§202. MEDICARE INTEGRITY PROGRAM.

Health Insurance Portability and Accountability Act of 1996

TITLE II—PREVENTING HEALTH CARE FRAUD AND ABUSE; ADMINISTRATIVE SIMPLIFICATION

(a) Establishment of Medicare Integrity Program.—Title XVIII is amended by adding at the end the following new section:

‘‘medicare integrity program

‘‘§1893. (a) Establishment of Program. (42 USC 1395ddd) —There is hereby established the Medicare Integrity Program (in this section referred to as the 'Program') under which the Secretary shall promote the integrity of the Medicare program by entering into contracts in accordance with this section with eligible entities to carry out the activities described in subsection (b).

‘‘(b) Activities Described.—The activities described in this subsection are as follows:

‘‘(1) Review of activities of providers of services or other individuals and entities furnishing items and services for which payment may be made under this title (including skilled nursing facilities and home health agencies), including medical and utilization review and fraud review (employing similar standards, processes, and technologies used by private health plans, including equipment and software technologies which surpass the capability of the equipment and technologies used in the review of claims under this title as of the date of the enactment of this section).

‘‘(2) Audit of cost reports.

‘‘(3) Determinations as to whether payment should not be, or should not have been, made under this title by reason of section 1862(b), and recovery of payments that should not have been made.

‘‘(4) Education of providers of services, beneficiaries, and other persons with respect to payment integrity and benefit quality assurance issues.

‘‘(5) Developing (and periodically updating) a list of items of durable medical equipment in accordance with section 1834(a)(15) which are subject to prior authorization under such section.

‘‘(c) Eligibility of Entities.—An entity is eligible to enter into a contract under the Program to carry out any of the activities described in subsection (b) if—

‘‘(1) the entity has demonstrated capability to carry out such activities;

‘‘(2) in carrying out such activities, the entity agrees to cooperate with the Inspector General of the Department of Health and Human Services, the Attorney General, and other law enforcement agencies, as appropriate, in the investigation and deterrence of fraud and abuse in relation to this title and in other cases arising out of such activities;

‘‘(3) the entity complies with such conflict of interest standards as are generally applicable to Federal acquisition and procurement; and

‘‘(4) the entity meets such other requirements as the Secretary may impose.

In the case of the activity described in subsection (b)(5), an entity shall be deemed to be eligible to enter into a contract under the Program to carry out the activity if the entity is a carrier with a contract in effect under section 1842.

‘‘(d) Process [NOTE: Regulations.] for Entering Into Contracts.—The Secretary shall enter into contracts under the Program in accordance with such procedures as the Secretary shall by regulation establish, except that such procedures shall include the following:

‘‘(1) Procedures for identifying, evaluating, and resolving organizational conflicts of interest that are generally applicable to Federal acquisition and procurement.

‘‘(2) Competitive procedures to be used—

‘‘(A) when entering into new contracts under this section;

‘‘(B) when entering into contracts that may result in the elimination of responsibilities of an individual fiscal intermediary or carrier under section 202(b) of the Health Insurance Portability and Accountability Act of 1996; and

‘‘(C) at any other time considered appropriate by the Secretary, except that the Secretary may continue to contract with entities that are carrying out the activities described in this section pursuant to agreements under section 1816 or contracts under section 1842 in effect on the date of the enactment of this section.

‘‘(3) Procedures under which a contract under this section may be renewed without regard to any provision of law requiring competition if the contractor has met or exceeded the performance requirements established in the current contract.

The Secretary may enter into such contracts without regard to final rules having been promulgated.

‘‘(e) Limitation [NOTE: Regulations.] on Contractor Liability.—The Secretary shall by regulation provide for the limitation of a contractor's liability for actions taken to carry out a contract under the Program, and such regulation shall, to the extent the Secretary finds appropriate, employ the same or comparable standards and other substantive and procedural provisions as are contained in section 1157.’’.

(b) Elimination of FI and Carrier Responsibility for Carrying Out Activities Subject to Program.—

(b)(1) Responsibilities of fiscal intermediaries under part A.—Section 1816 (42 U.S.C. 1395h) is amended by adding at the end the following new subsection:

‘‘(l) No agency or organization may carry out (or receive payment for carrying out) any activity pursuant to an agreement under this section to the extent that the activity is carried out pursuant to a contract under the Medicare Integrity Program under section 1893.’’.

(b)(2) Responsibilities of carriers under part b.—Section 1842(c) (42 U.S.C. 1395u(c)) is amended by adding at the end the following new paragraph:

‘‘(6) No carrier may carry out (or receive payment for carrying out) any activity pursuant to a contract under this subsection to the extent that the activity is carried out pursuant to a contract under the Medicare Integrity Program under section 1893. The previous sentence shall not apply with respect to the activity described in section 1893(b)(5) (relating to prior authorization of certain items of durable medical equipment under section 1834(a)(15)).