performance requirements under section 1874A(b)
of the Social Security Act, as inserted by paragraph
(1), the Secretary shall consider inclusion of the per-
formance standards described in sections 1816(f)(2)
of such Act (relating to timely processing of recon-
siderations and applications for exemptions) and sec-
tion 1842(b)(2)(B) of such Act (relating to timely
review of determinations and fair hearing requests),
as such sections were in effect before the date of the
enactment of this Act.
(b) CONFORMING AMENDMENTS TO SECTION 1816
(RELATING TO FISCAL INTERMEDIARIES).—Section 1816
(42 U.S.C. 1395h) is amended as follows:
(1) The heading is amended to read as follows:
‘‘PROVISIONS RELATING TO THE ADMINISTRATION OF
PART A’’.
(2) Subsection (a) is amended to read as fol-
lows:
‘‘(a) The administration of this part shall be con-
ducted through contracts with medicare administrative
contractors under section 1874A.’’.
(3) Subsection (b) is repealed.
(4) Subsection (c) is amended—
(A) by striking paragraph (1); and
(B) in each of paragraphs (2)(A) and
(3)(A), by striking ‘‘agreement under this sec-
tion’’ and inserting ‘‘contract under section
1874A that provides for making payments
under this part’’.
(5) Subsections (d) through (i) are repealed.
(6) Subsections (j) and (k) are each amended—
(A) by striking ‘‘An agreement with an
agency or organization under this section’’ and
inserting ‘‘A contract with a medicare adminis-
trative contractor under section 1874A with re-
spect to the administration of this part’’; and
(B) by striking ‘‘such agency or organiza-
tion’’ and inserting ‘‘such medicare administra-
tive contractor’’ each place it appears.
(7) Subsection (l) is repealed.
(c) CONFORMING AMENDMENTS TO SECTION 1842
(RELATING
TO CARRIERS).—Section 1842 (42 U.S.C.
1395u) is amended as follows:
(1) The heading is amended to read as follows:
‘‘PROVISIONS RELATING TO THE ADMINISTRATION OF
PART B’’.
(2) Subsection (a) is amended to read as fol-
lows:
‘‘(a) The administration of this part shall be con-
ducted through contracts with medicare administrative
contractors under section 1874A.’’.
(3) Subsection (b) is amended—
(A) by striking paragraph (1);
(B) in paragraph (2)—
(i) by striking subparagraphs (A) and
(B);
(ii) in subparagraph (C), by striking
‘‘carriers’’ and inserting ‘‘medicare admin-
istrative contractors’’; and
(iii) by striking subparagraphs (D)
and (E);
(C) in paragraph (3)—
(i) in the matter before subparagraph
(A), by striking ‘‘Each such contract shall
provide that the carrier’’ and inserting
‘‘The Secretary’’;
(ii) by striking ‘‘will’’ the first place it
appears in each of subparagraphs (A), (B),
(F), (G), (H), and (L) and inserting
‘‘shall’’;
(iii) in subparagraph (B), in the mat-
ter before clause (i), by striking ‘‘to the
policyholders and subscribers of the car-
rier’’ and inserting ‘‘to the policyholders
and subscribers of the medicare adminis-
trative contractor’’;
(iv) by striking subparagraphs (C),
(D), and (E);
(v) in subparagraph (H)—
(I) by striking ‘‘if it makes deter-
minations or payments with respect to
physicians’ services,’’; and
(II) by striking ‘‘carrier’’ and in-
serting ‘‘medicare administrative con-
tractor’’;
(vi) by striking subparagraph (I);
(vii) in subparagraph (L), by striking
the semicolon and inserting a period;
(viii) in the first sentence, after sub-
paragraph (L), by striking ‘‘and shall con-
tain’’ and all that follows through the pe-
riod; and
(ix) in the seventh sentence, by insert-
ing ‘‘medicare administrative contractor,’’
after ‘‘carrier,’’; and
(D) by striking paragraph (5);
(E) in paragraph (6)(D)(iv), by striking
‘‘carrier’’ and inserting ‘‘medicare administra-
tive contractor’’; and
(F) in paragraph (7), by striking ‘‘the car-
rier’’ and inserting ‘‘the Secretary’’ each place
it appears.
(4) Subsection (c) is amended—
(A) by striking paragraph (1);
(B) in paragraph (2), by striking ‘‘contract
under this section which provides for the dis-
bursement of funds, as described in subsection
(a)(1)(B),’’ and inserting ‘‘contract under sec-
tion 1874A that provides for making payments
under this part’’;
(C) in paragraph (3)(A), by striking ‘‘sub-
section 
(a)(1)(B)’’ 
and 
inserting 
‘‘section
1874A(a)(3)(B)’’;
(D) in paragraph (4), by striking ‘‘carrier’’
and inserting ‘‘medicare administrative con-
tractor’’; and
(E) by striking paragraphs (5) and (6).
(5) Subsections (d), (e), and (f) are repealed.
(6) Subsection (g) is amended by striking ‘‘car-
rier or carriers’’ and inserting ‘‘medicare administra-
tive contractor or contractors’’.
(7) Subsection (h) is amended—
(A) in paragraph (2)—
(i) by striking ‘‘Each carrier having
an agreement with the Secretary under
subsection (a)’’ and inserting ‘‘The Sec-
retary’’; and
(ii) by striking ‘‘Each such carrier’’
and inserting ‘‘The Secretary’’;
(B) in paragraph (3)(A)—
(i) by striking ‘‘a carrier having an
agreement with the Secretary under sub-
section (a)’’ and inserting ‘‘medicare ad-
ministrative contractor having a contract
under section 1874A that provides for
making payments under this part’’; and
(ii) by striking ‘‘such carrier’’ and in-
serting ‘‘such contractor’’;
(C) in paragraph (3)(B)—
(i) by striking ‘‘a carrier’’ and insert-
ing ‘‘a medicare administrative contractor’’
each place it appears; and
(ii) by striking ‘‘the carrier’’ and in-
serting ‘‘the contractor’’ each place it ap-
pears; and
(D) in paragraphs (5)(A) and (5)(B)(iii),
by striking ‘‘carriers’’ and inserting ‘‘medicare
administrative contractors’’ each place it ap-
pears.
(8) Subsection (l) is amended—
(A) in paragraph (1)(A)(iii), by striking
‘‘carrier’’ and inserting ‘‘medicare administra-
tive contractor’’; and
(B) in paragraph (2), by striking ‘‘carrier’’
and inserting ‘‘medicare administrative con-
tractor’’.
(9) Subsection (p)(3)(A) is amended by striking
‘‘carrier’’ and inserting ‘‘medicare administrative
contractor’’.
(10) Subsection (q)(1)(A) is amended by strik-
ing ‘‘carrier’’.
(d) EFFECTIVE DATE; TRANSITION RULE.—
(1) EFFECTIVE DATE.—
(A) IN
GENERAL.—Except as otherwise
provided in this subsection, the amendments
made by this section shall take effect on Octo-
ber 1, 2003, and the Secretary is authorized to
take such steps before such date as may be nec-
essary to implement such amendments on a
timely basis.
(B) CONSTRUCTION
FOR
CURRENT
CON-
TRACTS.—Such amendments shall not apply to
contracts in effect before the date specified
under subparagraph (A) that continue to retain
the terms and conditions in effect on such date
(except as otherwise provided under this Act,
other than under this section) until such date
as the contract is let out for competitive bid-
ding under such amendments.
(C) DEADLINE
FOR
COMPETITIVE
BID-
DING.—The Secretary shall provide for the let-
ting by competitive bidding of all contracts for
functions of medicare administrative contrac-
tors for annual contract periods that begin on
or after October 1, 2008.
(D) WAIVER
OF
PROVIDER
NOMINATION
PROVISIONS DURING TRANSITION.—During the
period beginning on the date of the enactment
of this Act and before the date specified under
subparagraph (A), the Secretary may enter into
new agreements under section 1816 of the So-
cial Security Act (42 U.S.C. 1395h) without re-
gard to any of the provider nomination provi-
sions of such section.
(2) GENERAL
TRANSITION
RULES.—The Sec-
retary shall take such steps, consistent with para-
graph (1)(B) and (1)(C), as are necessary to provide
for an appropriate transition from contracts under
section 1816 and section 1842 of the Social Security
Act (42 U.S.C. 1395h, 1395u) to contracts under
section 1874A, as added by subsection (a)(1).
(3) AUTHORIZING
CONTINUATION
OF
MIP
FUNCTIONS
UNDER
CURRENT
CONTRACTS
AND
AGREEMENTS AND UNDER ROLLOVER CONTRACTS.—
The provisions contained in the exception in section
1893(d)(2) of the Social Security Act (42 U.S.C.
1395ddd(d)(2)) shall continue to apply notwith-
standing the amendments made by this section, and
any reference in such provisions to an agreement or
contract shall be deemed to include a contract under
section 1874A of such Act, as inserted by subsection
(a)(1), that continues the activities referred to in
such provisions.
(e) REFERENCES.—On and after the effective date
provided under subsection (d)(1), any reference to a fiscal
intermediary or carrier under title XI or XVIII of the So-
cial Security Act (or any regulation, manual instruction,
interpretative rule, statement of policy, or guideline issued
to carry out such titles) shall be deemed a reference to
an appropriate medicare administrative contractor (as
provided under section 1874A of the Social Security Act).
(f) REPORTS ON IMPLEMENTATION.—
(1) PLAN FOR IMPLEMENTATION.—By not later
than October 1, 2002, the Secretary shall submit a
report to Congress and the Comptroller General of
the United States that describes the plan for imple-
mentation of the amendments made by this section.
The Comptroller General shall conduct an evaluation
of such plan and shall submit to Congress, not later
than 6 months after the date the report is received,
a report on such evaluation and shall include in such
report such recommendations as the Comptroller
General deems appropriate.
(2) STATUS OF IMPLEMENTATION.—The Sec-
retary shall submit a report to Congress not later
than October 1, 2006, that describes the status of
implementation of such amendments and that in-
cludes a description of the following:
(A) The number of contracts that have
been competitively bid as of such date.
(B) The distribution of functions among
contracts and contractors.
(C) A timeline for complete transition to
full competition.
(D) A detailed description of how the Sec-
retary has modified oversight and management
of medicare contractors to adapt to full com-
petition.
SEC. 202. REQUIREMENTS FOR INFORMATION SECURITY
FOR MEDICARE ADMINISTRATIVE CONTRAC-
TORS.
(a) IN GENERAL.—Section 1874A, as added by sec-
tion 201(a)(1), is amended by adding at the end the fol-
lowing new subsection:
‘‘(e) REQUIREMENTS
FOR
INFORMATION
SECU-
RITY.—
‘‘(1) DEVELOPMENT
OF
INFORMATION
SECU-
RITY
PROGRAM.—A medicare administrative con-
tractor that performs the functions referred to in
subparagraphs (A) and (B) of subsection (a)(4) (re-
lating to determining and making payments) shall
implement a contractor-wide information security
program to provide information security for the op-
eration and assets of the contractor with respect to
such functions under this title. An information secu-
rity program under this paragraph shall meet the re-
quirements for information security programs im-
posed on Federal agencies under section 3534(b)(2)
of title 44, United States Code (other than require-
ments under subparagraphs (B)(ii), (F)(iii), and
(F)(iv) of such section).
‘‘(2) INDEPENDENT AUDITS.—
‘‘(A) PERFORMANCE OF ANNUAL EVALUA-
TIONS.—Each year a medicare administrative
contractor that performs the functions referred
to in subparagraphs (A) and (B) of subsection
(a)(4) (relating to determining and making pay-
ments) shall undergo an evaluation of the infor-
mation security of the contractor with respect
to such functions under this title. The evalua-
tion shall—
‘‘(i) be performed by an entity that
meets such requirements for independence
as the Inspector General of the Depart-
ment of Health and Human Services may
establish; and
‘‘(ii) test the effectiveness of informa-
tion security control techniques for an ap-
propriate subset of the contractor’s infor-
mation systems (as defined in section
3502(8) of title 44, United States Code)
relating to such functions under this title
and an assessment of compliance with the
requirements of this subsection and related
information security policies, procedures,
standards and guidelines.
‘‘(B) DEADLINE
FOR
INITIAL
EVALUA-
TION.—
‘‘(i) NEW CONTRACTORS.—In the case
of a medicare administrative contractor
covered by this subsection that has not
previously performed the functions referred
to in subparagraphs (A) and (B) of sub-
section (a)(4) (relating to determining and
making payments) as a fiscal intermediary
or carrier under section 1816 or 1842, the
first independent evaluation conducted
pursuant subparagraph (A) shall be com-
pleted prior to commencing such functions.
‘‘(ii) OTHER
CONTRACTORS.—In the
case of a medicare administrative con-
tractor covered by this subsection that is
not described in clause (i), the first inde-
pendent evaluation conducted pursuant
subparagraph (A) shall be completed with-
in 1 year after the date the contractor
commences functions referred to in clause
(i) under this section.
‘‘(C) REPORTS ON EVALUATIONS.—
‘‘(i) TO THE INSPECTOR GENERAL.—
The results of independent evaluations
under subparagraph (A) shall be submitted
promptly to the Inspector General of the
Department of Health and Human Serv-
ices.
‘‘(ii) TO
CONGRESS.—The Inspector
General of Department of Health and
Human Services shall submit to Congress
annual reports on the results of such eval-
uations.’’.
(b) APPLICATION
OF REQUIREMENTS
TO FISCAL
INTERMEDIARIES AND CARRIERS.—
(1) IN
GENERAL.—The provisions of section
1874A(e)(2) of the Social Security Act (other than
subparagraph (B)), 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 pro-
visions.
(2) DEADLINE FOR INITIAL EVALUATION.—In
the case of such a fiscal intermediary or carrier with
an agreement or contract under such respective sec-
tion in effect as of the date of the enactment of this
Act, 
the 
first 
evaluation 
under 
section
1874A(e)(2)(A) of the Social Security Act (as added
by subsection (a)), pursuant to paragraph (1), shall
be completed (and a report on the evaluation sub-
mitted to the Secretary) by not later than 1 year
after such date.
TITLE III—EDUCATION AND
OUTREACH
SEC. 301. PROVIDER EDUCATION AND TECHNICAL ASSIST-
ANCE.
(a) COORDINATION OF EDUCATION FUNDING.—
(1) IN GENERAL.—The Social Security Act is
amended by inserting after section 1888 the fol-
lowing new section:
‘‘PROVIDER EDUCATION AND TECHNICAL ASSISTANCE
‘‘SEC. 1889. (a) COORDINATION
OF EDUCATION
FUNDING.—The Secretary shall coordinate the edu-
cational activities provided through medicare contractors
(as defined in subsection (g), including under section
1893) in order to maximize the effectiveness of Federal
education efforts for providers of services and suppliers.’’.
(2) EFFECTIVE DATE.—The amendment made
by paragraph (1) shall take effect on the date of the
enactment of this Act.
(3) REPORT.—Not later than October 1, 2002,
the Secretary shall submit to Congress a report that
includes a description and evaluation of the steps
taken to coordinate the funding of provider edu-
cation under section 1889(a) of the Social Security
Act, as added by paragraph (1).
(b) INCENTIVES TO IMPROVE CONTRACTOR PER-
FORMANCE.—
(1) IN GENERAL.—Section 1874A, as added by
section 201(a)(1) and as amended by section 202(a),
is amended by adding at the end the following new
subsection:
‘‘(f) INCENTIVES TO IMPROVE CONTRACTOR PER-
FORMANCE IN PROVIDER EDUCATION AND OUTREACH.—
In order to give medicare administrative contractors an
incentive to implement effective education and outreach
programs for providers of services and suppliers, the Sec-
retary shall develop and implement a methodology to
measure the specific claims payment error rates of such
contractors in the processing or reviewing of medicare
claims.’’.
(2) APPLICATION TO FISCAL INTERMEDIARIES
AND CARRIERS.—The provisions of section 1874A(f)
of the Social Security Act, as added by paragraph
(1), 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.
(3) GAO REPORT ON ADEQUACY OF METHOD-
OLOGY.—Not later than October 1, 2002, the Comp-
troller General of the United States shall submit to
Congress and to the Secretary a report on the ade-
quacy of the methodology under section 1874A(f)(1)
of the Social Security Act, as added by paragraph
(1), and shall include in the report such rec-
ommendations as the Comptroller General deter-
mines appropriate with respect to the methodology.
(4) REPORT ON USE OF METHODOLOGY IN AS-
SESSING
CONTRACTOR
PERFORMANCE.—Not later
than October 1, 2002, the Secretary shall submit to
Congress a report that describes how the Secretary
intends to use such methodology in assessing medi-
care contractor performance in implementing effec-
tive education and outreach programs, including
whether to use such methodology as a basis for per-
formance bonuses. The report shall include an anal-
ysis of the sources of identified errors and potential
changes in systems of contractors and rules of the
Secretary that could reduce claims error rates.
(c) PROVISION OF ACCESS TO AND PROMPT RE-
SPONSES FROM MEDICARE ADMINISTRATIVE CONTRAC-
TORS.—
(1) IN GENERAL.—Section 1874A, as added by
section 201(a)(1) and as amended by section 202(a)
and subsection (b), is further amended by adding at
the end the following new subsection:
‘‘(g) COMMUNICATIONS WITH BENEFICIARIES, PRO-
VIDERS OF SERVICES AND SUPPLIERS.—
‘‘(1) COMMUNICATION
STRATEGY.—The Sec-
retary shall develop a strategy for communications
with individuals entitled to benefits under part A or
enrolled under part B, or both, and with providers
of services and suppliers under this title.
‘‘(2) RESPONSE TO WRITTEN INQUIRIES.—Each
medicare administrative contractor shall, for those
providers of services and suppliers which submit
claims to the contractor for claims processing and
for those individuals entitled to benefits under part
A or enrolled under part B, or both, with respect to
whom claims are submitted for claims processing,
provide general written responses (which may be
through electronic transmission) in a clear, concise,
and accurate manner to inquiries of providers of
services, suppliers and individuals entitled to bene-
fits under part A or enrolled under part B, or both,
concerning the programs under this title within 45
business days of the date of receipt of such inquiries.
‘‘(3) RESPONSE
TO
TOLL-FREE
LINES.—The
Secretary shall ensure that each medicare adminis-
trative contractor shall provide, for those providers
of services and suppliers which submit claims to the
contractor for claims processing and for those indi-
viduals entitled to benefits under part A or enrolled
under part B, or both, with respect to whom claims
are submitted for claims processing, a toll-free tele-
phone number at which such individuals, providers
of services and suppliers may obtain information re-
garding billing, coding, claims, coverage, and other
appropriate information under this title.
‘‘(4) 
MONITORING
OF
CONTRACTOR
RE-
SPONSES.—
‘‘(A) IN GENERAL.—Each medicare admin-
istrative contractor shall, consistent with stand-
ards developed by the Secretary under subpara-
graph (B)—
‘‘(i) maintain a system for identifying
who provides the information referred to in
paragraphs (2) and (3); and
‘‘(ii) monitor the accuracy, consist-
ency, and timeliness of the information so
provided.
‘‘(B) DEVELOPMENT OF STANDARDS.—
‘‘(i) IN
GENERAL.—The Secretary
shall establish and make public standards
to monitor the accuracy, consistency, and
timeliness of the information provided in
response to written and telephone inquiries
under this subsection. Such standards shall
be consistent with the performance require-
ments established under subsection (b)(3).
‘‘(ii) 
EVALUATION.—In 
conducting
evaluations of individual medicare adminis-
trative contractors, the Secretary shall
take into account the results of the moni-
toring conducted under subparagraph (A)
taking into account as performance re-
quirements 
the 
standards 
established
under clause (i). The Secretary shall, in
consultation 
with 
organizations 
rep-
resenting providers of services, suppliers,
and individuals entitled to benefits under
part A or enrolled under part B, or both,
establish standards relating to the accu-
racy, consistency, and timeliness of the in-
formation so provided.’’.
‘‘(C) DIRECT
MONITORING.—Nothing in
this paragraph shall be construed as preventing
the Secretary from directly monitoring the ac-
curacy, consistency, and timeliness of the infor-
mation so provided.’’.
(2) EFFECTIVE DATE.—The amendment made
by paragraph (1) shall take effect October 1, 2002.
(3) APPLICATION TO FISCAL INTERMEDIARIES
AND CARRIERS.—The provisions of section 1874A(g)
of the Social Security Act, as added by paragraph
(1), 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.
(d) IMPROVED PROVIDER EDUCATION AND TRAIN-
ING.—
(1) IN GENERAL.—Section 1889, as added by
subsection (a), is amended by adding at the end the
following new subsections:
‘‘(b) ENHANCED EDUCATION AND TRAINING.—
‘‘(1) ADDITIONAL RESOURCES.—There are au-
thorized to be appropriated to the Secretary (in ap-
propriate part from the Federal Hospital Insurance
Trust Fund and the Federal Supplementary Medical
Insurance Trust Fund) $25,000,000 for each of fis-
cal years 2003 and 2004 and such sums as may be
necessary for succeeding fiscal years.
‘‘(2) USE.—The funds made available under
paragraph (1) shall be used to increase the conduct
by medicare contractors of education and training of
providers of services and suppliers regarding billing,
coding, and other appropriate items and may also be
used to improve the accuracy, consistency, and time-
liness of contractor responses.
‘‘(c) TAILORING EDUCATION AND TRAINING ACTIVI-
TIES FOR SMALL PROVIDERS OR SUPPLIERS.—
‘‘(1) IN GENERAL.—Insofar as a medicare con-
tractor conducts education and training activities, it
shall tailor such activities to meet the special needs
of small providers of services or suppliers (as defined
in paragraph (2)).
‘‘(2) SMALL PROVIDER OF SERVICES OR SUP-
PLIER.—In this subsection, the term ‘small provider
of services or supplier’ means—
‘‘(A) a provider of services with fewer than
25 full-time-equivalent employees; or
‘‘(B) a supplier with fewer than 10 full-
time-equivalent employees.’’.
(2) EFFECTIVE DATE.—The amendment made
by paragraph (1) shall take effect on October 1,
2002.
(e) 
REQUIREMENT
TO
MAINTAIN
INTERNET
SITES.—
(1) IN GENERAL.—Section 1889, as added by
subsection (a) and as amended by subsection (d), is
further amended by adding at the end the following
new subsection:
‘‘(d) INTERNET SITES; FAQS.—The Secretary, and
each medicare contractor insofar as it provides services
(including claims processing) for providers of services or
suppliers, shall maintain an Internet site which—
‘‘(1) provides answers in an easily accessible
format to frequently asked questions, and
‘‘(2) includes other published materials of the
contractor,
that relate to providers of services and suppliers under the
programs under this title (and title XI insofar as it relates
to such programs).’’.
(2) EFFECTIVE DATE.—The amendment made
by paragraph (1) shall take effect on October 1,
2002.
(f) ADDITIONAL
PROVIDER
EDUCATION
PROVI-
SIONS.—
(1) IN GENERAL.—Section 1889, as added by
subsection (a) and as amended by subsections (d)
and (e), is further amended by adding at the end the
following new subsections:
‘‘(e) ENCOURAGEMENT OF PARTICIPATION IN EDU-
CATION PROGRAM ACTIVITIES.—A medicare contractor
may not use a record of attendance at (or failure to at-
tend) educational activities or other information gathered
during an educational program conducted under this sec-
tion or otherwise by the Secretary to select or track pro-
viders of services or suppliers for the purpose of con-
ducting any type of audit or prepayment review.
‘‘(f) CONSTRUCTION.—Nothing in this section or sec-
tion 1893(g) shall be construed as providing for disclosure
by a medicare contractor of information that would com-
promise pending law enforcement activities or reveal find-
ings of law enforcement-related audits.
‘‘(g) DEFINITIONS.—For purposes of this section, the
term ‘medicare contractor’ includes the following:
‘‘(1) A medicare administrative contractor with
a contract under section 1874A, including a fiscal
intermediary with a contract under section 1816 and
a carrier with a contract under section 1842.
‘‘(2) An eligible entity with a contract under
section 1893.
Such term does not include, with respect to activities of
a specific provider of services or supplier an entity that
has no authority under this title or title IX with respect
to such activities and such provider of services or sup-
plier.’’.
(2) EFFECTIVE DATE.—The amendment made
by paragraph (1) shall take effect on the date of the
enactment of this Act.
SEC. 302. SMALL PROVIDER TECHNICAL ASSISTANCE DEM-
ONSTRATION PROGRAM.
(a) ESTABLISHMENT.—
(1) IN GENERAL.—The Secretary shall establish
a demonstration program (in this section referred to
as the ‘‘demonstration program’’) under which tech-
nical assistance described in paragraph (2) is made
available, upon request and on a voluntary basis, to
small providers of services or suppliers in order to
improve compliance with the applicable requirements
of the programs under medicare program under title
XVIII of the Social Security Act (including provi-
sions of title XI of such Act insofar as they relate
to such title and are not administered by the Office
of the Inspector General of the Department of
Health and Human Services).
(2) FORMS OF TECHNICAL ASSISTANCE.—The
technical assistance described in this paragraph is—
(A) evaluation and recommendations re-
garding billing and related systems; and
(B) information and assistance regarding
policies and procedures under the medicare pro-
gram, including coding and reimbursement.
(3) SMALL PROVIDERS OF SERVICES OR SUP-
PLIERS.—In this section, the term ‘‘small providers
of services or suppliers’’ means—
(A) a provider of services with fewer than
25 full-time-equivalent employees; or
(B) a supplier with fewer than 10 full-
time-equivalent employees.
(b) QUALIFICATION
OF
CONTRACTORS.—In con-
ducting the demonstration program, the Secretary shall
enter into contracts with qualified organizations (such as
peer review organizations or entities described in section
1889(g)(2) of the Social Security Act, as inserted by sec-
tion 5(f)(1)) with appropriate expertise with billing sys-
tems of the full range of providers of services and sup-
pliers to provide the technical assistance. In awarding such
contracts, the Secretary shall consider any prior investiga-
tions of the entity’s work by the Inspector General of De-
partment of Health and Human Services or the Comp-
troller General of the United States.
(c) DESCRIPTION OF TECHNICAL ASSISTANCE.—The
technical assistance provided under the demonstration
program shall include a direct and in-person examination
of billing systems and internal controls of small providers
of services or suppliers to determine program compliance
and to suggest more efficient or effective means of achiev-
ing such compliance.
(d) AVOIDANCE OF RECOVERY ACTIONS FOR PROB-
LEMS IDENTIFIED AS CORRECTED.—The Secretary shall
provide that, absent evidence of fraud and notwith-
standing any other provision of law, any errors found in
a compliance review for a small provider of services or sup-
plier that participates in the demonstration program shall
not be subject to recovery action if the technical assistance
personnel under the program determine that—
(1) the problem that is the subject of the com-
pliance review has been corrected to their satisfac-
tion within 30 days of the date of the visit by such
personnel to the small provider of services or sup-
plier; and
(2) such problem remains corrected for such pe-
riod as is appropriate.
The previous sentence applies only to claims filed as part
of the demonstration program and lasts only for the dura-
tion of such program and only as long as the small pro-
vider of services or supplier is a participant in such pro-
gram.
(e) GAO EVALUATION.—Not later than 2 years after
the date of the date the demonstration program is first
implemented, the Comptroller General, in consultation
with the Inspector General of the Department of Health
and Human Services, shall conduct an evaluation of the
demonstration program. The evaluation shall include a de-
termination of whether claims error rates are reduced for
small providers of services or suppliers who participated
in the program and the extent of improper payments made
as a result of the demonstration program. The Comp-
troller General shall submit a report to the Secretary and
the Congress on such evaluation and shall include in such
report recommendations regarding the continuation or ex-
tension of the demonstration program.
(f) FINANCIAL PARTICIPATION BY PROVIDERS.—The
provision of technical assistance to a small provider of
services or supplier under the demonstration program is
conditioned upon the small provider of services or supplier
paying an amount estimated (and disclosed in advance of
a provider’s or supplier’s participation in the program) to
be equal to 25 percent of the cost of the technical assist-
ance.
(g) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated to the Secretary (in ap-
propriate part from the Federal Hospital Insurance Trust
Fund and the Federal Supplementary Medical Insurance
Trust Fund) to carry out the demonstration program—
(1) for fiscal year 2003, $1,000,000, and
(2) for fiscal year 2004, $6,000,000.
SEC. 303. MEDICARE PROVIDER OMBUDSMAN; MEDICARE
BENEFICIARY OMBUDSMAN.
(a) MEDICARE
PROVIDER
OMBUDSMAN.—Section
1868 (42 U.S.C. 1395ee) is amended—
(1) by adding at the end of the heading the fol-
lowing: ‘‘; MEDICARE PROVIDER OMBUDSMAN’’;
(2) by inserting ‘‘PRACTICING PHYSICIANS AD-
VISORY COUNCIL.—(1)’’ after ‘‘(a)’’;
(3) in paragraph (1), as so redesignated under
paragraph (2), by striking ‘‘in this section’’ and in-
serting ‘‘in this subsection’’;
(4) by redesignating subsections (b) and (c) as
paragraphs (2) and (3), respectively; and
(5) by adding at the end the following new sub-
section:
‘‘(b) MEDICARE PROVIDER OMBUDSMAN.—The Sec-
retary shall appoint within the Department of Health and
Human Services a Medicare Provider Ombudsman. The
Ombudsman shall—
‘‘(1) provide assistance, on a confidential basis,
to providers of services and suppliers with respect to
complaints, grievances, and requests for information
concerning the programs under this title (including
provisions of title XI insofar as they relate to this
title and are not administered by the Office of the
Inspector General of the Department of Health and
Human Services) and in the resolution of unclear or
conflicting guidance given by the Secretary and
medicare contractors to such providers of services
and suppliers regarding such programs and provi-
sions and requirements under this title and such
provisions; and
‘‘(2) submit recommendations to the Secretary
for improvement in the administration of this title
and such provisions, including—
‘‘(A) recommendations to respond to recur-
ring patterns of confusion in this title and such
provisions (including recommendations regard-
ing suspending imposition of sanctions where
there is widespread confusion in program ad-
ministration), and
‘‘(B) recommendations to provide for an
appropriate and consistent response (including
not providing for audits) in cases of self-identi-
fied overpayments by providers of services and
suppliers.
The Ombudsman shall not serve as an advocate for any
increases in payments or new coverage of services, but
may identify issues and problems in payment or coverage
policies.’’.
(b) MEDICARE BENEFICIARY OMBUDSMAN.—Title
XVIII is amended by inserting after section 1806 the fol-
lowing new section:
‘‘MEDICARE BENEFICIARY OMBUDSMAN
‘‘SEC. 1807. (a) IN GENERAL.—The Secretary shall
appoint within the Department of Health and Human
Services a Medicare Beneficiary Ombudsman who shall
have expertise and experience in the fields of health care
and education of (and assistance to) individuals entitled
to benefits under this title.
‘‘(b) DUTIES.—The Medicare Beneficiary Ombuds-
man shall—
‘‘(1) receive complaints, grievances, and re-
quests for information submitted by individuals enti-
tled to benefits under part A or enrolled under part
B, or both, with respect to any aspect of the medi-
care program;
‘‘(2) provide assistance with respect to com-
plaints, grievances, and requests referred to in para-
graph (1), including—
‘‘(A) assistance in collecting relevant infor-
mation for such individuals, to seek an appeal
of a decision or determination made by a fiscal
intermediary, carrier, Medicare+Choice organi-
zation, or the Secretary; and
‘‘(B) assistance to such individuals with
any problems arising from disenrollment from a
Medicare+Choice plan under part C; and
‘‘(3) submit annual reports to Congress and the
Secretary that describe the activities of the Office
and that include such recommendations for improve-
ment in the administration of this title as the Om-
budsman determines appropriate.
The Ombudsman shall not serve as an advocate for any
increases in payments or new coverage of services, but
may identify issues and problems in payment or coverage
policies.
‘‘(c) WORKING WITH HEALTH INSURANCE COUN-
SELING PROGRAMS.—To the extent possible, the Ombuds-
man shall work with health insurance counseling programs
(receiving funding under section 4360 of Omnibus Budget
Reconciliation Act of 1990) to facilitate the provision of
information to individuals entitled to benefits under part
A or enrolled under part B, or both regarding
Medicare+Choice plans and changes to those plans. Noth-
ing in this subsection shall preclude further collaboration
between the Ombudsman and such programs.’’.
(c) DEADLINE FOR APPOINTMENT.—The Secretary
shall appoint the Medicare Provider Ombudsman and the
Medicare Beneficiary Ombudsman, under the amendments
made by subsections (a) and (b), respectively, by not later
than 1 year after the date of the enactment of this Act.
(d) FUNDING.—There are authorized to be appro-
priated to the Secretary (in appropriate part from the
Federal Hospital Insurance Trust Fund and the Federal
Supplementary Medical Insurance Trust Fund) to carry
out the provisions of subsection (b) of section 1868 of the
Social Security Act (relating to the Medicare Provider
Ombudsman), as added by subsection (a)(5) and section
1807 of such Act (relating to the Medicare Beneficiary
Ombudsman), as added by subsection (b), such sums as
are necessary for fiscal year 2002 and each succeeding fis-
cal year.
(e) USE OF CENTRAL, TOLL-FREE NUMBER (1-800-
MEDICARE).—
(1) PHONE TRIAGE SYSTEM; LISTING IN MEDI-
CARE HANDBOOK INSTEAD OF OTHER TOLL-FREE
NUMBERS.—Section 1804(b) (42 U.S.C. 1395b–
2(b)) is amended by adding at the end the following:
‘‘The Secretary shall provide, through the toll-free
number 1-800-MEDICARE, for a means by which
individuals seeking information about, or assistance
with, such programs who phone such toll-free num-
ber are transferred (without charge) to appropriate
entities for the provision of such information or as-
sistance. Such toll-free number shall be the toll-free
number listed for general information and assistance
in the annual notice under subsection (a) instead of
the listing of numbers of individual contractors.’’.
(2) MONITORING ACCURACY.—
(A) STUDY.—The Comptroller General of
the United States shall conduct a study to mon-
itor the accuracy and consistency of information
provided to individuals entitled to benefits
under part A or enrolled under part B, or both,
through the toll-free number 1-800-MEDI-
CARE, including an assessment of whether the
information provided is sufficient to answer
questions of such individuals. In conducting the
study, the Comptroller General shall examine
the education and training of the individuals
providing information through such number.
(B) REPORT.—Not later than 1 year after
the date of the enactment of this Act, the
Comptroller General shall submit to Congress a
report on the study conducted under subpara-
graph (A).
SEC. 304. BENEFICIARY OUTREACH DEMONSTRATION PRO-
GRAM.
(a) IN GENERAL.—The Secretary shall establish a
demonstration program (in this section referred to as the
‘‘demonstration program’’) under which medicare special-
ists employed by the Department of Health and Human
Services provide advice and assistance to individuals enti-
tled to benefits under part A of title XVIII of the Social
Security Act, or enrolled under part B of such title, or
both, regarding the medicare program at the location of
existing local offices of the Social Security Administration.
(b) LOCATIONS.—
(1) IN GENERAL.—The demonstration program
shall be conducted in at least 6 offices or areas.
Subject to paragraph (2), in selecting such offices
and areas, the Secretary shall provide preference for
offices with a high volume of visits by individuals re-
ferred to in subsection (a).
(2) ASSISTANCE FOR RURAL BENEFICIARIES.—
The Secretary shall provide for the selection of at
least 2 rural areas to participate in the demonstra-
tion program. In conducting the demonstration pro-
gram in such rural areas, the Secretary shall provide
for medicare specialists to travel among local offices
in a rural area on a scheduled basis.
(c) DURATION.—The demonstration program shall be
conducted over a 3-year period.
(d) EVALUATION AND REPORT.—
(1) EVALUATION.—The Secretary shall provide
for an evaluation of the demonstration program.
Such evaluation shall include an analysis of—
(A) utilization of, and satisfaction of those
individuals referred to in subsection (a) with,
the assistance provided under the program; and
(B) the cost-effectiveness of providing ben-
eficiary assistance through out-stationing medi-
care specialists at local offices of the Social Se-
curity Administration.
(2) REPORT.—The Secretary shall submit to
Congress a report on such evaluation and shall in-
clude in such report recommendations regarding the
feasibility of permanently out-stationing medicare
specialists at local offices of the Social Security Ad-
ministration.
TITLE IV—APPEALS AND
RECOVERY
SEC. 401. TRANSFER OF RESPONSIBILITY FOR MEDICARE
APPEALS.
(a) TRANSITION PLAN.—
(1) IN GENERAL.—Not later than October 1,
2002, the Commissioner of Social Security and the
Secretary shall develop and transmit to Congress
and the Comptroller General of the United States a
plan under which the functions of administrative law
judges responsible for hearing cases under title
XVIII of the Social Security Act (and related provi-
sions in title XI of such Act) are transferred from
the responsibility of the Commissioner and the So-
cial Security Administration to the Secretary and
the Department of Health and Human Services.
(2) GAO EVALUATION.—The Comptroller Gen-
eral of the United States shall evaluate the plan
and, not later than April 1, 2003, shall submit to
Congress a report on such evaluation.
(b) TRANSFER OF ADJUDICATION AUTHORITY.—
(1) IN
GENERAL.—Not earlier than July 1,
2003, and not later than October 1, 2003, the Com-
missioner of Social Security and the Secretary shall
implement the transition plan under subsection (a)
and transfer the administrative law judge functions
described in such subsection from the Social Secu-
rity Administration to the Secretary.
(2) ASSURING INDEPENDENCE OF JUDGES.—
The Secretary shall assure the independence of ad-
ministrative law judges performing the administra-
tive law judge functions transferred under para-
graph (1) from the Centers for Medicare & Medicaid
Services and its contractors.
(3) GEOGRAPHIC
DISTRIBUTION.—The Sec-
retary shall provide for an appropriate geographic
distribution of administrative law judges performing
the administrative law judge functions transferred
under paragraph (1) throughout the United States
to ensure timely access to such judges.
(4) 
HIRING
AUTHORITY.—Subject 
to 
the
amounts provided in advance in appropriations Act,
the Secretary shall have authority to hire adminis-
trative law judges to hear such cases, giving priority
to those judges with prior experience in handling
medicare appeals and in a manner consistent with
paragraph (3), and to hire support staff for such
judges.
(5) FINANCING.—Amounts payable under law
to the Commissioner for administrative law judges
performing the administrative law judge functions
transferred under paragraph (1) from the Federal
Hospital Insurance Trust Fund and the Federal
Supplementary Medical Insurance Trust Fund shall
become payable to the Secretary for the functions so
transferred.
(6) SHARED RESOURCES.—The Secretary shall
enter into such arrangements with the Commissioner
as may be appropriate with respect to transferred
functions of administrative law judges to share office
space, support staff, and other resources, with ap-
propriate reimbursement from the Trust Funds de-
scribed in paragraph (5).
(c) INCREASED FINANCIAL SUPPORT.—In addition to
any amounts otherwise appropriated, to ensure timely ac-
tion on appeals before administrative law judges and the
Departmental Appeals Board consistent with section 1869
of the Social Security Act (as amended by section 521 of
BIPA, 114 Stat. 2763A–534), there are authorized to be
appropriated (in appropriate part from the Federal Hos-
pital Insurance Trust Fund and the Federal Supple-
mentary Medical Insurance Trust Fund) to the Secretary
such sums as are necessary for fiscal year 2003 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 opportuni-
ties for administrative law judges (and their staffs);
and
(3) increase the staff of the Departmental Ap-
peals Board.
(d) 
CONFORMING
AMENDMENT.—Section
1869(f)(2)(A)(i) (42 U.S.C. 1395ff(f)(2)(A)(i)), as added
by section 522(a) of BIPA (114 Stat. 2763A–543), is
amended by striking ‘‘of the Social Security Administra-
tion’’.
SEC. 402. PROCESS FOR EXPEDITED ACCESS TO REVIEW.
(a) EXPEDITED ACCESS TO JUDICIAL REVIEW.—Sec-
tion 1869(b) (42 U.S.C. 1395ff(b)) as amended by BIPA,
is amended—
(1) in paragraph (1)(A), by inserting ‘‘, subject
to paragraph (2),’’ before ‘‘to judicial review of the
Secretary’s final decision’’;
(2) in paragraph (1)(F)—
(A) by striking clause (ii);
(B) by striking ‘‘PROCEEDING’’ and all
that follows through ‘‘DETERMINATION’’ and in-
serting ‘‘DETERMINATIONS
AND
RECONSIDER-
ATIONS’’; and
(C) by redesignating subclauses (I) and
(II) as clauses (i) and (ii) and by moving the
indentation of such subclauses (and the matter
that follows) 2 ems to the left; and
(3) by adding at the end the following new
paragraph:
‘‘(2) EXPEDITED
ACCESS
TO
JUDICIAL
RE-
VIEW.—
‘‘(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)
may obtain access to judicial review when a re-
view panel (described in subparagraph (D)), on
its own motion or at the request of the appel-
lant, determines that no entity in the adminis-
trative appeals process has the authority to de-
cide the question of law or regulation relevant
to the matters in controversy and that there is
no material issue of fact in dispute. The appel-
lant may make such request only once with re-
spect to a question of law or regulation in a
case of an appeal.
‘‘(B) PROMPT DETERMINATIONS.—If, after
or coincident with appropriately filing a request
for an administrative hearing, the appellant re-
quests a determination by the appropriate re-
view panel that no review panel has the author-
ity 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 docu-
ments and materials as the appropriate review
panel shall require for purposes of making such
determination, such review panel shall make a
determination on the request in writing within
60 days after the date such review panel re-
ceives the request and such accompanying docu-
ments and materials. Such a determination by
such review panel shall be considered a final de-
cision and not subject to review by the Sec-
retary.
‘‘(C) ACCESS TO JUDICIAL REVIEW.—
‘‘(i) IN GENERAL.—If the appropriate
review panel—
‘‘(I) determines that there are no
material issues of fact in dispute and
that the only issue is one of law or
regulation that no review panel has
the authority to decide; or
‘‘(II) fails to make such deter-
mination 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 date of the determination described
in such subparagraph; or
‘‘(II) clause (i)(II), within 60
days of the end of the period provided
under subparagraph (B) for the deter-
mination.
‘‘(iii) VENUE.—Such action shall be
brought in the district court of the United
States for the judicial district 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 AMOUNTS IN CON-
TROVERSY.—Where a provider of services
or supplier seeks judicial review pursuant
to this paragraph, the amount in con-
troversy shall be subject to annual interest
beginning on the first day of the first
month beginning after the 60-day period
as determined pursuant to clause (ii) and
equal to the rate of interest on obligations
issued for purchase by the Federal Hos-
pital Insurance Trust Fund and by the
Federal Supplementary Medical Insurance
Trust Fund for the month in which the
civil action authorized under this para-
graph is commenced, to be awarded by the
reviewing court in favor of the prevailing
party. No interest awarded pursuant to the
preceding sentence shall be deemed income
or cost for the purposes of determining re-
imbursement due providers of services or
suppliers under this Act.
‘‘(D) REVIEW PANELS.—For purposes of
this subsection, a ‘review panel’ is a panel con-
sisting of 3 members (who shall be administra-
tive law judges, members of the Departmental
Appeals Board, or qualified individuals associ-
ated with a qualified independent contractor (as
defined in subsection (c)(2)) or with another
independent entity) designated by the Secretary
for purposes of making determinations under
this paragraph.’’.
(b) APPLICATION TO PROVIDER AGREEMENT DETER-
MINATIONS.—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 sub-
paragraph:
‘‘(B) An institution or agency described in subpara-
graph (A) that has filed for a hearing under subparagraph
(A) shall have expedited access to judicial review under
this subparagraph in the same manner as providers of
services, suppliers, and individuals entitled to benefits
under part A or enrolled under part B, or both, may ob-
tain expedited access to judicial review under the process
established under section 1869(b)(2). Nothing in this sub-
paragraph shall be construed to affect the application of
any remedy imposed under section 1819 during the pend-
ency of an appeal under this subparagraph.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to appeals filed on or after October
1, 2002.
(d) EXPEDITED REVIEW
OF CERTAIN PROVIDER
AGREEMENT DETERMINATIONS.—
(1) TERMINATION AND CERTAIN OTHER IMME-
DIATE REMEDIES.—The Secretary shall develop and
implement a process to expedite proceedings under
sections 1866(h) of the Social Security Act (42
U.S.C. 1395cc(h)) in which the remedy of termi-
nation of participation, or a remedy described in
clause (i) or (iii) of section 1819(h)(2)(B) of such
Act (42 U.S.C. 1395i–3(h)(2)(B)) which is applied
on an immediate basis, has been imposed. Under
such process priority shall be provided in cases of
termination.
(2) INCREASED FINANCIAL SUPPORT.—In addi-
tion to any amounts otherwise appropriated, to re-
duce by 50 percent the average time for administra-
tive 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 appropriate part from the Federal Hospital In-
surance Trust Fund and the Federal Supplementary
Medical Insurance Trust Fund) to the Secretary
such additional sums for fiscal year 2003 and each
subsequent fiscal year as may be necessary. The
purposes for which such amounts are available in-
clude increasing the number of administrative law
judges (and their staffs) and the appellate level staff
at the Departmental Appeals Board of the Depart-
ment of Health and Human Services and educating
such judges and staffs on long-term care issues.
SEC. 403. 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 BIPA and as amended by
section 402(a), is further amended by adding at the
end the following new paragraph:
‘‘(3) REQUIRING
FULL
AND
EARLY
PRESEN-
TATION OF EVIDENCE 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,
2002.
(b) USE OF PATIENTS’ MEDICAL RECORDS.—Section
1869(c)(3)(B)(i) (42 U.S.C. 1395ff(c)(3)(B)(i)), as
amended by BIPA, is amended by inserting ‘‘(including
the medical records of the individual involved)’’ after
‘‘clinical experience’’.
(c) NOTICE REQUIREMENTS
FOR MEDICARE AP-
PEALS.—
(1) INITIAL DETERMINATIONS AND REDETER-
MINATIONS.—Section 
1869(a) 
(42 
U.S.C.
1395ff(a)), as amended by BIPA, is amended by
adding at the end the following new paragraph:
‘‘(4) REQUIREMENTS
OF
NOTICE
OF
DETER-
MINATIONS
AND
REDETERMINATIONS.—A written
notice of a determination on an initial determination
or on a redetermination, insofar as such determina-
tion or redetermination results in a denial of a claim
for benefits, shall include—
‘‘(A) the specific reasons for the deter-
mination, including—
‘‘(i) upon request, the provision of the
policy, manual, or regulation used in mak-
ing the determination; and
‘‘(ii) as appropriate in the case of a
redetermination, a summary of the clinical
or scientific evidence used in making the
determination;
‘‘(B) the procedures for obtaining addi-
tional information concerning the determination
or redetermination; and
‘‘(C) notification of the right to seek a re-
determination or otherwise appeal the deter-
mination and instructions on how to initiate
such a redetermination or appeal under this
section.
The written notice on a redetermination 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.’’.
(2) 
RECONSIDERATIONS.—Section
1869(c)(3)(E) (42 U.S.C. 1395ff(c)(3)(E)), as
amended by BIPA, 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 instruc-
tions on how to initiate such appeal under this
section’’ after ‘‘such decision, ’’.
(3) APPEALS.—Section 1869(d) (42 U.S.C.
1395ff(d)), as amended by BIPA, is amended—
(A) in the heading, by inserting ‘‘; NO-
TICE’’ after ‘‘SECRETARY’’; and
(B) by adding at the end the following new
paragraph:
‘‘(4) NOTICE.—Notice of the decision of an ad-
ministrative law judge shall be in writing in a man-
ner calculated to be understood by the individual en-
titled to benefits under part A or enrolled under part
B, or both, and shall include—
‘‘(A) the specific reasons for the deter-
mination (including, to the extent appropriate,
a summary of the clinical or scientific evidence
used in making the determination);
‘‘(B) the procedures for obtaining addi-
tional information 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)) by striking ‘‘prepare’’ and insert-
ing ‘‘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)), as amended by BIPA, is
amended—
(A) in subparagraph (A), by striking ‘‘suf-
ficient 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
(B) by adding at the end the following new
subparagraph:
‘‘(K) INDEPENDENCE REQUIREMENTS.—
‘‘(i) IN GENERAL.—Subject to clause
(ii), a qualified independent contractor
shall not conduct any activities in a case
unless the entity—
‘‘(I) is not a related party (as de-
fined in subsection (g)(5));
‘‘(II) does not have a material fa-
milial, financial, or professional rela-
tionship with such a party in relation
to such case; and
‘‘(III) does not otherwise have a
conflict of interest with such a party.
‘‘(ii) EXCEPTION
FOR
REASONABLE
COMPENSATION.—Nothing in clause (i)
shall be construed to prohibit receipt by a
qualified independent contractor of com-
pensation from the Secretary for the con-
duct of activities under this section if the
compensation is provided consistent with
clause (iii).
‘‘(iii) LIMITATIONS ON ENTITY COM-
PENSATION.—Compensation provided by
the Secretary to a qualified independent
contractor in connection with reviews
under this section shall not be contingent
on any decision rendered by the contractor
or by any reviewing professional.’’.
(2) ELIGIBILITY REQUIREMENTS FOR REVIEW-
ERS.—Section 1869 (42 U.S.C. 1395ff), as amended
by BIPA, is amended—
(A) by amending subsection (c)(3)(D) to
read as follows:
‘‘(D) QUALIFICATIONS FOR REVIEWERS.—
The requirements of subsection (g) shall be met
(relating to qualifications of reviewing profes-
sionals).’’; and
(B) by adding at the end the following new
subsection:
‘‘(g) QUALIFICATIONS OF REVIEWERS.—
‘‘(1) IN
GENERAL.—In reviewing determina-
tions under this section, a qualified independent con-
tractor shall assure that—
‘‘(A) each individual conducting a review
shall meet the qualifications of paragraph (2);
‘‘(B) compensation provided by the con-
tractor to each such reviewer is consistent with
paragraph (3); and
‘‘(C) in the case of a review by a panel de-
scribed in subsection (c)(3)(B) composed of
physicians or other health care professionals
(each in this subsection referred to as a ‘review-
ing professional’), each reviewing professional
meets the qualifications described in paragraph
(4) and, where a claim is regarding the fur-
nishing of treatment by a physician (allopathic
or osteopathic) or the provision of items or
services by a physician (allopathic or osteo-
pathic), each reviewing professional shall be a
physician (allopathic or osteopathic).
‘‘(2) INDEPENDENCE.—
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), each individual conducting a review
in a case shall—
‘‘(i) not be a related party (as defined
in paragraph (5));
‘‘(ii) not have a material familial, fi-
nancial, or professional relationship with
such a party in the case under review; and
‘‘(iii) not otherwise have a conflict of
interest with such a party.
‘‘(B) EXCEPTION.—Nothing in subpara-
graph (A) shall be construed to—
‘‘(i) prohibit an individual, solely on
the basis of a participation agreement with
a fiscal intermediary, carrier, or other con-
tractor, from serving as a reviewing profes-
sional if—
‘‘(I) the individual is not involved
in the provision of items or services in
the case under review;
‘‘(II) the fact of such an agree-
ment is disclosed to the Secretary and
the individual entitled to benefits
under part A or enrolled under part
B, or both, (or 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, car-
rier, or contractor;
‘‘(ii) prohibit an individual who has
staff privileges at the institution where the
treatment involved takes place from serv-
ing as a reviewer merely on the basis of
having such staff privileges if the existence
of such privileges is disclosed to the Sec-
retary and such individual (or authorized
representative), and neither party objects;
or
‘‘(iii) prohibit receipt of compensation
by a reviewing professional from a con-
tractor if the compensation is provided
consistent with paragraph (3).
For purposes of this paragraph, the term ‘par-
ticipation agreement’ means an agreement re-
lating to the provision of health care services by
the individual and does not include the provi-
sion of services as a reviewer under this sub-
section.
‘‘(3) LIMITATIONS
ON
REVIEWER
COMPENSA-
TION.—Compensation provided by a qualified inde-
pendent 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 re-
viewing professional shall be—
‘‘(A) a physician (allopathic or osteopathic)
who is appropriately credentialed or licensed in
one or more States to deliver health care serv-
ices 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 le-
gally authorized in one or more States (in ac-
cordance 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 appropriate 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 en-
rolled under part B, or both, any of the following:
‘‘(A) The Secretary, the medicare adminis-
trative contractor involved, or any fiduciary, of-
ficer, director, or employee of the Department
of Health and Human Services, or of such con-
tractor.
‘‘(B) The individual (or authorized rep-
resentative).
‘‘(C) The health care professional that pro-
vides 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.