H. R. 1—313
‘‘(3) A report under paragraph (1) shall include a description
of efforts by the Secretary to reduce such inconsistency or conflicts,
and recommendations for legislation or administrative action that
the Secretary determines appropriate to further reduce such
inconsistency or conflicts.’’.
Subtitle B—Contracting Reform
SEC. 911. INCREASED FLEXIBILITY IN MEDICARE ADMINISTRATION.
(a) CONSOLIDATION AND FLEXIBILITY IN MEDICARE ADMINISTRA-
TION.—
(1) IN GENERAL.—Title XVIII is amended by inserting after
section 1874 the following new section:
‘‘CONTRACTS WITH MEDICARE ADMINISTRATIVE CONTRACTORS
‘‘SEC. 1874A. (a) AUTHORITY.—
‘‘(1) AUTHORITY TO ENTER INTO CONTRACTS.—The Secretary
may enter into contracts with any eligible entity to serve as
a medicare administrative contractor with respect to the
performance of any or all of the functions described in para-
graph (4) or parts of those functions (or, to the extent provided
in a contract, to secure performance thereof by other entities).
‘‘(2) ELIGIBILITY OF ENTITIES.—An entity is eligible to enter
into a contract with respect to the performance of a particular
function described in paragraph (4) only if—
‘‘(A) the entity has demonstrated capability to carry
out such function;
‘‘(B) the entity complies with such conflict of interest
standards as are generally applicable to Federal acquisition
and procurement;
‘‘(C) the entity has sufficient assets to financially sup-
port the performance of such function; and
‘‘(D) the entity meets such other requirements as the
Secretary may impose.
‘‘(3) MEDICARE ADMINISTRATIVE CONTRACTOR DEFINED.—For
purposes of this title and title XI—
‘‘(A) IN GENERAL.—The term ‘medicare administrative
contractor’ means an agency, organization, or other person
with a contract under this section.
‘‘(B) APPROPRIATE
MEDICARE
ADMINISTRATIVE
CON-
TRACTOR.—With respect to the performance of a particular
function in relation to an individual entitled to benefits
under part A or enrolled under part B, or both, a specific
provider of services or supplier (or class of such providers
of services or suppliers), the ‘appropriate’ medicare
administrative contractor is the medicare administrative
contractor that has a contract under this section with
respect to the performance of that function in relation
to that individual, provider of services or supplier or class
of provider of services or supplier.
‘‘(4) FUNCTIONS DESCRIBED.—The functions referred to in
paragraphs (1) and (2) are payment functions (including the
function of developing local coverage determinations, as defined
in section 1869(f)(2)(B)), provider services functions, and func-
tions relating to services furnished to individuals entitled to
H. R. 1—314
benefits under part A or enrolled under part B, or both, as
follows:
‘‘(A) DETERMINATION
OF
PAYMENT
AMOUNTS.—Deter-
mining (subject to the provisions of section 1878 and to
such review by the Secretary as may be provided for by
the contracts) the amount of the payments required pursu-
ant to this title to be made to providers of services, sup-
pliers and individuals.
‘‘(B) MAKING PAYMENTS.—Making payments described
in subparagraph (A) (including receipt, disbursement, and
accounting for funds in making such payments).
‘‘(C) BENEFICIARY EDUCATION AND ASSISTANCE.—Pro-
viding education and outreach to individuals entitled to
benefits under part A or enrolled under part B, or both,
and providing assistance to those individuals with specific
issues, concerns, or problems.
‘‘(D) PROVIDER
CONSULTATIVE
SERVICES.—Providing
consultative services to institutions, agencies, and other
persons to enable them to establish and maintain fiscal
records necessary for purposes of this title and otherwise
to qualify as providers of services or suppliers.
‘‘(E) 
COMMUNICATION
WITH
PROVIDERS.—Commu-
nicating to providers of services and suppliers any informa-
tion or instructions furnished to the medicare administra-
tive contractor by the Secretary, and facilitating commu-
nication between such providers and suppliers and the
Secretary.
‘‘(F) PROVIDER
EDUCATION
AND
TECHNICAL
ASSIST-
ANCE.—Performing the functions relating to provider edu-
cation, training, and technical assistance.
‘‘(G) ADDITIONAL FUNCTIONS.—Performing such other
functions, including (subject to paragraph (5)) functions
under the Medicare Integrity Program under section 1893,
as are necessary to carry out the purposes of this title.
‘‘(5) RELATIONSHIP TO MIP CONTRACTS.—
‘‘(A) NONDUPLICATION OF DUTIES.—In entering into con-
tracts under this section, the Secretary shall assure that
functions of medicare administrative contractors in car-
rying out activities under parts A and B do not duplicate
activities carried out under a contract entered into under
the Medicare Integrity Program under section 1893. The
previous sentence shall not apply with respect to the
activity described in section 1893(b)(5) (relating to prior
authorization of certain items of durable medical equipment
under section 1834(a)(15)).
‘‘(B) CONSTRUCTION.—An entity shall not be treated
as a medicare administrative contractor merely by reason
of having entered into a contract with the Secretary under
section 1893.
‘‘(6) APPLICATION OF FEDERAL ACQUISITION REGULATION.—
Except to the extent inconsistent with a specific requirement
of this section, the Federal Acquisition Regulation applies to
contracts under this section.
‘‘(b) CONTRACTING REQUIREMENTS.—
‘‘(1) USE OF COMPETITIVE PROCEDURES.—
H. R. 1—315
‘‘(A) IN GENERAL.—Except as provided in laws with
general applicability to Federal acquisition and procure-
ment or in subparagraph (B), the Secretary shall use
competitive procedures when entering into contracts with
medicare administrative contractors under this section,
taking into account performance quality as well as price
and other factors.
‘‘(B) RENEWAL
OF
CONTRACTS.—The Secretary may
renew a contract with a medicare administrative contractor
under this section from term to term without regard to
section 5 of title 41, United States Code, or any other
provision of law requiring competition, if the medicare
administrative contractor has met or exceeded the perform-
ance requirements applicable with respect to the contract
and contractor, except that the Secretary shall provide
for the application of competitive procedures under such
a contract not less frequently than once every 5 years.
‘‘(C) TRANSFER
OF
FUNCTIONS.—The Secretary may
transfer functions among medicare administrative contrac-
tors consistent with the provisions of this paragraph. The
Secretary shall ensure that performance quality is consid-
ered in such transfers. The Secretary shall provide public
notice (whether in the Federal Register or otherwise) of
any such transfer (including a description of the functions
so transferred, a description of the providers of services
and suppliers affected by such transfer, and contact
information for the contractors involved).
‘‘(D) INCENTIVES
FOR
QUALITY.—The Secretary shall
provide incentives for medicare administrative contractors
to provide quality service and to promote efficiency.
‘‘(2) COMPLIANCE WITH REQUIREMENTS.—No contract under
this section shall be entered into with any medicare administra-
tive contractor unless the Secretary finds that such medicare
administrative contractor will perform its obligations under
the contract efficiently and effectively and will meet such
requirements as to financial responsibility, legal authority,
quality of services provided, and other matters as the Secretary
finds pertinent.
‘‘(3) PERFORMANCE REQUIREMENTS.—
‘‘(A) 
DEVELOPMENT
OF
SPECIFIC
PERFORMANCE
REQUIREMENTS.—
‘‘(i) IN GENERAL.—The Secretary shall develop con-
tract performance requirements to carry out the spe-
cific requirements applicable under this title to a func-
tion described in subsection (a)(4) and shall develop
standards for measuring the extent to which a con-
tractor has met such requirements.
‘‘(ii) CONSULTATION.—In developing such perform-
ance requirements and standards for measurement,
the Secretary shall consult with providers of services,
organizations representative of beneficiaries under this
title, and organizations and agencies performing func-
tions necessary to carry out the purposes of this section
with respect to such performance requirements.
‘‘(iii) PUBLICATION OF STANDARDS.—The Secretary
shall make such performance requirements and
measurement standards available to the public.
H. R. 1—316
‘‘(B) CONSIDERATIONS.—The Secretary shall include, as
one of the standards developed under subparagraph (A),
provider and beneficiary satisfaction levels.
‘‘(C) INCLUSION IN CONTRACTS.—All contractor perform-
ance requirements shall be set forth in the contract between
the Secretary and the appropriate medicare administrative
contractor. Such performance requirements—
‘‘(i) shall reflect the performance requirements
published under subparagraph (A), but may include
additional performance requirements;
‘‘(ii) shall be used for evaluating contractor
performance under the contract; and
‘‘(iii) shall be consistent with the written statement
of work provided under the contract.
‘‘(4) INFORMATION REQUIREMENTS.—The Secretary shall not
enter into a contract with a medicare administrative contractor
under this section unless the contractor agrees—
‘‘(A) to furnish to the Secretary such timely information
and reports as the Secretary may find necessary in per-
forming his functions under this title; and
‘‘(B) to maintain such records and afford such access
thereto as the Secretary finds necessary to assure the
correctness and verification of the information and reports
under subparagraph (A) and otherwise to carry out the
purposes of this title.
‘‘(5) SURETY BOND.—A contract with a medicare administra-
tive contractor under this section may require the medicare
administrative contractor, and any of its officers or employees
certifying payments or disbursing funds pursuant to the con-
tract, or otherwise participating in carrying out the contract,
to give surety bond to the United States in such amount as
the Secretary may deem appropriate.
‘‘(c) TERMS AND CONDITIONS.—
‘‘(1) IN GENERAL.—A contract with any medicare adminis-
trative contractor under this section may contain such terms
and conditions as the Secretary finds necessary or appropriate
and may provide for advances of funds to the medicare adminis-
trative contractor for the making of payments by it under
subsection (a)(4)(B).
‘‘(2) PROHIBITION ON MANDATES FOR CERTAIN DATA COLLEC-
TION.—The Secretary may not require, as a condition of entering
into, or renewing, a contract under this section, that the medi-
care administrative contractor match data obtained other than
in its activities under this title with data used in the adminis-
tration of this title for purposes of identifying situations in
which the provisions of section 1862(b) may apply.
‘‘(d) LIMITATION ON LIABILITY OF MEDICARE ADMINISTRATIVE
CONTRACTORS AND CERTAIN OFFICERS.—
‘‘(1) CERTIFYING OFFICER.—No individual designated pursu-
ant to a contract under this section as a certifying officer
shall, in the absence of the reckless disregard of the individual’s
obligations or the intent by that individual to defraud the
United States, be liable with respect to any payments certified
by the individual under this section.
‘‘(2) DISBURSING OFFICER.—No disbursing officer shall, in
the absence of the reckless disregard of the officer’s obligations
or the intent by that officer to defraud the United States,