Title: AFIRM Act
Policy area: Health

Summary:
Audit & Appeals Fairness, Integrity, and Reforms in Medicare Act of 2019 or the AFIRM Act
This bill makes a series of administrative and procedural changes to the Medicare appeals process, such as authorizing the creation of Medicare magistrates to handle smaller claims and allowing adjudicators to consolidate cases under certain circumstances.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 3078 Introduced in Senate (IS)]

<DOC>






116th CONGRESS
  1st Session
                                S. 3078

    To amend title XVIII of the Social Security Act to improve the 
  efficiency of the Medicare appeals process, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           December 17, 2019

Mr. Grassley (for himself and Mr. Wyden) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
    To amend title XVIII of the Social Security Act to improve the 
  efficiency of the Medicare appeals process, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Audit & Appeals 
Fairness, Integrity, and Reforms in Medicare Act of 2019'' or the 
``AFIRM Act''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Authority to establish a process to review low value claims; 
                            revision of amount in controversy 
                            thresholds.
Sec. 3. Remanding appeals to the redetermination level with the 
                            introduction of new evidence.
Sec. 4. Expedited access to appeals.
Sec. 5. Authority to use sampling and extrapolation methodologies and 
                            to consolidate appeals for administrative 
                            efficiency.
Sec. 6. Identification and referral of fraud.
Sec. 7. Study to assess hearing participation.
Sec. 8. Improvements to the Office of Medicare Hearings and Appeals.
Sec. 9. Review program improvements.
Sec. 10. Creation of Medicare Provider and Supplier Ombudsman for 
                            Reviews and Appeals.
Sec. 11. Limiting the audit and recovery period for patient status 
                            reviews.
Sec. 12. Incentives and disincentives for Medicare contractors, 
                            providers, and suppliers.

SEC. 2. AUTHORITY TO ESTABLISH A PROCESS TO REVIEW LOW VALUE CLAIMS; 
              REVISION OF AMOUNT IN CONTROVERSY THRESHOLDS.

    (a) Authority To Establish a Process To Review Low Value Claims.--
            (1) In general.--Section 1869(b) of the Social Security Act 
        (42 U.S.C. 1395ff(b)) is amended by adding at the end the 
        following new paragraph:
            ``(4) Conduct of reviews by medicare magistrates.--
                    ``(A) In general.--The Secretary shall establish, 
                through regulations, a process under which appealed 
                claims may be reviewed by officials within the Office 
                of Medicare Hearings and Appeals to be known as 
                Medicare magistrates.
                    ``(B) Medicare magistrate defined.--For purposes of 
                this section, the term `Medicare magistrate' means an 
                attorney who is licensed by a State, has expertise in 
                this title (including regulations and policies 
                promulgated thereunder), meets such other 
                qualifications as the Secretary shall require, and who 
                performs reviews and renders decisions in appeals 
                described in paragraph (1)(E)(i)(II).
                    ``(C) Requirements for reviews conducted by 
                magistrates.--The provisions of this subsection and 
                subsection (d) that govern hearings and decisions by 
                administrative law judges (including provisions related 
                to reviews of decisions by administrative law judges by 
                the Departmental Appeals Board of the Department of 
                Health and Human Services) shall apply to reviews and 
                decisions by Medicare magistrates in the same manner 
                and to the same extent as such provisions apply to 
                hearings and decisions by an administrative law judge. 
                The Secretary may establish by regulation such other 
                requirements and procedures as may be necessary so that 
                reviews by Medicare magistrates are resolved fairly, 
                efficiently, and expeditiously.''.
            (2) Conforming amendment.--Section 1869(b)(1)(A) of the 
        Social Security Act (42 U.S.C. 1395ff(b)(1)(A)), as amended by 
        section 4(b)(3), is amended by inserting ``and paragraph (4)'' 
        after ``subject to subparagraphs (D), (E), and (H)''.
    (b) Amount in Controversy Thresholds.--
            (1) In general.--Section 1869(b)(1)(E) of the Social 
        Security Act (42 U.S.C. 1395ff(b)(1)(E)) is amended--
                    (A) by striking clause (i) and inserting the 
                following:
                            ``(i) In general.--Except as otherwise 
                        provided in this section, subject to clause 
                        (iii)--
                                    ``(I) a review by a Medicare 
                                magistrate under paragraph (4), or a 
                                hearing by an administrative law judge 
                                under this subsection or subsection 
                                (d), shall not be available to an 
                                individual if the amount in controversy 
                                is less than $160;
                                    ``(II) a review by a Medicare 
                                magistrate under paragraph (4) shall be 
                                available to an individual if the 
                                amount in controversy is equal to or 
                                greater than the amount specified in 
                                subclause (I) but less than the amount 
                                specified in subclause (III); and
                                    ``(III) a hearing by an 
                                administrative law judge shall be 
                                available to an individual under this 
                                subsection or subsection (d) if the 
                                amount in controversy is equal to or 
                                greater than $1,630.'';
                    (B) in clause (iii)--
                            (i) by striking ``For requests for 
                        hearings'' and inserting ``For requests for 
                        Medicare magistrate reviews, hearings,'';
                            (ii) by striking ``2004'' and inserting 
                        ``2021''; and
                            (iii) by striking ``2003'' and inserting 
                        ``2020''; and
                    (C) by adding at the end the following new clause:
                            ``(iv) Judicial review.--Judicial review 
                        shall not be available to an individual under 
                        this section if the amount in controversy is 
                        less than the amount specified in clause 
                        (i)(III) (as adjusted under clause (iii)).''.
            (2) Conforming amendments.--
                    (A) Section 1155 of the Social Security Act (42 
                U.S.C. 1320c-4), as amended by section 4(b)(1), is 
                amended--
                            (i) in the second sentence, by striking 
                        ``$200 or more'' and inserting ``equal to or 
                        greater than the amount specified in section 
                        1869(b)(1)(E)(i)(III)'';
                            (ii) in the fourth sentence, by striking 
                        ``$2,000 or more'' and inserting ``equal to or 
                        greater than the amount specified in section 
                        1869(b)(1)(E)(i)(III)''; and
                            (iii) by inserting after the fourth 
                        sentence the following new sentences: ``Where 
                        the amount in controversy is equal to or 
                        greater than the amount specified in subclause 
                        (I) of section 1869(b)(1)(E)(i) but less than 
                        the amount specified in subclause (III) of such 
                        section, such beneficiary shall be entitled to 
                        a review by a Medicare magistrate in accordance 
                        with procedures established by the Secretary 
                        pursuant to section 1869. The provisions of 
                        section 1869(b)(1)(E)(iii) shall apply with 
                        respect to the dollar amounts referred to in 
                        this section in the same manner as they apply 
                        to the dollar amounts specified in section 
                        1869(b)(1)(E)(i).''.
                    (B) Section 1852(g)(5) of the Social Security Act 
                (42 U.S.C. 1395w-22(g)(5)), as amended by section 
                4(b)(2), is amended--
                            (i) in the first sentence, by striking 
                        ``$100 or more'' and inserting ``equal to or 
                        greater than the amount specified in section 
                        1869(b)(1)(E)(i)(III)'';
                            (ii) in the second sentence, by striking 
                        ``$1,000 or more'' and inserting ``equal to or 
                        greater than the amount specified in section 
                        1869(b)(1)(E)(i)(III)'';
                            (iii) by inserting after the second 
                        sentence the following new sentence: ``If the 
                        amount in controversy is equal to or greater 
                        than the amount specified in subclause (I) of 
                        section 1869(b)(1)(E)(i) but less than the 
                        amount specified in subclause (III) of such 
                        section, such enrollee shall be entitled to 
                        review by a Medicare magistrate in accordance 
                        with procedures established by the Secretary 
                        pursuant to section 1869.''; and
                            (iv) in the last sentence, by striking 
                        ``the first 2 sentences of''.
                    (C) Section 1876(c)(5)(B) of the Social Security 
                Act (42 U.S.C. 1395mm(c)(5)(B)), as amended by section 
                4(b)(4), is amended--
                            (i) in the first sentence, by striking 
                        ``$100 or more'' and inserting ``equal to or 
                        greater than the amount specified in section 
                        1869(b)(1)(E)(i)(III)'';
                            (ii) in the second sentence, by striking 
                        ``$1,000 or more'' and inserting ``equal to or 
                        greater than the amount specified in section 
                        1869(b)(1)(E)(i)(III)'';
                            (iii) by inserting after the second 
                        sentence the following new sentence: ``If the 
                        amount in controversy is equal to or greater 
                        than the amount specified in subclause (I) of 
                        section 1869(b)(1)(E)(i) but less than the 
                        amount specified in subclause (III) of such 
                        section, such member shall be entitled to 
                        review by a Medicare magistrate in accordance 
                        with procedures established by the Secretary 
                        pursuant to section 1869.''; and
                            (iv) in the fourth sentence, by striking 
                        ``the first 2 sentences of''.
    (c) Calculation of Amount in Controversy for the Aggregation of 
Claims.--Section 1869(b)(1)(E)(ii) of the Social Security Act (42 
U.S.C. 1395ff(b)(1)(E)(ii)) is amended--
            (1) by redesignating subclauses (I) and (II) as items (aa) 
        and (bb), respectively, and indenting appropriately;
            (2) in the matter preceding item (aa), as so redesignated, 
        by striking ``if the appeals involve'' and inserting the 
        following: ``if--
                                    ``(I) the appeals involve--'';
            (3) in item (bb), as so redesignated, by striking the 
        period at the end and inserting ``; and''; and
            (4) by adding at the end the following new subclause:
                                    ``(II) all claims that an 
                                individual seeks to aggregate are 
                                included in the same request for an 
                                aggregated appeal.''.
    (d) Effective Date.--The amendments made by this section shall take 
effect on January 1, 2021.

SEC. 3. REMANDING APPEALS TO THE REDETERMINATION LEVEL WITH THE 
              INTRODUCTION OF NEW EVIDENCE.

    (a) In General.--Section 1869(b)(3) of the Social Security Act (42 
U.S.C. 1395ff(b)(3)) is amended by striking ``A provider of services'' 
and all that follows through the period and inserting the following new 
subparagraphs:
                    ``(A) Remand upon submission of new evidence.--
                            ``(i) In general.--Except as provided in 
                        subparagraph (B), when a party to an appeal, 
                        other than an individual entitled to benefits 
                        under part A or enrolled under part B, or both, 
                        or the Centers for Medicare & Medicaid Services 
                        or its contractors, introduces new evidence 
                        into the administrative record at a 
                        reconsideration conducted by a qualified 
                        independent contractor under subsection (c) or 
                        at any subsequent, higher level of appeal, the 
                        appeal shall be remanded for a new 
                        redetermination under subsection (a)(3), and 
                        any prior decisions (other than the initial 
                        determination made by the Secretary pursuant to 
                        subsection (a)(1)) on this appeal shall be 
                        vacated.
                            ``(ii) Requirements.--For purposes of 
                        clause (i), except to the extent otherwise 
                        provided by the Secretary in regulations, the 
                        provisions that apply to redeterminations under 
                        subsection (a) and this subsection shall apply 
                        to redeterminations of appeals that are 
                        remanded.
                    ``(B) Exceptions.--The provisions of subparagraph 
                (A) shall not apply in instances where an adjudicator 
                determines that introduction of new evidence is 
                justified due to--
                            ``(i) a lower-level adjudicator's 
                        inadvertent omission or erroneous decision to 
                        omit such evidence from the administrative 
                        record when that evidence was timely submitted 
                        to the lower-level adjudicator by a party to 
                        the appeal;
                            ``(ii) a decision by a lower-level 
                        adjudicator to issue an unfavorable decision 
                        based on new or different grounds than were the 
                        basis of a previous adjudication; or
                            ``(iii) such other circumstances for good 
                        cause as the Secretary may establish.
                    ``(C) No appeal.--A decision to remand an appeal 
                under this paragraph shall not be subject to appeal.''.
    (b) Effective Date.--The amendments made by this section shall take 
effect on January 1, 2020, and shall apply to new appeals filed on or 
after such date.

SEC. 4. EXPEDITED ACCESS TO APPEALS.

    (a) In General.--Section 1869(b)(1) of the Social Security Act (42 
U.S.C. 1395ff(b)(1)) is amended by adding at the end the following new 
subparagraph:
                    ``(H) Expedited access to appeals for decisions on 
                the record.--
                            ``(i) Decision on the record.--Not later 
                        than 1 year after the date of the enactment of 
                        this subparagraph, the Secretary shall 
                        establish by regulation and implement a process 
                        authorizing an administrative law judge 
                        reviewing a decision pursuant to this 
                        subsection or subsection (d) to issue a 
                        decision on the record in cases where, based on 
                        the evidence of record, there are no material 
                        issues of fact in dispute and the 
                        administrative law judge determines that there 
                        is a binding authority that controls the 
                        decision in the matter under review.
                            ``(ii) Application of hearing rules to 
                        decisions on the record.--The provisions of 
                        subsection (d) that govern hearings by 
                        administrative law judges shall apply to a 
                        decision issued by an administrative law judge 
                        without a hearing pursuant to clause (i) in the 
                        same manner and to the same extent as such 
                        provisions apply to a hearing by an 
                        administrative law judge.''.
    (b) Conforming Amendments.--
            (1) Section 1155 of the Social Security Act (42 U.S.C. 
        1320c-4) is amended--
                    (A) in the second sentence, by striking ``Where'' 
                and inserting ``Subject to the succeeding sentences of 
                this section, where''; and
                    (B) by adding at the end the following new 
                sentence: ``The provisions of subparagraph (H) of 
                section 1869(b)(1) shall apply with respect to 
                decisions by an administrative law judge under this 
                section in the same manner as they apply to decisions 
                by an administrative law judge under such subparagraph 
                (H).''.
            (2) Section 1852(g)(5) of the Social Security Act (42 
        U.S.C. 1395w-22(g)(5)) is amended--
                    (A) in the first sentence, by striking ``An 
                enrollee'' and inserting ``Subject to the succeeding 
                sentences of this paragraph, an enrollee''; and
                    (B) by adding at the end the following new 
                sentence: ``The provisions of subparagraph (H) of 
                section 1869(b)(1) shall apply with respect to 
                decisions by an administrative law judge under this 
                paragraph in the same manner as they apply to decisions 
                by an administrative law judge under such subparagraph 
                (H).''.
            (3) Section 1869(b)(1)(A) of the Social Security Act (42 
        U.S.C. 1395ff(b)(1)(A)) is amended by striking ``subparagraphs 
        (D) and (E)'' and inserting ``subparagraphs (D), (E), and 
        (H)''.
            (4) Section 1876(c)(5)(B) of the Social Security Act (42 
        U.S.C. 1395mm(c)(5)(B)) is amended--
                    (A) in the first sentence, by striking ``A member'' 
                and inserting ``Subject to the succeeding sentences of 
                this subparagraph, a member''; and
                    (B) by adding at the end the following new 
                sentence: ``The provisions of subparagraph (H) of 
                section 1869(b)(1) shall apply with respect to 
                decisions by an administrative law judge under this 
                subparagraph in the same manner as they apply to 
                decisions by an administrative law judge under such 
                subparagraph (H).''.
    (c) Effective Date.--Unless otherwise specified, the amendments 
made by subsections (a) and (b) shall take effect on the date of the 
enactment of this Act and shall apply to cases that are pending as of 
such date.

SEC. 5. AUTHORITY TO USE SAMPLING AND EXTRAPOLATION METHODOLOGIES AND 
              TO CONSOLIDATE APPEALS FOR ADMINISTRATIVE EFFICIENCY.

    (a) In General.--Section 1869 of the Social Security Act (42 U.S.C. 
1395ff) is amended by adding at the end the following new subsection:
    ``(j) Authorities To Promote Administrative Efficiencies.--
            ``(1) Authority to consolidate appeals.--
                    ``(A) In general.--Any individual or entity 
                conducting redeterminations, reconsiderations, reviews, 
                or hearings under subsection (a)(3), (b), (c), or (d) 
                (in this section, referred to as an `adjudicator') may 
                consolidate pending requests for review into a single 
                action, and may issue a single decision, or separate 
                decisions, with respect to such review requests--
                            ``(i) if such requests involve one or more 
                        common questions of fact or law for similar 
                        claims submitted by the same appellant;
                            ``(ii) if such requests involve claims that 
                        were included within a statistical sample 
                        during the initial determination or any 
                        previous level of appeal;
                            ``(iii) if the appellant requests 
                        aggregation of two or more claims under 
                        subsection (b)(1)(E)(ii); or
                            ``(iv) in any other case in which the 
                        adjudicator determines that consolidation would 
                        promote administrative efficiency, consistent 
                        with such standards as the Secretary may 
                        establish by regulation.
                    ``(B) Deadlines.--The Secretary may establish 
                applicable timeframes for appellants to request 
                consolidations and for adjudicators to issue decisions 
                on appeals that have been consolidated.
            ``(2) Requirements for claims that were included in an 
        extrapolated overpayment or previously consolidated.--An 
        individual or entity requesting a redetermination, 
        reconsideration, review or hearing under subsection (a)(3), 
        (b), (c), or (d) with respect to two or more claims that were 
        included in an extrapolated overpayment, or claims that were 
        consolidated into a single appeal at a lower-level adjudication 
        under this section, must submit a single request for review or 
        hearing with respect to such claims in order to be entitled to 
        a review or hearing.
            ``(3) Authority to use statistical sampling and 
        extrapolation methodologies in adjudications.--With the consent 
        of the appellant, an adjudicator may use statistical sampling 
        and extrapolation methodologies in reaching a decision with 
        respect to a claim or claims for benefits for items or services 
        furnished under part A or B. When an appeal involves a decision 
        that was based on a statistical sample at the lower level, the 
        adjudicator's decision shall be based on the same statistical 
        sample.''.
    (b) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to requests for 
        review that are filed after the date of the enactment of this 
        Act.
            (2) Exception.--The requirements described in subsection 
        (j)(2) of section 1869 of the Social Security Act (42 U.S.C. 
        1395ff), as added by subsection (a), shall apply to requests 
        for review and requests for hearing that are pending at any 
        level of appeal as of the date of enactment of this Act and to 
        those filed after such date.

SEC. 6. IDENTIFICATION AND REFERRAL OF FRAUD.

    Not later than 1 year after the date of enactment of this Act, the 
Secretary of Health and Human Services, in consultation with the 
Inspector General of the Department of Health and Human Services and 
the Attorney General of the United States, shall establish and 
implement a process under which the Office of Medicare Hearings and 
Appeals and the Departmental Appeals Board of the Department of Health 
and Human Services shall refer cases in which there is a credible 
suspicion of fraudulent activity to appropriate law enforcement 
agencies and to the Centers for Medicare & Medicaid Services.

SEC. 7. STUDY TO ASSESS HEARING PARTICIPATION.

    (a) Study.--Not later than 1 year after the date of enactment of 
this Act, the Secretary of Health and Human Services shall conduct a 
study to determine whether it would be feasible to cost-effectively 
increase the participation, with respect to hearings conducted by the 
Office of Medicare Hearings and Appeals, of--
            (1) the Centers for Medicare & Medicaid Services;
            (2) entities serving as qualified independent contractors 
        under section 1869(c) of the Social Security Act (42 U.S.C. 
        1395ff(c));
            (3) entities serving as medicare administrative contractors 
        under section 1874A of such Act (42 U.S.C. 1395kk-1);
            (4) entities serving as recovery audit contractors under 
        section 1893(h) of such Act (42 U.S.C. 1395ddd(h)); and
            (5) other Medicare claims review entities determined 
        appropriate by the Secretary.
    (b) Report.--Not later than 2 years after the date of the enactment 
of this Act, the Secretary of Health and Human Services shall publish a 
report containing the results of the study required under subsection 
(a) on the Internet website of the Department of Health and Human 
Services.

SEC. 8. IMPROVEMENTS TO THE OFFICE OF MEDICARE HEARINGS AND APPEALS.

    (a) Training for ALJs and Medicare Magistrates.--Section 1869(e)(3) 
of the Social Security Act (42 U.S.C. 1395ff(e)(3)) is amended--
            (1) in the paragraph heading, by striking ``and 
        administrative law judges'' and inserting ``, administrative 
        law judges, and medicare magistrates; annual training for 
        administrative law judges and medicare magistrates'';
            (2) by striking ``The Secretary'' and inserting the 
        following:
                    ``(A) Continuing education requirement.--The 
                Secretary'';
            (3) by inserting ``and, beginning in 2020, to Medicare 
        magistrates'' after ``administrative law judges'' the first 
        place it appears;
            (4) by striking ``and administrative law judges'' and 
        inserting ``, administrative law judges, and Medicare 
        magistrates''; and
            (5) by adding at the end the following new subparagraph:
                    ``(B) Annual training.--Beginning with calendar 
                year 2020, each calendar year the Secretary shall 
                provide to each administrative law judge and Medicare 
                magistrate within the Office of Medicare Hearings and 
                Appeals training on Medicare policies, including any 
                policies that were changed or instituted in the 
                previous year.''.
    (b) Publication of Appeals Information.--Section 1869(e) of the 
Social Security Act (42 U.S.C. 1395ff(e)) is amended by adding at the 
end the following new paragraph:
            ``(5) Publication of appeals information.--Not later than 
        January 1, 2020, and annually thereafter, the Secretary of 
        Health and Human Services shall publish and maintain on the 
        Internet website of the Department of Health and Human Services 
        the following information regarding appeals heard by the Office 
        of Medicare Hearings and Appeals for each fiscal year:
                    ``(A) The percentage of appeals that received fully 
                favorable, partially favorable, and unfavorable 
                decisions.
                    ``(B) For each type of service, the percentage of 
                appeals that received fully favorable, partially 
                favorable, and unfavorable decisions.
                    ``(C) The average length of time elapsed between 
                the initial request for review and a final decision.
                    ``(D) Such other information as the Secretary 
                determines necessary to ensure greater transparency for 
                the Office of Medicare Hearings and Appeals.''.

SEC. 9. REVIEW PROGRAM IMPROVEMENTS.

    (a) In General.--Section 1893 of the Social Security Act (42 U.S.C. 
1395ddd) is amended--
            (1) in subsection (b), by adding at the end the following 
        new paragraph:
            ``(7) The review program improvements described in 
        subsection (k).''; and
            (2) by adding at the end the following new subsection:
    ``(k) Review Program Improvements.--
            ``(1) In general.--
                    ``(A) Guidelines.--
                            ``(i) In general.--To promote uniformity 
                        and consistency in initial determinations and 
                        appeals decisions relating to the 
                        appropriateness of payment with respect to 
                        items or services furnished under this title, 
                        the Secretary shall establish claim review 
                        guidelines for review contractors for reviewing 
                        claims for payment submitted by providers of 
                        services and suppliers.
                            ``(ii) Requirements.--Prior to the 
                        implementation of the claim review guidelines 
                        described in subparagraph (A)(i), the Secretary 
                        shall--
                                    ``(I) approve the claim review 
                                guidelines;
                                    ``(II) make the claim review 
                                guidelines publicly available as 
                                described in subparagraph (B); and
                                    ``(III) ensure that review 
                                contractors, Medicare magistrates, 
                                administrative law judges, and 
                                appropriate members of the Departmental 
                                Appeals Board are trained in the 
                                application of the claim review 
                                guidelines.
                            ``(iii) Transition period.--The Secretary 
                        may provide for or establish one or more 
                        transition periods, during which the use of 
                        existing claim review guidelines for reviewing 
                        claims submitted by providers of services and 
                        suppliers shall be permitted to continue until 
                        such time as the Secretary is able to review 
                        and approve the claim review guidelines 
                        established under this subparagraph.
                    ``(B) Transparency.--
                            ``(i) In general.--The Secretary shall 
                        ensure that the information described in clause 
                        (iii)--
                                    ``(I) is published on the Internet 
                                website of the Department of Health and 
                                Human Services for not less than 30 
                                days prior to its implementation;
                                    ``(II) remains available on such 
                                Internet website after such 
                                publication; and
                                    ``(III) is updated at least 
                                annually.
                            ``(ii) Expedited process.--The Secretary of 
                        Health and Human Services may expedite the 
                        process described in clause (i) for claims 
                        review guidelines that are expected to impact 
                        the improper payment rate, frequency of denials 
                        of payment, or costs to the Medicare program.
                            ``(iii) Information described.--The 
                        information described in this clause is the 
                        following:
                                    ``(I) Subject to clause (ii) and 
                                subparagraph (A), any new claim review 
                                guideline approved for use under this 
                                paragraph.
                                    ``(II) Any updates or revisions to 
                                existing claim review guidelines.
                    ``(C) Limitation.--Nothing in this section is 
                intended to--
                            ``(i) delineate sample size or how claims 
                        are to be selected for review;
                            ``(ii) require the publication of 
                        algorithms or methodologies used for claim 
                        selection; or
                            ``(iii) require the publication of 
                        information that could promote fraud or 
                        potential gaming.
                    ``(D) Review contractor defined.--In this 
                subsection, the term `review contractor' means--
                            ``(i) a medicare administrative contractor 
                        (as defined in section 1874A(a)(3)(A)) with a 
                        contract to conduct prepayment or post-payment 
                        reviews of claims for payment by providers of 
                        services or suppliers;
                            ``(ii) a recovery audit contractor with a 
                        contract under subsection (h); or
                            ``(iii) any other contractor the Secretary 
                        determines appropriate.
            ``(2) Program integrity initiatives.--To improve existing 
        and future Medicare program integrity initiatives, and to limit 
        unnecessary burdens on providers of services and suppliers, the 
        Secretary shall designate a point of contact to oversee and 
        undertake the following:
                    ``(A) Develop a comprehensive strategy for claim 
                review determinations made on a prepayment, post-
                payment, or prior-authorization basis that--
                            ``(i) focuses on identifying and reducing 
                        those claim errors that have the largest impact 
                        on the improper payment rate, pose the greatest 
                        risk to the Federal Hospital Insurance Trust 
                        Fund under section 1817 or the Federal 
                        Supplementary Medical Insurance Trust Fund 
                        under section 1841, or are likely to negatively 
                        affect quality of care;
                            ``(ii) reduces unnecessary burden on 
                        providers of services and suppliers and 
                        minimizes any negative effects on Medicare 
                        beneficiaries; and
                            ``(iii) utilizes data and other sources, 
                        including claims data, improper payment rate 
                        data, and reports from the Office of the 
                        Inspector General of the Department of Health 
                        and Human Services, the General Accountability 
                        Office, and the Medicare Payment Advisory 
                        Commission.
                    ``(B) Develop methods designed to minimize, using 
                available data, unnecessary duplicate reviews by review 
                contractors.
                    ``(C) To the extent possible given the specific 
                mission of each entity that has contracted with the 
                Secretary, work with all review contractors to develop 
                a uniform, consistent, and transparent review process 
                to reduce the burden on providers of services and 
                suppliers, including a uniform approach for such 
                entities to notify parties of pending reviews and to 
                request medical documentation, improved communication 
                with providers of services and suppliers, better 
                refinement of audits to target claims that are at the 
                highest risk for improper payments or other errors, and 
                any other areas in which the Secretary determines that 
                the burden on providers of services and suppliers may 
                be decreased.
                    ``(D) To the extent practicable, identify local 
                coverage determinations, national coverage 
                determinations, regulations, and program instructions 
                issued by the Centers for Medicare & Medicaid Services 
                for the Medicare program that need updating or that 
                inappropriately conflict with other Medicare policies 
                and make modifications where appropriate, and, if 
                necessary, establish new policies or claim review 
                guidelines with input from stakeholders as appropriate.
                    ``(E) Publish on the Internet website of the 
                Department of Health and Human Services the volume and 
                type of prepayment and post-payment claim reviews 
                performed by medicare administrative contractors under 
                section 1874A and recovery audit contractors under 
                subsection (h).
                    ``(F) Coordinate with the Office of Medicare 
                Hearings and Appeals and the Departmental Appeals Board 
                of the Department of Health and Human Services in the 
                implementation of the improved claim review guidelines 
                and evidentiary standards established by the provisions 
                of, and the amendments made by, the Audit & Appeals 
                Fairness, Integrity, and Reforms in Medicare Act of 
                2019, such as the decision to remand an appeal.
                    ``(G) Ensure that providers of services and 
                suppliers subject to post-payment review by a medicare 
                administrative contractor are granted a discussion 
                period with the contractor of at least 30 days from the 
                letter from the contractor regarding the result of the 
                review.
                    ``(H) Develop qualification standards for review 
                contractors that require prepayment and post-payment 
                reviews of claims for payment submitted by providers of 
                services or suppliers be overseen by a medical director 
                of the review contractor who has knowledge of relevant 
                Medicare laws, regulations, and program instruction, as 
                appropriate.
                    ``(I) Undertake verification methods, such as 
                sampling, to determine whether decisions by review 
                contractors are consistent with Medicare laws, 
                regulations, and program instruction (taking into 
                account geographical variations that are a result of 
                local coverage determinations).
                    ``(J) Determine whether punitive actions against 
                ineffective review contractors could be taken and what, 
                if any, financial incentives or disincentives could be 
                used to promote the accuracy of a review contractor's 
                reviews.''.
    (b) Annual RAC Report.--Section 1893(h)(8) of the Social Security 
Act (42 U.S.C. 1395ddd(h)(8)) is amended by inserting ``, and, with 
respect to reports submitted after the date of the enactment of the 
Audit & Appeals Fairness, Integrity, and Reforms in Medicare Act of 
2019, the number of claims corrected in the discussion period, the 
percentage of appeals of determinations by recovery audit contractors 
that were ultimately successful, a careful description of the 
denominator of total audits and appeals (given the likelihood that many 
appeals in a given year will not have a decision in that year), and 
separate reports on complex Medicare part A, complex Medicare part B, 
semiautomated, and automated reviews'' before the period at the end.
    (c) Independence of Adjudicators.--Nothing in this section or the 
amendments made thereby shall be construed as authorizing the Secretary 
of Health and Human Services to limit the authority or decisional 
independence of Medicare magistrates, administrative law judges, or the 
Departmental Appeals Board of the Department of Health and Human 
Services.

SEC. 10. CREATION OF MEDICARE PROVIDER AND SUPPLIER OMBUDSMAN FOR 
              REVIEWS AND APPEALS.

    Section 1808 of the Social Security Act (42 U.S.C. 1395b-9) is 
amended by adding at the end the following new subsection:
    ``(e) Medicare Reviews and Appeals Ombudsman.--
            ``(1) In general.--Not later than 1 year after the date of 
        the enactment of this subsection, the Secretary shall appoint 
        within the Centers for Medicare & Medicaid Services a Medicare 
        Reviews and Appeals Ombudsman.
            ``(2) Duties.--The Medicare Reviews and Appeals Ombudsman 
        shall--
                    ``(A) identify, investigate, and assist in the 
                resolution of complaints and inquiries related to the 
                Medicare audits and appeals process from providers of 
                services or suppliers with respect to benefits under 
                part A or B;
                    ``(B) identify trends in complaints and inquiries 
                regarding the current Medicare review and appeals 
                systems to provide recommendations for improvements to 
                the Secretary that would improve the efficacy and 
                efficiency of claim review and appeals systems, as well 
                as communication to beneficiaries, providers of 
                services, and suppliers;
                    ``(C) design a system by which to objectively 
                measure and evaluate reviewer responsiveness to 
                addressing inquiries from providers of services and 
                suppliers and inquiries from the Ombudsman;
                    ``(D) provide assistance to appellants and those 
                considering an appeal;
                    ``(E) publish data regarding the number of review 
                determinations appealed, each appeal's outcome, and 
                aggregate appeal statistics--
                            ``(i) for each medicare administrative 
                        contractor conducting redeterminations under 
                        section 1869(a)(3);
                            ``(ii) for each qualified independent 
                        contractor conducting reconsiderations under 
                        section 1869(c);
                            ``(iii) for each recovery audit contractor 
                        conducting reviews under section 1893(h);
                            ``(iv) by type of provider of services; and
                            ``(v) by type of supplier;
                    ``(F) assist in education and training efforts for 
                providers of services, suppliers, and review 
                contractors (as defined in section 1893(k)(1)(D));
                    ``(G) communicate with the Medicare Beneficiary 
                Ombudsman to assist with the identification, 
                investigation, and resolution of beneficiary-related 
                complaints, including those that overlap with requests 
                for review and appeals submitted by providers of 
                services or suppliers; and
                    ``(H) perform such other duties as determined 
                appropriate by the Secretary.''.

SEC. 11. LIMITING THE AUDIT AND RECOVERY PERIOD FOR PATIENT STATUS 
              REVIEWS.

    (a) In General.--Section 1893(h)(4) of the Social Security Act (42 
U.S.C. 1395ddd(h)(4)) is amended--
            (1) by redesignating subparagraphs (A) and (B) as clauses 
        (i) and (ii), respectively, and moving such clauses 2 ems to 
        the right;
            (2) by striking ``Each such'' and inserting the following:
                    ``(A) In general.--Except as provided in 
                subparagraph (B), each such''; and
            (3) by adding at the end the following new subparagraph:
                    ``(B) Limitation.--
                            ``(i) In general.--With respect to the 
                        classification of an individual entitled to 
                        benefits under part A or enrolled under part B, 
                        or both, as an inpatient or an outpatient for 
                        purposes of hospital claims for payment for 
                        items or services furnished to such individual 
                        under this title, such contracts shall provide 
                        that a recovery audit contractor shall only 
                        send additional documentation requests related 
                        to the appropriateness of such classification 
                        in the first 6 months after the date on which 
                        such items or services were furnished.
                            ``(ii) Exception.--The limitation described 
                        in clause (i) shall not apply where a claim for 
                        payment is submitted more than 3 months after 
                        the date on which such items or services were 
                        furnished.''.
    (b) Study on Shortening the Audit and Recovery Period for Other 
Reviews.--
            (1) Study.--The Secretary of Health and Human Services 
        shall conduct a study to assess--
                    (A) the potential burden on providers of services 
                (as defined in subsection (u) of section 1861 of the 
                Social Security Act (42 U.S.C. 1395x)) and suppliers 
                (as defined in subsection (d) of such section) under 
                the Medicare program of the audit and recovery period 
                applicable to audit and recovery activities conducted 
                by recovery audit contractors under section 1893(h)(4) 
                of such Act (42 U.S.C. 1395ddd(h)(4)); and
                    (B) the impact of shortening such period with 
                respect to different types of reviews.
            (2) Report.--Not later than 1 year after the date of the 
        enactment of this Act, the Secretary of Health and Human 
        Services shall publish a report containing the results of the 
        study required under paragraph (1) on the Internet website of 
        the Department of Health and Human Services.
    (c) Authority To Implement Shorter Audit and Recovery Period.--
Section 1893(h)(4) of the Social Security Act (42 U.S.C. 
1395ddd(h)(4)), as amended by subsection (a), is further amended--
            (1) in subparagraph (A), by striking ``subparagraph (B)'' 
        and inserting ``subparagraphs (B) and (C)''; and
            (2) by adding at the end the following new subparagraph:
                    ``(C) Authority to implement shorter audit and 
                recovery period.--Notwithstanding subparagraph (A)(ii), 
                with respect to payments made under this title for 
                specific categories of services, the Secretary may 
                enter into contracts under paragraph (1) that provide 
                for a retrospective period during which audit and 
                recovery activities may be conducted of not more than 3 
                years.''.
    (d) Report on RAC Payment Structure.--Not later than 6 months after 
the date of the enactment of this Act, the Secretary of Health and 
Human Services shall submit to Congress a report on ways to change, in 
a budget neutral manner, the payment structure for recovery audit 
contractors under section 1893(h)(1) of the Social Security Act (42 
U.S.C. 1395ddd(h)(1)) from an incentive-based model to a non-incentive 
based approach that does not impose additional financial burdens on 
providers.

SEC. 12. INCENTIVES AND DISINCENTIVES FOR MEDICARE CONTRACTORS, 
              PROVIDERS, AND SUPPLIERS.

    Section 1893 of the Social Security Act (42 U.S.C. 1395ddd), as 
amended by section 10, is further amended by adding at the end the 
following new subsection:
    ``(l) Compliance Incentive Program.--
            ``(1) In general.--Not later than 1 year after the date of 
        enactment of this subsection, the Secretary shall establish a 
        compliance incentive program, consisting of the components 
        described in paragraphs (2) and (3), to encourage--
                    ``(A) providers of services and suppliers to submit 
                accurate claims that comply with this title and the 
                policies, regulations, and program instructions 
                promulgated thereunder, as well as any applicable 
                national or local coverage determinations; and
                    ``(B) entities that have entered into contracts 
                with the Secretary under subsection (h) (referred to in 
                this subsection as `review contractors') to conduct 
                reviews under this section in a manner that is 
                consistent with the provisions of this title and the 
                claim review guidelines, regulations, and program 
                instructions promulgated thereunder, as well as any 
                applicable national or local coverage determinations.
            ``(2) Compliance with claim procedures by providers of 
        services and suppliers.--
                    ``(A) In general.--Not later than 6 months after 
                the date of enactment of this subsection, the Secretary 
                shall establish a system through which a provider of 
                services or supplier that has achieved a low rate of 
                denials of claims for payment subject to additional 
                documentation requests over a 2-year period, as 
                determined by the Secretary, shall be exempt for a 
                period of 1 year from any post-payment review of claims 
                for payment conducted by review contractors.
                    ``(B) Limitation.--The Secretary shall not exempt 
                or shall rescind an exemption granted to a provider of 
                services or supplier under subparagraph (A) if the 
                Secretary determines that there is a reasonable basis 
                to suspect gaming, fraud, abuse, or delay in the 
                provision of services or items by such provider or 
                services or supplier.
            ``(3) Compliance with review procedures by medicare 
        contractors.--
                    ``(A) In general.--Not later than 6 months after 
                the date of enactment of this subsection, the Secretary 
                shall establish a process, which may include the use of 
                sampling, for determining the frequency with which the 
                decisions made by a review contractor with respect to 
                reviews conducted under this section are consistent 
                with the provisions of this title and the policies, 
                regulations, and program instructions promulgated 
                thereunder, as well as any applicable national or local 
                coverage determinations. The results of this process 
                shall be made available to the public on the Internet 
                website of the Department of Health and Human Services.
                    ``(B) Access to medical records by review 
                contractors.--
                            ``(i) Access to records based on 
                        performance review.--Not later than 6 months 
                        after the date of enactment of this Act, the 
                        Secretary shall establish a system under which, 
                        in addition to any other adjustments that the 
                        Secretary may make to the number of medical 
                        records that a review contractor may request, 
                        for any incentive period--
                                    ``(I) the number of medical records 
                                that a review contractor that was a 
                                high-performing review contractor in 
                                the performance review period 
                                associated with such incentive period 
                                may request from a provider of services 
                                or supplier in carrying out activities 
                                under this section may be increased (on 
                                a sliding scale); and
                                    ``(II) the number of medical 
                                records that a review contractor that 
                                was a low-performing review contractor 
                                in the performance review period 
                                associated with such incentive period 
                                may request from a provider of services 
                                or supplier in carrying out activities 
                                under this section may be decreased (on 
                                a sliding scale).
                            ``(ii) Definitions.--In this subparagraph:
                                    ``(I) High-performing review 
                                contractor.--The term `high-performing 
                                review contractor' means a review 
                                contractor that, for a given 
                                performance review period, makes 
                                decisions with respect to reviews 
                                conducted under this section of the 
                                activities of providers of services and 
                                suppliers that are consistent with the 
                                provisions of this title and the 
                                policies, regulations, and program 
                                instructions promulgated thereunder, as 
                                well as any applicable national or 
                                local coverage determinations, at a 
                                rate that is equal to or greater than 
                                95 percent.
                                    ``(II) Incentive period.--The term 
                                `incentive period' means, with respect 
                                to a performance review period, a 
                                period of time (to be determined by the 
                                Secretary) following such performance 
                                review period during which the number 
                                of medical records that a review 
                                contractor may request from a provider 
                                of services or supplier may be 
                                increased or decreased based on such 
                                contractor's status as a high-
                                performing review contractor or a low-
                                performing review contractor for such 
                                performance review period.
                                    ``(III) Low-performing review 
                                contractor.--The term `low-performing 
                                review contractor' means a review 
                                contractor that, for a given 
                                performance review period, is not 
                                described in subclause (I).
                                    ``(IV) Performance review period.--
                                The term `performance review period' 
                                means a period of time (to be 
                                determined by the Secretary) during 
                                which a review contractor's decisions 
                                with respect to reviews conducted under 
                                this section are evaluated to determine 
                                if such review contractor is a high-
                                performing contractor or a low-
                                performing contractor for such 
                                period.''.
                                 <all>