Medicare DMEPOS Audit Improvement and Reform (AIR) Act of 2014 - Amends title XVIII (Medicare) of the Social Security Act (SSA) to establish a Medicare Administrative Contractor Payment Outreach and Education Program for DMEPOS (durable medical equipment, prosthetics, orthotics, and supplies) suppliers.
Requires each Medicare administrative contractor responsible for DMEPOS payments, in order to reduce improper payments to DMEPOS suppliers under Medicare part B (Supplementary Medical Insurance), to provide suppliers, physicians and practitioners who prescribe DMEPOS, and discharge planners and case managers who coordinate DMEPOS for individuals in the contractor's area with error rate reduction training as well as:
Sets forth the structure for audits of DMEPOS suppliers, requiring a contractor to give priority to activities under the DMEPOS payment outreach and education program that will reduce improper Medicare payments based on technical errors, medical necessity, and fraud.
Requires annual reports to Congress on the use of recovery audit contractors under the Medicare Integrity Program to include certain information on the results of audit appeals related to DMEPOS.
Requires the Secretary to: (1) increase the maximum record requests made by Medicare DMEPOS contractors in auditing claims of suppliers with a relatively high audited claims error rate for DMEPOS payments, and (2) decrease the maximum record requests for suppliers with a relatively low error rate.
Directs the Secretary to limit the audit documentation review period for Medicare administrative contractors to three years.
[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5083 Introduced in House (IH)]
113th CONGRESS
2d Session
H. R. 5083
To amend title XVIII of the Social Security Act to improve audit
effectiveness and efficiency in paying for durable medical equipment,
prosthetics, orthotics, and supplies (DMEPOS) under the Medicare
program, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 11, 2014
Mrs. Ellmers (for herself, Mr. Barrow of Georgia, Mr. Braley of Iowa,
Mr. Duncan of Tennessee, and Mr. Thompson of Pennsylvania) introduced
the following bill; which was referred to the Committee on Energy and
Commerce, and in addition to the Committee on Ways and Means, 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 improve audit
effectiveness and efficiency in paying for durable medical equipment,
prosthetics, orthotics, and supplies (DMEPOS) under the Medicare
program, 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.
This Act may be cited as the ``Medicare DMEPOS Audit Improvement
and Reform (AIR) Act of 2014''.
SEC. 2. IMPROVING MEDICARE AUDIT EFFECTIVENESS AND EFFICIENCY FOR
DURABLE MEDICAL EQUIPMENT, PROSTHETICS, ORTHOTICS, AND
SUPPLIES (DMEPOS).
(a) Medicare Administrative Contractor Payment Outreach and
Education Program for DMEPOS Suppliers.--
(1) In general.--Section 1874A of the Social Security Act
(42 U.S.C. 1395kk-1) is amended--
(A) in subsection (a)(4)--
(i) by redesignating subparagraph (G) as
subparagraph (H); and
(ii) by inserting after subparagraph (F)
the following new subparagraph:
``(G) Payment outreach and education program for
suppliers of durable medical equipment, prosthetics,
orthotics, and supplies (dmepos).--Implementing a
payment outreach and education program for DMEPOS
suppliers under subsection (h).''; and
(B) by adding at the end the following new
subsection:
``(h) Payment Outreach and Education Program for DMEPOS
Suppliers.--
``(1) In general.--In order to reduce improper payments
under part B for durable medical equipment, prosthetics,
orthotics, and supplies, each medicare administrative
contractor that has responsibility for payment under such part
for durable medical equipment, prosthetics, orthotics, and
supplies furnished in an area (in this subsection referred to
as a `Medicare DMEPOS contractor') shall carry out a program
(in this subsection referred to as the `DMEPOS payment outreach
and education program') under which the contractor, through
outreach, education, training, and technical assistance
activities conducted on a quarterly basis, provides DMEPOS
suppliers, physicians and practitioners who prescribe DMEPOS,
and discharge planners and case managers who coordinate DMEPOS
for individuals in such area with the information described in
paragraph (3) and with error reduction training under paragraph
(4).
``(2) Forms of activities.--The activities under a DMEPOS
payment outreach and education program shall include the
following:
``(A) Emails and other electronic communications.
``(B) Webinars.
``(C) Telephone calls.
``(D) In-person training.
``(E) Other forms of communications and assistance
determined appropriate by the Secretary.
``(3) Information to be provided through activities.--The
information to be provided under a DMEPOS payment outreach and
education program, with respect to payment for DMEPOS under
part B, shall include all of the following information:
``(A) A list of suppliers' most frequent payment
errors and most expensive payment errors over the last
quarter.
``(B) Specific instructions regarding how to
correct or avoid such errors in the future.
``(C) A notice of all new topics that have been
approved by the Secretary for audits conducted by
Medicare contractors in relation to payment for DMEPOS
under part B.
``(D) Specific instructions to prevent future
issues related to such new audits.
``(E) Other information determined appropriate by
the Secretary.
``(4) Error rate reduction training.--
``(A) In general.--The activities under a DMEPOS
payment outreach and education program shall include
error rate reduction training.
``(B) Requirements.--Such training shall--
``(i) be provided at least annually; and
``(ii) focus on reducing improper Medicare
payments for DMEPOS.
``(C) Invitation.--A Medicare DMEPOS contractor
with responsibility for payment for DMEPOS in an area
shall ensure that all DMEPOS suppliers, physicians and
practitioners who prescribe DMEPOS, and discharge
planners and case managers who coordinate DMEPOS for
individuals in the area are invited to attend the
training described in subparagraph (A) either in person
or online.
``(5) Priority.--A Medicare DMEPOS contractor shall give
priority to activities under the DMEPOS payment outreach and
education program that will reduce improper Medicare payments
based on technical errors, medical necessity, and fraud for
DMEPOS that--
``(A) have the highest rate of improper payment
under part B;
``(B) have the greatest total dollar amount of such
improper payments;
``(C) are due to clear misapplication or
misinterpretation of policies under this title;
``(D) are clearly due to common and inadvertent
clerical or administrative errors; or
``(E) are due to other types of errors that the
Secretary determines could be prevented through
activities under the program.
``(6) Information on improper payments from medicare
contractors.--
``(A) In general.--In order to assist Medicare
DMEPOS contractors in carrying out DMEPOS payment
outreach and education programs, the Secretary shall
provide each such contractor with a complete list of
improper payments for DMEPOS identified by recovery
audit contractors (and other contractors performing
audit activities relating to payment for DMEPOS) with
respect to suppliers located in the area being serviced
by the Medicare DMEPOS contractor. Such list shall not
include claims for payments that have been denied and
are being appealed by the supplier under section 1869.
Such information shall be provided on a quarterly
basis.
``(B) Information.--The information described in
subparagraph (A) shall include the following
information:
``(i) The suppliers of DMEPOS that have the
highest rate of improper payments under part B
for DMEPOS.
``(ii) The suppliers of DMEPOS that have
the greatest total dollar amounts of such
improper payments.
``(iii) The DMEPOS furnished in the area
that has the highest rates of such improper
payments.
``(iv) The DMEPOS furnished in the area
that is responsible for the greatest total
dollar amount of such improper payments.
``(v) Other information the Secretary
determines would assist Medicare DMEPOS
contractors in carrying out the DMEPOS payment
outreach and education program.
``(C) Format of information.--The information
furnished to Medicare DMEPOS contractors by the
Secretary under this paragraph shall be transmitted in
a manner that permits such contractors to easily
identify the DMEPOS suppliers for which targeted
outreach, education, training, and technical assistance
would be most effective. In carrying out the preceding
sentence, the Secretary shall ensure that--
``(i) the information with respect to
improper payments made to such a supplier
clearly displays the NPI or other identifier of
the supplier, the amount of the improper
payment, and any other information the
Secretary determines appropriate; and
``(ii) the information is in an electronic,
easily searchable database.
``(7) Communications.--All communications with a supplier
under a DMEPOS payment outreach and education program are
subject to the standards and requirements of subsection (g).
``(8) Advance notice for policy changes and
clarifications.--The Secretary shall not implement a policy
change or clarification for DMEPOS audit requirements earlier
than 6 months after the date of publication of such change or
clarification in the Federal Register.
``(9) Funding.--After application of paragraph (1)(C) of
section 1893(h), the Secretary shall retain a portion of the
amounts recovered by Medicare DMEPOS contractors under this
title with respect to DMEPOS which shall be available to the
Centers for Medicare & Medicaid Services Program Management
Account for purposes of carrying out this subsection and to
implement corrective actions to help reduce the error rate of
payments for DMEPOS under part B. The amount retained under the
preceding sentence shall not exceed an amount equal to 25
percent of the amounts recovered under section 1893(h) with
respect to DMEPOS.
``(10) Durable medical equipment, prosthetics, orthotics,
and supplies and dmepos defined.--In this subsection, the terms
`durable medical equipment, prosthetics, orthotics, and
supplies' and `DMEPOS' mean--
``(A) durable medical equipment (as defined in
section 1861(n)) and supplies used with such equipment,
other than implantable items for which payment may be
made under section 1833(t);
``(B) prosthetic devices (as described in section
1861(s)(8)), including items described in section
1842(s)(2)(D);
``(C) orthotics and prosthetics (as described in
section 1861(s)(9));
``(D) surgical dressings (as described in section
1861(s)(5));
``(E) home dialysis supplies and equipment (as
described in section 1861(s)(2)(F)); and
``(F) therapeutic shoes for diabetics (as described
in section 1861(s)(12)).''.
(2) Funding conforming amendment.--Section 1893(h)(2) of
the Social Security Act (42 U.S.C. 1395ddd(h)(2)) is amended by
inserting ``or section 1874A(h)(9)'' after ``paragraph
(1)(C)''.
(3) Transparency.--Section 1893(h)(8) of the Social
Security Act (42 U.S.C. 1395ddd(h)(8)) is amended--
(A) in the first sentence, by inserting before the
period at the end the following: ``, on the use of
medicare administrative contractors in conducting
audits with respect to durable medical equipment,
prosthetics, orthotics, and supplies under section
1874A, and on the overturn rates for each level of
appeal'';
(B) by striking ``Report.--The Secretary'' and
inserting ``Report.--
``(A) In general.--The Secretary''; and
(C) by adding at the end the following new
subparagraph:
``(B) Inclusion of certain information.--
``(i) In general.--For reports submitted
under this paragraph for 2015 or a subsequent
year, each such report shall include, with
respect to each recovery audit contractor (and
each medicare administrative contractor) that
is responsible for audits relating to payment
for durable medical equipment, prosthetics,
orthotics, and supplies, information on the
result of all appeals relating to audits for
durable medical equipment, prosthetics,
orthotics, and supplies for each individual
level of appeals with respect to each of the
categories of audits described in clause (ii)
carried out by recovery audit contractors under
this subsection or by medicare administrative
contractors under section 1874A. For purposes
of such reports and public reporting regarding
such reports, such information relating to
audits for orthotics and prosthetics shall be
grouped separately from the information
relating to audits for durable medical
equipment and supplies.
``(ii) Categories of audits.--For purposes
of clause (i), each of the following is a
separate category of audit:
``(I) Automated.
``(II) Complex.
``(III) Medical necessity review.
``(IV) Part B.''.
(b) Adjustment of Record Request Maximum Based on Error Rates.--
Section 1893 of the Social Security Act (42 U.S.C. 1395ddd) is amended
by adding at the end the following new subsection:
``(j) Adjustment of Maximum Record Request Threshold for Audits for
Payment for Durable Medical Equipment, Prosthetics, Orthotics, and
Supplies (DMEPOS) Based on Supplier Error Rates.--
``(1) Identification of error rates.--The Secretary shall
determine the audited claims error rates for payment for
durable medical equipment, prosthetics, orthotics, and supplies
and identify--
``(A) those DMEPOS suppliers with a relatively high
error rate with respect to claims for DMEPOS; and
``(B) those DMEPOS suppliers with a relatively low
error rate with respect to such claims or with a
steadily decreasing error rate for such claims.
``(2) Factors in identification.--
``(A) Analysis.--For purposes of identifying the
groups of DMEPOS suppliers under paragraph (1), the
Secretary shall analyze the following as they relate to
the total number and amount of claims submitted by
product category and by each DMEPOS supplier:
``(i) The improper payment rates of the
supplier.
``(ii) The amount of improper payments made
to the supplier.
``(iii) The frequency of errors made by the
supplier over time.
``(iv) Other information determined
appropriate by the Secretary.
In performing such analysis, the Secretary shall
exclude claims for payment that have been denied and
are being appealed by a DMEPOS supplier under section
1869.
``(B) Assignment based on composite score.--Using a
statistically valid sample, the Secretary shall assign
DMEPOS suppliers under paragraph (1) based on a
composite score determined using the analysis under
subparagraph (A) as follows:
``(i) Suppliers with high, expensive, and
frequent errors shall receive a high score and
be identified as high error suppliers under
paragraph (1)(A).
``(ii) Suppliers with few, inexpensive, and
infrequent errors shall receive a low score and
be identified as low error suppliers under
paragraph (1)(B).
``(iii) Only a small proportion of the
total suppliers in any area shall be assigned
to either group identified under either such
paragraph.
``(C) Timeframe of identification.--
``(i) In general.--Any identification of a
DMEPOS supplier under paragraph (1) shall be
for a period of 12 months.
``(ii) Reevaluation.--The Secretary shall
reevaluate each such identification at the end
of such period.
``(iii) Use of most current information.--
In carrying out the reevaluation under clause
(ii) with respect to a supplier, the Secretary
shall--
``(I) consider the most current
information available with respect to
the supplier under the analysis under
subparagraph (A); and
``(II) take into account
improvement or regression of the
supplier.
``(3) Adjustment of maximum record requests based on error
rate performance.--The Secretary shall establish procedures
under which, for those DMEPOS suppliers that are identified--
``(A) under paragraph (1)(A) (relating to a
relatively high error rate), the Secretary shall
increase the maximum record request made by Medicare
DMEPOS contractors in auditing claims of such suppliers
for DMEPOS; and
``(B) under paragraph (1)(B) (relating to a
relatively low or decreasing error rate), the Secretary
shall decrease the maximum record request made by
Medicare DMEPOS contractors of such suppliers.
``(4) Best performing suppliers have reduced random
audits.--In the case of a DMEPOS supplier that the Secretary
identifies under paragraph (1)(B) for a year as having an
audited claims error rate that is less than 15 percent for a
category of DMEPOS, the Secretary shall not conduct more than 1
random audit of a claim per product category for the year for
such category.
``(5) Restoration of clinical inference and judgment.--With
respect to the conduct of payment audits of DMEPOS suppliers
respecting DMEPOS under part B, the Secretary shall use
clinical inference and clinical judgment in the evaluation of
medical records and orders when conducting such audits in the
same manner as the Secretary interpreted and applied such
clinical judgment to claim reviews before 2009 pursuant to the
Secretary's instruction to contractors.
``(6) Treatment of certain documentation created by
orthotists and prosthetists.--For purposes of determining under
this title the reasonableness and medical necessity of
prosthetic devices and orthotics and prosthetics, documentation
created by orthotists and prosthetists relating to the need for
such devices, orthotics, and prosthetics shall be considered
part of the medical record.
``(7) Definitions.--In this subsection:
``(A) Durable medical equipment, prosthetics,
orthotics, and supplies and dmepos.--The terms `durable
medical equipment, prosthetics, orthotics, and
supplies' and `DMEPOS' have the meaning given such
terms in section 1874A(h)(10).
``(B) DMEPOS supplier.--The term `DMEPOS supplier'
means an entity that furnishes DMEPOS to individuals
for which payment may be made under part B.
``(C) Medicare dmepos contractor.--The term
`Medicare DMEPOS contractor' means a recovery audit
contractor and any other contractor (including a
medicare administrative contractor) that performs pre-
pay or post-pay audits with respect to claims for
payment for DMEPOS under part B.''.
(c) Application of Timely Filing Limits to Reoccurring DMEPOS
Claims Subject to Payment Audits.--Section 1842(b)(3)(B) of the Social
Security Act (42 U.S.C. 1395u(b)(3)(B)) is amended by inserting before
the semicolon at the end the following: ``, except that the reopening
of a claim by a Medicare DMEPOS contractor (as defined in section
1893(j)(7)) in a post-payment audit or a claim denial in a prepayment
audit for DMEPOS (as defined in such section) shall toll the timely
claim filing limits under this part such that the Secretary may not
prohibit a DMEPOS supplier (as defined in such section) from taking an
appeal from the determination of a claim in a pre- or post-payment
audit, or the submission or resubmission for payment of any claims that
follow sequentially from the audited claim on the basis that the timely
claim filing limits have expired''.
(d) Maximum Audit Documentation Review Period of 3 Years for
Medicare Contractors.--
(1) RACs.--Section 1893(h)(4)(B) of the Social Security Act
(42 U.S.C. 1395ddd(h)(4)(B)) is amended by striking ``4 fiscal
years'' and inserting ``3 fiscal years''.
(2) In overpayment of claims.--The last sentences of
subsections (b) and (c) of section 1870 of the Social Security
Act (42 U.S.C. 1395gg) are each amended by striking ``fifth
year'' and ``five-year'' and inserting ``third year'' and
``three-year'', respectively.
(3) Limitation on audit documentation review period.--
Section 1874A(a) of the Social Security Act (42 U.S.C. 1395kk-
1(a)) is amended by adding at the end the following new
paragraph:
``(7) Limitation on audit documentation review period.--The
Secretary shall limit the audit documentation review period for
medicare administrative contractors to 3 years.''.
(4) Effective date.--The amendments made by this subsection
shall apply with respect to payments made for items and
services furnished on or after the date of the enactment of
this Act.
<all>
Introduced in House
Introduced in House
Referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, 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.
Referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, 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.
Referred to the Subcommittee on Health.
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