TITLE IX--ADMINISTRATIVE IMPROVEMENTS, REGULATORY REDUCTION, AND CONTRACTING REFORM

Subtitle D--Appeals and Recovery

SEC. 933. REVISIONS TO MEDICARE APPEALS PROCESS.

(a) REQUIRING FULL AND EARLY PRESENTATION OF EVIDENCE-

(1) IN GENERAL- Section 1869(b) (42 U.S.C. 1395ff(b)), as amended by section 932(a), is further amended by adding at the end the following new paragraph:

`(3) REQUIRING FULL AND EARLY PRESENTATION OF EVIDENCE BY PROVIDERS- A provider of services or supplier may not introduce evidence in any appeal under this section that was not presented at the reconsideration conducted by the qualified independent contractor under subsection (c), unless there is good cause which precluded the introduction of such evidence at or before that reconsideration.'.

(2) EFFECTIVE DATE- The amendment made by paragraph (1) shall take effect on October 1, 2004.

(b) USE OF PATIENTS' MEDICAL RECORDS- Section 1869(c)(3)(B)(i) (42 U.S.C. 1395ff(c)(3)(B)(i)) is amended by inserting `(including the medical records of the individual involved)' after `clinical experience'.

(c) NOTICE REQUIREMENTS FOR MEDICARE APPEALS-

(1) INITIAL DETERMINATIONS AND REDETERMINATIONS- Section 1869(a) (42 U.S.C. 1395ff(a)) is amended by adding at the end the following new paragraphs:

`(4) REQUIREMENTS OF NOTICE OF DETERMINATIONS- With respect to an initial determination insofar as it results in a denial of a claim for benefits--

`(A) the written notice on the determination shall include--

`(i) the reasons for the determination, including whether a local medical review policy or a local coverage determination was used;

`(ii) the procedures for obtaining additional information concerning the determination, including the information described in subparagraph (B); and

`(iii) notification of the right to seek a redetermination or otherwise appeal the determination and instructions on how to initiate such a redetermination under this section;

`(B) such written notice shall be provided in printed form and written in a manner calculated to be understood by the individual entitled to benefits under part A or enrolled under part B, or both; and

`(C) the individual provided such written notice may obtain, upon request, information on the specific provision of the policy, manual, or regulation used in making the redetermination.

`(5) REQUIREMENTS OF NOTICE OF REDETERMINATIONS- With respect to a redetermination insofar as it results in a denial of a claim for benefits--

`(A) the written notice on the redetermination shall include--

`(i) the specific reasons for the redetermination;

`(ii) as appropriate, a summary of the clinical or scientific evidence used in making the redetermination;

`(iii) a description of the procedures for obtaining additional information concerning the redetermination; and

`(iv) notification of the right to appeal the redetermination and instructions on how to initiate such an appeal under this section;

`(B) such written notice shall be provided in printed form and written in a manner calculated to be understood by the individual entitled to benefits under part A or enrolled under part B, or both; and

`(C) the individual provided such written notice may obtain, upon request, information on the specific provision of the policy, manual, or regulation used in making the redetermination.'.

(2) RECONSIDERATIONS- Section 1869(c)(3)(E) (42 U.S.C. 1395ff(c)(3)(E)) is amended--

(A) by inserting `be written in a manner calculated to be understood by the individual entitled to benefits under part A or enrolled under part B, or both, and shall include (to the extent appropriate)' after `in writing,'; and

(B) by inserting `and a notification of the right to appeal such determination and instructions on how to initiate such appeal under this section' after `such decision,'.

(3) APPEALS- Section 1869(d) (42 U.S.C. 1395ff(d)) is amended--

(A) in the heading, by inserting `; NOTICE' after `SECRETARY'; and

(B) by adding at the end the following new paragraph:

`(4) NOTICE- Notice of the decision of an administrative law judge shall be in writing in a manner calculated to be understood by the individual entitled to benefits under part A or enrolled under part B, or both, and shall include--

`(A) the specific reasons for the determination (including, to the extent appropriate, a summary of the clinical or scientific evidence used in making the determination);

`(B) the procedures for obtaining additional information concerning the decision; and

`(C) notification of the right to appeal the decision and instructions on how to initiate such an appeal under this section.'.

(4) SUBMISSION OF RECORD FOR APPEAL- Section 1869(c)(3)(J)(i) (42 U.S.C. 1395ff(c)(3)(J)(i)) is amended by striking `prepare' and inserting `submit' and by striking `with respect to' and all that follows through `and relevant policies'.

(d) QUALIFIED INDEPENDENT CONTRACTORS-

(1) ELIGIBILITY REQUIREMENTS OF QUALIFIED INDEPENDENT CONTRACTORS- Section 1869(c)(3) (42 U.S.C. 1395ff(c)(3)) is amended--

(A) in subparagraph (A), by striking `sufficient training and expertise in medical science and legal matters' and inserting `sufficient medical, legal, and other expertise (including knowledge of the program under this title) and sufficient staffing'; and

(B) by adding at the end the following new subparagraph:

`(K) INDEPENDENCE REQUIREMENTS-

`(i) IN GENERAL- Subject to clause (ii), a qualified independent contractor shall not conduct any activities in a case unless the entity--

`(I) is not a related party (as defined in subsection (g)(5));

`(II) does not have a material familial, financial, or professional relationship with such a party in relation to such case; and

`(III) does not otherwise have a conflict of interest with such a party.

`(ii) EXCEPTION FOR REASONABLE COMPENSATION- Nothing in clause (i) shall be construed to prohibit receipt by a qualified independent contractor of compensation from the Secretary for the conduct of activities under this section if the compensation is provided consistent with clause (iii).

`(iii) LIMITATIONS ON ENTITY COMPENSATION- Compensation provided by the Secretary to a qualified independent contractor in connection with reviews under this section shall not be contingent on any decision rendered by the contractor or by any reviewing professional.'.

(2) ELIGIBILITY REQUIREMENTS FOR REVIEWERS- Section 1869 (42 U.S.C. 1395ff) is amended--

(A) by amending subsection (c)(3)(D) to read as follows:

`(D) QUALIFICATIONS FOR REVIEWERS- The requirements of subsection (g) shall be met (relating to qualifications of reviewing professionals).'; and

(B) by adding at the end the following new subsection:

`(g) QUALIFICATIONS OF REVIEWERS-

`(1) IN GENERAL- In reviewing determinations under this section, a qualified independent contractor shall assure that--

`(A) each individual conducting a review shall meet the qualifications of paragraph (2);

`(B) compensation provided by the contractor to each such reviewer is consistent with paragraph (3); and

`(C) in the case of a review by a panel described in subsection (c)(3)(B) composed of physicians or other health care professionals (each in this subsection referred to as a `reviewing professional'), a reviewing professional meets the qualifications described in paragraph (4) and, where a claim is regarding the furnishing of treatment by a physician (allopathic or osteopathic) or the provision of items or services by a physician (allopathic or osteopathic), a reviewing professional shall be a physician (allopathic or osteopathic).

`(2) INDEPENDENCE-

`(A) IN GENERAL- Subject to subparagraph (B), each individual conducting a review in a case shall--

`(i) not be a related party (as defined in paragraph (5));

`(ii) not have a material familial, financial, or professional relationship with such a party in the case under review; and

`(iii) not otherwise have a conflict of interest with such a party.

`(B) EXCEPTION- Nothing in subparagraph (A) shall be construed to--

`(i) prohibit an individual, solely on the basis of a participation agreement with a fiscal intermediary, carrier, or other contractor, from serving as a reviewing professional if--

`(I) the individual is not involved in the provision of items or services in the case under review;

`(II) the fact of such an agreement is disclosed to the Secretary and the individual entitled to benefits under part A or enrolled under part B, or both, or such individual's authorized representative, and neither party objects; and

`(III) the individual is not an employee of the intermediary, carrier, or contractor and does not provide services exclusively or primarily to or on behalf of such intermediary, carrier, or contractor;

`(ii) prohibit an individual who has staff privileges at the institution where the treatment involved takes place from serving as a reviewer merely on the basis of having such staff privileges if the existence of such privileges is disclosed to the Secretary and such individual (or authorized representative), and neither party objects; or

`(iii) prohibit receipt of compensation by a reviewing professional from a contractor if the compensation is provided consistent with paragraph (3).

For purposes of this paragraph, the term `participation agreement' means an agreement relating to the provision of health care services by the individual and does not include the provision of services as a reviewer under this subsection.

`(3) LIMITATIONS ON REVIEWER COMPENSATION- Compensation provided by a qualified independent contractor to a reviewer in connection with a review under this section shall not be contingent on the decision rendered by the reviewer.

`(4) LICENSURE AND EXPERTISE- Each reviewing professional shall be--

`(A) a physician (allopathic or osteopathic) who is appropriately credentialed or licensed in one or more States to deliver health care services and has medical expertise in the field of practice that is appropriate for the items or services at issue; or

`(B) a health care professional who is legally authorized in one or more States (in accordance with State law or the State regulatory mechanism provided by State law) to furnish the health care items or services at issue and has medical expertise in the field of practice that is appropriate for such items or services.

`(5) RELATED PARTY DEFINED- For purposes of this section, the term `related party' means, with respect to a case under this title involving a specific individual entitled to benefits under part A or enrolled under part B, or both, any of the following:

`(A) The Secretary, the medicare administrative contractor involved, or any fiduciary, officer, director, or employee of the Department of Health and Human Services, or of such contractor.

`(B) The individual (or authorized representative).

`(C) The health care professional that provides the items or services involved in the case.

`(D) The institution at which the items or services (or treatment) involved in the case are provided.

`(E) The manufacturer of any drug or other item that is included in the items or services involved in the case.

`(F) Any other party determined under any regulations to have a substantial interest in the case involved.'.

(3) REDUCING MINIMUM NUMBER OF QUALIFIED INDEPENDENT CONTRACTORS- Section 1869(c)(4) (42 U.S.C. 1395ff(c)(4)) is amended by striking `not fewer than 12 qualified independent contractors under this subsection' and inserting `a sufficient number of qualified independent contractors (but not fewer than 4 such contractors) to conduct reconsiderations consistent with the timeframes applicable under this subsection'.

(4) EFFECTIVE DATE- The amendments made by paragraphs (1) and (2) shall be effective as if included in the enactment of the respective provisions of subtitle C of title V of BIPA (114 Stat. 2763A-534).

(5) TRANSITION- In applying section 1869(g) of the Social Security Act (as added by paragraph (2)), any reference to a medicare administrative contractor shall be deemed to include a reference to a fiscal intermediary under section 1816 of the Social Security Act (42 U.S.C. 1395h) and a carrier under section 1842 of such Act (42 U.S.C. 1395u).

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