242
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
243
‘‘(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 sup-
plier whereby both parties agree to settle a pro-
jected overpayment based on less than a statis-
tically valid sample of claims and the provider 
of services or supplier agrees not to appeal the 
claims involved.
‘‘(6) 
NOTICE
OF
OVER-UTILIZATION
OF 
CODES.—The Secretary shall establish, in consulta-
tion with organizations representing the classes of 
providers of services and suppliers, a process under 
which the Secretary provides for notice to classes of 
providers of services and suppliers served by the con-
tractor in cases in which the contractor has identi-
244
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;
245
‘‘(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
246
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
247
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.—
248
‘‘(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
249
under the procedures that apply under subsection 
(h)(1)(A) to a provider of services that is dissatisfied 
with a determination 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 Secu-
rity Act, as added by subsection (a)(2), within 6 
months after the date of the enactment of this Act. 
(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 pro-
vider enrollment forms made on or after January 1, 
2003. 
(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. 837. PROCESS FOR CORRECTION OF MINOR ERRORS 
AND OMISSIONS ON CLAIMS WITHOUT PUR-
SUING APPEALS PROCESS. 
The Secretary shall develop, in consultation with ap-
propriate medicare contractors (as defined in section 
1889(g) of the Social Security Act, as inserted by section
250
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
251
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
252
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,
253
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-
254
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.—
255
‘‘(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.—
256
‘‘(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
257
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.
295
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-