such toll-free number are transferred (without charge) to
appropriate entities for the provision of such information
or assistance. 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.’’.
SEC. 8. PROVIDER APPEALS.
(a) MEDICARE ADMINISTRATIVE LAW JUDGES.—Sec-
tion 1869 (42 U.S.C. 1395ff), as amended by section 521(a)
of Medicare, Medicaid, and SCHIP Benefits Improvement
and Protection Act of 2000 (114 Stat. 2763A–534), as en-
acted into law by section 1(a)(6) of Public Law 106–554,
is amended by adding at the end the following new sub-
section:
‘‘(g) MEDICARE ADMINISTRATIVE LAW JUDGES.—
‘‘(1) TRANSITION PLAN.—Not later than October
1, 2003, the Commissioner of Social Security and the
Secretary shall develop and implement a plan under
which the functions of administrative law judges re-
sponsible for hearing cases under this title (and re-
lated provisions in title XI) shall be transferred from
the responsibility of the Commissioner and the Social
Security Administration to the Secretary and the De-
partment of Health and Human Services. The plan
shall include recommendations with respect to—
‘‘(A) the number of administrative law
judges and support staff required to hear and de-
cide such cases in a timely manner; and
‘‘(B) funding levels required for fiscal year
2004 and subsequent fiscal years under this sub-
section to hear such cases in a timely manner.
Nothing in this subsection shall be construed as affect-
ing the independence of administrative law judges
from the Department of Health and Human Services
and from medicare contractors in carrying out their
responsibilities for hearing and deciding cases.
‘‘(2) INCREASED FINANCIAL SUPPORT.—In addi-
tion to any amounts otherwise appropriated, there
are authorized to be appropriated (in appropriate
part from the Federal Hospital Insurance Trust Fund
and the Federal Supplementary Medical Insurance
Trust Fund) to the Secretary to increase the number
of administrative law judges described in paragraph
(1) and to improve education and training for such
judges and their staffs in carrying out functions
under this title, $5,000,000 for fiscal year 2003 and
such sums as are necessary for fiscal year 2004 and
each subsequent fiscal year.
‘‘(3) SUBMITTAL
OF
PLAN
TO
CONGRESS
AND
GAO; REPORT OF GAO.—Not later than July 1, 2003,
the Secretary shall submit to the Committee on Ways
and Means of the House of Representatives, the Com-
mittee on Finance of the Senate, and the Comptroller
General of the United States the terms of the plan de-
veloped under paragraph (1). No later than Sep-
tember 1, 2003, the Comptroller General shall submit
to such Committees a report containing an evaluation
of the terms of such plan.’’.
(b) PROCESS FOR EXPEDITED ACCESS TO JUDICIAL
REVIEW.—
(1) IN GENERAL.—Section 1869(b) (42 U.S.C.
1395ff(b)) as amended by Medicare, Medicaid, and
SCHIP Benefits Improvement and Protection Act of
2000 (114 Stat. 2763A–534), as enacted into law by
section 1(a)(6) of Public Law 106–554, is amended—
(A) in paragraph (1)(A), by inserting ‘‘,
subject to paragraph (2),’’ before ‘‘to judicial re-
view of the Secretary’s final decision’’; and
(B) by adding at the end the following new
paragraph:
‘‘(2) EXPEDITED
ACCESS
TO
JUDICIAL
RE-
VIEW.—
‘‘(A) IN GENERAL.—The Secretary shall es-
tablish a process under which a provider of serv-
ices or supplier that furnishes an item or service
or a beneficiary who has filed an appeal under
paragraph (1) (other than an appeal filed under
paragraph (1)(F)) may obtain access to judicial
review when a review panel (described in sub-
paragraph (D)), on its own motion or at the re-
quest of the appellant, determines that it does
not have the authority to decide the question of
law or regulation relevant to the matters in con-
troversy and that there is no material issue of
fact in dispute. The appellant may make such
request only once with respect to a question of
law or regulation 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 review
panel that no review panel has the authority to
decide the question of law or regulations relevant
to the matters in controversy and that there is
no material issue of fact in dispute and if such
request is accompanied by the documents and
materials as the appropriate review panel shall
require for purposes of making such determina-
tion, such review panel shall make a determina-
tion on the request in writing within 60 days
after the date such review panel receives the re-
quest and such accompanying documents and
materials. Such a determination by such review
panel shall be considered a final decision and
not subject to review by the Secretary.
‘‘(C) ACCESS TO JUDICIAL REVIEW.—
‘‘(i) IN GENERAL.—If the appropriate
review panel—
‘‘(I) determines that there are no
material issues of fact in dispute and
that the only issue is one of law or reg-
ulation 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 ap-
plicant, 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 controversy
shall be subject to annual interest beginning
on the first day of the first month beginning
after the 60-day period as determined pur-
suant to clause (ii) and equal to the rate of
interest on obligations issued for purchase
by the Federal Hospital Insurance Trust
Fund for the month in which the civil ac-
tion authorized under this paragraph is
commenced, to be awarded by the reviewing
court in favor of the prevailing party. No
interest awarded pursuant to the preceding
sentence shall be deemed income or cost for
the purposes of determining reimbursement
due providers of services or suppliers under
this Act.
‘‘(D) REVIEW
PANELS.—For purposes of
this subsection, a ‘review panel’ is an adminis-
trative law judge, the Departmental Appeals
Board, a qualified independent contractor (as
defined in subsection (c)(2)), or an entity des-
ignated by the Secretary for purposes of making
determinations under this paragraph.’’.
(2) 
APPLICATION
TO
TERMINATION
PRO-
CEEDINGS.—Section 1866(h) (42 U.S.C. 1395cc(h)) is
amended by adding at the end the following new
paragraph:
‘‘(3) The provisions of section 1869(b)(2) shall apply
with respect to determinations described in paragraph (1)
in the same manner as they apply to a provider of services
that has filed an appeal under section 1869(b)(1).’’.
(3) EFFECTIVE DATE.—The amendments made
by this subsection shall apply to appeals filed on or
after October 1, 2002.
(c) REQUIRING FULL AND EARLY PRESENTATION OF
EVIDENCE.—
(1) IN GENERAL.—Section 1869(b) (42 U.S.C.
1395ff(b)), as amended by Medicare, Medicaid, and
SCHIP Benefits Improvement and Protection Act of
2000 (114 Stat. 2763A–534), as enacted into law by
section 1(a)(6) of Public Law 106–554, and as
amended by subsection (b), 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.
SEC. 9. RECOVERY OF OVERPAYMENTS AND PREPAYMENT
REVIEW; ENROLLMENT OF PROVIDERS.
(a) RECOVERY OF OVERPAYMENTS AND PREPAYMENT
REVIEW.—Section 1893 (42 U.S.C. 1395ddd) is amended
by adding at the end the following new subsections:
‘‘(f) RECOVERY OF OVERPAYMENTS AND PREPAYMENT
REVIEW.—
‘‘(1) USE OF REPAYMENT PLANS.—
‘‘(A) IN GENERAL.—If the repayment, with-
in 30 days by a provider of services or supplier,
of an overpayment under this title would con-
stitute a hardship (as defined in subparagraph
(B)), subject to subparagraph (C), the Secretary
shall enter into a plan (which meets terms and
conditions determined to be appropriate by the
Secretary) with the provider of services or sup-
plier for the offset or repayment of such overpay-
ment over a period of not longer than 3 years,
or in the case of extreme hardship (as deter-
mined by the Secretary) over a period of not
longer than 5 years. Interest shall accrue on the
balance through the period of repayment.
‘‘(B) HARDSHIP.—
‘‘(i) IN
GENERAL.—For purposes of
subparagraph (A), the repayment of an
overpayment (or overpayments) within 30
days is deemed to constitute a hardship if—
‘‘(I) in the case of a provider of
services that files cost reports, the ag-
gregate amount of the overpayments
exceeds 10 percent of the amount paid
under this title to the provider of serv-
ices for the cost reporting period cov-
ered by the most recently submitted
cost report; or
‘‘(II) in the case of another pro-
vider of services or supplier, the aggre-
gate amount of the overpayments ex-
ceeds 10 percent of the amount paid
under this title to the provider of serv-
ices or supplier for the previous cal-
endar year.
‘‘(ii) RULE
OF
APPLICATION.—The
Secretary shall establish rules for the appli-
cation of this subparagraph in the case of a
provider of services or supplier that was not
paid under this title during the previous
year or was paid under this title only dur-
ing a portion of that year.
‘‘(iii) TREATMENT OF PREVIOUS OVER-
PAYMENTS.—If a provider of services or
supplier has entered into a repayment plan
under subparagraph (A) with respect to a
specific overpayment amount, such payment
amount under the repayment plan shall not
be taken into account under clause (i) with
respect to subsequent overpayment amounts.
‘‘(C) 
EXCEPTIONS.—Subparagraph 
(A)
shall not apply if the Secretary has reason to
suspect that the provider of services or supplier
may file for bankruptcy or otherwise cease to do
business or if there is an indication of fraud or
abuse committed against the program.
‘‘(D) IMMEDIATE COLLECTION IF VIOLATION
OF REPAYMENT PLAN.—If a provider of services
or supplier fails to make a payment in accord-
ance with a repayment plan under this para-
graph, the Secretary may immediately seek to
offset or otherwise recover the total balance out-
standing (including applicable interest) under
the repayment plan.
‘‘(2) LIMITATION ON RECOUPMENT UNTIL DETER-
MINATION
BY
QUALIFIED
INDEPENDENT
CON-
TRACTOR.—
‘‘(A) IN GENERAL.—In the case of a pro-
vider of services or supplier that is determined to
have received an overpayment under this title
and that seeks a reconsideration by a qualified
independent contractor on such determination
under section 1869(b)(1), the Secretary may not
take any action (or authorize any other person,
including any medicare contractor, as defined in
paragraph (9)) to recoup the overpayment until
the date the decision on the reconsideration has
been rendered.
‘‘(B) COLLECTION WITH INTEREST.—Inso-
far as the determination on such appeal is
against the provider of services or supplier, in-
terest on the overpayment shall accrue on and
after the date of the original notice of overpay-
ment. Insofar as such determination against the
provider of services or supplier is later reversed,
the Secretary shall provide for repayment of the
amount recouped plus interest at the same rate
as would apply under the previous sentence for
the period in which the amount was recouped.
‘‘(3) STANDARDIZATION
OF
RANDOM
PREPAY-
MENT REVIEW.—
‘‘(A) IN GENERAL.—A medicare contractor
may conduct random prepayment review only to
develop a contractor-wide or program-wide
claims payment error rates or under such addi-
tional circumstances as may be provided under
regulations, developed in consultation with pro-
viders of services and suppliers.
‘‘(B) CONSTRUCTION.—Nothing in subpara-
graph (A) shall be construed as preventing the
denial of payments for claims actually reviewed
under a random prepayment review.
‘‘(4) LIMITATION ON USE OF EXTRAPOLATION.—
A medicare contractor may not use extrapolation to
determine overpayment amounts to be recovered by
recoupment, offset, or otherwise unless—
‘‘(A) there is a sustained or high level of
payment error (as defined by the Secretary by
regulation); or
‘‘(B) documented educational intervention
has failed to correct the payment error (as deter-
mined by the Secretary).
‘‘(5) PROVISION
OF
SUPPORTING
DOCUMENTA-
TION.—In the case of a provider of services or sup-
plier with respect to which amounts were previously
overpaid, a medicare contractor may request the peri-
odic production of records or supporting documenta-
tion for a limited sample of submitted claims to en-
sure that the previous practice is not continuing.
‘‘(6) CONSENT SETTLEMENT REFORMS.—
‘‘(A) IN GENERAL.—The Secretary may use
a consent settlement (as defined in subparagraph
(D)) to settle a projected overpayment.
‘‘(B) OPPORTUNITY TO SUBMIT ADDITIONAL
INFORMATION
BEFORE
CONSENT
SETTLEMENT
OFFER.—Before offering a provider of services or
supplier a consent settlement, the Secretary
shall—
‘‘(i) communicate to the provider of
services or supplier in a non-threatening
manner that, based on a review of the med-
ical records requested by the Secretary, a
preliminary analysis indicates that there
would be an overpayment; and
‘‘(ii) provide for a 45-day period dur-
ing which the provider of services or sup-
plier may furnish additional information
concerning the medical records for the
claims that had been reviewed.
‘‘(C) CONSENT
SETTLEMENT
OFFER.—The
Secretary shall review any additional informa-
tion furnished by the provider of services or sup-
plier under subparagraph (B)(ii). Taking into
consideration such information, the Secretary
shall determine if there still appears to be an
overpayment. If so, the Secretary—
‘‘(i) shall provide notice of such deter-
mination to the provider of services or sup-
plier, including an explanation of the rea-
son for such determination; and
‘‘(ii) in order to resolve the overpay-
ment, may offer the provider of services or
supplier—
‘‘(I) the opportunity for a statis-
tically valid random sample; or
‘‘(II) a consent settlement.
The opportunity provided under clause (ii)(I)
does not waive any appeal rights with respect to
the alleged overpayment involved.
‘‘(D) CONSENT
SETTLEMENT
DEFINED.—
For purposes of this paragraph, the term ‘con-
sent settlement’ means an agreement between the
Secretary and a provider of services or supplier
whereby both parties agree to settle a projected
overpayment based on less than a statistically
valid sample of claims and the provider of serv-
ices or supplier agrees not to appeal the claims
involved.
‘‘(7) LIMITATIONS ON NON-RANDOM PREPAYMENT
REVIEW.—
‘‘(A) LIMITATION
ON
INITIATION
OF
NON-RANDOM
PREPAYMENT
REVIEW.—A
medicare contractor may not initiate non-
random prepayment review of a provider of
services or supplier based on the initial
identification by that provider of services or
supplier of an improper billing practice un-
less there is a sustained or high level of pay-
ment error (as defined in paragraph
(4)(A)).
‘‘(B) TERMINATION
OF
NON-RANDOM
PREPAYMENT REVIEW.—The Secretary shall
issue regulations relating to the termi-
nation, including termination dates, of non-
random prepayment review. Such regula-
tions may vary such a termination date
based upon the differences in the cir-
cumstances triggering prepayment review.
‘‘(8) PAYMENT AUDITS.—
‘‘(A) WRITTEN NOTICE FOR POST-PAYMENT
AUDITS.—Subject to subparagraph (C), if a
medicare contractor decides to conduct a post-
payment audit of a provider of services or sup-
plier under this title, the contractor shall provide
the provider of services or supplier with written
notice of the intent to conduct such an audit.
‘‘(B) EXPLANATION OF FINDINGS FOR ALL
AUDITS.—Subject to subparagraph (C), if a
medicare contractor audits a provider of services
or supplier under this title, the contractor shall
provide for an exit conference with the provider
or supplier during which the contractor shall—
‘‘(i) give the provider of services or
supplier a full review and explanation of
the findings of the audit in a manner that
is understandable to the provider of services
or supplier and permits the development of
an appropriate corrective action plan;
‘‘(ii) inform the provider of services or
supplier of the appeal rights under this
title;
‘‘(iii) give the provider of services or
supplier an opportunity to provide addi-
tional information to the contractor; and
‘‘(iv) take into account information
provided, on a timely basis, by the provider
of services or supplier under clause (iii).
‘‘(C) EXCEPTION.—Subparagraphs (A) and
(B) shall not apply if the provision of notice or
findings would compromise pending law enforce-
ment activities or reveal findings of law enforce-
ment-related audits.
‘‘(9) DEFINITIONS.—For purposes of this sub-
section:
‘‘(A) MEDICARE
CONTRACTOR.—The term
‘medicare contractor’ has the meaning given such
term in section 1889(g).
‘‘(B) RANDOM PREPAYMENT REVIEW.—The
term ‘random prepayment review’ means a de-
mand for the production of records or docu-
mentation absent cause with respect to a claim.
‘‘(g) NOTICE OF OVER-UTILIZATION OF CODES.—The
Secretary shall establish a process under which the Sec-
retary provides for notice to classes of providers of services
and suppliers served by the contractor in cases in which
the contractor has identified that particular billing codes
may be overutilized by that class of providers of services
or suppliers under the programs under this title (or provi-
sions of title XI insofar as they relate to such programs).’’.
(b) PROVIDER ENROLLMENT PROCESS; RIGHT OF AP-
PEAL.—
(1) IN
GENERAL.—Section 1866 (42 U.S.C.
1395cc) is amended—
(A) by adding at the end of the heading the
following: ‘‘; ENROLLMENT PROCESSES’’; and
(B) by adding at the end the following new
subsection:
‘‘(j) ENROLLMENT PROCESS FOR PROVIDERS OF SERV-
ICES AND SUPPLIERS.—
‘‘(1) IN GENERAL.—The Secretary shall establish
by regulation a process for the enrollment of providers
of services and suppliers under this title.
‘‘(2) APPEAL
PROCESS.—Such process shall
provide—
‘‘(A) a method by which providers of serv-
ices and suppliers whose application to enroll
(or, if applicable, to renew enrollment) are de-
nied are provided a mechanism to appeal such
denial; and
‘‘(B) prompt deadlines for actions on appli-
cations for enrollment (and, if applicable, re-
newal of enrollment) and for consideration of ap-
peals.’’.
(2) EFFECTIVE DATE.—The Secretary of Health
and Human Services shall provide for the establish-
ment of the enrollment and appeal process under the
amendment made by paragraph (1) within 6 months
after the date of the enactment of this Act.
(c) PROCESS FOR CORRECTION OF MINOR ERRORS
AND OMISSIONS ON CLAIMS WITHOUT PURSUING APPEALS
PROCESS.—The Secretary of Health and Human Services
shall develop, in consultation with appropriate medicare
contractors (as defined in section 1889(g) of the Social Se-
curity Act, as inserted by section 5(f)(1)) and representa-
tives of providers of services and suppliers, a process where-
by, in the case of minor errors or omissions that are detected
in the submission of claims under the programs under title
XVIII of such Act, a provider of services or supplier is given
an opportunity to correct such an error or omission without
the need to initiate an appeal. Such process shall include
the ability to resubmit corrected claims.
SEC. 10. BENEFICIARY OUTREACH DEMONSTRATION PRO-
GRAM.
(a) IN GENERAL.—The Secretary of Health and
Human Services shall establish a demonstration program
(in this section referred to as the ‘‘demonstration program’’)
under which medicare specialists employed by the Depart-
ment of Health and Human Services provide advice and
assistance to medicare beneficiaries 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. Sub-
ject to paragraph (2), in selecting such offices and
areas, the Secretary shall provide preference for offices
with a high volume of visits by medicare beneficiaries.
(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 beneficiary satisfac-
tion with, the assistance provided under the pro-
gram; and
(B) the cost-effectiveness of providing bene-
ficiary assistance through out-stationing medi-
care specialists at local social security offices.
(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.
SEC. 11. POLICY DEVELOPMENT REGARDING EVALUATION
AND MANAGEMENT (E & M) DOCUMENTATION
GUIDELINES.
(a) IN GENERAL.—The Secretary of Health and
Human Services may not implement any new documenta-
tion guidelines for evaluation and management physician
services under the title XVIII of the Social Security Act
on or after the date of the enactment of this Act unless the
Secretary—
(1) has developed the guidelines in collaboration
with practicing physicians and provided for an as-
sessment of the proposed guidelines by the physician
community;
(2) has established a plan that contains specific
goals, including a schedule, for improving the use of
such guidelines;
(3) has conducted appropriate and representative
pilot projects under subsection (b) to test modifica-
tions to the evaluation and management documenta-
tion guidelines;
(4) finds that the objectives described in sub-
section (c) will be met in the implementation of such
guidelines; and
(5) has conducted appropriate outreach to physi-
cians for education and training with respect to the
guidelines.
The Secretary shall make changes to the manner in which
existing evaluation and management documentation guide-
lines are implemented to reduce paperwork burdens on phy-
sicians.
(b) PILOT PROJECTS TO TEST EVALUATION AND MAN-
AGEMENT DOCUMENTATION GUIDELINES.—
(1) LENGTH
AND
CONSULTATION.—Each pilot
project under this subsection shall—
(A) be of sufficient length to allow for pre-
paratory physician and medicare contractor
education, analysis, and use and assessment of
potential evaluation and management guidelines;
and
(B) be conducted, in development and
throughout the planning and operational stages
of the project, in consultation with practicing
physicians.
(2) RANGE OF PILOT PROJECTS.—Of the pilot
projects conducted under this subsection—
(A) at least one shall focus on a peer review
method by physicians (not employed by a medi-
care contractor) which evaluates medical record
information for claims submitted by physicians
identified as statistical outliers relative to defini-
tions published in the Current Procedures Ter-
minology (CPT) code book of the American Med-
ical Association;
(B) one shall focus on an alternative meth-
od to detailed guidelines based on physician doc-
umentation of face to face encounter time with a
patient;
(C) at least one shall be conducted for serv-
ices furnished in a rural area and at least one
for services furnished outside such an area; and
(D) at least one shall be conducted in a set-
ting where physicians bill under physicians serv-
ices in teaching settings and at one shall be con-
ducted in a setting other than a teaching setting.
(3) BANNING OF TARGETING OF PILOT PROJECT
PARTICIPANTS.—Data collected under this subsection
shall not be used as the basis for overpayment de-
mands or post-payment audits.
(4) STUDY OF IMPACT.—Each pilot project shall
examine the effect of the modified evaluation and
management documentation guidelines on—
(A) different types of physician practices,
including those with fewer than 10 full-time-
equivalent employees (including physicians); and
(B) the costs of physician compliance, in-
cluding education, implementation, auditing,
and monitoring.
(c) OBJECTIVES FOR EVALUATION AND MANAGEMENT
GUIDELINES.—The objectives for modified evaluation and
management documentation guidelines developed by the
Secretary shall be to—
(1) enhance clinically relevant documentation
needed to code accurately and assess coding levels ac-
curately;
(2) decrease the level of non-clinically pertinent
and burdensome documentation time and content in
the physician’s medical record;
(3) increase accuracy by reviewers; and
(4) educate both physicians and reviewers.
(d) STUDY OF SIMPLER, ALTERNATIVE SYSTEMS OF
DOCUMENTATION FOR PHYSICIAN CLAIMS.—
(1) STUDY.—The Secretary of Health and
Human Services shall carry out a study of the mat-
ters described in paragraph (2).
(2) MATTERS DESCRIBED.—The matters referred
to in paragraph (1) are—
(A) the development of a simpler, alter-
native system of requirements for documentation
accompanying claims for evaluation and man-
agement physician services for which payment is
made under title XVIII of the Social Security
Act; and
(B) consideration of systems other than cur-
rent coding and documentation requirements for
payment for such physician services.
(3) CONSULTATION
WITH
PRACTICING
PHYSI-
CIANS.—In designing and carrying out the study
under paragraph (1), the Secretary shall consult with
practicing physicians, including physicians who are
part of group practices.
(4) APPLICATION OF HIPAA UNIFORM CODING RE-
QUIREMENTS.—In developing an alternative system
under paragraph (2), the Secretary shall consider re-
quirements of administrative simplification under
part C of title XI of the Social Security Act.
(5) REPORT TO CONGRESS.—(A) The Secretary
shall submit to Congress a report on the results of the
study conducted under paragraph (1).
(B) The Medicare Payment Advisory Commis-
sion shall conduct an analysis of the results of the
study included in the report under subparagraph (A)
and shall submit a report on such analysis to Con-
gress.
(e) STUDY ON APPROPRIATE CODING OF CERTAIN EX-
TENDED OFFICE VISITS.—The Secretary shall conduct a
study of the appropriateness of coding in cases of extended
office visits in which there is no diagnosis made. The Sec-
retary shall submit a report to Congress on such study and
shall include recommendations on how to code appro-
priately for such visits in a manner that takes into account
the amount of time the physician spent with the patient.
(f) DEFINITIONS.—In this section—
(1) the term ‘‘rural area’’ has the meaning given
that term in section 1886(d)(2)(D) of the Social Secu-
rity Act, 42 U.S.C. 1395ww(d)(2)(D); and
(2) the term ‘‘teaching settings’’ are those set-
tings described in section 415.150 of title 42, Code of
Federal Regulations.
SEC. 12. IMPROVEMENT IN OVERSIGHT OF TECHNOLOGY
AND COVERAGE.
(a) IMPROVED COORDINATION BETWEEN FDA AND
CMS ON COVERAGE OF BREAKTHROUGH MEDICAL DE-
VICES.—
(1) IN GENERAL.—Upon request by an applicant
and to the extent feasible (as determined by the Sec-
retary of Health and Human Services), the Secretary
shall, in the case of a class III medical device that is
subject to premarket approval under section 515 of
the Federal Food, Drug, and Cosmetic Act, coordinate
reviews of coverage decisions under title XVIII of the
Social Security Act with the review for application
for premarket approval conducted by the Food and
Drug Administration under such section. Such co-
ordination shall include the sharing of appropriate
information.
(2) PUBLICATION OF PLAN.—Not later than 6
months after the date of the enactment of this Act, the
Secretary shall submit to appropriate Committees of
Congress a report that contains the plan for improv-
ing such coordination and for shortening the time lag
between the premarket approval by the Food and
Drug Administration and coding and coverage deci-
sions by the Centers for Medicare & Medicaid Serv-
ices.
(3) CONSTRUCTION.—Nothing in this subsection
shall be construed as changing the criteria for cov-
erage of a medical device under title XVIII of the So-
cial Security Act nor premarket approval by the Food
and Drug Administration.
(b) COUNCIL FOR TECHNOLOGY AND INNOVATION.—
(1) ESTABLISHMENT.—The Secretary of Health
and Human Services shall establish a Council for
Technology and Innovation within the Centers for
Medicare & Medicaid Services (in this section referred
to as ‘‘CMS’’).
(2) COMPOSITION.—The Council shall be com-
posed of senior CMS staff and clinicians and shall be
chaired by the Executive Coordinator for Technology
and Innovation (appointed or designated under para-
graph (4)).
(3) DUTIES.—The Council shall coordinate the
activities of coverage, coding, and payment processes
under title XVIII of the Social Security Act with re-
spect to new technologies and procedures, including
new drug therapies, and shall coordinate the exchange
of information on new technologies between CMS and
other entities that make similar decisions.
(4) EXECUTIVE COORDINATOR FOR TECHNOLOGY
AND INNOVATION.—The Secretary shall appoint (or
designate) a noncareer appointee (as defined in sec-
tion 3132(a)(7) of title 5, United States Code) who
shall serve as the Executive Coordinator for Tech-
nology and Innovation. Such executive coordinator
shall report to the Administrator of CMS, shall chair
the Council, shall oversee the execution of its duties,
and shall serve as a single point of contact for outside
groups and entities regarding the coverage, coding,
and payment processes under title XVIII of the Social
Security Act.
(c) GAO STUDY ON IMPROVEMENTS IN EXTERNAL
DATA COLLECTION FOR USE IN THE MEDICARE INPATIENT
PAYMENT SYSTEM.—
(1) STUDY.—The Comptroller General of the
United States shall conduct a study that analyzes
which external data can be collected in a shorter time
frame by the Centers For Medicare & Medicaid Serv-
ices for use in computing payments for inpatient hos-
pital services. The study may include an evaluation
of the feasibility and appropriateness of using of
quarterly samples or special surveys or any other
methods. The study shall include an analysis of
whether other executive agencies, such as the Bureau
of Labor Statistics in the Department of Commerce,
are best suited to collect this information.
(2) REPORT.—By not later than October 1,
2002, the Comptroller General shall submit a report
to Congress on the study under paragraph (1).
(d) APPLICATION OF OSHA BLOODBORNE PATHOGENS
STANDARD TO CERTAIN HOSPITALS.—
(1) IN
GENERAL.—Section 1866 (42 U.S.C.
1395cc) is amended—
(A) in subsection (a)(1)—
(i) in subparagraph (R), by striking
‘‘and’’ at the end;
(ii) in subparagraph (S), by striking
the period at the end and inserting ‘‘, and’’;
and
(iii) by inserting after subparagraph
(S) the following new subparagraph:
‘‘(T) in the case of hospitals that are not other-
wise subject to the Occupational Safety and Health
Act of 1970, to comply with the Bloodborne Pathogens
standard under section 1910.1030 of title 29 of the
Code of Federal Regulations (or as subsequently redes-
ignated).’’; and
(B) by adding at the end of subsection (b)
the following new paragraph:
‘‘(4)(A) A hospital that fails to comply with the re-
quirement of subsection (a)(1)(T) (relating to the
Bloodborne Pathogens standard) is subject to a civil money
penalty in an amount described in subparagraph (B), but
is not subject to termination of an agreement under this
section.
‘‘(B) The amount referred to in subparagraph (A) is
an amount that is similar to the amount of civil penalties
that may be imposed under section 17 of the Occupational
Safety and Health Act of 1970 for a violation of the
Bloodborne Pathogens standard referred to in subsection
(a)(1)(T) by a hospital that is subject to the provisions of
such Act.
‘‘(C) A civil money penalty under this paragraph shall
be imposed and collected in the same manner as civil money
penalties under subsection (a) of section 1128A are imposed
and collected under that section.’’.
(2) EFFECTIVE DATE.—The amendments made
by this paragraph (1) shall apply to hospitals as of
July 1, 2002.
(e) IOM STUDY ON LOCAL COVERAGE DETERMINA-
TIONS.—
(1) STUDY.—The Secretary shall enter into an
arrangement with the Institute of Medicine of the Na-
tional Academy of Sciences under which the Institute
shall conduct a study on the capabilities and infor-
mation available for local coverage determinations
(including the application of local medical review
policies) under the medicare program under title
XVIII of the Social Security Act. Such study shall
examine—
(A) the consistency of the definitions used
in such determinations;
(B) the extent to which such determinations
are based on evidence, including medical and
scientific evidence;
(C) the advantages and disadvantages of
local coverage decisionmaking, including the
flexibility it offers for ensuring timely patient
access to new medical technology for which data
are still be collected;
(D) whether local coverage determinations
are made, in the absence of adequate data, in
order to collect such data in a manner that re-
sults in coverage of experimental items or serv-
ices; and
(E) the advantages and disadvantages of
maintaining local medicare contractor advisory
committees that can advise on local coverage de-
cisions based on an open, collaborative public
process.
(2) REPORT.—Such arrangement shall provide
that the Institute shall submit to the Secretary a re-
port on such study by not later than 3 years after the
date of the enactment of this Act. The Secretary shall
promptly transmit a copy of such report to Congress.
(f) METHODS FOR DETERMINING PAYMENT BASIS FOR
NEW LAB TESTS.—Section 1833(h) (42 U.S.C. 1395l(h))
is amended by adding at the end the following:
‘‘(8)(A) The Secretary shall establish by regulation
procedures for determining the basis for, and amount of,
payment under this subsection for any clinical diagnostic
laboratory test with respect to which a new or substantially
revised HCPCS code is assigned on or after January 1,
2003 (in this paragraph referred to as ‘new tests’).
‘‘(B) Determinations under subparagraph (A) shall be
made only after the Secretary—
‘‘(i) makes available to the public (through an
Internet site and other appropriate mechanisms) a
list that includes any such test for which establish-
ment of a payment amount under this subsection is
being considered for a year;
‘‘(ii) on the same day such list is made avail-
able, causes to have published in the Federal Register
notice of a meeting to receive comments and rec-
ommendations (and data on which recommendations
are based) from the public on the appropriate basis
under this subsection for establishing payment
amounts for the tests on such list;
‘‘(iii) not less than 30 days after publication of
such notice convenes a meeting, that includes rep-
resentatives of officials of the Centers for Medicare &
Medicaid Services involved in determining payment
amounts, to receive such comments and recommenda-
tions (and data on which the recommendations are
based);
‘‘(iv) taking into account the comments and rec-
ommendations (and accompanying data) received at
such meeting, develops and makes available to the
public (through an Internet site and other appro-
priate mechanisms) a list of proposed determinations
with respect to the appropriate basis for establishing
a payment amount under this subsection for each
such code, together with an explanation of the reasons
for each such determination, the data on which the
determinations are based, and a request for public
written comments on the proposed determination; and
‘‘(v) taking into account the comments received
during the public comment period, develops and
makes available to the public (through an Internet
site and other appropriate mechanisms) a list of final
determinations of the payment amounts for such tests
under this subsection, together with the rationale for
each such determination, the data on which the deter-
minations are based, and responses to comments and
suggestions received from the public.
‘‘(C) Under the procedures established pursuant to sub-
paragraph (A), the Secretary shall—
‘‘(i) set forth the criteria for making determina-
tions under subparagraph (A); and
‘‘(ii) make available to the public the data (other
than proprietary data) considered in making such de-
terminations.
‘‘(D) The Secretary may convene such further public
meetings to receive public comments on payment amounts
for new tests under this subsection as the Secretary deems
appropriate.
‘‘(E) For purposes of this paragraph:
‘‘(i) The term ‘HCPCS’ refers to the Health Care
Procedure Coding System.
‘‘(ii) A code shall be considered to be ‘substan-
tially revised’ if there is a substantive change to the
definition of the test or procedure to which the code
applies (such as a new analyte or a new methodology
for measuring an existing analyte-specific test).’’.
SEC. 13. MISCELLANEOUS PROVISIONS.
(a) TREATMENT OF HOSPITALS FOR CERTAIN SERV-
ICES UNDER MEDICARE SECONDARY PAYOR (MSP) PROVI-
SIONS.—
(1) IN GENERAL.—The Secretary of Health and
Human Services shall not require a hospital (includ-
ing a critical access hospital) to ask questions (or ob-
tain information) relating to the application of sec-
tion 1862(b) of the Social Security Act (relating to
medicare secondary payor provisions) in the case of
reference laboratory services described in paragraph
(2), if the Secretary does not impose such requirement
in the case of such services furnished by an inde-
pendent laboratory.
(2) REFERENCE
LABORATORY
SERVICES
DE-
SCRIBED.—Reference laboratory services described in
this paragraph are clinical laboratory diagnostic tests
(or the interpretation of such tests, or both) furnished
without a face-to-face encounter between the bene-
ficiary and the hospital involved and in which the
hospital submits a claim only for such test or inter-
pretation.
(b) CLARIFICATION OF PRUDENT LAYPERSON TEST
FOR EMERGENCY SERVICES UNDER THE MEDICARE FEE-
FOR-SERVICE PROGRAM.—
(1) IN
GENERAL.—Section 1862 (42 U.S.C.
1395y) is amended by inserting after subsection (c)
the following new subsection:
‘‘(d) In the case of hospital services and physicians’
services that—
‘‘(1) are furnished, to an individual who is not
enrolled in a Medicare+Choice plan under part C, by
a hospital or a critical access hospital; and
‘‘(2) are needed to evaluate or stabilize an emer-
gency medical condition (as defined in section
1852(d)(3)(B), relating to application of a prudent
layperson rule) and that are provided to meet the re-
quirements of section 1867,
such services shall be deemed to be reasonable and necessary
for the diagnosis or treatment of illness or injury for pur-
poses of subsection (a)(1)(A).’’.
(2) EFFECTIVE DATE.—The amendment made by
paragraph (1) shall apply to items and services fur-
nished on or after January 1, 2002.
(c) PROMPT SUBMISSION OF OVERDUE REPORTS ON
PAYMENT
AND UTILIZATION
OF OUTPATIENT THERAPY
SERVICES.—The Secretary of Health and Human Services
shall submit to Congress as expeditiously as practicable the
reports required under section 4541(d)(2) of the Balanced
Budget Act of 1997 (relating to alternatives to a single an-
nual dollar cap on outpatient therapy) and under section
221(d) of the Medicare, Medicaid, and SCHIP Balanced
Budget Refinement Act of 1999 (relating to utilization pat-
terns for outpatient therapy).
(d) AUTHORIZING USE
OF ARRANGEMENTS WITH
OTHER HOSPICE PROGRAMS TO PROVIDE CORE HOSPICE
SERVICES IN CERTAIN CIRCUMSTANCES.—
(1) IN
GENERAL.—Section 1861(dd)(5) (42
U.S.C. 1395x(dd)(5)) is amended by adding at the
end the following new subparagraph:
‘‘(D) In extraordinary, exigent, or other non-routine
circumstances, such as unanticipated periods of high pa-
tient loads, staffing shortages due to illness or other events,
or temporary travel of a patient outside a hospice pro-
gram’s service area, a hospice program may enter into ar-
rangements with another hospice program for the provision
by that other program of services described in paragraph
(2)(A)(ii)(I). The provisions of paragraph (2)(A)(ii)(II)
shall apply with respect to the services provided under such
arrangements.’’.
(2) CONFORMING PAYMENT PROVISION.—Section
1814(i) (42 U.S.C. 1395f(i)) is amended by adding at
the end the following new paragraph:
‘‘(4) In the case of hospice care provided by a hospice
program under arrangements under section 1861(dd)(5)(D)
made by another hospice program, the hospice program that
made the arrangements shall bill and be paid for the hospice
care.’’.
(3) EFFECTIVE DATE.—The amendments made
by this subsection shall apply to hospice care provided
on or after the date of the enactment of this Act.