To amend title XVIII of the Social Security Act to provide whistleblower protection to employees of clinical laboratories who furnish services under the Medicare Program, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Clinical Laboratory Compliance 
Improvement Act of 2004''.

SEC. 2. PROTECTION OF EMPLOYEES OF PROVIDERS AND SUPPLIERS OF CLINICAL 
              DIAGNOSTIC LABORATORY TESTS WHO REPORT VIOLATIONS.

    (a) In General.--Section 1846 of the Social Security Act (42 U.S.C. 
1395w-2) is amended by adding at the end the following new subsection:
    ``(c)(1)(A) Each provider or clinical laboratory approved for 
participation under this title to provide clinical diagnostic 
laboratory tests shall post in a conspicuous place a notice to 
employees that indicates the manner in which to report instances of 
noncompliance with conditions of participation under this title of the 
provider or laboratory (as the case may be), including deficiencies 
with respect to testing, quality, and inadequately trained personnel.
    ``(B)(i) A notice under subparagraph (A) shall include--
            ``(I) the name and contact information of the appropriate 
        entity, accreditation organization, or State or Federal agency 
        to report instances of noncompliance; and
            ``(II) a description of the rights and protections under 
        this section of individuals who report instances of 
        noncompliance.
    ``(ii) The Secretary shall specify the form of the notice.
    ``(2)(A) A provider or clinical laboratory approved for 
participation under this title to provide clinical diagnostic 
laboratory tests shall not discriminate or retaliate in any manner 
against any employee of the provider or laboratory (as the case may be) 
because that employee, or any other person, has presented a grievance 
or complaint, or has initiated or cooperated in any investigation or 
proceeding of any kind, relating to the clinical diagnostic laboratory 
tests performed by the provider or laboratory (as the case may be) or 
other requirements and prohibitions of this title.
    ``(B) An employee of a provider or clinical laboratory approved for 
participation under this title to provide clinical diagnostic 
laboratory tests who has been discriminated or retaliated against in 
employment in violation of this subsection may initiate judicial action 
in a United States District Court and shall be entitled to 
reinstatement, reimbursement for lost wages and work benefits caused by 
the unlawful acts of the employing provider or laboratory (as the case 
may be). Prevailing employees are entitled to reasonable attorney's 
fees and costs associated with pursuing the judicial action.
    ``(C) No action may be brought under subparagraph (B) more than 2 
years after the discrimination or retaliation with respect to which the 
action is brought.
    ``(D) For purposes of this paragraph--
            ``(i) an adverse employment action shall be treated as 
        `retaliation or discrimination'; and
            ``(ii) an adverse employment action includes--
                    ``(I) the failure to promote an individual or 
                provide any other employment-related benefit for which 
                the individual would otherwise be eligible;
                    ``(II) an adverse evaluation or decision made in 
                relation to accreditation, certification, 
                credentialing, or licensing of the individual; and
                    ``(III) a personnel action that is adverse to the 
                individual concerned.''.
    (b) Clerical Amendment.--The heading of such section is amended by 
adding at the end the following:

                    ``; whistleblower protections''.

    (c) Effective Date.--The amendment made by subsection (a) shall 
take effect January 1, 2005.

SEC. 3. REQUIREMENT FOR UNANNOUNCED SURVEYS.

    (a) In General.--Section 1846 of the Social Security Act (42 U.S.C. 
1395w-2), as amended by section 2(a), is further amended by adding at 
the end the following new subsections:
    ``(d)(1) Upon receipt of a report of an instance of noncompliance 
with conditions of participation by a provider or clinical laboratory 
approved for participation under this title to provide clinical 
diagnostic laboratory tests, the investigative organization shall--
            ``(A) provide notice to the Secretary and other 
        investigative organizations involved of receipt of the report 
        within 3 business days of such receipt using a standard format 
        and manner of transmission developed by the Secretary for such 
        purpose;
            ``(B) promptly determine whether to investigate the report; 
        and
    ``(C) if appropriate, promptly investigate the report.
    ``(2) In measuring performance of an investigative organization 
under a contract entered into with the Secretary, the Secretary shall 
provide for appropriate adjustments to payments under the contract for 
failure to carry out the responsibilities of this subsection.
    ``(3) In this subsection, the term `investigative organization' 
means an accreditation organization, a State agency, or other entity 
responsible for surveys of such providers or clinical laboratories.
    ``(e)(1) Each provider or clinical laboratory approved for 
participation under this title to provide clinical diagnostic 
laboratory tests shall be subject to a standard survey, to be conducted 
without any prior notice to the provider or laboratory (as the case may 
be). Each survey shall include verification of compliance with 
requirements under subsection (c).
    ``(2) Any individual who notifies (or causes to be notified) a 
provider or laboratory of the time or date on which such a survey is 
scheduled to be conducted is subject to a civil money penalty not to 
exceed $2,000.
    ``(3) The Secretary shall review each State's procedures for the 
scheduling and conduct of standard surveys to assure that the State has 
taken all reasonable steps to avoid giving notice of such a survey 
through the scheduling procedures and the conduct of the surveys 
themselves.
    ``(f) The Secretary shall submit to Congress an annual report on 
the actions taken under this section. Each such report shall include 
information on reports made under subsection (c), actions taken under 
subsection (d), the promptness with which such actions were taken, the 
findings of any investigation of such reports, and any actions taken 
based upon such findings.''.
    (b) Clerical Amendment.--The heading of such section, as amended by 
section 2(b), is further amended by adding at the end the following:

                       ``; unannounced surveys''.

    (c) Effective Date.--The amendment made by subsection (a) shall 
take effect January 1, 2005.

Summary: Clinical Laboratory Compliance Improvement Act of 2004 - Amends title XVIII (Medicare) of the Social Security Act to require each provider or clinical laboratory approved for participation under Medicare to provide clinical diagnostic laboratory tests to post in a conspicuous place a notice to employees that indicates the manner in which to report instances of noncompliance with conditions of participation.

Prohibits such a provider or clinical laboratory from discriminating against or retaliating in any manner against any employee because that employee, or any other person, has presented a grievance or complaint, or has initiated or cooperated in any investigation or proceeding of any kind, relating to the clinical diagnostic laboratory tests performed or other requirements and prohibitions of Medicare. Provides for judicial action for any employee so aggrieved.

Requires the investigative organization, upon receipt of a report of an instance of noncompliance, to: (1) provide notice to the Secretary and other investigative organizations involved of receipt of the report within three business days, using a standard format and manner of transmission developed by the Secretary for such purpose; (2) promptly determine whether to investigate the report; and (3) if appropriate, promptly investigate it.

Requires that the Secretary, in measuring the performance of an investigative organization under contract, to provide for appropriate adjustments to payments for failure to carry out the responsibilities of this Act. Subjects each provider or clinical laboratory to a standard survey, including verification of compliance with requirements, conducted without prior notice. Makes liable for civil monetary penalties any individual who notifies (or causes to be notified) a provider or laboratory of the time or date on which such a survey is scheduled to be conducted.