To reduce the amount of paperwork and improve payment policies for health care services, to prevent fraud and abuse through health care provider education, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Health Care Paperwork Reduction and 
Fraud Prevention Act of 2001''.

SEC. 2. NATIONAL BIPARTISAN COMMISSION ON BILLING CODES AND FORMS 
              SIMPLIFICATION.

    (a) Establishment.--There is hereby established the Commission on 
Billing Codes and Forms Simplification (in this section referred to as 
the ``Commission'').
    (b) Duties.--The Commission shall make recommendations regarding 
the following:
            (1) Standardized forms.--Standardizing credentialing and 
        billing forms respecting health care claims, that all Federal 
        Government agencies would use and that the private sector is 
        able (and is encouraged, but not required) to use.
            (2) Reduction in billing codes.--A significant reduction 
        and simplification in the number of billing codes.
            (3) Regulatory and appeals process reform.--Reforms in the 
        medicare regulatory and appeals processes in order to ensure 
        that the Secretary of Health and Human Services provides 
        appropriate guidance to physicians, providers of services, and 
        ambulance providers that are attempting to properly submit 
        claims under the medicare program and to ensure that the 
        Secretary does not target inadvertent billing errors.
    (c) Membership.--
            (1) Number and appointment.--The Commission shall be 
        composed of 17 members, of whom--
                    (A) four shall be appointed by the President;
                    (B) six shall be appointed by the Majority Leader 
                of the Senate, in consultation with the Minority Leader 
                of the Senate, of whom not more than 4 shall be of the 
                same political party;
                    (C) six shall be appointed by the Speaker of the 
                House of Representatives, in consultation with the 
                Minority Leader of the House of Representatives, of 
                whom not more than 4 shall be of the same political 
                party; and
                    (D) one, who shall serve as Chairman of the 
                Commission, appointed jointly by the President, 
                Majority Leader of the Senate, and the Speaker of the 
                House of Representatives.
            (2) Appointment.--Members of the Commission shall be 
        appointed by not later than 90 days after the date of the 
        enactment of this Act.
    (d) Incorporation of Bipartisan Commission Provisions.--The 
provisions of paragraphs (3) through (8) of subsection (c) and 
subsections (d), (e), and (h) of section 4021 of the Balanced Budget 
Act of 1997 shall apply to the Commission under this section in the 
same manner as they applied to the National Bipartisan Commission on 
the Future of Medicare under such section.
    (e) Report.--Not later than December 31, 2001, the Commission shall 
submit a report to the President and Congress which shall contain a 
detailed statement of only those recommendations, findings, and 
conclusions of the Commission that receive the approval of at least 11 
members of the Commission.
    (f) Termination.--The Commission shall terminate 30 days after the 
date of submission of the report required in subsection (e).

SEC. 3. EDUCATION OF PHYSICIANS AND PROVIDERS CONCERNING MEDICARE 
              PROGRAM PAYMENTS.

    (a) Written Requests.--
            (1) In general.--The Secretary of Health and Human Services 
        shall establish a process under which a physician may request, 
        in writing from a carrier, assistance in addressing 
        questionable codes and procedures under the medicare program 
        under title XVIII of the Social Security Act and then the 
        carrier shall respond in writing within 30 business days 
        respond with the correct billing or procedural answer.
            (2) Use of written statement.--
                    (A) In general.--Subject to subparagraph (B), a 
                written statement under paragraph (1) may be used as 
                proof against a future audit or overpayment under the 
                medicare program.
                    (B) Limit on application.--Subparagraph (A) shall 
                not apply retroactively and shall not apply to cases of 
                fraudulent billing.
    (b) Restoration of Toll-Free Hotline.--
            (1) In general.--The Administrator of the Health Care 
        Financing Administration shall restore the toll-free telephone 
        hotline so that physicians may call for information and 
        questions about the medicare program.
            (2) Authorization of appropriations.--There are authorized 
        to be appropriated such sums as may be necessary to carry out 
        paragraph (1).
    (c) Definitions.--For purposes of this section:
            (1) Physician.--The term ``physician'' has the meaning 
        given such term in section 1861(r) of the Social Security Act 
        (42 U.S.C. 1395x(r)).
            (2) Carrier.--The term ``carrier'' means a carrier (as 
        defined in section 1842(f) of the Social Security Act (42 
        U.S.C. 1395u(f))) with a contract under title XVIII of such Act 
to administer benefits under part B of such title.

SEC. 4. POLICY DEVELOPMENT REGARDING E&M GUIDELINES UNDER THE MEDICARE 
              PROGRAM.

    (a) In General.--HCFA may not implement any new evaluation and 
management guidelines (in this section referred to as ``E&M 
guidelines'') under the medicare program, unless HCFA--
            (1) has provided for an assessment of the proposed 
        guidelines by physicians;
            (2) has established a plan that contains specific goals, 
        including a schedule, for improving participation of 
        physicians;
            (3) has carried out a minimum of 4 pilot projects 
        consistent with subsection (b) in at least 4 different HCFA 
        regions (to be specified by the Secretary) to test such 
        guidelines; and
            (4) finds that the objectives described in subsection (c) 
        will be met in the implementation of such guidelines.
    (b) Pilot Projects.--
            (1) Length and consultation.--Each pilot project under this 
        subsection shall--
                    (A) be of sufficient length to allow for 
                preparatory physician and carrier education, analysis, 
                and use and assessment of potential E&M guidelines; and
                    (B) be conducted, throughout the planning and 
                operational stages of the project, in consultation with 
                national and State medical societies.
            (2) Peer review and rural pilot projects.--Of the pilot 
        projects conducted under this subsection--
                    (A) at least one shall focus on a peer review 
                method by physicians which evaluates medical record 
                information for statistical outlier services relative 
                to definitions and guidelines published in the CPT 
                book, instead of an approach using the review of 
                randomly selected medical records using non-clinical 
                personnel; and
                    (B) at least one shall be conducted for services 
                furnished in a rural area.
            (3) Study of impact.--Each pilot project shall examine the 
        effect of the E&M guidelines on--
                    (A) different types of physician practices, such as 
                large and small groups; and
                    (B) the costs of compliance, and patient and 
                physician satisfaction.
            (4) Report on how met objectives.--HCFA shall submit a 
        report to the Committees on Commerce and Ways and Means of the 
        House of Representatives, the Committee on Finance of the 
        Senate, and the Practicing Physicians Advisory Council, six 
        months after the conclusion of the pilot projects. Such report 
        shall include the extent to which the pilot projects met the 
        objectives specified in subsection (c).
    (c) Objectives for E&M Guidelines.--The objectives for E&M 
guidelines specified in this subsection are as follows (relative to the 
E&M guidelines and review policies in effect as of the date of the 
enactment of this Act):
            (1) Enhancing clinically relevant documentation needed to 
        accurately code and assess coding levels accurately.
            (2) Reducing administrative burdens.
            (3) Decreasing the level of non-clinically pertinent and 
        burdensome documentation time and content in the record.
            (4) Increased accuracy by carrier reviewers.
            (5) Education of both physicians and reviewers.
            (6) Appropriate use of E&M codes by physicians and their 
        staffs.
            (7) The extent to which the tested E&M documentation 
        guidelines substantially adhere to the CPT coding rules.
    (d) Definitions.--For purposes of this section and sections 5 and 
6:
            (1) Physician.--The term ``physician'' has the meaning 
        given such term in section 1861(r) of the Social Security Act 
        (42 U.S.C. 1395x(r)).
            (2) Carrier.--The term ``carrier'' means a carrier (as 
        defined in section 1842(f) of the Social Security Act (42 
        U.S.C. 1395u(f))) with a contract under title XVIII of such Act 
        to administer benefits under part B of such title.
            (3) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (4) HCFA.--The term ``HCFA'' means the Health Care 
        Financing Administration.
            (5) Medicare program.--The term ``medicare program'' means 
        the program under title XVIII of the Social Security Act.

SEC. 5. OVERPAYMENTS UNDER THE MEDICARE PROGRAM.

    (a) Individualized Notice.--If a carrier proceeds with a post-
payment audit of a physician under the medicare program, the carrier 
shall provide the physician with an individualized notice of billing 
problems, such as a personal visit or carrier-to-physician telephone 
conversation during normal working hours, within 3 months of initiating 
such audit. The notice should include suggestions to the physician on 
how the billing problem may be remedied.
    (b) Repayment of Overpayments Without Penalty.--The Secretary shall 
permit physicians to repay medicare overpayments within 3 months 
without penalty or interest and without threat of denial of other 
claims based upon extrapolation. If a physician should discover an 
overpayment before a carrier notifies the physician of the error, the 
physician may reimburse the medicare program without penalty and the 
Secretary may not audit or target the physician on the basis of such 
repayment, unless other evidence of fraudulent billing exists.
    (c) Treatment of First-Time Billing Errors.--If a physician's 
medicare billing error was a first-time error and the physician has not 
previously been the subject of a post-payment audit, the carrier may 
not assess a fine through extrapolation of such an error to other 
claims, unless the physician has submitted a fraudulent claim.
    (d) Timely Notice of Problem Claims Before Using Extrapolation.--A 
carrier may seek reimbursement or penalties against a physician based 
on extrapolation of a medicare claim only if the carrier has 
informed the physician of potential problems with the claim within one 
year after the date the claim was submitted for reimbursement.
    (e) Submission of Additional Information.--A physician may submit 
additional information and documentation to dispute a carrier's charges 
of overpayment without waiving the physician's right to a hearing by an 
administrative law judge.
    (f) Limitation on Delay in Payment.--Following a post-payment 
audit, a carrier that is conducting a pre-payment screen on a physician 
service under the medicare program may not delay reimbursements for 
more than one month and as soon as the physician submits a corrected 
claim, the carrier shall eliminate application of such a pre-payment 
screen.

SEC. 6. ENFORCEMENT PROVISIONS UNDER THE MEDICARE PROGRAM.

    If a physician is suspected of fraud or wrongdoing in the medicare 
program, inspectors associated with the Office of Inspector General of 
the Department of Health and Human Services--
            (1) may not enter the physician's private office with a gun 
        or deadly weapon to make an arrest; and
            (2) may not make such an arrest without a valid warrant of 
        arrest, unless the physician is fleeing or deemed dangerous.

Summary: Health Care Paperwork Reduction and Fraud Prevention Act of 2001 - Establishes the Commission on Billing Codes and Forms Simplification which shall make recommendations regarding: (1) standardized forms; and (2) reduction in billing codes; and (3) regulatory and appeals process reform.Directs the Secretary of Health and Human Services to establish a process under which a physician may request, in writing from a carrier, assistance in addressing questionable codes and procedures under the medicare program.Sets forth provisions concerning: (1) policy development regarding evaluation and management guidelines under Medicare; and (2) Medicare overpayments.