,i  #aac? ,,congress  #b;d ,session  ,h4
 ,r4 #ejhc  ,,9 ,,! ,,h\se ,,(          
,,repres5tatives  ,july #aa1 #bjad ,mrs4
 ,ellm]s 7= h]self1 ,mr4 ,b>r[ (        
,georgia1 ,mr4 ,braley ( ,i[a1 ,mr4     
,duncan ( ,t5nessee1 & ,mr4 ,?ompson (  
,p5nsylvania7 introduc$ ! foll[+ bill2  
:i* 0 ref]r$ to ! ,committee on ,en]gy &
 ,comm]ce1 & 9 addition to ! ,committee 
on ,ways & ,means1 = a p]iod to be      
subsequ5tly det]m9$ by ! ,speak]1 9 ea* 
case = consid]ation ( su* provisions z  
fall )9 ! jurisdiction ( ! committee    
conc]n$  ,a ,,bill  ,to am5d title      
,,xviii ( ! ,social ,security ,act to   
improve audit effectiv5ess & effici5cy 9
 pay+ = durable m$ical equipm5t1        
pro/hetics1 or?otics1 & supplies        
7,,dmepos7 "u ! ,m$ic>e program1 & = o!r
 purposes4  #a4 ,%ort title ,?is ,act   
may be cit$ z ! ,m$ic>e ,,dmepos ,audit 
,improvem5t & ,re=m 7,,air7 ,act (      
#bjad4  #b4 ,improv+ ,m$ic>e audit      
effectiv5ess & effici5cy = durable      
m$ical equipm5t1 pro/hetics1 or?otics1 &

 supplies 7,,dmepos7  7a7 ,m$ic>e       
adm9i/rative contractor paym5t outrea* &
 education program = ,,dmepos suppli]s  
7#a7 ,9 g5]al ,section #ahgd;,a ( !     
,social ,security ,act 7#db ,u4,s4,c4   
#aciekk-#a7 is am5d$--  7,a7 9          
subsection 7a77#d7--  7i7 by r$esignat+ 
subp>agraph 7,g7 z subp>agraph 7,h72 &  
7ii7 by ins]t+ aft] subp>agraph 7,f7 !  
foll[+ new subp>agraph3  7,g7 ,paym5t   
outrea* & education program = suppli]s (
 durable m$ical equipm5t1 pro/hetics1   
or?otics1 & supplies 7,,dmepos7         
,implem5t+ a paym5t outrea* & education 
program = ,,dmepos suppli]s "u          
subsection 7h74  2 &  7,b7 by add+ at ! 
end ! foll[+ new subsection3  7h7       
,paym5t outrea* & education program =   
,,dmepos suppli]s  7#a7 ,9 g5]al ,9 ord]
 to r$uce improp] paym5ts "u "p ,b =    
durable m$ical equipm5t1 pro/hetics1    
or?otics1 & supplies1 ea* m$ic>e        
adm9i/rative contractor t has           
responsibility = paym5t "u su* "p =     
durable m$ical equipm5t1 pro/hetics1    

or?otics1 & supplies furni%$ 9 an area  
79 ?is subsection ref]r$ to z a ,m$ic>e 
,,dmepos contractor7 %all c>ry out a    
program 79 ?is subsection ref]r$ to z ! 
,,dmepos paym5t outrea* & education     
program7 "u :i* ! contractor1 ?r\gh     
outrea*1 education1 tra9+1 & te*nical   
assi/ance activities conduct$ on a      
qu>t]ly basis1 provides ,,dmepos        
suppli]s1 physicians & practition]s :o  
prescribe ,,dmepos1 & dis*>ge plann]s & 
case manag]s :o coord9ate ,,dmepos =    
individuals 9 su* area ) ! in=mation    
describ$ 9 p>agraph 7#c7 & ) error      
r$uction tra9+ "u p>agraph 7#d74  7#b7  
,=ms ( activities ,! activities "u a    
,,dmepos paym5t outrea* & education     
program %all include ! foll[+3  7,a7    
,emails & o!r electronic communications4
  7,b7 ,web9>s4  7,c7 ,telephone calls4 
7,d7 ,9-p]son tra9+4  7,e7 ,o!r =ms (   
communications & assi/ance det]m9$      
appropriate by ! ,secret>y4  7#c7       
,in=mation to be provid$ ?r\gh          
activities ,! in=mation to be provid$ "u

 a ,,dmepos paym5t outrea* & education  
program1 ) respect to paym5t = ,,dmepos 
"u "p ,b1 %all include all ( ! foll[+   
in=mation3  7,a7 ,a li/ ( suppli]s' mo/ 
frequ5t paym5t errors & mo/ exp5sive    
paym5t errors ov] ! la/ qu>t]4  7,b7    
,specific in/ructions reg>d+ h[ to      
correct or avoid su* errors 9 ! future4 
7,c7 ,a notice ( all new topics t h be5 
approv$ by ! ,secret>y = audits conduct$
 by ,m$ic>e contractors 9 relation to   
paym5t = ,,dmepos "u "p ,b4  7,d7       
,specific in/ructions to prev5t future  
issues relat$ to su* new audits4  7,e7  
,o!r in=mation det]m9$ appropriate by ! 
,secret>y4  7#d7 ,error rate r$uction   
tra9+  7,a7 ,9 g5]al ,! activities "u a 
,,dmepos paym5t outrea* & education     
program %all include error rate r$uction
 tra9+4  7,b7 ,requirem5ts ,su* tra9+   
%all--  7i7 be provid$ at lea/ annually2
 &  7ii7 focus on r$uc+ improp] ,m$ic>e 
paym5ts = ,,dmepos4  7,c7 ,invitation ,a
 ,m$ic>e ,,dmepos contractor )          
responsibility = paym5t = ,,dmepos 9 an 

area %all ensure t all ,,dmepos         
suppli]s1 physicians & practition]s :o  
prescribe ,,dmepos1 & dis*>ge plann]s & 
case manag]s :o coord9ate ,,dmepos =    
individuals 9 ! area are invit$ to att5d
 ! tra9+ describ$ 9 subp>agraph 7,a7    
ei!r 9 p]son or onl9e4  7#e7 ,priority  
,a ,m$ic>e ,,dmepos contractor %all give
 priority to activities "u ! ,,dmepos   
paym5t outrea* & education program t w  
r$uce improp] ,m$ic>e paym5ts bas$ on   
te*nical errors1 m$ical necessity1 &    
fraud = ,,dmepos t--  7,a7 h ! highe/   
rate ( improp] paym5t "u "p ,b2  7,b7 h 
! greate/ total doll> am\nt ( su*       
improp] paym5ts2  7,c7 are due to cle>  
misapplication or mis9t]pretation (     
policies "u ?is title2  7,d7 are cle>ly 
due to common & inadv]t5t cl]ical or    
adm9i/rative errors2 or  7,e7 are due to
 o!r types ( errors t ! ,secret>y       
det]m9es c\ld be prev5t$ ?r\gh          
activities "u ! program4  7#f7          
,in=mation on improp] paym5ts f m$ic>e  
contractors  7,a7 ,9 g5]al ,9 ord] to   

assi/ ,m$ic>e ,,dmepos contractors 9    
c>ry+ out ,,dmepos paym5t outrea* &     
education programs1 ! ,secret>y %all    
provide ea* su* contractor ) a complete 
li/ ( improp] paym5ts = ,,dmepos        
id5tifi$ by recov]y audit contractors 7&
 o!r contractors p]=m+ audit activities 
relat+ to paym5t = ,,dmepos7 ) respect  
to suppli]s locat$ 9 ! area be+ s]vic$  
by ! ,m$ic>e ,,dmepos contractor4 ,su*  
li/ %all n include claims = paym5ts t h 
be5 d5i$ & are be+ appeal$ by ! suppli] 
"u section #ahfi4 ,su* in=mation %all be
 provid$ on a qu>t]ly basis4  7,b7      
,in=mation ,! in=mation describ$ 9      
subp>agraph 7,a7 %all include ! foll[+  
in=mation3  7i7 ,! suppli]s ( ,,dmepos t
 h ! highe/ rate ( improp] paym5ts "u "p
 ,b = ,,dmepos4  7ii7 ,! suppli]s (     
,,dmepos t h ! greate/ total doll>      
am\nts ( su* improp] paym5ts4  7iii7 ,! 
,,dmepos furni%$ 9 ! area t has ! highe/
 rates ( su* improp] paym5ts4  7iv7 ,!  
,,dmepos furni%$ 9 ! area t is          
responsible = ! greate/ total doll>     

am\nt ( su* improp] paym5ts4  7v7 ,o!r  
in=mation ! ,secret>y det]m9es w\ld     
assi/ ,m$ic>e ,,dmepos contractors 9    
c>ry+ out ! ,,dmepos paym5t outrea* &   
education program4  7,c7 ,=mat (        
in=mation ,! in=mation furni%$ to       
,m$ic>e ,,dmepos contractors by !       
,secret>y "u ?is p>agraph %all be       
transmitt$ 9 a mann] t p]mits su*       
contractors to easily id5tify ! ,,dmepos
 suppli]s = :i* t>get$ outrea*1         
education1 tra9+1 & te*nical assi/ance  
w\ld be mo/ effective4 ,9 c>ry+ out !   
prec$+ s5t5ce1 ! ,secret>y %all ensure  
t--  7i7 ! in=mation ) respect to       
improp] paym5ts made to su* a suppli]   
cle>ly displays ! ,,npi or o!r id5tifi] 
( ! suppli]1 ! am\nt ( ! improp] paym5t1
 & any o!r in=mation ! ,secret>y        
det]m9es appropriate2 &  7ii7 !         
in=mation is 9 an electronic1 easily    
se>*able database4  7#g7 ,communications
 ,all communications ) a suppli] "u a   
,,dmepos paym5t outrea* & education     
program are subject to ! /&>ds &        

requirem5ts ( subsection 7g74  7#h7     
,advance notice = policy *anges &       
cl>ifications ,! ,secret>y %all n       
implem5t a policy *ange or cl>ification 
= ,,dmepos audit requirem5ts e>li] ?an  
#f mon?s aft] ! date ( publication ( su*
 *ange or cl>ification 9 ! ,f$]al       
,regi/]4  7#i7 ,fund+ ,aft] application 
( p>agraph 7#a77;,c7 ( section          
#ahic7;h71 ! ,secret>y %all reta9 a     
portion ( ! am\nts recov]$ by ,m$ic>e   
,,dmepos contractors "u ?is title )     
respect to ,,dmepos :i* %all be         
available to ! ,c5t]s = ,m$ic>e         
,m$icaid ,s]vices ,program ,managem5t   
,acc\nt = purposes ( c>ry+ out ?is      
subsection & to implem5t corrective     
actions to help r$uce ! error rate (    
paym5ts = ,,dmepos "u "p ,b4 ,! am\nt   
reta9$ "u ! prec$+ s5t5ce %all n exce$  
an am\nt equal to #be p]c5t ( ! am\nts  
recov]$ "u section #ahic7;h7 ) respect  
to ,,dmepos4  7#aj7 ,durable m$ical     
equipm5t1 pro/hetics1 or?otics1 &       
supplies & ,,dmepos def9$ ,9 ?is        

subsection1 ! t]ms durable m$ical       
equipm5t1 pro/hetics1 or?otics1 &       
supplies & ,,dmepos mean--  7,a7 durable
 m$ical equipm5t 7z def9$ 9 section     
#ahfa7n77 & supplies us$ ) su* equipm5t1
 o!r ?an implantable items = :i* paym5t 
may be made "u section #ahcc7t72  7,b7  
pro/hetic devices 7z describ$ 9 section 
#ahfa7s77#h771 includ+ items describ$ 9 
section #ahdb7s77#b77;,d72  7,c7        
or?otics & pro/hetics 7z describ$ 9     
section #ahfa7s77#i772  7,d7 surgical   
dress+s 7z describ$ 9 section           
#ahfa7s77#e772  7,e7 home dialysis      
supplies & equipm5t 7z describ$ 9       
section #ahfa7s77#b77;,f772 &  7,f7     
!rapeutic %oes = diabetics 7z describ$ 9
 section #ahfa7s77#ab774  4  7#b7 ,fund+
 con=m+ am5dm5t ,section #ahic7;h77#b7 (
 ! ,social ,security ,act 7#db ,u4,s4,c4
 #acie;ddd7h77#b77 is am5d$ by ins]t+ or
 section #ahgd;,a7h77#i7 aft] p>agraph  
7#a77;,c74  7#c7 ,transp>5cy ,section   
#ahic7;h77#h7 ( ! ,social ,security ,act
 7#db ,u4,s4,c4 #acie;ddd7h77#h77 is    

am5d$--  7,a7 9 ! fir/ s5t5ce1 by ins]t+
 be=e ! p]iod at ! end ! foll[+3 1 on ! 
use ( m$ic>e adm9i/rative contractors 9 
conduct+ audits ) respect to durable    
m$ical equipm5t1 pro/hetics1 or?otics1 &
 supplies "u section #ahgd;,a1 & on !   
ov]turn rates = ea* level ( appeal2     
7,b7 by /rik+ ,report4--,! ,secret>y &  
ins]t+  ,report4-- 7,a7 ,9 g5]al ,!     
,secret>y  2 &  7,c7 by add+ at ! end ! 
foll[+ new subp>agraph3  7,b7 ,inclusion
 ( c]ta9 in=mation  7i7 ,9 g5]al ,=     
reports submitt$ "u ?is p>agraph = #bjae
 or a subsequ5t ye>1 ea* su* report %all
 include1 ) respect to ea* recov]y audit
 contractor 7& ea* m$ic>e adm9i/rative  
contractor7 t is responsible = audits   
relat+ to paym5t = durable m$ical       
equipm5t1 pro/hetics1 or?otics1 &       
supplies1 in=mation on ! result ( all   
appeals relat+ to audits = durable      
m$ical equipm5t1 pro/hetics1 or?otics1 &
 supplies = ea* individual level (      
appeals ) respect to ea* ( ! categories 
( audits describ$ 9 clause 7ii7 c>ri$   

out by recov]y audit contractors "u ?is 
subsection or by m$ic>e adm9i/rative    
contractors "u section #ahgd;,a4 ,=     
purposes ( su* reports & public report+ 
reg>d+ su* reports1 su* in=mation relat+
 to audits = or?otics & pro/hetics %all 
be gr\p$ sep>ately f ! in=mation relat+ 
to audits = durable m$ical equipm5t &   
supplies4  7ii7 ,categories ( audits ,= 
purposes ( clause 7i71 ea* ( ! foll[+ is
 a sep>ate category ( audit3  7,i7      
,automat$4  7,,ii7 ,complex4  7,,iii7   
,m$ical necessity review4  7,,iv7 ,"p   
,b4  4  7b7 ,adju/m5t ( record reque/   
maximum bas$ on error rates ,section    
#ahic ( ! ,social ,security ,act 7#db   
,u4,s4,c4 #acie;ddd7 is am5d$ by add+ at
 ! end ! foll[+ new subsection3  7j7    
,adju/m5t ( maximum record reque/       
?re%old = audits = paym5t = durable     
m$ical equipm5t1 pro/hetics1 or?otics1 &
 supplies 7,,dmepos7 bas$ on suppli]    
error rates  7#a7 ,id5tification ( error
 rates ,! ,secret>y %all det]m9e !      
audit$ claims error rates = paym5t =    

durable m$ical equipm5t1 pro/hetics1    
or?otics1 & supplies & id5tify--  7,a7  
^? ,,dmepos suppli]s ) a relatively high
 error rate ) respect to claims =       
,,dmepos2 &  7,b7 ^? ,,dmepos suppli]s )
 a relatively l[ error rate ) respect to
 su* claims or ) a /eadily decreas+     
error rate = su* claims4  7#b7 ,factors 
9 id5tification  7,a7 ,analysis ,=      
purposes ( id5tify+ ! gr\ps ( ,,dmepos  
suppli]s "u p>agraph 7#a71 ! ,secret>y  
%all analyze ! foll[+ z !y relate to !  
total numb] & am\nt ( claims submitt$ by
 product category & by ea* ,,dmepos     
suppli]3  7i7 ,! improp] paym5t rates ( 
! suppli]4  7ii7 ,! am\nt ( improp]     
paym5ts made to ! suppli]4  7iii7 ,!    
frequ5cy ( errors made by ! suppli] ov] 
"t4  7iv7 ,o!r in=mation det]m9$        
appropriate by ! ,secret>y4  ,9 p]=m+   
su* analysis1 ! ,secret>y %all exclude  
claims = paym5t t h be5 d5i$ & are be+  
appeal$ by a ,,dmepos suppli] "u section
 #ahfi4  7,b7 ,assignm5t bas$ on        
composite score ,us+ a /ati/ically valid

 sample1 ! ,secret>y %all assign        
,,dmepos suppli]s "u p>agraph 7#a7 bas$ 
on a composite score det]m9$ us+ !      
analysis "u subp>agraph 7,a7 z foll[s3  
7i7 ,suppli]s ) high1 exp5sive1 &       
frequ5t errors %all receive a high score
 & be id5tifi$ z high error suppli]s "u 
p>agraph 7#a77;,a74  7ii7 ,suppli]s )   
few1 inexp5sive1 & infrequ5t errors %all
 receive a l[ score & be id5tifi$ z l[  
error suppli]s "u p>agraph 7#a77;,b74   
7iii7 ,only a small proportion ( ! total
 suppli]s 9 any area %all be assign$ to 
ei!r gr\p id5tifi$ "u ei!r su* p>agraph4
  7,c7 ,timeframe ( id5tification  7i7  
,9 g5]al ,any id5tification ( a ,,dmepos
 suppli] "u p>agraph 7#a7 %all be = a   
p]iod ( #ab mon?s4  7ii7 ,reevaluation  
,! ,secret>y %all reevaluate ea* su*    
id5tification at ! end ( su* p]iod4     
7iii7 ,use ( mo/ curr5t in=mation ,9    
c>ry+ out ! reevaluation "u clause 7ii7 
) respect to a suppli]1 ! ,secret>y     
%all--  7,i7 consid] ! mo/ curr5t       
in=mation available ) respect to !      

suppli] "u ! analysis "u subp>agraph    
7,a72 &  7,,ii7 take into acc\nt        
improvem5t or regression ( ! suppli]4   
7#c7 ,adju/m5t ( maximum record reque/s 
bas$ on error rate p]=mance ,! ,secret>y
 %all e/abli% proc$ures "u :i*1 = ^?    
,,dmepos suppli]s t are id5tifi$--  7,a7
 "u p>agraph 7#a77;,a7 7relat+ to a     
relatively high error rate71 ! ,secret>y
 %all increase ! maximum record reque/  
made by ,m$ic>e ,,dmepos contractors 9  
audit+ claims ( su* suppli]s = ,,dmepos2
 &  7,b7 "u p>agraph 7#a77;,b7 7relat+  
to a relatively l[ or decreas+ error    
rate71 ! ,secret>y %all decrease !      
maximum record reque/ made by ,m$ic>e   
,,dmepos contractors ( su* suppli]s4    
7#d7 ,be/ p]=m+ suppli]s h r$uc$ r&om   
audits ,9 ! case ( a ,,dmepos suppli] t 
! ,secret>y id5tifies "u p>agraph       
7#a77;,b7 = a ye> z hav+ an audit$      
claims error rate t is less ?an #ae     
p]c5t = a category ( ,,dmepos1 !        
,secret>y %all n conduct m ?an #a r&om  
audit ( a claim p] product category = ! 

ye> = su* category4  7#e7 ,re/oration ( 
cl9ical inf]5ce & judgm5t ,) respect to 
! conduct ( paym5t audits ( ,,dmepos    
suppli]s respect+ ,,dmepos "u "p ,b1 !  
,secret>y %all use cl9ical inf]5ce &    
cl9ical judgm5t 9 ! evaluation ( m$ical 
records & ord]s :5 conduct+ su* audits 9
 ! same mann] z ! ,secret>y int]pret$ & 
appli$ su* cl9ical judgm5t to claim     
reviews be=e #bjji pursuant to !        
,secret>y's in/ruction to contractors4  
7#f7 ,treatm5t ( c]ta9 docum5tation     
creat$ by or?oti/s & pro/heti/s ,=      
purposes ( det]m9+ "u ?is title !       
reasonabl5ess & m$ical necessity (      
pro/hetic devices & or?otics &          
pro/hetics1 docum5tation creat$ by      
or?oti/s & pro/heti/s relat+ to ! ne$ = 
su* devices1 or?otics1 & pro/hetics %all
 be consid]$ "p ( ! m$ical record4  7#g7
 ,def9itions ,9 ?is subsection3  7,a7   
,durable m$ical equipm5t1 pro/hetics1   
or?otics1 & supplies & ,,dmepos ,! t]ms 
durable m$ical equipm5t1 pro/hetics1    
or?otics1 & supplies & ,,dmepos h !     

mean+ giv5 su* t]ms 9 section           
#ahgd;,a7h77#aj74  7,b7 ,,dmepos suppli]
 ,! t]m ,,dmepos suppli] means an entity
 t furni%es ,,dmepos to individuals =   
:i* paym5t may be made "u "p ,b4  7,c7  
,m$ic>e ,,dmepos contractor ,! t]m      
,m$ic>e ,,dmepos contractor means a     
recov]y audit contractor & any o!r      
contractor 7includ+ a m$ic>e            
adm9i/rative contractor7 t p]=ms pre-pay
 or po/-pay audits ) respect to claims =
 paym5t = ,,dmepos "u "p ,b4  4  7c7    
,application ( timely fil+ limits to    
reoccurr+ ,,dmepos claims subject to    
paym5t audits ,section                  
#ahdb7;b77#c77;,b7 ( ! ,social ,security
 ,act 7#db ,u4,s4,c4 #acieu7b77#c77;,b77
 is am5d$ by ins]t+ be=e ! semicolon at 
! end ! foll[+3 1 except t ! reop5+ ( a 
claim by a ,m$ic>e ,,dmepos contractor  
7z def9$ 9 section #ahic7;j77#g77 9 a   
po/-paym5t audit or a claim d5ial 9 a   
prepaym5t audit = ,,dmepos 7z def9$ 9   
su* section7 %all toll ! timely claim   
fil+ limits "u ?is "p su* t ! ,secret>y 

may n prohibit a ,,dmepos suppli] 7z    
def9$ 9 su* section7 f tak+ an appeal f 
! det]m9ation ( a claim 9 a pre- or     
po/-paym5t audit1 or ! submission or    
resubmission = paym5t ( any claims t    
foll[ sequ5tially f ! audit$ claim on ! 
basis t ! timely claim fil+ limits h    
expir$4  7d7 ,maximum audit docum5tation
 review p]iod ( #c ye>s = ,m$ic>e       
contractors  7#a7 ,r,a,cs ,section      
#ahic7;h77#d77;,b7 ( ! ,social ,security
 ,act 7#db ,u4,s4,c4                    
#acie;ddd7h77#d77;,b77 is am5d$ by /rik+
 #d fiscal ye>s & ins]t+ #c fiscal ye>s4
  7#b7 ,9 ov]paym5t ( claims ,! la/     
s5t5ces ( subsections 7b7 & 7c7 (       
section #ahgj ( ! ,social ,security ,act
 7#db ,u4,s4,c4 #acie;gg7 are ea* am5d$ 
by /rik+ fif? ye> & five-ye> & ins]t+   
?ird ye> & ?ree-ye>1 respectively4  7#c7
 ,limitation on audit docum5tation      
review p]iod ,section #ahgd;,a7a7 ( !   
,social ,security ,act 7#db ,u4,s4,c4   
#aciekk-#a7;a77 is am5d$ by add+ at !   
end ! foll[+ new p>agraph3  7#g7        

,limitation on audit docum5tation review
 p]iod ,! ,secret>y %all limit ! audit  
docum5tation review p]iod = m$ic>e      
adm9i/rative contractors to #c ye>s4  4 
7#d7 ,effective date ,! am5dm5ts made by
 ?is subsection %all apply ) respect to 
paym5ts made = items & s]vices furni%$  
on or aft] ! date ( ! enactm5t ( ?is    
,act4