Audit & Appeals Fairness, Integrity, and Reforms in Medicare Act of 2019
A BILL
To amend title XVIII of the Social Security Act to improve the efficiency of the Medicare appeals process, and for other purposes.
2. Authority to establish a process to review low value claims; revision of amount in controversy thresholds
Authority To establish a process To review low value claims—
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.”
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)”.
Amount in controversy thresholds—
In general— Section 1869(b)(1)(E) of the Social Security Act (42 U.S.C. 1395ff(b)(1)(E)) is amended—
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.”
in clause (iii)—
by striking “For requests for hearings” and inserting “For requests for Medicare magistrate reviews, hearings,”;
by striking “2004” and inserting “2021”; and
by striking “2003” and inserting “2020”; and
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)).”
Conforming amendments—
Section 1155 of the Social Security Act (42 U.S.C. 1320c–4), as amended by section 4(b)(1), is amended—
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)”;
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
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).”.
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—
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)”;
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)”;
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
in the last sentence, by striking “the first 2 sentences of”.
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—
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)”;
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)”;
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
in the fourth sentence, by striking “the first 2 sentences of”.
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—
by redesignating subclauses (I) and (II) as items (aa) and (bb), respectively, and indenting appropriately;
in the matter preceding item (aa), as so redesignated, by striking “if the appeals involve” and inserting the following: “if—
“(I) the appeals involve—”
in item (bb), as so redesignated, by striking the period at the end and inserting “; and”; and
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.”
Effective date— The amendments made by this section shall take effect on January 1, 2021.
3. Remanding appeals to the redetermination level with the introduction of new evidence
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.”
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.
4. Expedited access to appeals
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.”
Conforming amendments—
Section 1155 of the Social Security Act (42 U.S.C. 1320c–4) is amended—
in the second sentence, by striking “Where” and inserting “Subject to the succeeding sentences of this section, where”; and
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).”.
Section 1852(g)(5) of the Social Security Act (42 U.S.C. 1395w–22(g)(5)) is amended—
in the first sentence, by striking “An enrollee” and inserting “Subject to the succeeding sentences of this paragraph, an enrollee”; and
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).”.
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)”.
Section 1876(c)(5)(B) of the Social Security Act (42 U.S.C. 1395mm(c)(5)(B)) is amended—
in the first sentence, by striking “A member” and inserting “Subject to the succeeding sentences of this subparagraph, a member”; and
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).”.
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.
5. Authority to use sampling and extrapolation methodologies and to consolidate appeals for administrative efficiency
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.”
Effective date—
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.
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.
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.
7. Study to assess hearing participation
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—
the Centers for Medicare & Medicaid Services;
entities serving as qualified independent contractors under section 1869(c) of the Social Security Act (42 U.S.C. 1395ff(c));
entities serving as medicare administrative contractors under section 1874A of such Act (42 U.S.C. 1395kk–1);
entities serving as recovery audit contractors under section 1893(h) of such Act (42 U.S.C. 1395ddd(h)); and
other Medicare claims review entities determined appropriate by the Secretary.
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.
8. Improvements to the Office of Medicare Hearings and Appeals
Training for ALJs and Medicare magistrates— Section 1869(e)(3) of the Social Security Act (42 U.S.C. 1395ff(e)(3)) is amended—
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”;
by striking “The Secretary” and inserting the following:
“(A) Continuing education requirement—The Secretary”
by inserting “and, beginning in 2020, to Medicare magistrates” after “administrative law judges” the first place it appears;
by striking “and administrative law judges” and inserting “, administrative law judges, and Medicare magistrates”; and
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.”
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.”
9. Review program improvements
in subsection (b), by adding at the end the following new paragraph:
“(7) The review program improvements described in subsection (k).”
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.”
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.
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.
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.”
11. Limiting the audit and recovery period for patient status reviews
by redesignating subparagraphs (A) and (B) as clauses (i) and (ii), respectively, and moving such clauses 2 ems to the right;
by striking “Each such” and inserting the following:
“(A) In general—Except as provided in subparagraph (B), each such”
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.”
Study on shortening the audit and recovery period for other reviews—
Study— The Secretary of Health and Human Services shall conduct a study to assess—
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
the impact of shortening such period with respect to different types of reviews.
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.
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—
in subparagraph (A), by striking “subparagraph (B)” and inserting “subparagraphs (B) and (C)”; and
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.”
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.
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.”