I 114th CONGRESS 1st Session H. R. 1526 IN THE HOUSE OF REPRESENTATIVES March 23, 2015 Mr. Meadows introduced the following bill; which was referred to the Committee on Ways and Means , and in addition to the Committee on Energy and Commerce , for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To amend title XVIII of the Social Security Act to modify policies relating to payment under the Medicare program for durable medical equipment, orthotics and prosthetics, and prosthetic devices, and for other purposes.

1. Short title This Act may be cited as the Medicare Audit Improvement Act of 2015 . 2. Medicare payment for durable medical equipment, orthotics and prosthetics, and prosthetic devices (a) Use of prosthetist and orthotist notes for determinations of medical necessity Section 1834(h)(1) of the Social Security Act ( 42 U.S.C. 1395m(h)(1) ) is amended by adding at the end the following new subparagraph: (I) Use of prosthetist and orthotist notes for determinations of medical necessity In determining under section 1862(a)(1) whether an orthotic or prosthetic or prosthetic device furnished to an individual on or after the date of the enactment of this subparagraph is reasonable and necessary, any records or documentation of an orthotist or prosthetist who furnished such orthotic or prosthetic or prosthetic device to such individual shall be considered part of the medical record of the individual. . (b) Authorizing MAC and RAC review for supplier license or accreditation for durable medical equipment and orthotics and prosthetics (1) MAC review Section 1874A(a)(4)(A) of the Social Security Act ( 42 U.S.C. 1395kk–1(a)(4)(A) ) is amended by inserting , including determining that payment shall not be made to a supplier of durable medical equipment, or of orthotics and prosthetics, for which a claim for payment is made on or after the date of the enactment of the Medicare Audit Improvement Act of 2015 on account of the application of section 1834(h)(1)(F) (relating to supplier licensing or accreditation by a National Board) before the period at the end. (2) RAC review Section 1893(h) of the Social Security Act ( 42 U.S.C. 1395ddd(h) ) is amended by adding at the end the following new paragraph: (10) Review of supplier license or accreditation for durable medical equipment and orthotics and prosthetics For purposes of paragraph (1), with respect to durable medical equipment and orthotics and prosthetics for which a claim for payment was made by a supplier in 2011 or a subsequent year, a payment that should not have been made to such supplier for such durable medical equipment or such orthotics and prosthetics on account of the application of section 1834(h)(1)(F) (relating to supplier licensing or accreditation by a National Board) shall be considered an overpayment under this title. . (c) Exempting services that receive prior authorization from RAC review Section 1893(h) of the Social Security Act ( 42 U.S.C. 1395ddd(h) ), as amended by subsection (b)(2), is further amended— (1) in paragraph (1), by inserting subject to paragraph (11), after Program, ; and (2) by adding at the end the following new paragraph: (11) Services that receive prior authorization exempted from review Recovery audit contractors may not conduct reviews with respect to payments under this title for durable medical equipment, orthotics or prosthetics, or prosthetic devices for which audits under this subsection have not been initiated before the date of the enactment of this paragraph and to which prior authorization under this title applies. . (d) Annual report on overturned MAC and RAC denials Section 1874A of the Social Security Act ( 42 U.S.C. 1395kk–1 ) is amended by adding at the end the following new subsection: (h) Annual report on overturned MAC and RAC denials (1) In general Not later than March 1 of 2016, and of each year thereafter, the Secretary shall submit to Congress a report that includes the information described in paragraph (2). (2) Information described The information described in this paragraph, with respect to determinations by medicare administrative contractors that payment cannot be made, and by recovery audit contractors that payment should not have been made, under this title for items and services, is the following: (A) The number of such determinations that, in the prior year, were determined on appeal to have been incorrect. (B) The HCPCS codes that, in the prior year, accounted for— (i) the greatest number of such determinations; and (ii) the greatest total amount payment being at issue in such determinations. (C) The number of such determinations that, in the prior year, were based upon a determination— (i) that the items and services were furnished to an individual as an inpatient rather than as an outpatient; (ii) regarding the application of the medical review activities described in the notice entitled Selecting Hospital Claims for Patient Status Reviews: Admissions On or After October 1, 2013 , posted on the Internet website of the Centers for Medicare & Medicaid Services (commonly known as the two-midnights rule ); (iii) that applied to a provider of outpatient services; and (iv) regarding a claim for payment for orthotics or prosthetics or prosthetic devices. . (e) Treating orthotics and prosthetics separately from medical equipment and supplies (1) In general Section 1834 of the Social Security Act ( 42 U.S.C. 1395m ) is amended— (A) in subsection (j)(5)— (i) by striking subparagraph (C); and (ii) by redesignating subparagraphs (D) through (F) as subparagraphs (C) through (E), respectively; (B) by adding at the end the following new subsection: (r) Requirements for orthotists and prosthetists (1) Issuance and renewal of supplier number (A) Payment No payment may be made under this part for orthotics and prosthetics (as described in section 1861(s)(9)) furnished by a supplier of orthotics and prosthetics unless such supplier obtains (and renews at such intervals as the Secretary may require) a supplier number. (B) Standards for possessing a supplier number A supplier of orthotics and prosthetics may not obtain a supplier number unless the supplier— (i) complies with all applicable State and Federal licensure and regulatory requirements; (ii) acquires accreditation from the American Board for Certification in Orthotics, Prosthetics and Pedorthics, Inc., the Board of Certification/Accreditation, International, or such other accreditation entity that the Secretary determines to have accreditation standards that are equivalent to the accreditation standards of such boards; (iii) maintains a physical facility on an appropriate site; (iv) has proof of appropriate liability insurance; and (v) meets such other requirements as the Secretary may specify. (C) Prohibition against multiple supplier numbers The Secretary may not issue more than one supplier number to any supplier of orthotics and prosthetics unless the issuance of more than one number is appropriate to identify other entities under the supplier’s ownership or control. (D) Prohibition against delegation of supplier determinations The Secretary may not delegate (other than by contract under section 1842) the responsibility to determine whether suppliers meet the standards necessary to obtain a supplier number. (E) Construction relating to previously issued and renewed supplier numbers Supplier numbers obtained under subsection (j)(1) prior to the enactment of this subsection by suppliers of orthotics and prosthetics that meet the standards described in subparagraph (B) shall be considered to have obtained a supplier number for purposes of subparagraph (A). (2) Certificates of medical necessity (A) Information provided by suppliers of orthotics and prosthetics on certificates of medical necessity (i) In general A supplier of orthotics and prosthetics may distribute to physicians, or to individuals entitled to benefits under this part, a certificate of medical necessity for commercial purposes if the certificate contains the following information: (I) An identification of the supplier and the beneficiary to whom such orthotics and prosthetics are furnished. (II) An identification of the treating physician, including the name, Medicare provider number, address, and telephone number of such physician. (III) A description of such orthotics and prosthetics. (IV) Any billing code identifying such orthotics and prosthetics, including the HCPCS codes, and summary descriptors of the items and services being recommended. (V) The codes used under this title for payment for such orthotics and prosthetics, a description of the medical and functional condition of the beneficiary, and information about the need of the beneficiary for the orthotics or prosthetics. (VI) Any other administrative information identified by the Secretary. (ii) Information on payment amount and charges If a supplier distributes a certificate of medical necessity for orthotics and prosthetics, the supplier shall also list on the certificate of medical necessity the fee schedule amount and the supplier’s charge for the orthotics and prosthetics being furnished prior to distribution of such certificate to the physician. (iii) Penalty Any supplier of orthotics and prosthetics who knowingly and willfully distributes a certificate of medical necessity in violation of clause (i) or fails to provide the information required under clause (ii) or (iii) is subject to a civil money penalty in an amount not to exceed $1,000 for each such certificate of medical necessity so distributed. The provisions of section 1128A (other than subsections (a) and (b)) shall apply to civil money penalties under this subparagraph in the same manner as they apply to a penalty or proceeding under section 1128A(a). (B) Signature of treating physician required The Secretary shall require that, in order for a certificate of medical necessity submitted to the Secretary to be treated as showing that orthotics and prosthetics are reasonable and necessary for the diagnosis or treatment of an illness or injury or to improve the functioning of a malformed body member, the certificate of medical necessity be signed by the treating physician. (C) Definition For purposes of this paragraph, the term certificate of medical necessity means a form or other document, including a detailed written order, containing information required by the Secretary to be submitted to show that orthotics and prosthetics are reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member. (3) Coverage and review criteria The Secretary shall annually review the coverage and utilization of orthotics and prosthetics to determine whether such orthotics and prosthetics should be made subject to coverage and utilization review criteria, and if appropriate, shall develop and apply such criteria to such items. (4) Limitation on patient liability (A) In general Subject to subparagraph (B), if a supplier of orthotics and prosthetics furnishes orthotics and prosthetics to an individual for which no payment may be made under this part (including, subject to section 1879, because the orthotics and prosthetics are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member, as required under section 1862(a)(1)), any expenses incurred for such orthotics and prosthetics furnished to an individual by such a supplier not on an assigned basis shall be the responsibility of such supplier. The individual shall have no financial responsibility for such expenses and the supplier shall refund on a timely basis to the individual (and shall be liable to the individual for) any amounts collected from the individual for such items or services. The provisions of subsection (a)(18) shall apply to refunds required under the previous sentence in the same manner as such provisions apply to refunds under such subsection. (B) Exception If a supplier of orthotics and prosthetics furnishes orthotics and prosthetics to an individual for which payment is denied in advance under subsection (a)(15), expenses incurred for such orthotics and prosthetics shall be the responsibility of the individual. . (2) Conforming amendments Section 1865(a)(1) of the Social Security Act ( 42 U.S.C. 1395bb(a)(1) ) is amended by inserting or section 1834(r), as applicable, after section 1834(j) . (f) Limitation of competitive acquisition for off-the-Shelf orthotics Section 1847(a)(7)(A) of the Social Security Act ( 42 U.S.C. 1395w–3(a)(7)(A) ) is amended— (1) in clause (i), by striking or at the end; (2) by redesignating clause (ii) as clause (iii); and (3) by inserting after clause (i) the following new clause: (ii) by an orthotist or prosthetist described in subclause (II) or (III) of section 1834(h)(1)(F)(iii) to the patients of the orthotist or prosthetist as part of the professional service of the orthotist or prosthetist; or . (g) Limiting recoupment from Medicare appellants until completion of ALJ appeals process Section 1869 of the Social Security Act ( 42 U.S.C. 1395ff ) is amended by adding at the end the following new subsection: (j) Limitation on recoupment prior to completion of ALJ appeals process (1) In general Notwithstanding any other provision of this section, the Secretary may not recoup more than half of the amount of any payments made to a qualifying provider or supplier with respect to a claim for items or services that is subject to a determination, reconsideration, or hearing under this subsection, before— (A) the date on which a decision has been rendered under subsection (d)(1) with respect to such claim; or (B) in the case of a determination or reconsideration for such claim which is not eligible for a hearing under subsection (d)(1), the date on which the appeals process for such claim under this section (other than subsection (h)) is treated as exhausted. (2) Qualifying provider or supplier defined For purposes of paragraph (1), the term qualifying provider or supplier means a provider of services or supplier that— (A) has maintained a Medicare provider number for six years or longer; (B) is not under investigation for any potential violations of applicable Federal and State laws and regulations; (C) has a good record of submitting proper claims for items or services under this title, as determined by the Secretary; and (D) furnished the items or services described in paragraph (1) to an individual in person. . (h) Eligibility for payment for suppliers and providers based on qualifications (1) In general Title XVIII of the Social Security Act is amended by inserting after section 1863 ( 42 U.S.C. 1395z ) the following new section: 1863A. Eligibility for payment for suppliers and providers based on qualifications (a) In general No payment may be made under this title for an item or service that is furnished— (1) in a State that requires a provider or supplier to be licensed in order to furnish such item or service, unless the provider or supplier furnishing such item or service possesses all applicable licensure from the State; or (2) in a State that does not require a provider or supplier to be licensed in order to furnish such item or service, unless the provider or supplier meets all applicable qualifications, as determined by the Secretary. (b) Applicable qualifications defined For purposes of subsection (a), the term applicable qualifications means, with respect to a provider or supplier, all applicable accreditations, certifications, and credentials required of such provider or supplier under this title in order for such provider and supplier to receive payment under this title for items or services furnished by such provider or supplier, including the requirements described in the special payment rules for certain prosthetics and custom-fabricated orthotics under section 1834(h)(1)(F). . (2) Effective date This section shall apply with respect to items and services furnished on or after the date of the enactment of this section.