,,ii #aacth ,,congress #ast ,session ,s4 #ajab ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,may #bb1 #bjac ,mr4 ,blunt 7for himself and ,mr4 ,pryor7 introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to amend title ,,xviii of the ,social ,security ,act to improve operations of recovery auditors under the ,medicare integrity program1 to increase transparency and accuracy in audits conducted by contractors1 and for other purposes4 #a4 ,short title2 table of contents 7a7 ,short title ,this ,act may be cited as the ,medicare ,audit ,improvement ,act of #bjac4 7b7 ,table of contents ,the table of contents of this ,act is as follows3 ,sec4 #a4 ,short title2 table of contents4 ,sec4 #b4 ,combined additional documentation request limit4 ,sec4 #c4 ,improvement of recovery auditor operations4 ,sec4 #d4 ,greater transparency of recovery auditor performance4 ,sec4 #e4 ,accurate payment for rebilled claims4 ,sec4 #f4 ,requirement for physician validation for medical necessity denials4 ,sec4 #g4 ,assuring due process in application of guidelines for reopening and revision of determinations4 #b4 ,combined additional documentation request limit 7a7 ,establishment of limits per hospital ,the ,secretary of ,health and ,human ,services shall establish a process under which the number of additional documentation requests made to a hospital 7as defined in subsection 7c77#c77 by ,medicare contractors 7as defined in subsection 7c77#a77 pursuant to prepayment and postpayment audits that require a hospital to submit a medical record for audit purposes1 as required under chapter #c of the ,medicare ,program ,integrity ,manual1 or otherwise1 shall be subject to a single1 combined maximum limit of additional documentation requests per year for the ,medicare contractors specified in subsection 7c77#a74 ,however1 such maximum limit shall be applied incrementally as a limit for requests for additional documentation in #de-;day periods during the year so that the maximum number of such requests in a #de-;day period is #ejj or1 in the case of a hospital that receives less than #ajj1jjj1jjj in ,medicare inpatient hospital payments in the previous year1 #cej4 7b7 ,establishment of percentage-,based limits per claim type ,in addition to the limit established under subsection 7a71 the ,secretary shall establish a distinct additional documentation request limit for each hospital claim type 7as defined in subsection 7c77#b77 for each hospital for a #de-;day period in a year4 ,for a hospital for each hospital claim type for a #de-;day period in a calendar year1 the additional documentation request limit under this subsection for a claim type shall be #b percent of the total number of hospital discharges for such hospital for the previous calendar year divided by #h4 7c7 ,definitions ,in this section3 7#a7 ,medicare contractor ,the term ,medicare contractor means any of the following3 7,a7 ,a ,medicare administrative contractor under section #ahgd;,a of the ,social ,security ,act 7#db ,u4,s4,c4 #aciekk71 including a fiscal intermediary and a carrier under sections #ahaf and #ahdb1 respectively4 7,b7 ,a recovery audit contractor under section #ahic7;h7 of such ,act 7#db ,u4,s4,c4 #acie;ddd7h774 7,c7 ,a ,comprehensive ,error ,rate ,testing 7,,cert7 program contractor with a contract with the ,secretary of ,health and ,human ,services to review error rates under title ,,xviii of the ,social ,security ,act 7#db ,u4,s4,c4 #acie et seq474 7#b7 ,hospital claim type ,each of the following shall be considered a separate hospital claim type3 7,a7 ,,ipps ,a claim for payment under section #ahhf7;d7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acieww7d77 made by a hospital for furnishing inpatient hospital services4 7,b7 ,outpatient hospital services ,a claim for payment under section #ahcc7t7 of such ,act 7#db ,u4,s4,c4 #aciel7t77 made by a hospital for furnishing covered ,,opd services4 7,c7 ,,cah services ,a claim for payment for inpatient or outpatient critical access hospital services1 whether under section #ahad7l7 of such ,act 7#db ,u4,s4,c4 #acie;f7l77 or under section #ahcd7;g7 of such ,act 7#db ,u4,s4,c4 #aciem7g774 7,d7 ,inpatient rehabilitation services ,a claim for payment under section #ahhf7;j7 of such ,act 7#db ,u4,s4,c4 #acieww7j77 made by a hospital for furnishing inpatient rehabilitation services4 7,e7 ,other inpatient services ,a claim for payment under any other provision of section #ahhf of such ,act 7#db ,u4,s4,c4 #acieww7 made by a hospital for furnishing inpatient hospital services1 such as subsection 7s7 7relating to inpatient hospital services furnish by a psychiatric hospital7 or subsection 7m7 7relating to inpatient hospital services furnish by a long term care hospital74 7,f7 ,skilled nursing facility services ,a claim for payment under section #ahhh7;e7 of such ,act 7#db ,u4,s4,c4 #acieyy7e77 made by a hospital for furnishing covered skilled nursing facility services4 7#c7 ,hospital ,the term hospital means the campus of a hospital 7as defined in subsection 7e7 of section #ahfa of the ,social ,security ,act 7#db ,u4,s4,c4 #aciex77 or of a psychiatric hospital 7as defined in subsection 7f7 of such section71 a comprehensive outpatient rehabilitation facility 7as defined in subsection 7cc77#b7 of such section71 a critical access hospital 7as defined in subsection 7mm7 of such section71 or a long-term care hospital 7as defined in subsection 7ccc7 of such section71 as identified by the tax identification number of the hospital1 and includes all inpatient hospital facilities under such number located in the same area as such campus4 7d7 ,effective date ,this section takes effect on the date of the enactment of this ,act and shall apply with respect to claims submitted for payment under title ,,xviii of the ,social ,security ,act for items or services furnished by providers of services or suppliers on or after the first day of the first month beginning #fj days after the date of the enactment of this ,act4 #c4 ,improvement of recovery auditor operations 7a7 ,recovery auditors 7#a7 ,in general ,section #ahic7;h7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acie;ddd7h77 is amended by adding at the end the following new paragraph3 7#aj7 ,mandatory terms and conditions under contracts with recovery audit contractors ,in addition to such other terms and conditions as the ,secretary may require under contracts with recovery audit contractors under this subsection with respect to a hospital1 including a psychiatric hospital 7as defined in section #ahfa7;f771 the ,secretary shall ensure each of the following requirements are included under such contracts3 7,a7 ,penalties for certain compliance failures 7i7 ,in general ,each such contract shall provide for the imposition of financial penalties by the ,secretary under such contract in the case of any recovery audit contractor with respect to which the ,secretary determines there is a pattern of failure by such contractor to meet any program requirement described in clause 7ii74 ,the ,secretary shall establish the amount of financial penalties and the periodicity under which such penalties shall be imposed under this subparagraph1 in no case less often than annually4 7ii7 ,program requirement described ,for purposes of this subparagraph1 each of the following requirements under the statement of work for a recovery audit contractor constitutes a program requirement with respect to which failure to meet such requirement shall result in the imposition of a financial penalty under clause 7i73 7,i7 ,audit deadline ,completing a determination with respect to each audit of a hospital the recovery audit contractor conducts within the timeframes applicable under guidelines of the ,secretary4 7,,ii7 ,timely communication ,in the case of a denial of a claim of a hospital1 furnishing the hospital the required notice of the pending denial in a timely fashion consistent with claims and appeals timeframes specified in guidelines of the ,secretary4 7,b7 ,penalty for overturned appeals 7i7 ,in general ,each such contract shall require a recovery audit contractor to pay a fee to the prevailing party in the case of a claim denial that is overturned on appeal4 7ii7 ,fee amount ,the amount of the fee payable by a recovery audit contractor to a prevailing party under clause 7i7 shall be determined under a fee schedule established by the ,secretary for such purpose4 ,the amount of such fee under such fee schedule shall reflect the cost incurred by a typical hospital in appealing a claim denied by a recovery audit contractor4 7,c7 ,postpayment and prepayment audits 7i7 ,requiring focus on widespread payment errors 7,i7 ,in general ,the ,secretary shall not approve the conduct of a postpayment or prepayment medical necessity audit by a recovery audit contractor unless such review addresses a widespread payment error rate 7as defined in clause 7ii774 7,,ii7 ,cessation of audit ,a recovery audit contractor that commences an audit under subclause 7,i7 shall cease such audit or any similar audits1 if upon annual review1 the applicable payment error rate is no longer a widespread payment error rate 7as so defined74 7ii7 ,widespread payment error rate defined 7,i7 ,in general ,in this subparagraph1 the term widespread payment error rate means1 with respect to medical necessity reviews conducted by a recovery audit contractor1 a payment error rate that exceeds the rate specified in subclause 7,,ii7 for a particular medical necessity audit determined by the ,secretary using a statistically significant sampling of claims submitted by hospitals in the jurisdiction of the recovery audit contractor and adjusted to take into account claim denials overturned on appeal4 7,,ii7 ,rate specified ,the rate specified in this subclause is #dj percent1 except that the ,secretary shall annually evaluate such rate and reduce it as necessary to account for changes in payment error rates with the aim of continued1 steady improvement of billing practices4 7,d7 ,guidelines for prepayment review 7i7 ,in general ,a recovery audit contractor may conduct prepayment review only in the manner provided under prepayment review guidelines 7described in clause 7ii77 established by the ,secretary4 7ii7 ,consistent prepayment review guidelines ,for purposes of prepayment review activities authorized under this subsection and section #ahgd;,a7h7 7relating to prepayment review by medicare administrative contractors71 the ,secretary shall establish guidelines under which consistent criteria for minimum payment error rates or improper billing practices occasion prepayment review by contractors under this subsection and section #ahgd;,a4 ,such guidelines shall include criteria and timeframes for termination of prepayment review4 4 7#b7 ,conforming amendment to apply financial penalties imposed on recovery contractors to the trust funds ,section #ahic7;h77#b7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acie;ddd7h77#b77 is amended by inserting 1 and amounts collected by the ,secretary under paragraph 7#aj77;,a77i7 7relating to financial penalties for contractor compliance failures71 after paragraph 7#a77;,c74 7b7 ,conforming amendment for medicare administrative contractors ,section #ahgd;,a of the ,social ,security ,act 7#db ,u4,s4,c4 #aciekk-#a7 is amended by adding at the end the following new subsection3 7h7 ,mandatory terms and conditions under contracts with medicare administrative contractors ,in addition to such other terms and conditions as the ,secretary may require under contracts with medicare administrative contractors under this section with respect to a hospital1 including a psychiatric hospital 7as defined in section #ahfa7;f771 the ,secretary shall ensure each of the following requirements are included under such contracts3 7#a7 ,postpayment and prepayment audits 7,a7 ,requiring focus on widespread payment errors 7i7 ,in general ,the ,secretary shall not approve the conduct of a postpayment or prepayment medical necessity audit by a medicare administrative contractor unless such review addresses a widespread payment error rate 7as defined in subparagraph 7,b774 7ii7 ,cessation of audit ,a medicare administrative contractor that commences an audit under clause 7i7 shall cease such audit or any similar audits1 if upon annual review1 the applicable payment error rate is no longer a widespread payment error rate 7as so defined74 7,b7 ,widespread payment error rate defined ,in this paragraph1 the term widespread payment error rate means1 with respect to medical necessity reviews conducted by a medicare administrative contractor1 a payment error rate of #dj percent or greater for a particular medical necessity audit determined by the ,secretary using a statistically significant sampling of claims submitted by hospitals in the jurisdiction of the medicare administrative contractor and adjusted to take into account claim denials overturned on appeal4 7#b7 ,guidelines for prepayment review ,a medicare administrative contractor may only conduct prepayment review in the manner provided under prepayment review guidelines established by the ,secretary under section #ahic7;h77#aj77;,d77ii74 4 7c7 ,effective date ,the amendments made by this section shall apply to contracts entered into or renewed with recovery audit contractors under section #ahic7;h7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acie;ddd7h77 and medicare administrative contractors under section #ahgd;,a of the ,social ,security ,act 7#db ,u4,s4,c4 #aciekk-#a7 on or after the date of the enactment of this ,act4 #d4 ,greater transparency of recovery auditor performance 7a7 ,annual publication of relevant performance information ,section #ahic7;h7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acie;ddd7h771 as amended by section #c7;a71 is further amended by adding at the end the following new paragraph3 7#aa7 ,information on recovery audit contractor performance ,with respect to each recovery audit contractor with a contract under this section for a contract year1 the ,secretary shall publish on the ,internet website of the ,centers for ,medicare ,medicaid ,services the following information with respect to the performance of each such recovery audit contractor3 7,a7 ,publicly available information on audit rates1 denials1 and appeals outcomes ,with respect to the performance of each such recovery audit contractor during a contract year1 the ,secretary shall post on such ,internet website the following information3 7i7 ,audits ,the aggregate number of claims audited by the recovery audit contractor during the contract year involved1 as well as the number of audits of each of the following audit types 7each in this paragraph referred to as an audit type73 7,i7 ,automated4 7,,ii7 ,complex4 7,,iii7 ,medical necessity review4 7,,iv7 ,part ,a claims4 7,v7 ,part ,b claims4 7,,vi7 ,durable medical equipment claims4 7,,vii7 ,part ,a medical necessity4 7ii7 ,,adr requests ,the aggregate number of requests for medical records1 referred to as additional documentation requests1 for each audit type during the contract year involved4 7iii7 ,denials ,the aggregate number of denials for each audit type made by the recovery audit contractor during the contract year involved4 7iv7 ,denial rates ,the denial rate of the recovery audit contractor during the contract year involved for part ,a claims1 part ,b claims1 and durable medical equipment claims for each audit type during the contract year involved4 7v7 ,appeals ,the aggregate number of appeals filed by providers of services and suppliers with respect to denials for each audit type made by the recovery audit contractor during the contract year involved4 7vi7 ,appeals rates ,the aggregate rate of appeals filed by providers of services and suppliers with respect to denials for each audit type made by the recovery audit contractor during the contract year involved4 7vii7 ,appeals volume and outcomes at each of the #e stages of appeal ,for claims denied by a recovery audit contractor1 the number of claims during the contract year that were appealed by the provider1 the number of concluded appeals that did not advance to a subsequent appeals stage1 and the number and percentage of completed appeals that were decided in favor of the provider1 for each level of appeal as follows3 7,i7 ,reconsideration by the relevant medicare contractor4 7,,ii7 ,redetermination by a qualified independent contractor4 7,,iii7 ,administrative law judge hearing4 7,,iv7 ,medicare ,appeals ,council review4 7,v7 ,united ,states ,district ,court judicial review4 7viii7 ,net denials2 net denial rates ,the net denials for each audit type1 calculated as the number of denials for such audit type under clause 7iii7 minus the number of such denials that are overturned on appeal and the net denial rate for each audit type1 calculated in the same manner as denial rates under clause 7iv7 but subtracting from denials those denials that are overturned on appeal4 7,b7 ,public availability of independent performance evaluation ,the ,secretary shall make available on such ,internet website the results of any performance evaluation with respect to each recovery audit contractor conducted by an independent entity selected by the ,secretary for such purpose4 ,each performance evaluation shall include in its results for posting on such ,internet website a determination of annual error rates of the recovery audit contractor for each audit type and the net denials and net denial rates described in subparagraph 7,a77viii74 4 7b7 ,effective date ,the amendment made by subsection 7a7 shall apply to contracts entered into or renewed with recovery audit contractors under section #ahic7;h7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acie;ddd7h77 on or after the date of the enactment of this ,act4 #e4 ,accurate payment for rebilled claims 7a7 ,rebilling under part b inpatient claims denied based on site of service where services found medically necessary at the outpatient level 7#a7 ,recovery auditors ,section #ahic7;h7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acie;ddd7h771 as amended by sections #c7;a7 and #d7;a71 is further amended by adding at the end the following new paragraph3 7#ab7 ,treatment of resubmission of specified claims as original claims 7,a7 ,treatment as original claim ,the resubmission of a specified claim 7as defined in subparagraph 7,c77 shall be deemed to be an original claim for purposes of-- 7i7 payment under part ,b2 and 7ii7 provisions under this title relating to-- 7,i7 the authority of a hospital to resubmit a claim for payment under the appropriate section of this title2 and 7,,ii7 requirements for the timely submission of claims1 including under sections #ahad7;a71 #ahdb7;b77#c71 and #ahce7;a74 7,b7 ,payment for items and services under resubmitted claim ,payment shall be made for a specified claim resubmitted under subparagraph 7,a7 for all the items and services furnished for which payment may be made under part ,b4 7,c7 ,definitions ,in this paragraph3 7i7 ,specified claim 7,i7 ,in general ,the term specified claim means a claim submitted by a hospital for payment under part ,a for inpatient hospital services which a recovery audit contractor 7or entity adjudicating a provider appeal of a ,medicare claim denied payment by a recovery audit contractor7 determines1 subject to subclause 7,,ii71 that the inpatient hospital services were not medically necessary and reasonable under section #ahfb7;a77#a77;,a74 7,,ii7 ,requirements for determination ,a recovery audit contractor or entity adjudicating such provider appeal shall1 before completing a determination described in subclause 7,i71 assess and make a specific finding as to whether the denied inpatient hospital services were medically necessary and reasonable in an outpatient setting of the hospital4 7ii7 ,resubmission ,the term resubmission includes1 with respect to a specified claim of a hospital1 the submission by the hospital of a new claim or of an adjusted original claim4 4 7#b7 ,conforming amendment for medicare administrative contractors ,subsection 7h7 of section #ahgd;,a of the ,social ,security ,act 7#db ,u4,s4,c4 #aciekk-#a71 as added by section #c7;b71 is further amended by adding at the end the following new paragraph3 7#c7 ,treatment of resubmission of specified claims as original claims 7,a7 ,treatment as original claim ,the resubmission of a specified claim 7as defined in subparagraph 7,c77 shall be deemed to be an original claim for purposes of-- 7i7 payment under part ,b2 and 7ii7 provisions under this title relating to-- 7,i7 the authority of a hospital to resubmit a claim for payment under the appropriate section of this title2 and 7,,ii7 requirements for the timely submission of claims1 including under sections #ahad7;a71 #ahdb7;b77#c71 and #ahce7;a74 7,b7 ,payment for items and services under resubmitted claim ,payment shall be made for a specified claim resubmitted under subparagraph 7,a7 for all the items and services furnished for which payment may be made under part ,b4 7,c7 ,definitions ,in this paragraph3 7i7 ,specified claim 7,i7 ,in general ,the term specified claim means a claim submitted by a hospital for payment under part ,a for inpatient hospital services which a medicare administrative contractor 7or entity adjudicating a hospital appeal of a ,medicare claim denied payment by a medicare administrative contractor7 determines1 subject to subclause 7,,ii71 that the inpatient hospital services were not medically necessary and reasonable under section #ahfb7;a77#a77;,a74 7,,ii7 ,requirements for determination ,a medicare administrative contractor or entity adjudicating such provider appeal shall1 before completing a determination described in subclause 7,i71 assess and make a specific finding as to whether the denied inpatient hospital services were medically necessary and reasonable in an outpatient setting of the hospital4 7ii7 ,resubmission ,the term resubmission includes1 with respect to a specified claim of a hospital1 the submission by the hospital of a new claim or of an adjusted original claim4 4 7#c7 ,conforming amendment for cert contractors 7,a7 ,treatment of resubmission of specified claims as original claims ,a ,comprehensive ,error ,rate ,testing 7,,cert7 program contractor with a contract with the ,secretary of ,health and ,human ,services to review error rates under title ,,xviii of the ,social ,security ,act 7#db ,u4,s4,c4 #acie et seq47 shall deem the resubmission of a specified claim 7as defined in subparagraph 7,c77 as an original claim for purposes of-- 7i7 payment under part ,b of such title ,,xvii2 and 7ii7 provisions under such title relating to-- 7,i7 the authority of a hospital to resubmit a claim for payment under the appropriate section of such title2 and 7,,ii7 requirements for the timely submission of claims1 including under sections #ahad7;a71 #ahdb7;b77#c71 and #ahce7;a7 of such ,act 7#db ,u4,s4,c4 #acie;f7a71 #acieu7b77#c71 and #acien7a71 respectively74 7,b7 ,payment for items and services under resubmitted claim ,payment shall be made for a specified claim resubmitted under subparagraph 7,a7 for all the items and services furnished for which payment may be made under part ,b of such title ,,xviii4 7,c7 ,definitions ,in this paragraph3 7i7 ,specified claim 7,i7 ,in general ,the term specified claim means a claim submitted by a hospital 7as defined in section #ahfa7;e7 of such ,act 7#db ,u4,s4,c4 #aciex7e777 for payment under title ,,xviii of such ,act for inpatient hospital services which a ,comprehensive ,error ,rate ,testing 7,,cert7 program contractor 7or entity adjudicating a hospital appeal of a ,medicare claim denied payment by a ,,cert program contractor7 determines the inpatient hospital services were not medically necessary and reasonable under section #ahfb7;a77#a77;,a7 of such ,act 7#db ,u4,s4,c4 #aciey7a77#a77;,a774 7,,ii7 ,requirements for determination ,a ,,cert program contractor or entity adjudicating such provider appeal shall1 before completing a determination described in subclause 7,i71 assess and make a specific finding as to whether the denied inpatient hospital services were medically necessary and reasonable in an outpatient setting of the hospital4 7ii7 ,resubmission ,the term resubmission includes1 with respect to a specified claim of a hospital1 the submission by the hospital of a new claim or of an adjusted original claim4 7iii7 ,effective date ,the amendments made by paragraphs 7#a7 and 7#b71 and the provisions of paragraph 7#c71 shall apply to contracts entered into or renewed with recovery audit contractors under section #ahic7;h7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acie;ddd7h771 medicare administrative contractors under section #ahgd;,a of the ,social ,security ,act 7#db ,u4,s4,c4 #aciekk-#a7 and ,comprehensive ,error ,rate ,testing 7,,cert7 program contractors1 respectively1 on or after the date of the enactment of this ,act4 7b7 ,treatment of audited claims as reopened 7#a7 ,recovery auditors ,section #ahic7;h77#d7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acie;ddd7h77#d77 is amended by adding after and below subparagraph 7,b7 the following3 ,for purposes of the ability of a hospital to resubmit a claim for payment under the appropriate section of this title and for purposes of requirements for the timely submission of claims by hospitals1 including under sections #ahad7;a71 #ahdb7;b77#c71 and #ahce7;a71 any claim that is the subject of an audit by a recovery audit contractor with a contract under this section shall be deemed to be a reopened claim4 ,such reopened claims are not subject to the timely filing limitations under such sections 7and related regulations7 and shall be adjusted and paid without regard to such timely filing limitations44 7#b7 ,conforming amendment for medicare administrative contractors ,section #ahgd;,a7h7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciekk-#a7;h771 as added by section #c7;b7 and as amended by subsection 7a77#b71 is further amended by adding at the end the following new paragraph3 7#d7 ,treatment of audited claims as reopened ,for purposes of the ability of a hospital to resubmit a claim for payment under the appropriate provisions of this title and for purposes of requirements for the timely submission of claims by hospitals1 including under sections #ahad7;a71 #ahdb7;b77#c71 and #ahce7;a71 any claim that is the subject of an audit by a medicare administrative contractor with a contract under this section shall be deemed to be a reopened claim4 ,such reopened claims are not subject to the timely filing limitations under such sections 7and related regulations7 and shall be adjusted and paid without regard to such timely filing limitations4 4 7#c7 ,conforming amendment for ,,cert contractors 7,a7 ,treatment of audited claims as reopened ,any claim made for payment for services furnished by a hospital under title ,,xviii of the ,social ,security ,act 7#db ,u4,s4,c4 #acie et seq47 that is the subject of an audit by a ,comprehensive ,error ,rate ,testing 7,,cert7 program contractor with a contract with the ,secretary of ,health and ,human ,services shall be deemed to be a reopened claim for purposes of the ability of such hospital to resubmit a claim for payment under the appropriate provisions of such title ,,xviii and for purposes of requirements for the timely submission of claims by hospitals under such title ,,xviii1 including under sections #ahad7;a71 #ahdb7;b77#c71 and #ahce7;a7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acie;f7a71 #acieu7b77#c71 and #acien7a71 respectively74 ,such reopened claims are not subject to the timely filing limitations under such sections 7and related regulations7 and shall be adjusted and paid without regard to such timely filing limitations4 7,b7 ,definition ,in this paragraph1 the term hospital has the meaning given such term in subsection 7e7 of section #ahfa of the ,social ,security ,act 7#db ,u4,s4,c4 #aciex71 and includes a psychiatric hospital as defined in subsection 7f7 of such section4 7#d7 ,effective date ,the amendments made by paragraphs 7#a7 and 7#b71 and the provisions of paragraph 7#c71 shall take effect on the date of the enactment of this ,act and apply to claims subject to audit on or after ,september #a1 #bjaj4 #f4 ,requirement for physician validation for medical necessity denials 7a7 ,recovery auditors ,section #ahic7;h7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acie;ddd7h771 as amended by sections #c7;a71 #d7;a71 and #f7;a77#a71 is further amended by adding at the end the following new paragraph3 7#ac7 ,physician validation of medical necessity denials made by non-physician reviewers 7,a7 ,in general ,each contract under this section for a recovery audit contractor shall require that a physician 7as defined in section #ahfa7r77#a77 review each denial of a claim for medical necessity when a medical necessity review of such claim is performed and a denial is made by an employee of the contractor who is not a physician 7as so defined74 7,b7 ,determination2 validation ,a physician reviewing a claim under subparagraph 7,a7 shall-- 7i7 make a determination whether the denial of the claim under the medical necessity review by the non-physician employee is appropriate2 7ii7 sign and certify such determination2 and 7iii7 append such signed and certified determination to the claim file4 7,c7 ,treatment as medically necessary ,a claim with respect to which a denial has been made as described in subparagraph 7,a7 for which the physician determines the denial is not appropriate under subparagraph 7,b7 shall be deemed to be medically necessary4 7,d7 ,medical necessity review defined ,in this paragraph1 the term medical necessity review means1 with respect to an audit of a claim of a provider of services or supplier1 a review conducted by a recovery audit contractor for the purpose of determining whether an item or service furnished for which the claim is filed by such provider of services or supplier is reasonable and necessary for the diagnosis or treatment of illness or injury under section #ahfb7;a77#a77;,a74 4 7b7 ,conforming amendment to medicare administrative contractors ,subsection 7h7 of section #ahgd;,a of the ,social ,security ,act 7#db ,u4,s4,c4 #aciekk-#a71 as added by section #c7;b7 and as amended by subsections 7a77#b7 and 7b77#b7 of section #f1 is further amended by adding at the end the following new paragraph3 7#e7 ,physician validation of medical necessity denials made by non-physician reviewers 7,a7 ,in general ,a physician 7as defined in section #ahfa7r77#a77 shall review each denial of a claim for medical necessity when a medical necessity review of such claim is performed and a denial is made by an employee of the contractor who is not a physician 7as so defined74 7,b7 ,determination2 validation ,a physician reviewing a claim under subparagraph 7,a7 shall-- 7i7 make a determination whether the denial of the claim under the medical necessity review by the non-physician employee is appropriate2 7ii7 sign and certify such determination2 and 7iii7 append such signed and certified determination to the claim file4 7,c7 ,treatment as medically necessary ,a claim with respect to which a denial has been made as described in subparagraph 7,a7 for which the physician determines the denial is not appropriate under subparagraph 7,b7 shall be deemed to be medically necessary4 7,d7 ,medical necessity review defined ,in this paragraph1 the term medical necessity review means1 with respect to an audit of a claim of a provider of services or supplier1 a review conducted by a medicare administrative contractor for the purpose of determining whether an item or service furnished for which the claim is filed by such provider of services or supplier is reasonable and necessary for the diagnosis or treatment of illness or injury under section #ahfb7;a77#a77;,a74 4 7c7 ,conforming requirement for ,,cert contractors 7#a7 ,contract requirement for physician validation of medical necessity denials made by non-physician reviewers ,the ,secretary of ,health and ,human ,services shall require under each contract with a ,comprehensive ,error ,rate ,testing 7,,cert7 program contractor to review error rates under title ,,xviii of the ,social ,security ,act 7#db ,u4,s4,c4 #acie et seq47 that the ,,cert program contractor ensure that a physician 7as defined in section #ahfa7r77#a7 of such ,act 7#db ,u4,s4,c4 #aciex7r77#a777 reviews each denial of a claim for medical necessity when a medical necessity review of such claim is performed and a denial is made by an employee of the contractor who is not a physician 7as so defined74 7#b7 ,determination2 validation ,a physician reviewing a claim under paragraph 7#a7 shall-- 7,a7 make a determination whether the denial of the claim under the medical necessity review by the non-physician employee is appropriate2 7,b7 sign and certify such determination2 and 7,c7 append such signed and certified determination to the claim file4 7#c7 ,treatment as medically necessary ,a claim with respect to which a denial has been made as described in paragraph 7#a7 for which the physician determines the denial is not appropriate under paragraph 7#b7 shall be deemed to be medically necessary4 7#d7 ,medical necessity review defined ,in this subsection1 the term medical necessity review means1 with respect to an audit of a claim of a provider of services or supplier1 a review conducted by a ,,cert program contractor for the purpose of determining whether an item or service furnished for which the claim is filed by such provider of services or supplier is reasonable and necessary for the diagnosis or treatment of illness or injury under section #ahfb7;a77#a77;,a7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciey7a77#a77;,a774 7d7 ,effective date ,the amendments made by subsections 7a7 and 7b71 and the provisions of subsection 7c71 shall apply to contracts entered into or renewed with recovery audit contractors under section #ahic7;h7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acie;ddd7h771 medicare administrative contractors under section #ahgd;,a of the ,social ,security ,act 7#db ,u4,s4,c4 #aciekk-#a7 and ,comprehensive ,error ,rate ,testing 7,,cert7 program contractors1 respectively1 on or after the date of the enactment of this ,act4 #g4 ,assuring due process in application of guidelines for reopening and revision of determinations ,section #ahfi7;b77#a77;,g7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acie;ff7b77#a77;,g77 is amended by adding at the end the following3 ,the ,secretary's compliance with such guidelines shall be subject to administrative and judicial review under this section44