I 
113TH CONGRESS 
1ST SESSION H. R. 1250 
To amend title XVIII of the Social Security Act to improve operations 
of recovery auditors under the Medicare integrity program, to increase 
transparency and accuracy in audits conducted by contractors, and for 
other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 19, 2013 
Mr. GRAVES of Missouri (for himself, Mr. SCHIFF, Mr. HANNA, Mr. 
HUELSKAMP, Mr. LOEBSACK, Mr. OWENS, Mr. FARR, Mr. POMPEO, Mr. 
LONG, Mr. KING of Iowa, and Mr. KING of New York) introduced the 
following bill; which was referred to the Committee on Ways and Means, 
and in addition to the Committee on Energy and Commerce, for a period 
to be subsequently determined by the Speaker, in each case for consider-
ation of such provisions as fall within the jurisdiction of the committee 
concerned 
A BILL 
To amend title XVIII of the Social Security Act to improve 
operations of recovery auditors under the Medicare integ-
rity program, to increase transparency and accuracy in 
audits conducted by contractors, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Medicare Audit Improvement Act of 2013’’. 
VerDate Mar 15 2010 
15:58 Mar 27, 2013
Jkt 029200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H1250.IH
H1250
tkelley on DSK3SPTVN1PROD with BILLS
(b) TABLE OF CONTENTS.—The table of contents of 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
Sec. 2. Combined additional documentation request limit. 
Sec. 3. Improvement of recovery auditor operations. 
Sec. 4. Greater transparency of recovery auditor performance. 
Sec. 5. Accurate payment for rebilled claims. 
Sec. 6. Requirement for physician validation for medical necessity denials. 
Sec. 7. Assuring due process in application of guidelines for reopening and revi-
sion of determinations. 
SEC. 2. COMBINED ADDITIONAL DOCUMENTATION RE-
QUEST LIMIT. 
(a) ESTABLISHMENT OF LIMITS PER HOSPITAL.— 
The Secretary of Health and Human Services shall estab-
lish a process under which the number of additional docu-
mentation requests made to a hospital (as defined in sub-
section (c)(3)) by Medicare contractors (as defined in sub-
section (c)(1)) pursuant to prepayment and postpayment 
audits that require a hospital to submit a medical record 
for audit purposes, as required under chapter 3 of the 
Medicare Program Integrity Manual, or otherwise, shall 
be subject to a single, combined maximum limit of addi-
tional documentation requests per year for the Medicare 
contractors specified in subsection (c)(1). However, such 
maximum limit shall be applied incrementally as a limit 
for requests for additional documentation in 45-day peri-
ods during the year so that the maximum number of such 
requests in a 45-day period is 500 or, in the case of a 
VerDate Mar 15 2010 
15:58 Mar 27, 2013
Jkt 029200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H1250.IH
H1250
tkelley on DSK3SPTVN1PROD with BILLS
hospital that receives less than $100,000,000 in Medicare 
inpatient hospital payments in the previous year, 350. 
(b) ESTABLISHMENT OF PERCENTAGE-BASED LIM-
ITS PER CLAIM TYPE.—In addition to the limit estab-
lished under subsection (a), the Secretary shall establish 
a distinct additional documentation request limit for each 
hospital claim type (as defined in subsection (c)(2)) for 
each hospital for a 45-day period in a year. For a hospital 
for each hospital claim type for a 45-day period in a cal-
endar year, the additional documentation request limit 
under this subsection for a claim type shall be 2 percent 
of the total number of hospital discharges for such hos-
pital for the previous calendar year divided by 8. 
(c) DEFINITIONS.—In this section: 
(1) 
MEDICARE
CONTRACTOR.—The 
term 
‘‘Medicare contractor’’ means any of the following: 
(A) A Medicare administrative contractor 
under section 1874A of the Social Security Act 
(42 U.S.C. 1395kk), including a fiscal inter-
mediary and a carrier under sections 1816 and 
1842, respectively. 
(B) A recovery audit contractor under sec-
tion 
1893(h) 
of 
such 
Act 
(42 
U.S.C. 
1395ddd(h)). 
VerDate Mar 15 2010 
15:58 Mar 27, 2013
Jkt 029200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H1250.IH
H1250
tkelley on DSK3SPTVN1PROD with BILLS
(C) A Comprehensive Error Rate Testing 
(CERT) program contractor with a contract 
with the Secretary of Health and Human Serv-
ices to review error rates under title XVIII of 
the Social Security Act (42 U.S.C. 1395 et 
seq.). 
(2) HOSPITAL CLAIM TYPE.—Each of the fol-
lowing shall be considered a separate ‘‘hospital claim 
type’’: 
(A) IPPS.—A claim for payment under 
section 1886(d) of the Social Security Act (42 
U.S.C. 1395ww(d)) made by a hospital for fur-
nishing inpatient hospital services. 
(B) OUTPATIENT HOSPITAL SERVICES.—A 
claim for payment under section 1833(t) of 
such Act (42 U.S.C. 1395l(t)) made by a hos-
pital for furnishing covered OPD services. 
(C) CAH SERVICES.—A claim for payment 
for inpatient or outpatient critical access hos-
pital services, whether under section 1814(l) of 
such Act (42 U.S.C. 1395f(l)) or under section 
1834(g) of such Act (42 U.S.C. 1395m(g)). 
(D) INPATIENT
REHABILITATION
SERV-
ICES.—A claim for payment under section 
1886(j) of such Act (42 U.S.C. 1395ww(j)) 
VerDate Mar 15 2010 
15:58 Mar 27, 2013
Jkt 029200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H1250.IH
H1250
tkelley on DSK3SPTVN1PROD with BILLS
made by a hospital for furnishing inpatient re-
habilitation services. 
(E) 
OTHER
INPATIENT
SERVICES.—A 
claim for payment under any other provision of 
section 1886 of such Act (42 U.S.C. 1395ww) 
made by a hospital for furnishing inpatient hos-
pital services, such as subsection (s) (relating to 
inpatient hospital services furnish by a psy-
chiatric hospital) or subsection (m) (relating to 
inpatient hospital services furnish by a long 
term care hospital). 
(F) SKILLED
NURSING
FACILITY
SERV-
ICES.—A claim for payment under section 
1888(e) of such Act (42 U.S.C. 1395yy(e)) 
made by a hospital for furnishing covered 
skilled nursing facility services. 
(3) HOSPITAL.—The term ‘‘hospital’’ means 
the campus of a hospital (as defined in subsection 
(e) of section 1861 of the Social Security Act (42 
U.S.C. 1395x)) or of a psychiatric hospital (as de-
fined in subsection (f) of such section), a com-
prehensive outpatient rehabilitation facility (as de-
fined in subsection (cc)(2) of such section), a critical 
access hospital (as defined in subsection (mm) of 
such section), or a long-term care hospital (as de-
VerDate Mar 15 2010 
15:58 Mar 27, 2013
Jkt 029200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H1250.IH
H1250
tkelley on DSK3SPTVN1PROD with BILLS
fined in subsection (ccc) of such section), as identi-
fied by the tax identification number of the hospital, 
and includes all inpatient hospital facilities under 
such number located in the same area as such cam-
pus. 
(d) EFFECTIVE DATE.—This section takes effect on 
the date of the enactment of this Act and shall apply with 
respect to claims submitted for payment under title XVIII 
of the Social Security Act for items or services furnished 
by providers of services or suppliers on or after the first 
day of the first month beginning 60 days after the date 
of the enactment of this Act. 
SEC. 3. IMPROVEMENT OF RECOVERY AUDITOR OPER-
ATIONS. 
(a) RECOVERY AUDITORS.— 
(1) IN GENERAL.—Section 1893(h) of the So-
cial Security Act (42 U.S.C. 1395ddd(h)) is amend-
ed by adding at the end the following new para-
graph: 
‘‘(10) MANDATORY
TERMS
AND
CONDITIONS 
UNDER
CONTRACTS
WITH
RECOVERY
AUDIT
CON-
TRACTORS.—In addition to such other terms and 
conditions as the Secretary may require under con-
tracts with recovery audit contractors under this 
subsection with respect to a hospital, including a 
VerDate Mar 15 2010 
15:58 Mar 27, 2013
Jkt 029200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6201
E:\BILLS\H1250.IH
H1250
tkelley on DSK3SPTVN1PROD with BILLS
psychiatric hospital (as defined in section 1861(f)), 
the Secretary shall ensure each of the following re-
quirements are included under such contracts: 
‘‘(A) PENALTIES
FOR
CERTAIN
COMPLI-
ANCE FAILURES.— 
‘‘(i) IN
GENERAL.—Each such con-
tract shall provide for the imposition of fi-
nancial penalties by the Secretary under 
such contract in the case of any recovery 
audit contractor with respect to which the 
Secretary determines there is a pattern of 
failure by such contractor to meet any pro-
gram requirement described in clause (ii). 
The Secretary shall establish the amount 
of financial penalties and the periodicity 
under which such penalties shall be im-
posed under this subparagraph, in no case 
less often than annually. 
‘‘(ii) PROGRAM
REQUIREMENT
DE-
SCRIBED.—For purposes of this subpara-
graph, each of the following requirements 
under the statement of work for a recovery 
audit contractor constitutes a program re-
quirement with respect to which failure to 
meet such requirement shall result in the 
VerDate Mar 15 2010 
15:58 Mar 27, 2013
Jkt 029200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H1250.IH
H1250
tkelley on DSK3SPTVN1PROD with BILLS
imposition of a financial penalty under 
clause (i): 
‘‘(I) AUDIT
DEADLINE.—Com-
pleting a determination with respect 
to each audit of a hospital the recov-
ery audit contractor conducts within 
the 
timeframes 
applicable 
under 
guidelines of the Secretary. 
‘‘(II) 
TIMELY
COMMUNICA-
TION.—In the case of a denial of a 
claim of a hospital, furnishing the 
hospital the required notice of the 
pending denial in a timely fashion 
consistent with claims and appeals 
timeframes specified in guidelines of 
the Secretary. 
‘‘(B) PENALTY
FOR
OVERTURNED
AP-
PEALS.— 
‘‘(i) IN
GENERAL.—Each such con-
tract shall require a recovery audit con-
tractor to pay a fee to the prevailing party 
in the case of a claim denial that is over-
turned on appeal. 
‘‘(ii) FEE AMOUNT.—The amount of 
the fee payable by a recovery audit con-
VerDate Mar 15 2010 
15:58 Mar 27, 2013
Jkt 029200
PO 00000
Frm 00008
Fmt 6652
Sfmt 6201
E:\BILLS\H1250.IH
H1250
tkelley on DSK3SPTVN1PROD with BILLS
tractor to a prevailing party under clause 
(i) shall be determined under a fee sched-
ule established by the Secretary for such 
purpose. The amount of such fee under 
such fee schedule shall reflect the cost in-
curred by a typical hospital in appealing a 
claim denied by a recovery audit con-
tractor. 
‘‘(C) POSTPAYMENT AND PREPAYMENT AU-
DITS.— 
‘‘(i) REQUIRING
FOCUS
ON
WIDE-
SPREAD PAYMENT ERRORS.— 
‘‘(I) IN
GENERAL.—The Sec-
retary shall not approve the conduct 
of a postpayment or prepayment med-
ical necessity audit by a recovery 
audit contractor unless such review 
addresses a widespread payment error 
rate (as defined in clause (ii)). 
‘‘(II) CESSATION OF AUDIT.—A 
recovery audit contractor that com-
mences an audit under subclause (I) 
shall cease such audit or any similar 
audits, if upon annual review, the ap-
plicable payment error rate is no 
VerDate Mar 15 2010 
15:58 Mar 27, 2013
Jkt 029200
PO 00000
Frm 00009
Fmt 6652
Sfmt 6201
E:\BILLS\H1250.IH
H1250
tkelley on DSK3SPTVN1PROD with BILLS
longer a widespread payment error 
rate (as so defined). 
‘‘(ii) WIDESPREAD
PAYMENT
ERROR 
RATE DEFINED.— 
‘‘(I) IN GENERAL.—In this sub-
paragraph, the term ‘widespread pay-
ment error rate’ means, with respect 
to medical necessity reviews conducted 
by a recovery audit contractor, a pay-
ment error rate that exceeds the rate 
specified in subclause (II) for a par-
ticular medical necessity audit deter-
mined by the Secretary using a statis-
tically significant sampling of claims 
submitted by hospitals in the jurisdic-
tion of the recovery audit contractor 
and adjusted to take into account 
claim denials overturned on appeal. 
‘‘(II) 
RATE
SPECIFIED.—The 
rate specified in this subclause is 40 
percent, except that the Secretary 
shall annually evaluate such rate and 
reduce it as necessary to account for 
changes in payment error rates with 
VerDate Mar 15 2010 
15:58 Mar 27, 2013
Jkt 029200
PO 00000
Frm 00010
Fmt 6652
Sfmt 6201
E:\BILLS\H1250.IH
H1250
tkelley on DSK3SPTVN1PROD with BILLS
the aim of continued, steady improve-
ment of billing practices. 
‘‘(D) GUIDELINES FOR PREPAYMENT RE-
VIEW.— 
‘‘(i) IN GENERAL.—A recovery audit 
contractor may conduct prepayment review 
only in the manner provided under prepay-
ment review guidelines (described in clause 
(ii)) established by the Secretary. 
‘‘(ii) CONSISTENT
PREPAYMENT
RE-
VIEW GUIDELINES.—For purposes of pre-
payment review activities authorized under 
this subsection and section 1874A(h) (re-
lating to prepayment review by medicare 
administrative contractors), the Secretary 
shall establish guidelines under which con-
sistent criteria for minimum payment error 
rates or improper billing practices occasion 
prepayment review by contractors under 
this subsection and section 1874A. Such 
guidelines shall include criteria and time-
frames for termination of prepayment re-
view.’’. 
(2) CONFORMING AMENDMENT TO APPLY FI-
NANCIAL PENALTIES IMPOSED ON RECOVERY CON-
VerDate Mar 15 2010 
20:18 Apr 02, 2013
Jkt 029200
PO 00000
Frm 00011
Fmt 6652
Sfmt 6201
E:\BILLS\H1250.IH
H1250
tkelley on DSK3SPTVN1PROD with BILLS
TRACTORS
TO
THE
TRUST
FUNDS.—Section 
1893(h)(2) of the Social Security Act (42 U.S.C. 
1395ddd(h)(2)) is amended by inserting ‘‘, and 
amounts collected by the Secretary under paragraph 
(10)(A)(i) (relating to financial penalties for con-
tractor compliance failures),’’ after ‘‘paragraph 
(1)(C)’’. 
(b) CONFORMING AMENDMENT FOR MEDICARE AD-
MINISTRATIVE CONTRACTORS.—Section 1874A of the So-
cial Security Act (42 U.S.C. 1395kk–1) is amended by 
adding at the end the following new subsection: 
‘‘(h) MANDATORY TERMS AND CONDITIONS UNDER 
CONTRACTS WITH MEDICARE ADMINISTRATIVE CON-
TRACTORS.—In addition to such other terms and condi-
tions as the Secretary may require under contracts with 
medicare administrative contractors under this section 
with respect to a hospital, including a psychiatric hospital 
(as defined in section 1861(f)), the Secretary shall ensure 
each of the following requirements are included under 
such contracts: 
‘‘(1) POSTPAYMENT
AND
PREPAYMENT
AU-
DITS.— 
‘‘(A) REQUIRING FOCUS ON WIDESPREAD 
PAYMENT ERRORS.— 
VerDate Mar 15 2010 
20:18 Apr 02, 2013
Jkt 029200
PO 00000
Frm 00012
Fmt 6652
Sfmt 6201
E:\BILLS\H1250.IH
H1250
tkelley on DSK3SPTVN1PROD with BILLS
‘‘(i) IN
GENERAL.—The Secretary 
shall not approve the conduct of a 
postpayment or prepayment medical neces-
sity audit by a medicare administrative 
contractor unless such review addresses a 
widespread payment error rate (as defined 
in subparagraph (B)). 
‘‘(ii) CESSATION OF AUDIT.—A medi-
care administrative contractor that com-
mences an audit under clause (i) shall 
cease such audit or any similar audits, if 
upon annual review, the applicable pay-
ment error rate is no longer a widespread 
payment error rate (as so defined). 
‘‘(B) WIDESPREAD PAYMENT ERROR RATE 
DEFINED.—In this paragraph, the term ‘wide-
spread payment error rate’ means, with respect 
to medical necessity reviews conducted by a 
medicare administrative contractor, a payment 
error rate of 40 percent or greater for a par-
ticular medical necessity audit determined by 
the Secretary using a statistically significant 
sampling of claims submitted by hospitals in 
the jurisdiction of the medicare administrative 
VerDate Mar 15 2010 
15:58 Mar 27, 2013
Jkt 029200
PO 00000
Frm 00013
Fmt 6652
Sfmt 6201
E:\BILLS\H1250.IH
H1250
tkelley on DSK3SPTVN1PROD with BILLS
contractor and adjusted to take into account 
claim denials overturned on appeal. 
‘‘(2) GUIDELINES FOR PREPAYMENT REVIEW.— 
A medicare administrative contractor may only con-
duct prepayment review in the manner provided 
under prepayment review guidelines established by 
the Secretary under section 1893(h)(10)(D)(ii).’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to contracts entered into or re-
newed with recovery audit contractors under section 
1893(h) of the Social Security Act (42 U.S.C. 
1395ddd(h)) and medicare administrative contractors 
under section 1874A of the Social Security Act (42 U.S.C. 
1395kk–1) on or after the date of the enactment of this 
Act. 
SEC. 4. GREATER TRANSPARENCY OF RECOVERY AUDITOR 
PERFORMANCE. 
(a) ANNUAL PUBLICATION OF RELEVANT PERFORM-
ANCE INFORMATION.—Section 1893(h) of the Social Secu-
rity Act (42 U.S.C. 1395ddd(h)), as amended by section 
3(a), is further amended by adding at the end the fol-
lowing new paragraph: 
‘‘(11) INFORMATION ON RECOVERY AUDIT CON-
TRACTOR PERFORMANCE.—With respect to each re-
covery audit contractor with a contract under this 
VerDate Mar 15 2010 
15:58 Mar 27, 2013
Jkt 029200
PO 00000
Frm 00014
Fmt 6652
Sfmt 6201
E:\BILLS\H1250.IH
H1250
tkelley on DSK3SPTVN1PROD with BILLS
section for a contract year, the Secretary shall pub-
lish on the Internet website of the Centers for Medi-
care & Medicaid Services the following information 
with respect to the performance of each such recov-
ery audit contractor: 
‘‘(A) PUBLICLY AVAILABLE INFORMATION 
ON AUDIT RATES, DENIALS, AND APPEALS OUT-
COMES.—With respect to the performance of 
each such recovery audit contractor during a 
contract year, the Secretary shall post on such 
Internet website the following information: 
‘‘(i) AUDITS.—The aggregate number 
of claims audited by the recovery audit 
contractor during the contract year in-
volved, as well as the number of audits of 
each of the following audit types (each in 
this paragraph referred to as an ‘audit 
type’): 
‘‘(I) Automated. 
‘‘(II) Complex. 
‘‘(III) Medical necessity review. 
‘‘(IV) Part A claims. 
‘‘(V) Part B claims. 
‘‘(VI) Durable medical equipment 
claims. 
VerDate Mar 15 2010 
15:58 Mar 27, 2013
Jkt 029200
PO 00000
Frm 00015
Fmt 6652
Sfmt 6201
E:\BILLS\H1250.IH
H1250
tkelley on DSK3SPTVN1PROD with BILLS
‘‘(VII) Part A medical necessity. 
‘‘(ii) ADR REQUESTS.—The aggregate 
number of requests for medical records, re-
ferred to as additional documentation re-
quests, for each audit type during the con-
tract year involved. 
‘‘(iii) DENIALS.—The aggregate num-
ber of denials for each audit type made by 
the recovery audit contractor during the 
contract year involved. 
‘‘(iv) DENIAL
RATES.—The denial 
rate of the recovery audit contractor dur-
ing the contract year involved for part A 
claims, part B claims, and durable medical 
equipment claims for each audit type dur-
ing the contract year involved. 
‘‘(v) APPEALS.—The aggregate num-
ber of appeals filed by providers of services 
and suppliers with respect to denials for 
each audit type made by the recovery audit 
contractor during the contract year in-
volved. 
‘‘(vi) APPEALS
RATES.—The aggre-
gate rate of appeals filed by providers of 
services and suppliers with respect to deni-
VerDate Mar 15 2010 
15:58 Mar 27, 2013
Jkt 029200
PO 00000
Frm 00016
Fmt 6652
Sfmt 6201
E:\BILLS\H1250.IH
H1250
tkelley on DSK3SPTVN1PROD with BILLS
als for each audit type made by the recov-
ery audit contractor during the contract 
year involved. 
‘‘(vii) APPEALS
VOLUME
AND
OUT-
COMES AT EACH OF THE 5 STAGES OF AP-
PEAL.—For claims denied by a recovery 
audit contractor, the number of claims 
during the contract year that were ap-
pealed by the provider, the number of con-
cluded appeals that did not advance to a 
subsequent appeals stage, and the number 
and percentage of completed appeals that 
were decided in favor of the provider, for 
each level of appeal as follows: 
‘‘(I) Reconsideration by the rel-
evant medicare contractor. 
‘‘(II) Redetermination by a quali-
fied independent contractor. 
‘‘(III) Administrative law judge 
hearing. 
‘‘(IV) Medicare Appeals Council 
review. 
‘‘(V) 
United 
States 
District 
Court judicial review. 
VerDate Mar 15 2010 
15:58 Mar 27, 2013
Jkt 029200
PO 00000
Frm 00017
Fmt 6652
Sfmt 6201
E:\BILLS\H1250.IH
H1250
tkelley on DSK3SPTVN1PROD with BILLS
‘‘(viii) NET
DENIALS; NET
DENIAL 
RATES.—The net denials for each audit 
type, calculated as the number of denials 
for such audit type under clause (iii) 
minus the number of such denials that are 
overturned on appeal and the net denial 
rate for each audit type, calculated in the 
same manner as denial rates under clause 
(iv) but subtracting from denials those de-
nials that are overturned on appeal 
‘‘(B) PUBLIC
AVAILABILITY
OF
INDE-
PENDENT
PERFORMANCE
EVALUATION.—The 
Secretary shall make available on such Internet 
website the results of any performance evalua-
tion with respect to each recovery audit con-
tractor conducted by an independent entity se-
lected by the Secretary for such purpose. Each 
performance evaluation shall include in its re-
sults for posting on such Internet website a de-
termination of annual error rates of the recov-
ery audit contractor for each audit type and the 
net denials and net denial rates described in 
subparagraph (A)(viii).’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to contracts entered into or re-
VerDate Mar 15 2010 
15:58 Mar 27, 2013
Jkt 029200
PO 00000
Frm 00018
Fmt 6652
Sfmt 6201
E:\BILLS\H1250.IH
H1250
tkelley on DSK3SPTVN1PROD with BILLS
newed with recovery audit contractors under section 
1893(h) of the Social Security Act (42 U.S.C. 
1395ddd(h)) on or after the date of the enactment of this 
Act. 
SEC. 5. ACCURATE PAYMENT FOR REBILLED CLAIMS. 
(a) REBILLING UNDER PART B INPATIENT CLAIMS 
DENIED BASED ON SITE OF SERVICE WHERE SERVICES 
FOUND MEDICALLY NECESSARY AT THE OUTPATIENT 
LEVEL.— 
(1) RECOVERY AUDITORS.—Section 1893(h) of 
the Social Security Act (42 U.S.C. 1395ddd(h)), as 
amended by sections 3(a) and 4(a), is further 
amended by adding at the end the following new 
paragraph: 
‘‘(12) TREATMENT OF RESUBMISSION OF SPEC-
IFIED CLAIMS AS ORIGINAL CLAIMS.— 
‘‘(A) TREATMENT AS ORIGINAL CLAIM.— 
The resubmission of a specified claim (as de-
fined in subparagraph (C)) shall be deemed to 
be an original claim for purposes of— 
‘‘(i) payment under part B; and 
‘‘(ii) provisions under this title relat-
ing to— 
‘‘(I) the authority of a hospital to 
resubmit a claim for payment under 
VerDate Mar 15 2010 
15:58 Mar 27, 2013
Jkt 029200
PO 00000
Frm 00019
Fmt 6652
Sfmt 6201
E:\BILLS\H1250.IH
H1250
tkelley on DSK3SPTVN1PROD with BILLS
the appropriate section of this title; 
and 
‘‘(II) requirements for the timely 
submission of claims, including under 
sections 1814(a), 1842(b)(3), and 
1835(a). 
‘‘(B) PAYMENT FOR ITEMS AND SERVICES 
UNDER RESUBMITTED CLAIM.—Payment shall 
be made for a specified claim resubmitted under 
subparagraph (A) for all the items and services 
furnished for which payment may be made 
under part B. 
‘‘(C) DEFINITIONS.—In this paragraph: 
‘‘(i) SPECIFIED CLAIM.— 
‘‘(I) IN
GENERAL.—The term 
‘specified claim’ means a claim sub-
mitted by a hospital for payment 
under part A for inpatient hospital 
services which a recovery audit con-
tractor (or entity adjudicating a pro-
vider appeal of a Medicare claim de-
nied payment by a recovery audit con-
tractor) determines, subject to sub-
clause (II), that the inpatient hospital 
services were not medically necessary 
VerDate Mar 15 2010 
15:58 Mar 27, 2013
Jkt 029200
PO 00000
Frm 00020
Fmt 6652
Sfmt 6201
E:\BILLS\H1250.IH
H1250
tkelley on DSK3SPTVN1PROD with BILLS
and 
reasonable 
under 
section 
1862(a)(1)(A). 
‘‘(II) REQUIREMENTS
FOR
DE-
TERMINATION.—A recovery audit con-
tractor or entity adjudicating such 
provider appeal shall, before com-
pleting a determination described in 
subclause (I), assess and make a spe-
cific finding as to whether the denied 
inpatient hospital services were medi-
cally necessary and reasonable in an 
outpatient setting of the hospital. 
‘‘(ii) RESUBMISSION.—The term ‘re-
submission’ includes, with respect to a 
specified claim of a hospital, the submis-
sion by the hospital of a new claim or of 
an adjusted original claim.’’. 
(2) CONFORMING AMENDMENT FOR MEDICARE 
ADMINISTRATIVE CONTRACTORS.—Subsection (h) of 
section 1874A of the Social Security Act (42 U.S.C. 
1395kk–1), as added by section 3(b), is further 
amended by adding at the end the following new 
paragraph: 
‘‘(3) TREATMENT OF RESUBMISSION OF SPECI-
FIED CLAIMS AS ORIGINAL CLAIMS.— 
VerDate Mar 15 2010 
15:58 Mar 27, 2013
Jkt 029200
PO 00000
Frm 00021
Fmt 6652
Sfmt 6201
E:\BILLS\H1250.IH
H1250
tkelley on DSK3SPTVN1PROD with BILLS
‘‘(A) TREATMENT AS ORIGINAL CLAIM.— 
The resubmission of a specified claim (as de-
fined in subparagraph (C)) shall be deemed to 
be an original claim for purposes of— 
‘‘(i) payment under part B; and 
‘‘(ii) provisions under this title relat-
ing to— 
‘‘(I) the authority of a hospital to 
resubmit a claim for payment under 
the appropriate section of this title; 
and 
‘‘(II) requirements for the timely 
submission of claims, including under 
sections 1814(a), 1842(b)(3), and 
1835(a). 
‘‘(B) PAYMENT FOR ITEMS AND SERVICES 
UNDER RESUBMITTED CLAIM.—Payment shall 
be made for a specified claim resubmitted under 
subparagraph (A) for all the items and services 
furnished for which payment may be made 
under part B. 
‘‘(C) DEFINITIONS.—In this paragraph: 
‘‘(i) SPECIFIED CLAIM.— 
‘‘(I) IN
GENERAL.—The term 
‘specified claim’ means a claim sub-
VerDate Mar 15 2010 
15:58 Mar 27, 2013
Jkt 029200
PO 00000
Frm 00022
Fmt 6652
Sfmt 6201
E:\BILLS\H1250.IH
H1250
tkelley on DSK3SPTVN1PROD with BILLS
mitted by a hospital for payment 
under part A for inpatient hospital 
services which a medicare administra-
tive contractor (or entity adjudicating 
a hospital appeal of a Medicare claim 
denied payment by a medicare admin-
istrative contractor) determines, sub-
ject to subclause (II), that the inpa-
tient hospital services were not medi-
cally necessary and reasonable under 
section 1862(a)(1)(A). 
‘‘(II) REQUIREMENTS
FOR
DE-
TERMINATION.—A medicare adminis-
trative contractor or entity adjudi-
cating such provider appeal shall, be-
fore completing a determination de-
scribed in subclause (I), assess and 
make a specific finding as to whether 
the denied inpatient hospital services 
were medically necessary and reason-
able in an outpatient setting of the 
hospital. 
‘‘(ii) RESUBMISSION.—The term ‘re-
submission’ includes, with respect to a 
specified claim of a hospital, the submis-
VerDate Mar 15 2010 
15:58 Mar 27, 2013
Jkt 029200
PO 00000
Frm 00023
Fmt 6652
Sfmt 6201
E:\BILLS\H1250.IH
H1250
tkelley on DSK3SPTVN1PROD with BILLS
sion by the hospital of a new claim or of 
an adjusted original claim.’’. 
(3) CONFORMING AMENDMENT FOR CERT CON-
TRACTORS.— 
(A) TREATMENT
OF
RESUBMISSION
OF 
SPECIFIED
CLAIMS
AS
ORIGINAL
CLAIMS.—A 
Comprehensive Error Rate Testing (CERT) 
program contractor with a contract with the 
Secretary of Health and Human Services to re-
view error rates under title XVIII of the Social 
Security Act (42 U.S.C. 1395 et seq.) shall 
deem the resubmission of a specified claim (as 
defined in subparagraph (C)) as an original 
claim for purposes of— 
(i) payment under part B of such title 
XVII; and 
(ii) provisions under such title relating 
to— 
(I) the authority of a hospital to 
resubmit a claim for payment under 
the appropriate section of such title; 
and 
(II) requirements for the timely 
submission of claims, including under 
sections 1814(a), 1842(b)(3), and 
VerDate Mar 15 2010 
15:58 Mar 27, 2013
Jkt 029200
PO 00000
Frm 00024
Fmt 6652
Sfmt 6201
E:\BILLS\H1250.IH
H1250
tkelley on DSK3SPTVN1PROD with BILLS
1835(a) of such Act (42 U.S.C. 
1395f(a), 1395u(b)(3), and 1395n(a), 
respectively). 
(B) PAYMENT FOR ITEMS AND SERVICES 
UNDER RESUBMITTED CLAIM.—Payment shall 
be made for a specified claim resubmitted under 
subparagraph (A) for all the items and services 
furnished for which payment may be made 
under part B of such title XVIII. 
(C) DEFINITIONS.—In this paragraph: 
(i) SPECIFIED CLAIM.— 
(I) 
IN
GENERAL.—The 
term 
‘‘specified claim’’ means a claim sub-
mitted by a hospital (as defined in 
section 1861(e) of such Act (42 
U.S.C. 1395x(e))) for payment under 
title XVIII of such Act for inpatient 
hospital services which a Comprehen-
sive Error Rate Testing (CERT) pro-
gram contractor (or entity adjudi-
cating a hospital appeal of a Medicare 
claim denied payment by a CERT 
program contractor) determines the 
inpatient hospital services were not 
medically necessary and reasonable 
VerDate Mar 15 2010 
15:58 Mar 27, 2013
Jkt 029200
PO 00000
Frm 00025
Fmt 6652
Sfmt 6201
E:\BILLS\H1250.IH
H1250
tkelley on DSK3SPTVN1PROD with BILLS
under section 1862(a)(1)(A) of such 
Act (42 U.S.C. 1395y(a)(1)(A)). 
(II) REQUIREMENTS FOR DETER-
MINATION.—A CERT program con-
tractor or entity adjudicating such 
provider appeal shall, before com-
pleting a determination described in 
subclause (I), assess and make a spe-
cific finding as to whether the denied 
inpatient hospital services were medi-
cally necessary and reasonable in an 
outpatient setting of the hospital. 
(ii) RESUBMISSION.—The term ‘‘re-
submission’’ includes, with respect to a 
specified claim of a hospital, the submis-
sion by the hospital of a new claim or of 
an adjusted original claim. 
(iii) EFFECTIVE DATE.—The amend-
ments made by paragraphs (1) and (2), 
and the provisions of paragraph (3), shall 
apply to contracts entered into or renewed 
with recovery audit contractors under sec-
tion 1893(h) of the Social Security Act (42 
U.S.C. 1395ddd(h)), medicare administra-
tive contractors under section 1874A of 
VerDate Mar 15 2010 
15:58 Mar 27, 2013
Jkt 029200
PO 00000
Frm 00026
Fmt 6652
Sfmt 6201
E:\BILLS\H1250.IH
H1250
tkelley on DSK3SPTVN1PROD with BILLS
the 
Social 
Security 
Act 
(42 
U.S.C. 
1395kk–1) and Comprehensive Error Rate 
Testing (CERT) program contractors, re-
spectively, on or after the date of the en-
actment of this Act. 
(b) TREATMENT
OF
AUDITED
CLAIMS
AS
RE-
OPENED.— 
(1) RECOVERY AUDITORS.—Section 1893(h)(4) 
of 
the 
Social 
Security 
Act 
(42 
U.S.C. 
1395ddd(h)(4)) is amended by adding after and 
below subparagraph (B) the following: ‘‘For pur-
poses of the ability of a hospital to resubmit a claim 
for payment under the appropriate section of this 
title and for purposes of requirements for the timely 
submission of claims by hospitals, including under 
sections 1814(a), 1842(b)(3), and 1835(a), any 
claim that is the subject of an audit by a recovery 
audit contractor with a contract under this section 
shall be deemed to be a reopened claim. Such re-
opened claims are not subject to the timely filing 
limitations under such sections (and related regula-
tions) and shall be adjusted and paid without regard 
to such timely filing limitations.’’. 
(2) CONFORMING AMENDMENT FOR MEDICARE 
ADMINISTRATIVE CONTRACTORS.—Section 1874A(h) 
VerDate Mar 15 2010 
15:58 Mar 27, 2013
Jkt 029200
PO 00000
Frm 00027
Fmt 6652
Sfmt 6201
E:\BILLS\H1250.IH
H1250
tkelley on DSK3SPTVN1PROD with BILLS
of the Social Security Act (42 U.S.C. 1395kk–1(h)), 
as added by section 3(b) and as amended by sub-
section (a)(2), is further amended by adding at the 
end the following new paragraph: 
‘‘(4) TREATMENT OF AUDITED CLAIMS AS RE-
OPENED.—For purposes of the ability of a hospital 
to resubmit a claim for payment under the appro-
priate provisions of this title and for purposes of re-
quirements for the timely submission of claims by 
hospitals, 
including 
under 
sections 
1814(a), 
1842(b)(3), and 1835(a), any claim that is the sub-
ject of an audit by a medicare administrative con-
tractor with a contract under this section shall be 
deemed to be a reopened claim. Such reopened 
claims are not subject to the timely filing limitations 
under such sections (and related regulations) and 
shall be adjusted and paid without regard to such 
timely filing limitations.’’. 
(3) CONFORMING AMENDMENT FOR CERT CON-
TRACTORS.— 
(A) TREATMENT OF AUDITED CLAIMS AS 
REOPENED.—Any claim made for payment for 
services furnished by a hospital under title 
XVIII of the Social Security Act (42 U.S.C. 
1395 et seq.) that is the subject of an audit by 
VerDate Mar 15 2010 
15:58 Mar 27, 2013
Jkt 029200
PO 00000
Frm 00028
Fmt 6652
Sfmt 6201
E:\BILLS\H1250.IH
H1250
tkelley on DSK3SPTVN1PROD with BILLS
a Comprehensive Error Rate Testing (CERT) 
program contractor with a contract with the 
Secretary of Health and Human Services shall 
be deemed to be a reopened claim for purposes 
of the ability of such hospital to resubmit a 
claim for payment under the appropriate provi-
sions of such title XVIII and for purposes of re-
quirements for the timely submission of claims 
by hospitals under such title XVIII, including 
under 
sections 
1814(a), 
1842(b)(3), 
and 
1835(a) of the Social Security Act (42 U.S.C. 
1395f(a), 1395u(b)(3), and 1395n(a), respec-
tively). Such reopened claims are not subject to 
the timely filing limitations under such sections 
(and related regulations) and shall be adjusted 
and paid without regard to such timely filing 
limitations. 
(B) DEFINITION.—In this paragraph, the 
term ‘‘hospital’’ has the meaning given such 
term in subsection (e) of section 1861 of the 
Social Security Act (42 U.S.C. 1395x), and in-
cludes a psychiatric hospital as defined in sub-
section (f) of such section. 
(4) EFFECTIVE DATE.—The amendments made 
by paragraphs (1) and (2), and the provisions of 
VerDate Mar 15 2010 
15:58 Mar 27, 2013
Jkt 029200
PO 00000
Frm 00029
Fmt 6652
Sfmt 6201
E:\BILLS\H1250.IH
H1250
tkelley on DSK3SPTVN1PROD with BILLS
paragraph (3), shall take effect on the date of the 
enactment of this Act and apply to claims subject to 
audit on or after September 1, 2010. 
SEC. 6. REQUIREMENT FOR PHYSICIAN VALIDATION FOR 
MEDICAL NECESSITY DENIALS. 
(a) RECOVERY AUDITORS.—Section 1893(h) of the 
Social Security Act (42 U.S.C. 1395ddd(h)), as amended 
by sections 3(a), 4(a), and 6(a)(1), is further amended by 
adding at the end the following new paragraph: 
‘‘(13) PHYSICIAN VALIDATION OF MEDICAL NE-
CESSITY DENIALS MADE BY NON-PHYSICIAN REVIEW-
ERS.— 
‘‘(A) IN GENERAL.—Each contract under 
this section for a recovery audit contractor shall 
require that a physician (as defined in section 
1861(r)(1)) review each denial of a claim for 
medical necessity when a medical necessity re-
view of such claim is performed and a denial is 
made by an employee of the contractor who is 
not a physician (as so defined). 
‘‘(B) DETERMINATION; 
VALIDATION.—A 
physician reviewing a claim under subparagraph 
(A) shall— 
‘‘(i) make a determination whether 
the denial of the claim under the medical 
VerDate Mar 15 2010 
15:58 Mar 27, 2013
Jkt 029200
PO 00000
Frm 00030
Fmt 6652
Sfmt 6201
E:\BILLS\H1250.IH
H1250
tkelley on DSK3SPTVN1PROD with BILLS