I 
109TH CONGRESS 
1ST SESSION H. R. 2762 
To direct the Secretary of Health and Human Services to establish a dem-
onstration project for the use of an Internet-based form for submission 
of certain claims under the Medicare Program. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 7, 2005 
Mr. ANDREWS introduced the following bill; which was referred to the Com-
mittee on Ways and Means, and in addition to the Committee on Energy 
and Commerce, for a period to be subsequently determined by the Speak-
er, in each case for consideration of such provisions as fall within the ju-
risdiction of the committee concerned 
A BILL 
To direct the Secretary of Health and Human Services to 
establish a demonstration project for the use of an Inter-
net-based form for submission of certain claims under 
the Medicare Program. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. MEDICARE INTERNET-BASED CLAIMS SUBMIS-
SION DEMONSTRATION PROJECT. 
(a) 
ESTABLISHMENT
OF
DEMONSTRATION 
PROJECT.—The Secretary of Health and Human Services 
shall implement a demonstration project (in this section
referred to as the ‘‘project’’) to provide for the use of the 
Internet for the electronic submission of claims by pro-
viders of services under the medicare program for which 
the HCFA–1500 claim form is utilized. The Secretary 
may carry out the project directly or through a third-party 
contractor. 
(b) PROMPT PAYMENT OF CLAIMS.— 
(1) IN GENERAL.—Subject to paragraph (2), 
for each clean claim that is submitted electronically 
by a provider of services under the project, the Sec-
retary shall make payment to the provider of serv-
ices for the claim by not later than 30 days after re-
ceipt of the claim. 
(2) EXCEPTIONS FOR FRAUD.—Payment shall 
not be made if the Secretary determines the claim 
is fraudulent, in part or in whole. In promulgating 
regulations to carry out the project, the Secretary 
shall provide examples of fraudulent or otherwise de-
ficient claims for which payment would not be made 
under the medicare program or through the project. 
(c) DESIGNATION OF MEDICARE PAYMENT AREAS 
COVERED BY PROJECT.—The Secretary shall designate 
medicare payment areas located in the New England or 
mid-Atlantic areas as areas in which the project under this 
section will be conducted.
(d) 
CONSULTATION.—Before 
implementing 
the 
project under this section, the Secretary shall consult with 
affected parties on— 
(1) the design of the project, including require-
ments for electronic signatures; 
(2) the selection criteria for the third-party con-
tractor; and 
(3) the establishment of performance standards, 
as described in subsection (e). 
(e) PERFORMANCE STANDARDS.— 
(1) IN GENERAL.—The Secretary shall establish 
performance standards for the accuracy and timeli-
ness of claims filing, processing, and payment func-
tions performed under the project. 
(2) NONCOMPLIANCE.—In the event that a 
third-party contractor (if any) is not in substantial 
compliance with the performance standards estab-
lished under paragraph (1), such claims filing, proc-
essing, and payment functions shall be performed by 
the Secretary unless the Secretary contracts with 
another third-party contractor. 
(f) CONFIDENTIALITY OF INFORMATION.— 
(1) COMPLIANCE
WITH
HIPAA
RULES.—The 
Secretary shall ensure that a third-party contractor 
participating under the project shall protect the con-
fidentiality of individually identifiable health infor-
mation consistent with the standards for the privacy 
of such information promulgated by the Secretary 
under the Health Insurance Portability and Ac-
countability Act of 1996, or any subsequent com-
prehensive and more protective set of confidentiality 
standards enacted into law or promulgated by the 
Secretary. 
(2) PROHIBITION ON SALE OF INDIVIDUALLY 
IDENTIFIABLE
HEALTH
INFORMATION.—A third- 
party contractor participating under the project may 
not sell any individually identifiable health informa-
tion collected under the project. 
(g) REPORT TO CONGRESS.—The Secretary shall pe-
riodically submit reports to the Congress providing— 
(1) analysis of the overall effectiveness of the 
project; 
(2) findings with respect to— 
(A) increase or reduction in funds lost to 
fraud, abuse, misuse, mistakes, and any other 
factor the Secretary determines to be appro-
priate; and 
(B) changes in efficiency in processing 
claims submitted by electronic means compared 
with claims not submitted electronically; and
(3) recommendations on— 
(A) continuation of the project; and 
(B) extension or expansion of the use of 
Internet-based electronic claims submission 
under the medicare program. 
(h) WAIVER AUTHORITY.—The Secretary shall waive 
compliance with the requirements of title XVIII of the So-
cial Security Act to such extent and for such period as 
the Secretary determines is necessary to conduct the 
project. 
(i) DURATION.—A demonstration project under this 
section shall be conducted for a 3-year period. 
(j) DEFINITIONS.—In this section: 
(1) The term ‘‘medicare program’’ means the 
health insurance program established under title 
XVIII of the Social Security Act (42 U.S.C. 1395 et 
seq.). 
(2) The term ‘‘provider of service’’ has the 
meaning given that term in section 1861(u) of such 
Act (42 U.S.C. 1395x(u)), and includes a physician 
(as defined in section 1861(r) of such Act (42 
U.S.C. 1395x(r)).
(3) The term ‘‘clean claim’’ has the meaning 
given that term in section 1816(c)(2)(B)(i) of such 
Act (42 U.S.C. 1395h(c)(2)(B)(i)). 
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