSULTATION.—Section 1866(j)(1)(C) of 
the Social Security Act, as added by subsection 
(a)(2), shall apply with respect to changes in provider 
enrollment forms made on or after January 1, 2004. 
(3) HEARING RIGHTS.—Section 1866(j)(2) of the 
Social Security Act, as added by subsection (a)(2), 
shall apply to denials occurring on or after such date 
(not later than 1 year after the date of the enactment 
of this Act) as the Secretary specifies. 
SEC. 407. PROCESS FOR CORRECTION OF MINOR ERRORS 
AND OMISSIONS WITHOUT PURSUING AP-
PEALS PROCESS. 
(a) CLAIMS.—The Secretary shall develop, in consulta-
tion with appropriate medicare contractors (as defined in 
section 1889(g) of the Social Security Act, as inserted by 
section 301(a)(1)) and representatives of providers of serv-
ices and suppliers, a process whereby, in the case of minor 
errors or omissions (as defined by the Secretary) that are 
detected in the submission of claims under the programs 
under title XVIII of such Act, a provider of services or sup-
plier is given an opportunity to correct such an error or 
omission without the need to initiate an appeal. Such proc-
ess shall include the ability to resubmit corrected claims. 
(b) PERMITTING USE OF CORRECTED AND SUPPLE-
MENTARY DATA.—
103
(1) IN
GENERAL.—Section 1886(d)(10)(D)(vi) 
(42 U.S.C. 1395ww(d)(10)(D)(vi)) is amended by 
adding after subclause (II) at the end the following: 
‘‘Notwithstanding subclause (I), a hospital may submit, 
and the Secretary may accept upon verification, data that 
corrects or supplements the data described in such subclause 
without regard to whether the corrected or supplementary 
data relate to a cost report that has been settled.’’. 
(2) EFFECTIVE DATE.—The amendment made by 
paragraph (1) shall apply to fiscal years beginning 
with fiscal year 2004. 
(3) SUBMITTAL AND RESUBMITTAL OF APPLICA-
TIONS PERMITTED FOR FISCAL YEAR 2004.—
(A) IN
GENERAL.—Notwithstanding any 
other provision of law, a hospital may submit 
(or resubmit) an application for a change de-
scribed in section 1886(d)(10)(C)(i)(II) of the 
Social Security Act for fiscal year 2004 if the 
hospital demonstrates on a timely basis to the 
satisfaction of the Secretary that the use of cor-
rected or supplementary data under the amend-
ment made by paragraph (1) would materially 
affect the approval of such an application. 
(B) 
APPLICATION
OF
BUDGET
NEU-
TRALITY.—If one or more hospital’s applications
104
are approved as a result of paragraph (1) and 
subparagraph (A) for fiscal year 2004, the Sec-
retary shall make a proportional adjustment in 
the standardized amounts determined under sec-
tion 1886(d)(3) of the Social Security Act (42 
U.S.C. 1395ww(d)(3)) for fiscal year 2004 to as-
sure that approval of such applications does not 
result in aggregate payments under section 
1886(d) of such Act that are greater or less than 
those that would otherwise be made if paragraph 
(1) and subparagraph (A) did not apply. 
SEC. 408. 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 
403(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 medi-
care administrative contractor that has a con-
tract under section 1874A that provides for mak-
ing payments under this title with respect to eli-
105
gible items and services described in subpara-
graph (C), the Secretary shall establish a prior 
determination process that meets the require-
ments of this subsection and that shall be applied 
by such contractor in the case of eligible request-
ers. 
‘‘(B) ELIGIBLE REQUESTER.—For purposes 
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 para-
graph (2), eligible items and services are items 
and services which are physicians’ services (as
106
defined in paragraph (4)(A) of section 1848(f) 
for purposes of calculating the sustainable 
growth rate under such section). 
‘‘(2) SECRETARIAL FLEXIBILITY.—The Secretary 
shall establish by regulation reasonable limits on the 
categories of eligible items and services for which a 
prior determination of coverage may be requested 
under this subsection. In establishing such limits, the 
Secretary may consider the dollar amount involved 
with respect to the item or service, administrative 
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 sub-
section an eligible requester may submit to the 
contractor a request for a determination, before 
the furnishing of an eligible item or service in-
volved as to whether the item or service is cov-
ered under this title consistent with the applica-
ble requirements of section 1862(a)(1)(A) (relat-
ing 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
107
medical necessity for the item or service, and 
any other appropriate documentation. In the 
case of a request submitted by an eligible re-
quester who is described in paragraph (1)(B)(ii), 
the Secretary may require that the request also 
be accompanied by a copy of the advance bene-
ficiary notice involved. 
‘‘(4) RESPONSE TO REQUEST.—
‘‘(A) IN GENERAL.—Under such process, the 
contractor shall provide the eligible requester 
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 in-
formation 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 coverage 
determination. 
‘‘(B) DEADLINE TO RESPOND.—Such notice 
shall be provided within the same time period as
108
the time period applicable to the contractor pro-
viding 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 DETER-
MINATION.—If the contractor makes the deter-
mination described in paragraph (4)(A)(i), such 
determination shall be binding on the contractor 
in the absence of fraud or evidence of misrepre-
sentation of facts presented to the contractor. 
‘‘(B) NOTICE AND RIGHT TO REDETERMINA-
TION IN CASE OF A DENIAL.—
109
‘‘(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 noncoverage 
determination (if any) the determina-
tion is based, and the right to such a 
redetermination. 
‘‘(ii) DEADLINE
FOR
REDETERMINA-
TIONS.—The contractor shall complete and 
provide notice of such redetermination with-
in the same time period as the time period 
applicable to the contractor providing notice 
of redeterminations relating to a claim for 
benefits under subsection (a)(3)(C)(ii). 
‘‘(6) LIMITATION ON FURTHER REVIEW.—
‘‘(A) IN GENERAL.—Contractor determina-
tions described in paragraph (4)(A)(ii) or
110
(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 other-
wise. 
‘‘(B) DECISION NOT TO SEEK PRIOR DETER-
MINATION 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 respect 
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 administrative 
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 services 
shall not be taken into account in such adminis-
trative or judicial review.
111
‘‘(C) NO PRIOR DETERMINATION AFTER RE-
CEIPT OF SERVICES.—Once an individual is pro-
vided 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 manner 
as to provide for the acceptance of requests for deter-
minations 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 ef-
fective but contracts are not provided under section 
1874A of the Social Security Act with medicare ad-
ministrative 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 sec-
tion 1816, or contract under section 1842, respec-
tively, of such Act. 
(3) LIMITATION ON APPLICATION TO SGR.—For 
purposes of applying section 1848(f)(2)(D) of the So-
cial Security Act (42 U.S.C. 1395w–4(f)(2)(D)), the
112
amendment made by subsection (a) shall not be con-
sidered to be a change in law or regulation. 
(c) PROVISIONS RELATING TO ADVANCE BENEFICIARY 
NOTICES; REPORT ON PRIOR DETERMINATION PROCESS.—
(1) DATA COLLECTION.—The Secretary shall es-
tablish a process for the collection of information on 
the instances in which an advance beneficiary notice 
(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 Secretary 
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 pro-
gram. 
(3) GAO REPORT ON USE OF ADVANCE BENE-
FICIARY NOTICES.—Not later than 18 months after 
the date on which section 1869(g) of the Social Secu-
rity Act (as added by subsection (a)) takes effect, the 
Comptroller General of the United States shall submit 
to Congress a report on the use of advance beneficiary 
notices under title XVIII of such Act. Such report
113
shall include information concerning the providers of 
services and other persons that have provided such no-
tices and the response of beneficiaries to such notices. 
(4) GAO REPORT ON USE OF PRIOR DETERMINA-
TION 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 effect, the 
Comptroller General of the United States shall submit 
to Congress a report on the use of the prior deter-
mination 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 result-
ing 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 
whether the amount of information required was 
burdensome to physicians and beneficiaries. 
(5) ADVANCE BENEFICIARY NOTICE DEFINED.—
In this subsection, the term ‘‘advance beneficiary no-
tice’’ means a written notice provided under section
1879(a) of the Social Security Act (42 U.S.C.
114
1395pp(a)) to an individual entitled to benefits 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 believes that pay-
ment will not be made for some or all of such items 
or services under such title. 
TITLE V—MISCELLANEOUS 
PROVISIONS 
SEC. 501. POLICY DEVELOPMENT REGARDING EVALUATION 
AND MANAGEMENT (E & M) DOCUMENTATION 
GUIDELINES. 
(a) IN GENERAL.—The Secretary may not implement 
any new documentation guidelines for, or clinical examples 
of, evaluation and management 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 
and specialists) and provided for an assessment of the 
proposed guidelines by the physician community; 
(2) has established a plan that contains specific 
goals, including a schedule, for improving the use of 
such guidelines;
115
(3) has conducted appropriate and representative 
pilot projects under subsection (b) to test modifica-
tions to the evaluation and management documenta-
tion guidelines; 
(4) finds that the objectives described in sub-
section (c) will be met in the implementation of such 
guidelines; and 
(5) has established, and is implementing, a pro-
gram to educate physicians on the use of such guide-
lines and that includes appropriate outreach. 
The Secretary shall make changes to the manner in which 
existing evaluation and management documentation guide-
lines are implemented to reduce paperwork burdens on phy-
sicians. 
(b) PILOT PROJECTS TO TEST EVALUATION AND MAN-
AGEMENT DOCUMENTATION GUIDELINES.—
(1) IN GENERAL.—The Secretary shall conduct 
under this subsection appropriate and representative 
pilot projects to test new evaluation and management 
documentation guidelines referred to in subsection 
(a). 
(2) LENGTH
AND
CONSULTATION.—Each pilot 
project under this subsection shall—
(A) be voluntary;
116
(B) be of sufficient length as determined by 
the Secretary to allow for preparatory physician 
and medicare contractor education, analysis, 
and use and assessment of potential evaluation 
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 review 
method by physicians (not employed by a medi-
care contractor) which evaluates medical record 
information for claims submitted by physicians 
identified as statistical outliers relative to defini-
tions published in the Current Procedures Ter-
minology (CPT) code book of the American Med-
ical Association; 
(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;
117
(C) at least one shall be conducted for serv-
ices 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 set-
ting 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 overpayment de-
mands or post-payment audits. Such limitation ap-
plies 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 participant in 
the pilot project. 
(5) STUDY OF IMPACT.—Each pilot project shall 
examine the effect of the new evaluation and manage-
ment documentation guidelines on—
(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.
118
(6) PERIODIC
REPORTS.—The Secretary shall 
submit to Congress periodic reports on the pilot 
projects under this subsection. 
(c) OBJECTIVES FOR EVALUATION AND MANAGEMENT 
GUIDELINES.—The objectives for modified evaluation and 
management documentation guidelines developed by the 
Secretary shall be to—
(1) identify clinically relevant documentation 
needed to code accurately and assess coding levels ac-
curately; 
(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.—
(1) STUDY.—The Secretary shall carry out a 
study of the matters described in paragraph (2). 
(2) MATTERS DESCRIBED.—The matters referred 
to in paragraph (1) are—
(A) the development of a simpler, alter-
native system of requirements for documentation 
accompanying claims for evaluation and man-
agement physician services for which payment is
119
made under title XVIII of the Social Security 
Act; and 
(B) consideration of systems other than cur-
rent 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 generalists 
and specialists. 
(4) APPLICATION OF HIPAA UNIFORM CODING RE-
QUIREMENTS.—In developing an alternative system 
under paragraph (2), the Secretary shall consider re-
quirements of administrative simplification under 
part C of title XI of the Social Security Act. 
(5) REPORT TO CONGRESS.—(A) Not later than 
October 1, 2005, 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.
120
(e) STUDY ON APPROPRIATE CODING OF CERTAIN EX-
TENDED OFFICE VISITS.—The Secretary shall conduct a 
study of the appropriateness of coding in cases of extended 
office visits in which there is no diagnosis made. Not later 
than October 1, 2005, the Secretary shall submit a report 
to Congress on such study and shall include recommenda-
tions on how to code appropriately for such visits in a man-
ner that takes into account the amount of time the physi-
cian 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 Social Secu-
rity 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. 
SEC. 502. IMPROVEMENT IN OVERSIGHT OF TECHNOLOGY 
AND COVERAGE. 
(a) COUNCIL FOR TECHNOLOGY AND INNOVATION.—
Section 1868 (42 U.S.C. 1395ee), as amended by section 
301(a), is amended by adding at the end the following new 
subsection: 
‘‘(c) COUNCIL FOR TECHNOLOGY AND INNOVATION.—
‘‘(1) ESTABLISHMENT.—The Secretary shall es-
tablish a Council for Technology and Innovation
121
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 Technology 
and Innovation (appointed or designated under para-
graph (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 
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 defined 
in section 3132(a)(7) of title 5, United States Code) 
who shall serve as the Executive Coordinator for Tech-
nology and Innovation. Such executive coordinator 
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 contact for outside 
groups and entities regarding the coverage, coding, 
and payment processes under this title.’’.
122
(b) 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: 
‘‘(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 substantially 
revised HCPCS code is assigned on or after January 1, 
2005 (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 Register 
notice of a meeting to receive comments and rec-
ommendations (and data on which recommendations 
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-
123
resentatives of officials of the Centers for Medicare & 
Medicaid Services involved in determining payment 
amounts, to receive such comments and recommenda-
tions (and data on which the recommendations 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 reasons 
for each such determination, the data on which the 
determinations are based, and a request for public 
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 deter-
minations are based, and responses to comments and 
suggestions received from the public.
124
‘‘(C) Under the procedures established pursuant to sub-
paragraph (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 de-
terminations. 
‘‘(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).’’. 
(c) GAO STUDY ON IMPROVEMENTS IN EXTERNAL 
DATA COLLECTION FOR USE IN THE MEDICARE INPATIENT 
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
125
frame by the Centers for Medicare & Medicaid Serv-
ices for use in computing payments for inpatient hos-
pital services. The study may include an evaluation 
of the feasibility and appropriateness of using of 
quarterly samples or special surveys or any other 
methods. The study shall include an analysis of 
whether other executive agencies, such as the Bureau 
of Labor Statistics in the Department of Commerce, 
are best suited to collect this information. 
(2) REPORT.—By not later than October 1, 
2004, the Comptroller General shall submit a report 
to Congress on the study under paragraph (1). 
(d) PROCESS FOR ADOPTION OF ICD CODES AS DATA 
STANDARD.—Section 1172(f) (42 U.S.C. 1320d–1(f)) is 
amended by inserting after the first sentence the following: 
‘‘Notwithstanding the preceding sentence, if the National 
Committee on Vital and Health Statistics has not made a 
recommendation to the Secretary before the date of the en-
actment of this sentence, with respect to the adoption of the 
International Classification of Diseases, 10th Revision, 
Procedure Coding System (‘ICD–10–PCS’) and the Inter-
national Classification of Diseases, 10th Revision, Clinical 
Modification (‘ICD–10–CM’) as a standard under this part 
for the reporting of services, the Secretary may adopt ICD–
126
10–PCS and ICD–10–CM as such a standard on or after 
such date without receiving such a recommendation.’’. 
SEC. 503. 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 of 
section 1862(b) of the Social Security Act (relating to medi-
care secondary payor provisions) in the case of reference 
laboratory services described in subsection (b), if the Sec-
retary does not impose such requirement in the case of such 
services furnished by an independent laboratory. 
(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 submits 
a claim only for such test or interpretation. 
SEC. 504. EMTALA IMPROVEMENTS. 
(a) PAYMENT FOR EMTALA-MANDATED SCREENING 
AND STABILIZATION SERVICES.—
127
(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 pursu-
ant to section 1867 to an individual who is entitled to bene-
fits under this title, determinations as to whether the item 
or service is reasonable and necessary shall be made on the 
basis of the information available to the treating physician 
or practitioner (including the patient’s presenting symp-
toms or complaint) at the time the item or service was or-
dered or furnished by the physician or practitioner (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 fur-
nished on or after January 1, 2004. 
(b) NOTIFICATION OF PROVIDERS WHEN EMTALA IN-
VESTIGATION 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:
128
‘‘(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 ORGANIZATIONS 
IN EMTALA CASES INVOLVING TERMINATION OF PARTICI-
PATION.—
(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 para-
graph (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 hospital’s 
participation under this title for violations re-
lated to the appropriateness of a medical screen-
ing examination, stabilizing treatment, or an 
appropriate transfer as required by this section, 
and shall provide a period of 5 days for such re-
view. The Secretary shall provide a copy of the
129
organization’s report to the hospital or physician 
consistent with confidentiality requirements im-
posed on the organization under such part B.’’. 
(2) EFFECTIVE DATE.—The amendments made 
by paragraph (1) shall apply to terminations of par-
ticipation initiated on or after the date of the enact-
ment of this Act. 
SEC. 505. EMERGENCY MEDICAL TREATMENT AND ACTIVE 
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 Emer-
gency 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 com-
posed of 19 members, including the Administrator of the 
Centers for Medicare & Medicaid Services and the Inspector 
General of the Department of Health and Human Services 
and of which—
(1) 4 shall be representatives of hospitals, includ-
ing at least one public hospital, that have experience
130
with the application of EMTALA and at least 2 of 
which have not been cited for EMTALA violations; 
(2) 7 shall be practicing physicians drawn from 
the fields of emergency medicine, cardiology or 
cardiothoracic surgery, orthopedic surgery, neuro-
surgery, pediatrics or a pediatric subspecialty, obstet-
rics-gynecology, and psychiatry, with 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 Centers 
for Medicare & Medicaid Services; and 
(5) 1 shall be from a State survey office involved 
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 para-
graph (4). 
In selecting members described in paragraphs (1) through 
(3), the Secretary shall consider qualified individuals nomi-
nated by organizations representing providers and patients. 
(c) 
GENERAL
RESPONSIBILITIES.—The 
Advisory 
Group—
(1) shall review EMTALA regulations;
131
(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 
(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 Advi-
sory 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).
132
SEC. 506. AUTHORIZING USE OF ARRANGEMENTS TO PRO-
VIDE CORE HOSPICE SERVICES IN CERTAIN 
CIRCUMSTANCES. 
(a) IN GENERAL.—Section 1861(dd)(5) (42 U.S.C. 
1395x(dd)(5)) is amended by adding at the end the fol-
lowing: 
‘‘(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 pro-
gram’s service area, a hospice program may enter into ar-
rangements with another hospice program for the provision 
by that other program of services described in paragraph 
(2)(A)(ii)(I). The provisions of paragraph (2)(A)(ii)(II) 
shall apply with respect to the services provided under such 
arrangements. 
‘‘(E) A hospice program may provide services de-
scribed in paragraph (1)(A) other than directly by the pro-
gram if the services are highly specialized services of a reg-
istered professional nurse and are provided non-routinely 
and so infrequently so that the provision of such services 
directly would be impracticable and prohibitively expen-
sive.’’. 
(b) 
CONFORMING
PAYMENT
PROVISION.—Section 
1814(i) (42 U.S.C. 1395f(i)) is amended by adding at the 
end the following new paragraph:
133
‘‘(4) 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.’’. 
(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. 507. 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 or a State occupational safety and health 
plan that is approved under section 18(b) of such Act, 
to comply with the Bloodborne Pathogens standard 
under section 1910.1030 of title 29 of the Code of Fed-
134
eral Regulations (or as subsequently redesignated).’’; 
and 
(2) by adding at the end of subsection (b) the fol-
lowing 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 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, 2004.
135
SEC. 508. BIPA-RELATED TECHNICAL AMENDMENTS AND 
CORRECTIONS. 
(a) TECHNICAL AMENDMENTS RELATING TO ADVISORY 
COMMITTEE UNDER BIPA SECTION 522.—(1) Subsection 
(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). 
(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 redes-
ignated—
(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 amend-
ed 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 ‘‘POLICY’’
136
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—
(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 provided, 
the amendments made by this section shall be effective as 
if included in the enactment of BIPA.
137
SEC. 509. 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 sub-
section (a), the minimum period of exclusion shall be not 
less than five years, except that, upon the request of the ad-
ministrator of a Federal health care program (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 individual or entity that 
is the sole community physician or sole source of essential 
specialized services in a community.’’. 
SEC. 510. TREATMENT OF CERTAIN DENTAL CLAIMS. 
(a) IN GENERAL.—Section 1862 (42 U.S.C. 1395y), as 
amended by section 508(a)(1), is amended by adding at the 
end the following new subsection: 
‘‘(k)(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 spe-
cifically excluded under subsection (a)(12) as a condition
138
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 
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 sub-
section (a) shall take effect on the date that is 60 days after 
the date of the enactment of this Act. 
SEC. 511. FURNISHING HOSPITALS WITH INFORMATION TO 
COMPUTE DSH FORMULA. 
Beginning not later than 1 year after the date of the 
enactment of this Act, the Secretary shall furnish to sub-
section (d) hospitals (as defined in section 1886(d)(1)(B) 
of the Social Security Act, 42 U.S.C. 1395ww(d)(1)(B)) the 
data necessary for such hospitals to compute the number 
of patient days described in subclause (II) of section 
1886(d)(5)(F)(vi) of the Social Security Act (42 U.S.C. 
1395ww(d)(5)(F)(vi)) used in computing the dispropor-
tionate patient percentage under such section for that hos-
pital. Such data shall also be furnished to other hospitals 
which would qualify for additional payments under part 
A of title XVIII of the Social Security Act on the basis of 
such data.
139
SEC. 512. REVISIONS TO REASSIGNMENT PROVISIONS. 
(a) IN
GENERAL.—Section 1842(b)(6)(A)(ii) (42 
U.S.C. 1395u(b)(6)(A)(ii)) is amended to read as follows: 
‘‘(ii) where the service was provided under a contractual 
arrangement between such physician or other person and 
a qualified entity (as defined by the Secretary) or other per-
son, to the entity or other person if under such arrangement 
such entity or individual submits the bill for such service 
and such arrangement (I) includes joint and several liabil-
ity for overpayment by such physician or other person and 
such entity or other person, and (II) meets such other pro-
gram integrity and other safeguards as the Secretary may 
determine to be appropriate,’’. 
(b) CONFORMING AMENDMENT.—The second sentence 
of section 1842(b)(6) (42 U.S.C. 1395u(b)(6)) is amended 
by striking ‘‘except to an employer or facility as described 
in clause (A)’’ and inserting ‘‘except to an employer, entity, 
or other person as described in subparagraph (A)’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to payments made on or after one year 
after the date of the enactment of this Act. 
SEC. 513. SPECIALIZED MEDICARE+CHOICE PLANS FOR SPE-
CIAL NEEDS BENEFICIARIES. 
(a) TREATMENT AS COORDINATED CARE PLAN.—Sec-
tion 1851(a)(2)(A) (42 U.S.C. 1395w–21(a)(2)(A)) is 
amended by adding at the end the following new sentence:
140
‘‘Specialized Medicare+Choice plans for special needs bene-
ficiaries (as defined in section 1859(b)(4)) may be any type 
of coordinated care plan.’’. 
(b) SPECIALIZED MEDICARE+CHOICE PLAN FOR SPE-
CIAL NEEDS BENEFICIARIES DEFINED.—Section 1859(b) 
(42 U.S.C. 1395w–29(b)) is amended by adding at the end 
the following new paragraph: 
‘‘(4) SPECIALIZED
MEDICARE+CHOICE
PLANS 
FOR SPECIAL NEEDS BENEFICIARIES.—
‘‘(A) IN GENERAL.—The term ‘specialized 
Medicare+Choice plan for special needs bene-
ficiaries’ means a Medicare+Choice plan that 
exclusively serves special needs beneficiaries (as 
defined in subparagraph (B)). 
‘‘(B) SPECIAL
NEEDS
BENEFICIARY.—The 
term 
‘special 
needs 
beneficiary’ 
means 
a 
Medicare+Choice eligible individual who—
‘‘(i) is institutionalized (as defined by 
the Secretary); 
‘‘(ii) is entitled to medical assistance 
under a State plan under title XIX; or 
‘‘(iii) meets such requirements as the 
Secretary may determine would benefit 
from enrollment in such a specialized 
Medicare+Choice plan described in sub-
141
paragraph (A) for individuals with severe 
or disabling chronic conditions.’’. 
(c) RESTRICTION ON ENROLLMENT PERMITTED.—Sec-
tion 1859 (42 U.S.C. 1395w–29) is amended by adding at 
the end the following new subsection: 
‘‘(f) RESTRICTION ON ENROLLMENT FOR SPECIALIZED 
MEDICARE+CHOICE PLANS FOR SPECIAL NEEDS BENE-
FICIARIES.—In the case of a specialized Medicare+Choice 
plan (as defined in subsection (b)(4)), notwithstanding any 
other provision of this part and in accordance with regula-
tions of the Secretary and for periods before January 1, 
2008, the plan may restrict the enrollment of individuals 
under the plan to individuals who are within one or more 
classes of special needs beneficiaries.’’. 
(d) REPORT TO CONGRESS.—Not later than December 
31, 2006, the Secretary shall submit to Congress a report 
that assesses the impact of specialized Medicare+Choice 
plans for special needs beneficiaries on the cost and quality 
of services provided to enrollees. Such report shall include 
an assessment of the costs and savings to the medicare pro-
gram as a result of amendments made by subsections (a), 
(b), and (c). 
(e) EFFECTIVE DATES.—
142
(1) IN
GENERAL.—The amendments made by 
subsections (a), (b), and (c) shall take effect upon the 
date of the enactment of this Act. 
(2) DEADLINE FOR ISSUANCE OF REQUIREMENTS 
FOR SPECIAL NEEDS BENEFICIARIES; TRANSITION.—
No later than 6 months after the date of the enact-
ment of this Act, the Secretary shall issue final regu-
lations to establish requirements for special needs 
beneficiaries under section 1859(b)(4)(B)(iii) of the 
Social Security Act, as added by subsection (b). 
SEC. 514. TEMPORARY SUSPENSION OF OASIS REQUIRE-
MENT FOR COLLECTION OF DATA ON NON-
MEDICARE AND NON-MEDICAID PATIENTS. 
(a) IN GENERAL.—During the period described in sub-
section (b), the Secretary may not require, under section 
4602(e) of the Balanced Budget Act of 1997 or otherwise 
under OASIS, a home health agency to gather or submit 
information that relates to an individual who is not eligible 
for benefits under either title XVIII or title XIX of the So-
cial Security Act (such information in this section referred 
to as ‘‘non-medicare/medicaid OASIS information’’). 
(b) PERIOD OF SUSPENSION.—The period described in 
this subsection—
(1) begins on the date of the enactment of this 
Act; and
143
(2) ends on the last day of the 2nd month begin-
ning after the date as of which the Secretary has pub-
lished final regulations regarding the collection and 
use by the Centers for Medicare & Medicaid Services 
of non-medicare/medicaid OASIS information fol-
lowing the submission of the report required under 
subsection (c). 
(c) REPORT.—
(1) STUDY.—The Secretary shall conduct a study 
on how non-medicare/medicaid OASIS information is 
and can be used by large home health agencies. Such 
study shall examine—
(A) whether there are unique benefits from 
the analysis of such information that cannot be 
derived from other information available to, or 
collected by, such agencies; and 
(B) the value of collecting such information 
by small home health agencies compared to the 
administrative burden related to such collection. 
In conducting the study the Secretary shall obtain 
recommendations from quality assessment experts in 
the use of such information and the necessity of small, 
as well as large, home health agencies collecting such 
information.
311
(2) by adding at the end of subsection 
(b) the following new paragraph: 
‘‘(4)(A) A hospital that fails to comply with 
the requirement of subsection (a)(1)(T) (relat-
ing to the Bloodborne Pathogens standard) is 
subject to a civil money penalty in an amount 
described in subparagraph (B), but is not sub-
ject to termination of an agreement under 
this section. 
‘‘(B) The amount referred to in subpara-
graph (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 sub-
ject 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 im-
posed and collected under that section.’’. 
(b) EFFECTIVE
DATE.—The amendments 
made by this subsection (a) shall apply to hos-
pitals as of July 1, 2004.