H. R. 1—334
Medical Insurance Trust Fund, established under section 1841 of
such Act (42 U.S.C. 1395t)) to the Secretary such sums as are
necessary for fiscal year 2005 and each subsequent fiscal year
to—
(1) increase the number of administrative law judges (and
their staffs) under subsection (b)(4);
(2) improve education and training opportunities for
administrative law judges (and their staffs); and
(3) increase the staff of the Departmental Appeals Board.
(d) CONFORMING
AMENDMENT.—Section 1869(f)(2)(A)(i) (42
U.S.C. 1395ff(f)(2)(A)(i)) is amended by striking ‘‘of the Social Secu-
rity Administration’’.
SEC. 932. PROCESS FOR EXPEDITED ACCESS TO REVIEW.
(a) EXPEDITED ACCESS TO JUDICIAL REVIEW.—
(1) IN GENERAL.—Section 1869(b) (42 U.S.C. 1395ff(b)) is
amended—
(A) in paragraph (1)(A), by inserting ‘‘, subject to para-
graph (2),’’ before ‘‘to judicial review of the Secretary’s
final decision’’; and
(B) by adding at the end the following new paragraph:
‘‘(2) EXPEDITED ACCESS TO JUDICIAL REVIEW.—
‘‘(A) IN
GENERAL.—The Secretary shall establish a
process under which a provider of services or supplier
that furnishes an item or service or an individual entitled
to benefits under part A or enrolled under part B, or
both, who has filed an appeal under paragraph (1) (other
than an appeal filed under paragraph (1)(F)(i)) may obtain
access to judicial review when a review entity (described
in subparagraph (D)), on its own motion or at the request
of the appellant, determines that the Departmental Appeals
Board does not have the authority to decide the question
of law or regulation relevant to the matters in controversy
and that there is no material issue of fact in dispute.
The appellant may make such request only once with
respect to a question of law or regulation for a specific
matter in dispute in a case of an appeal.
‘‘(B) PROMPT DETERMINATIONS.—If, after or coincident
with appropriately filing a request for an administrative
hearing, the appellant requests a determination by the
appropriate review entity that the Departmental Appeals
Board does not have the authority to decide the question
of law or regulations relevant to the matters in controversy
and that there is no material issue of fact in dispute,
and if such request is accompanied by the documents and
materials as the appropriate review entity shall require
for purposes of making such determination, such review
entity shall make a determination on the request in writing
within 60 days after the date such review entity receives
the request and such accompanying documents and mate-
rials. Such a determination by such review entity 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
entity—
H. R. 1—335
‘‘(I) determines that there are no material
issues of fact in dispute and that the only issues
to be adjudicated are ones of law or regulation
that the Departmental Appeals Board does not
have authority to decide; or
‘‘(II) fails to make such determination 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 the date
of the determination described in such clause; or
‘‘(II) clause (i)(II), within 60 days of the end
of the period provided under subparagraph (B)
for the determination.
‘‘(iii) VENUE.—Such action shall be brought in the
district court of the United States for the judicial dis-
trict in which the appellant is located (or, in the case
of an action brought jointly by more than one applicant,
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
ANY
AMOUNTS
IN
CON-
TROVERSY.—Where a provider of services or supplier
is granted judicial review pursuant to this paragraph,
the amount in controversy (if any) shall be subject
to annual interest beginning on the first day of the
first month beginning after the 60-day period as deter-
mined pursuant to clause (ii) and equal to the rate
of interest on obligations issued for purchase 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 sen-
tence shall be deemed income or cost for the purposes
of determining reimbursement due providers of serv-
ices or suppliers under this title.
‘‘(D) REVIEW ENTITY DEFINED.—For purposes of this
subsection, the term ‘review entity’ means an entity of
up to three reviewers who are administrative law judges
or members of the Departmental Appeals Board selected
for purposes of making determinations under this para-
graph.’’.
(2) CONFORMING AMENDMENT.—Section 1869(b)(1)(F)(ii) (42
U.S.C. 1395ff(b)(1)(F)(ii)) is amended to read as follows:
‘‘(ii) REFERENCE TO EXPEDITED ACCESS TO JUDICIAL
REVIEW.—For the provision relating to expedited access
to judicial review, see paragraph (2).’’.
(b) APPLICATION TO PROVIDER AGREEMENT DETERMINATIONS.—
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 subparagraph:
‘‘(B) An institution or agency described in subparagraph (A)
that has filed for a hearing under subparagraph (A) shall have
expedited access to judicial review under this subparagraph in
H. R. 1—336
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) EXPEDITED REVIEW
OF CERTAIN PROVIDER AGREEMENT
DETERMINATIONS.—
(1) TERMINATION
AND
CERTAIN
OTHER
IMMEDIATE
REM-
EDIES.—Section 1866(h)(1) (42 U.S.C. 1395cc(h)(1)), as amended
by subsection (b), is amended by adding at the end the following
new subparagraph:
‘‘(C)(i) The Secretary shall develop and implement a process
to expedite proceedings under this subsection in which—
‘‘(I) the remedy of termination of participation has been
imposed;
‘‘(II) a remedy described in clause (i) or (iii) of section
1819(h)(2)(B) has been imposed, but only if such remedy has
been imposed on an immediate basis; or
‘‘(III) a determination has been made as to a finding of
substandard quality of care that results in the loss of approval
of a skilled nursing facility’s nurse aide training program.
‘‘(ii) Under such process under clause (i), priority shall be
provided in cases of termination described in clause (i)(I).
‘‘(iii) 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.’’.
(2) WAIVER OF DISAPPROVAL OF NURSE-AIDE TRAINING PRO-
GRAMS.—Sections 1819(f)(2) and section 1919(f)(2) (42 U.S.C.
1395i–3(f)(2) and 1396r(f)(2)) are each amended—
(A) in subparagraph (B)(iii), by striking ‘‘subparagraph
(C)’’ and inserting ‘‘subparagraphs (C) and (D)’’; and
(B) by adding at the end the following new subpara-
graph:
‘‘(D) WAIVER OF DISAPPROVAL OF NURSE-AIDE TRAINING
PROGRAMS.—Upon application of a nursing facility, the Sec-
retary may waive the application of subparagraph
(B)(iii)(I)(c) if the imposition of the civil monetary penalty
was not related to the quality of care provided to residents
of the facility. Nothing in this subparagraph shall be con-
strued as eliminating any requirement upon a facility to
pay a civil monetary penalty described in the preceding
sentence.’’.
(3) INCREASED
FINANCIAL
SUPPORT.—In addition to any
amounts otherwise appropriated, to reduce by 50 percent the
average time for administrative 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,
established under section 1817 of the Social Security Act (42
U.S.C. 1395i), and the Federal Supplementary Medical Insur-
ance Trust Fund, established under section 1841 of such Act
(42 U.S.C. 1395t)) to the Secretary such additional sums for
fiscal year 2004 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
H. R. 1—337
(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.
(d) EFFECTIVE DATE.—The amendments made by this section
shall apply to appeals filed on or after October 1, 2004.
SEC. 933. 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 section 932(a), is further amended by adding at
the end the following new paragraph:
‘‘(3) REQUIRING
FULL
AND
EARLY
PRESENTATION
OF
EVI-
DENCE 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)) is amended by inserting
‘‘(including the medical records of the individual involved)’’ after
‘‘clinical experience’’.
(c) NOTICE REQUIREMENTS FOR MEDICARE APPEALS.—
(1) INITIAL DETERMINATIONS AND REDETERMINATIONS.—Sec-
tion 1869(a) (42 U.S.C. 1395ff(a)) is amended by adding at
the end the following new paragraphs:
‘‘(4) REQUIREMENTS OF NOTICE OF DETERMINATIONS.—With
respect to an initial determination insofar as it results in a
denial of a claim for benefits—
‘‘(A) the written notice on the determination shall
include—
‘‘(i) the reasons for the determination, including
whether a local medical review policy or a local cov-
erage determination was used;
‘‘(ii) the procedures for obtaining additional
information concerning the determination, including
the information described in subparagraph (B); and
‘‘(iii) notification of the right to seek a redetermina-
tion or otherwise appeal the determination and instruc-
tions on how to initiate such a redetermination under
this section;
‘‘(B) such written notice shall be provided in printed
form and written in a manner calculated to be understood
by the individual entitled to benefits under part A or
enrolled under part B, or both; and
‘‘(C) the individual provided such written notice may
obtain, upon request, information on the specific provision
of the policy, manual, or regulation used in making the
redetermination.
‘‘(5) REQUIREMENTS
OF
NOTICE
OF
REDETERMINATIONS.—
With respect to a redetermination insofar as it results in a
denial of a claim for benefits—
‘‘(A) the written notice on the redetermination shall
include—
H. R. 1—338
‘‘(i) the specific reasons for the redetermination;
‘‘(ii) as appropriate, a summary of the clinical or
scientific evidence used in making the redetermination;
‘‘(iii) a description of the procedures for obtaining
additional information concerning the redetermination;
and
‘‘(iv) notification of the right to appeal the redeter-
mination 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 calculated to be understood
by the individual entitled to benefits under part A or
enrolled under part B, or both; and
‘‘(C) the individual provided such written 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)) is amended—
(A) by inserting ‘‘be written in a manner calculated
to be understood by the individual entitled 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 instructions on how to ini-
tiate such appeal under this section’’ after ‘‘such decision,’’.
(3) APPEALS.—Section 1869(d) (42 U.S.C. 1395ff(d)) is
amended—
(A) in the heading, by inserting ‘‘; NOTICE’’ after ‘‘SEC-
RETARY’’; and
(B) by adding at the end the following new paragraph:
‘‘(4) NOTICE.—Notice of the decision of an administrative
law judge shall be in writing in a manner calculated to be
understood by the individual entitled to benefits under part
A or enrolled under part B, or both, and shall include—
‘‘(A) the specific reasons for the determination
(including, to the extent appropriate, a summary of the
clinical or scientific evidence used in making the determina-
tion);
‘‘(B) the procedures for obtaining additional informa-
tion 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.—Section
1869(c)(3)(J)(i) (42 U.S.C. 1395ff(c)(3)(J)(i)) is amended 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)) is
amended—
(A) in subparagraph (A), by striking ‘‘sufficient 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
H. R. 1—340
‘‘(iii) not otherwise have a conflict of interest with
such a party.
‘‘(B) EXCEPTION.—Nothing in subparagraph (A) shall
be construed to—
‘‘(i) prohibit an individual, solely on the basis of
a participation agreement with a fiscal intermediary,
carrier, or other contractor, from serving as a reviewing
professional if—
‘‘(I) the individual is not involved in the provi-
sion of items or services in the case under review;
‘‘(II) the fact of such an agreement is disclosed
to the Secretary and the individual entitled to
benefits under part A or enrolled under part B,
or both, or such individual’s authorized representa-
tive, 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 indi-
vidual (or authorized representative), and neither party
objects; or
‘‘(iii) prohibit receipt of compensation by a
reviewing professional from a contractor if the com-
pensation is provided consistent with paragraph (3).
For purposes of this paragraph, the term ‘participation
agreement’ means an agreement relating 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 COMPENSATION.—Compensa-
tion provided by a qualified independent 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 reviewing profes-
sional 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 legally authorized
in one or more States (in accordance 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 appro-
priate 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 enrolled under part B, or both, any of the
following:
H. R. 1—341
‘‘(A) The Secretary, the medicare administrative con-
tractor involved, or any fiduciary, officer, director, or
employee of the Department of Health and Human Serv-
ices, or of such contractor.
‘‘(B) The individual (or authorized representative).
‘‘(C) The health care professional that provides 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 services 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
INDE-
PENDENT
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
consistent with the timeframes applicable under this sub-
section’’.
(4) EFFECTIVE
DATE.—The amendments made by para-
graphs (1) and (2) shall be effective as if included 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 Security Act (42 U.S.C. 1395h) and a carrier under
section 1842 of such Act (42 U.S.C. 1395u).
SEC. 934. PREPAYMENT REVIEW.
(a) IN GENERAL.—Section 1874A, as added by section 911(a)(1)
and as amended by sections 912(b), 921(b)(1), and 921(c)(1), is
further amended by adding at the end the following new subsection:
‘‘(h) CONDUCT OF PREPAYMENT REVIEW.—
‘‘(1) CONDUCT OF RANDOM PREPAYMENT REVIEW.—
‘‘(A) IN
GENERAL.—A medicare administrative con-
tractor may conduct random prepayment 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 consultation
with providers of services and suppliers.
‘‘(B) USE OF STANDARD PROTOCOLS WHEN CONDUCTING
PREPAYMENT REVIEWS.—When a medicare administrative
contractor conducts a random prepayment review, the con-
tractor may conduct such review only in accordance with
a standard protocol for random prepayment audits devel-
oped 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’
H. R. 1—342
means a demand for the production of records or docu-
mentation 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 administrative con-
tractor may not initiate non-random prepayment review
of a provider of services or supplier based on the initial
identification 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 under section
1893(f)(3)(A).
‘‘(B) 
TERMINATION
OF
NON-RANDOM
PREPAYMENT
REVIEW.—The Secretary shall issue regulations relating to
the termination, including termination dates, of non-
random prepayment review. Such regulations may vary
such a termination date based upon the differences in
the circumstances triggering prepayment review.’’.
(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
REGULA-
TIONS.—The Secretary shall first issue regulations under sec-
tion 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 Social 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 section 1842 of such Act (42 U.S.C. 1395u)
in the same manner as they apply to medicare administrative
contractors under such provisions.
SEC. 935. RECOVERY OF OVERPAYMENTS.
(a) IN GENERAL.—Section 1893 (42 U.S.C. 1395ddd) is amended
by adding at the end the following new subsection:
‘‘(f) RECOVERY OF OVERPAYMENTS.—
‘‘(1) USE OF REPAYMENT PLANS.—
‘‘(A) IN GENERAL.—If the repayment, within 30 days
by a provider of services or supplier, of an overpayment
under this title would constitute a hardship (as described
in subparagraph (B)), subject to subparagraph (C), upon
request of the provider of services or supplier the Secretary
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
H. R. 1—343
the period of repayment. Such plan shall meet terms and
conditions determined to be appropriate by the Secretary.
‘‘(B) HARDSHIP.—
‘‘(i) IN GENERAL.—For purposes of subparagraph
(A), the repayment of an overpayment (or overpay-
ments) within 30 days is deemed to constitute a hard-
ship if—
‘‘(I) in the case of a provider of services that
files cost reports, the aggregate amount of the
overpayments exceeds 10 percent of the amount
paid under this title to the provider of services
for the cost reporting period covered by the most
recently submitted cost report; or
‘‘(II) in the case of another provider of services
or supplier, the aggregate amount of the overpay-
ments exceeds 10 percent of the amount paid under
this title to the provider of services or supplier
for the previous calendar year.
‘‘(ii) RULE OF APPLICATION.—The Secretary shall
establish rules for the application 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 during a portion
of that year.
‘‘(iii) TREATMENT OF PREVIOUS OVERPAYMENTS.—
If a provider of services or supplier has entered into
a repayment plan under subparagraph (A) with respect
to a specific overpayment amount, such payment
amount under the repayment plan shall not be taken
into account under clause (i) with respect to subsequent
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 partici-
pation in the program under this title; or
‘‘(ii) there is an indication of fraud or abuse com-
mitted against the program.
‘‘(D) IMMEDIATE COLLECTION IF VIOLATION OF REPAY-
MENT PLAN.—If a provider of services or supplier fails to
make a payment in accordance with a repayment plan
under this paragraph, the Secretary may immediately seek
to offset or otherwise recover the total balance outstanding
(including applicable interest) under the repayment plan.
‘‘(E) RELATION TO NO FAULT PROVISION.—Nothing in
this paragraph shall be construed as affecting the applica-
tion of section 1870(c) (relating to no adjustment in the
cases of certain overpayments).
‘‘(2) LIMITATION ON RECOUPMENT.—
‘‘(A) IN GENERAL.—In the case of a provider of services
or supplier that is determined to have received an overpay-
ment under this title and that seeks a reconsideration
by a qualified independent contractor on such determina-
tion 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