,,ii  #aac? ,,congress  #a/ ,session    
,s4 #ajab  ,,9 ,,! ,,s5ate ,,( ,,!      
,,unit$ ,,/ates  ,may #bb1 #bjac ,mr4   
,blunt 7= himself & ,mr4 ,pryor7        
introduc$ ! foll[+ bill2 :i* 0 read     
twice & ref]r$ to ! ,committee on       
,f9ance  ,a ,,bill  ,to am5d title      
,,xviii ( ! ,social ,security ,act to   
improve op]ations ( recov]y auditors "u 
! ,m$ic>e integrity program1 to increase
 transp>5cy & accuracy 9 audits conduct$
 by contractors1 & = o!r purposes4  #a4 
,%ort title2 table ( cont5ts  7a7 ,%ort 
title ,?is ,act may be cit$ z ! ,m$ic>e 
,audit ,improvem5t ,act ( #bjac4  7b7   
,table ( cont5ts ,! table ( cont5ts (   
?is ,act is z foll[s3  ,sec4 #a4 ,%ort  
title2 table ( cont5ts4 ,sec4 #b4       
,comb9$ additional docum5tation reque/  
limit4 ,sec4 #c4 ,improvem5t ( recov]y  
auditor op]ations4 ,sec4 #d4 ,great]    
transp>5cy ( recov]y auditor p]=mance4  
,sec4 #e4 ,accurate paym5t = rebill$    
claims4 ,sec4 #f4 ,requirem5t =         
physician validation = m$ical necessity 

d5ials4 ,sec4 #g4 ,assur+ due process 9 
application ( guidel9es = reop5+ &      
revision ( det]m9ations4  #b4 ,comb9$   
additional docum5tation reque/ limit    
7a7 ,e/abli%m5t ( limits p] hospital ,! 
,secret>y ( ,heal? & ,human ,s]vices    
%all e/abli% a process "u :i* ! numb] ( 
additional docum5tation reque/s made to 
a hospital 7z def9$ 9 subsection        
7c77#c77 by ,m$ic>e contractors 7z def9$
 9 subsection 7c77#a77 pursuant to      
prepaym5t & po/paym5t audits t require a
 hospital to submit a m$ical record =   
audit purposes1 z requir$ "u *apt] #c ( 
! ,m$ic>e ,program ,integrity ,manual1  
or o!rwise1 %all be subject to a s+le1  
comb9$ maximum limit ( additional       
docum5tation reque/s p] ye> = ! ,m$ic>e 
contractors specifi$ 9 subsection       
7c77#a74 ,h[ev]1 su* maximum limit %all 
be appli$ increm5tally z a limit =      
reque/s = additional docum5tation 9     
#de-;day p]iods dur+ ! ye> s t ! maximum
 numb] ( su* reque/s 9 a #de-;day p]iod 
is #ejj or1 9 ! case ( a hospital t     

receives less ?an #ajj1jjj1jjj 9 ,m$ic>e
 inpati5t hospital paym5ts 9 ! previ\s  
ye>1 #cej4  7b7 ,e/abli%m5t (           
p]c5tage-,bas$ limits p] claim type ,9  
addition to ! limit e/abli%$ "u         
subsection 7a71 ! ,secret>y %all e/abli%
 a di/9ct additional docum5tation reque/
 limit = ea* hospital claim type 7z     
def9$ 9 subsection 7c77#b77 = ea*       
hospital = a #de-;day p]iod 9 a ye>4 ,= 
a hospital = ea* hospital claim type = a
 #de-;day p]iod 9 a cal5d> ye>1 !       
additional docum5tation reque/ limit "u 
?is subsection = a claim type %all be #b
 p]c5t ( ! total numb] ( hospital       
dis*>ges = su* hospital = ! previ\s     
cal5d> ye> divid$ by #h4  7c7           
,def9itions ,9 ?is section3  7#a7       
,m$ic>e contractor ,! t]m ,m$ic>e       
contractor means any ( ! foll[+3  7,a7  
,a ,m$ic>e adm9i/rative contractor "u   
section #ahgd;,a ( ! ,social ,security  
,act 7#db ,u4,s4,c4 #aciekk71 includ+ a 
fiscal int]m$i>y & a c>ri] "u sections  
#ahaf & #ahdb1 respectively4  7,b7 ,a   

recov]y audit contractor "u section     
#ahic7;h7 ( su* ,act 7#db ,u4,s4,c4     
#acie;ddd7h774  7,c7 ,a ,compreh5sive   
,error ,rate ,te/+ 7,,c]t7 program      
contractor ) a contract ) ! ,secret>y ( 
,heal? & ,human ,s]vices to review error
 rates "u title ,,xviii ( ! ,social     
,security ,act 7#db ,u4,s4,c4 #acie et  
seq474  7#b7 ,hospital claim type ,ea* (
 ! foll[+ %all be consid]$ a sep>ate    
hospital claim type3  7,a7 ,,ipps ,a    
claim = paym5t "u section #ahhf7;d7 ( ! 
,social ,security ,act 7#db ,u4,s4,c4   
#acieww7d77 made by a hospital = furni%+
 inpati5t hospital s]vices4  7,b7       
,outpati5t hospital s]vices ,a claim =  
paym5t "u section #ahcc7t7 ( su* ,act   
7#db ,u4,s4,c4 #aciel7t77 made by a     
hospital = furni%+ cov]$ ,,opd s]vices4 
7,c7 ,,cah s]vices ,a claim = paym5t =  
inpati5t or outpati5t critical access   
hospital s]vices1 :e!r "u section       
#ahad7l7 ( su* ,act 7#db ,u4,s4,c4      
#acie;f7l77 or "u section #ahcd7;g7 (   
su* ,act 7#db ,u4,s4,c4 #aciem7g774     

7,d7 ,inpati5t rehabilitation s]vices ,a
 claim = paym5t "u section #ahhf7;j7 (  
su* ,act 7#db ,u4,s4,c4 #acieww7j77 made
 by a hospital = furni%+ inpati5t       
rehabilitation s]vices4  7,e7 ,o!r      
inpati5t s]vices ,a claim = paym5t "u   
any o!r provision ( section #ahhf ( su* 
,act 7#db ,u4,s4,c4 #acieww7 made by a  
hospital = furni%+ inpati5t hospital    
s]vices1 su* z subsection 7s7 7relat+ to
 inpati5t hospital s]vices furni% by a  
psy*iatric hospital7 or subsection 7m7  
7relat+ to inpati5t hospital s]vices    
furni% by a long t]m c>e hospital74     
7,f7 ,skill$ nurs+ facility s]vices ,a  
claim = paym5t "u section #ahhh7;e7 (   
su* ,act 7#db ,u4,s4,c4 #acieyy7e77 made
 by a hospital = furni%+ cov]$ skill$   
nurs+ facility s]vices4  7#c7 ,hospital 
,! t]m hospital means ! campus ( a      
hospital 7z def9$ 9 subsection 7e7 (    
section #ahfa ( ! ,social ,security ,act
 7#db ,u4,s4,c4 #aciex77 or ( a         
psy*iatric hospital 7z def9$ 9          
subsection 7f7 ( su* section71 a        

compreh5sive outpati5t rehabilitation   
facility 7z def9$ 9 subsection 7cc77#b7 
( su* section71 a critical access       
hospital 7z def9$ 9 subsection 7mm7 (   
su* section71 or a long-t]m c>e hospital
 7z def9$ 9 subsection 7ccc7 ( su*      
section71 z id5tifi$ by ! tax           
id5tification numb] ( ! hospital1 &     
includes all inpati5t hospital          
facilities "u su* numb] locat$ 9 ! same 
area z su* campus4  7d7 ,effective date 
,?is section takes effect on ! date ( ! 
enactm5t ( ?is ,act & %all apply )      
respect to claims submitt$ = paym5t "u  
title ,,xviii ( ! ,social ,security ,act
 = items or s]vices furni%$ by provid]s 
( s]vices or suppli]s on or aft] ! fir/ 
day ( ! fir/ mon? beg9n+ #fj days aft] !
 date ( ! enactm5t ( ?is ,act4  #c4     
,improvem5t ( recov]y auditor op]ations 
7a7 ,recov]y auditors  7#a7 ,9 g5]al    
,section #ahic7;h7 ( ! ,social ,security
 ,act 7#db ,u4,s4,c4 #acie;ddd7h77 is   
am5d$ by add+ at ! end ! foll[+ new     
p>agraph3  7#aj7 ,m&atory t]ms &        

conditions "u contracts ) recov]y audit 
contractors ,9 addition to su* o!r t]ms 
& conditions z ! ,secret>y may require  
"u contracts ) recov]y audit contractors
 "u ?is subsection ) respect to a       
hospital1 includ+ a psy*iatric hospital 
7z def9$ 9 section #ahfa7;f771 !        
,secret>y %all ensure ea* ( ! foll[+    
requirem5ts are includ$ "u su*          
contracts3  7,a7 ,p5alties = c]ta9      
compliance failures  7i7 ,9 g5]al ,ea*  
su* contract %all provide = ! imposition
 ( f9ancial p5alties by ! ,secret>y "u  
su* contract 9 ! case ( any recov]y     
audit contractor ) respect to :i* !     
,secret>y det]m9es !re is a patt]n (    
failure by su* contractor to meet any   
program requirem5t describ$ 9 clause    
7ii74 ,! ,secret>y %all e/abli% ! am\nt 
( f9ancial p5alties & ! p]iodicity "u   
:i* su* p5alties %all be impos$ "u ?is  
subp>agraph1 9 no case less (t5 ?an     
annually4  7ii7 ,program requirem5t     
describ$ ,= purposes ( ?is subp>agraph1 
ea* ( ! foll[+ requirem5ts "u ! /atem5t 

( "w = a recov]y audit contractor       
con/itutes a program requirem5t )       
respect to :i* failure to meet su*      
requirem5t %all result 9 ! imposition ( 
a f9ancial p5alty "u clause 7i73  7,i7  
,audit deadl9e ,complet+ a det]m9ation )
 respect to ea* audit ( a hospital !    
recov]y audit contractor conducts )9 !  
timeframes applicable "u guidel9es ( !  
,secret>y4  7,,ii7 ,timely communication
 ,9 ! case ( a d5ial ( a claim ( a      
hospital1 furni%+ ! hospital ! requir$  
notice ( ! p5d+ d5ial 9 a timely fa%ion 
consi/5t ) claims & appeals timeframes  
specifi$ 9 guidel9es ( ! ,secret>y4     
7,b7 ,p5alty = ov]turn$ appeals  7i7 ,9 
g5]al ,ea* su* contract %all require a  
recov]y audit contractor to pay a fee to
 ! prevail+ p>ty 9 ! case ( a claim     
d5ial t is ov]turn$ on appeal4  7ii7    
,fee am\nt ,! am\nt ( ! fee payable by a
 recov]y audit contractor to a prevail+ 
p>ty "u clause 7i7 %all be det]m9$ "u a 
fee s*$ule e/abli%$ by ! ,secret>y = su*
 purpose4 ,! am\nt ( su* fee "u su* fee 

s*$ule %all reflect ! co/ incurr$ by a  
typical hospital 9 appeal+ a claim d5i$ 
by a recov]y audit contractor4  7,c7    
,po/paym5t & prepaym5t audits  7i7      
,requir+ focus on widespread paym5t     
errors  7,i7 ,9 g5]al ,! ,secret>y %all 
n approve ! conduct ( a po/paym5t or    
prepaym5t m$ical necessity audit by a   
recov]y audit contractor unless su*     
review addresses a widespread paym5t    
error rate 7z def9$ 9 clause 7ii774     
7,,ii7 ,cessation ( audit ,a recov]y    
audit contractor t comm5ces an audit "u 
subclause 7,i7 %all cease su* audit or  
any simil> audits1 if ^u annual review1 
! applicable paym5t error rate is no    
long] a widespread paym5t error rate 7z 
s def9$74  7ii7 ,widespread paym5t error
 rate def9$  7,i7 ,9 g5]al ,9 ?is       
subp>agraph1 ! t]m widespread paym5t    
error rate means1 ) respect to m$ical   
necessity reviews conduct$ by a recov]y 
audit contractor1 a paym5t error rate t 
exce$s ! rate specifi$ 9 subclause      
7,,ii7 = a p>ticul> m$ical necessity    

audit det]m9$ by ! ,secret>y us+ a      
/ati/ically significant sampl+ ( claims 
submitt$ by hospitals 9 ! jurisdiction (
 ! recov]y audit contractor & adju/$ to 
take into acc\nt claim d5ials ov]turn$  
on appeal4  7,,ii7 ,rate specifi$ ,!    
rate specifi$ 9 ?is subclause is #dj    
p]c5t1 except t ! ,secret>y %all        
annually evaluate su* rate & r$uce x z  
necess>y to acc\nt = *anges 9 paym5t    
error rates ) ! aim ( cont9u$1 /eady    
improvem5t ( bill+ practices4  7,d7     
,guidel9es = prepaym5t review  7i7 ,9   
g5]al ,a recov]y audit contractor may   
conduct prepaym5t review only 9 ! mann] 
provid$ "u prepaym5t review guidel9es   
7describ$ 9 clause 7ii77 e/abli%$ by !  
,secret>y4  7ii7 ,consi/5t prepaym5t    
review guidel9es ,= purposes ( prepaym5t
 review activities au?oriz$ "u ?is      
subsection & section #ahgd;,a7h7 7relat+
 to prepaym5t review by m$ic>e          
adm9i/rative contractors71 ! ,secret>y  
%all e/abli% guidel9es "u :i* consi/5t  
crit]ia = m9imum paym5t error rates or  

improp] bill+ practices occasion        
prepaym5t review by contractors "u ?is  
subsection & section #ahgd;,a4 ,su*     
guidel9es %all include crit]ia &        
timeframes = t]m9ation ( prepaym5t      
review4  4  7#b7 ,con=m+ am5dm5t to     
apply f9ancial p5alties impos$ on       
recov]y contractors to ! tru/ funds     
,section #ahic7;h77#b7 ( ! ,social      
,security ,act 7#db ,u4,s4,c4           
#acie;ddd7h77#b77 is am5d$ by ins]t+ 1 &
 am\nts collect$ by ! ,secret>y "u      
p>agraph 7#aj77;,a77i7 7relat+ to       
f9ancial p5alties = contractor          
compliance failures71 aft] p>agraph     
7#a77;,c74  7b7 ,con=m+ am5dm5t = m$ic>e
 adm9i/rative contractors ,section      
#ahgd;,a ( ! ,social ,security ,act 7#db
 ,u4,s4,c4 #aciekk-#a7 is am5d$ by add+ 
at ! end ! foll[+ new subsection3  7h7  
,m&atory t]ms & conditions "u contracts 
) m$ic>e adm9i/rative contractors ,9    
addition to su* o!r t]ms & conditions z 
! ,secret>y may require "u contracts )  
m$ic>e adm9i/rative contractors "u ?is  

section ) respect to a hospital1 includ+
 a psy*iatric hospital 7z def9$ 9       
section #ahfa7;f771 ! ,secret>y %all    
ensure ea* ( ! foll[+ requirem5ts are   
includ$ "u su* contracts3  7#a7         
,po/paym5t & prepaym5t audits  7,a7     
,requir+ focus on widespread paym5t     
errors  7i7 ,9 g5]al ,! ,secret>y %all n
 approve ! conduct ( a po/paym5t or     
prepaym5t m$ical necessity audit by a   
m$ic>e adm9i/rative contractor unless   
su* review addresses a widespread paym5t
 error rate 7z def9$ 9 subp>agraph      
7,b774  7ii7 ,cessation ( audit ,a      
m$ic>e adm9i/rative contractor t        
comm5ces an audit "u clause 7i7 %all    
cease su* audit or any simil> audits1 if
 ^u annual review1 ! applicable paym5t  
error rate is no long] a widespread     
paym5t error rate 7z s def9$74  7,b7    
,widespread paym5t error rate def9$ ,9  
?is p>agraph1 ! t]m widespread paym5t   
error rate means1 ) respect to m$ical   
necessity reviews conduct$ by a m$ic>e  
adm9i/rative contractor1 a paym5t error 

rate ( #dj p]c5t or great] = a p>ticul> 
m$ical necessity audit det]m9$ by !     
,secret>y us+ a /ati/ically significant 
sampl+ ( claims submitt$ by hospitals 9 
! jurisdiction ( ! m$ic>e adm9i/rative  
contractor & adju/$ to take into acc\nt 
claim d5ials ov]turn$ on appeal4  7#b7  
,guidel9es = prepaym5t review ,a m$ic>e 
adm9i/rative contractor may only conduct
 prepaym5t review 9 ! mann] provid$ "u  
prepaym5t review guidel9es e/abli%$ by !
 ,secret>y "u section                   
#ahic7;h77#aj77;,d77ii74  4  7c7        
,effective date ,! am5dm5ts made by ?is 
section %all apply to contracts ent]$   
into or r5ew$ ) recov]y audit           
contractors "u section #ahic7;h7 ( !    
,social ,security ,act 7#db ,u4,s4,c4   
#acie;ddd7h77 & m$ic>e adm9i/rative     
contractors "u section #ahgd;,a ( !     
,social ,security ,act 7#db ,u4,s4,c4   
#aciekk-#a7 on or aft] ! date ( !       
enactm5t ( ?is ,act4  #d4 ,great]       
transp>5cy ( recov]y auditor p]=mance   
7a7 ,annual publication ( relevant      

p]=mance in=mation ,section #ahic7;h7 ( 
! ,social ,security ,act 7#db ,u4,s4,c4 
#acie;ddd7h771 z am5d$ by section       
#c7;a71 is fur!r am5d$ by add+ at ! end 
! foll[+ new p>agraph3  7#aa7 ,in=mation
 on recov]y audit contractor p]=mance ,)
 respect to ea* recov]y audit contractor
 ) a contract "u ?is section = a        
contract ye>1 ! ,secret>y %all publi% on
 ! ,int]net website ( ! ,c5t]s = ,m$ic>e
  ,m$icaid ,s]vices ! foll[+ in=mation )
 respect to ! p]=mance ( ea* su* recov]y
 audit contractor3  7,a7 ,publicly      
available in=mation on audit rates1     
d5ials1 & appeals outcomes ,) respect to
 ! p]=mance ( ea* su* recov]y audit     
contractor dur+ a contract ye>1 !       
,secret>y %all po/ on su* ,int]net      
website ! foll[+ in=mation3  7i7 ,audits
 ,! aggregate numb] ( claims audit$ by !
 recov]y audit contractor dur+ !        
contract ye> involv$1 z well z ! numb] (
 audits ( ea* ( ! foll[+ audit types    
7ea* 9 ?is p>agraph ref]r$ to z an audit
 type73  7,i7 ,automat$4  7,,ii7        

,complex4  7,,iii7 ,m$ical necessity    
review4  7,,iv7 ,"p ,a claims4  7,v7 ,"p
 ,b claims4  7,,vi7 ,durable m$ical     
equipm5t claims4  7,,vii7 ,"p ,a m$ical 
necessity4  7ii7 ,,adr reque/s ,!       
aggregate numb] ( reque/s = m$ical      
records1 ref]r$ to z additional         
docum5tation reque/s1 = ea* audit type  
dur+ ! contract ye> involv$4  7iii7     
,d5ials ,! aggregate numb] ( d5ials =   
ea* audit type made by ! recov]y audit  
contractor dur+ ! contract ye> involv$4 
7iv7 ,d5ial rates ,! d5ial rate ( !     
recov]y audit contractor dur+ ! contract
 ye> involv$ = "p ,a claims1 "p ,b      
claims1 & durable m$ical equipm5t claims
 = ea* audit type dur+ ! contract ye>   
involv$4  7v7 ,appeals ,! aggregate     
numb] ( appeals fil$ by provid]s (      
s]vices & suppli]s ) respect to d5ials =
 ea* audit type made by ! recov]y audit 
contractor dur+ ! contract ye> involv$4 
7vi7 ,appeals rates ,! aggregate rate ( 
appeals fil$ by provid]s ( s]vices &    
suppli]s ) respect to d5ials = ea* audit

 type made by ! recov]y audit contractor
 dur+ ! contract ye> involv$4  7vii7    
,appeals volume & outcomes at ea* ( ! #e
 /ages ( appeal ,= claims d5i$ by a     
recov]y audit contractor1 ! numb] (     
claims dur+ ! contract ye> t 7 appeal$  
by ! provid]1 ! numb] ( conclud$ appeals
 t did n advance to a subsequ5t appeals 
/age1 & ! numb] & p]c5tage ( complet$   
appeals t 7 decid$ 9 favor ( ! provid]1 
= ea* level ( appeal z foll[s3  7,i7    
,reconsid]ation by ! relevant m$ic>e    
contractor4  7,,ii7 ,r$et]m9ation by a  
qualifi$ indep5d5t contractor4  7,,iii7 
,adm9i/rative law judge he>+4  7,,iv7   
,m$ic>e ,appeals ,c\ncil review4  7,v7  
,unit$ ,/ates ,di/rict ,c\rt judicial   
review4  7viii7 ,net d5ials2 net d5ial  
rates ,! net d5ials = ea* audit type1   
calculat$ z ! numb] ( d5ials = su* audit
 type "u clause 7iii7 m9us ! numb] ( su*
 d5ials t are ov]turn$ on appeal & ! net
 d5ial rate = ea* audit type1 calculat$ 
9 ! same mann] z d5ial rates "u clause  
7iv7 b subtract+ f d5ials ^? d5ials t   

are ov]turn$ on appeal4  7,b7 ,public   
availability ( indep5d5t p]=mance       
evaluation ,! ,secret>y %all make       
available on su* ,int]net website !     
results ( any p]=mance evaluation )     
respect to ea* recov]y audit contractor 
conduct$ by an indep5d5t entity select$ 
by ! ,secret>y = su* purpose4 ,ea*      
p]=mance evaluation %all include 9 its  
results = po/+ on su* ,int]net website a
 det]m9ation ( annual error rates ( !   
recov]y audit contractor = ea* audit    
type & ! net d5ials & net d5ial rates   
describ$ 9 subp>agraph 7,a77viii74  4   
7b7 ,effective date ,! am5dm5t made by  
subsection 7a7 %all apply to contracts  
ent]$ into or r5ew$ ) recov]y audit     
contractors "u section #ahic7;h7 ( !    
,social ,security ,act 7#db ,u4,s4,c4   
#acie;ddd7h77 on or aft] ! date ( !     
enactm5t ( ?is ,act4  #e4 ,accurate     
paym5t = rebill$ claims  7a7 ,rebill+ "u
 "p b inpati5t claims d5i$ bas$ on site 
( s]vice :]e s]vices f\nd m$ically      
necess>y at ! outpati5t level  7#a7     

,recov]y auditors ,section #ahic7;h7 ( !
 ,social ,security ,act 7#db ,u4,s4,c4  
#acie;ddd7h771 z am5d$ by sections      
#c7;a7 & #d7;a71 is fur!r am5d$ by add+ 
at ! end ! foll[+ new p>agraph3  7#ab7  
,treatm5t ( resubmission ( specifi$     
claims z orig9al claims  7,a7 ,treatm5t 
z orig9al claim ,! resubmission ( a     
specifi$ claim 7z def9$ 9 subp>agraph   
7,c77 %all be deem$ to be an orig9al    
claim = purposes (--  7i7 paym5t "u "p  
,b2 &  7ii7 provisions "u ?is title     
relat+ to--  7,i7 ! au?ority ( a        
hospital to resubmit a claim = paym5t "u
 ! appropriate section ( ?is title2 &   
7,,ii7 requirem5ts = ! timely submission
 ( claims1 includ+ "u sections          
#ahad7;a71 #ahdb7;b77#c71 & #ahce7;a74  
7,b7 ,paym5t = items & s]vices "u       
resubmitt$ claim ,paym5t %all be made = 
a specifi$ claim resubmitt$ "u          
subp>agraph 7,a7 = all ! items & s]vices
 furni%$ = :i* paym5t may be made "u "p 
,b4  7,c7 ,def9itions ,9 ?is p>agraph3  
7i7 ,specifi$ claim  7,i7 ,9 g5]al ,!   

t]m specifi$ claim means a claim        
submitt$ by a hospital = paym5t "u "p ,a
 = inpati5t hospital s]vices :i* a      
recov]y audit contractor 7or entity     
adjudicat+ a provid] appeal ( a ,m$ic>e 
claim d5i$ paym5t by a recov]y audit    
contractor7 det]m9es1 subject to        
subclause 7,,ii71 t ! inpati5t hospital 
s]vices 7 n m$ically necess>y &         
reasonable "u section                   
#ahfb7;a77#a77;,a74  7,,ii7 ,requirem5ts
 = det]m9ation ,a recov]y audit         
contractor or entity adjudicat+ su*     
provid] appeal %all1 be=e complet+ a    
det]m9ation describ$ 9 subclause 7,i71  
assess & make a specific f9d+ z to :e!r 
! d5i$ inpati5t hospital s]vices 7      
m$ically necess>y & reasonable 9 an     
outpati5t sett+ ( ! hospital4  7ii7     
,resubmission ,! t]m resubmission       
includes1 ) respect to a specifi$ claim 
( a hospital1 ! submission by ! hospital
 ( a new claim or ( an adju/$ orig9al   
claim4  4  7#b7 ,con=m+ am5dm5t = m$ic>e
 adm9i/rative contractors ,subsection   

7h7 ( section #ahgd;,a ( ! ,social      
,security ,act 7#db ,u4,s4,c4           
#aciekk-#a71 z add$ by section #c7;b71  
is fur!r am5d$ by add+ at ! end ! foll[+
 new p>agraph3  7#c7 ,treatm5t (        
resubmission ( specifi$ claims z orig9al
 claims  7,a7 ,treatm5t z orig9al claim 
,! resubmission ( a specifi$ claim 7z   
def9$ 9 subp>agraph 7,c77 %all be deem$ 
to be an orig9al claim = purposes (--   
7i7 paym5t "u "p ,b2 &  7ii7 provisions 
"u ?is title relat+ to--  7,i7 !        
au?ority ( a hospital to resubmit a     
claim = paym5t "u ! appropriate section 
( ?is title2 &  7,,ii7 requirem5ts = !  
timely submission ( claims1 includ+ "u  
sections #ahad7;a71 #ahdb7;b77#c71 &    
#ahce7;a74  7,b7 ,paym5t = items &      
s]vices "u resubmitt$ claim ,paym5t %all
 be made = a specifi$ claim resubmitt$  
"u subp>agraph 7,a7 = all ! items &     
s]vices furni%$ = :i* paym5t may be made
 "u "p ,b4  7,c7 ,def9itions ,9 ?is     
p>agraph3  7i7 ,specifi$ claim  7,i7 ,9 
g5]al ,! t]m specifi$ claim means a     

claim submitt$ by a hospital = paym5t "u
 "p ,a = inpati5t hospital s]vices :i* a
 m$ic>e adm9i/rative contractor 7or     
entity adjudicat+ a hospital appeal ( a 
,m$ic>e claim d5i$ paym5t by a m$ic>e   
adm9i/rative contractor7 det]m9es1      
subject to subclause 7,,ii71 t !        
inpati5t hospital s]vices 7 n m$ically  
necess>y & reasonable "u section        
#ahfb7;a77#a77;,a74  7,,ii7 ,requirem5ts
 = det]m9ation ,a m$ic>e adm9i/rative   
contractor or entity adjudicat+ su*     
provid] appeal %all1 be=e complet+ a    
det]m9ation describ$ 9 subclause 7,i71  
assess & make a specific f9d+ z to :e!r 
! d5i$ inpati5t hospital s]vices 7      
m$ically necess>y & reasonable 9 an     
outpati5t sett+ ( ! hospital4  7ii7     
,resubmission ,! t]m resubmission       
includes1 ) respect to a specifi$ claim 
( a hospital1 ! submission by ! hospital
 ( a new claim or ( an adju/$ orig9al   
claim4  4  7#c7 ,con=m+ am5dm5t = c]t   
contractors  7,a7 ,treatm5t (           
resubmission ( specifi$ claims z orig9al

 claims ,a ,compreh5sive ,error ,rate   
,te/+ 7,,c]t7 program contractor ) a    
contract ) ! ,secret>y ( ,heal? & ,human
 ,s]vices to review error rates "u title
 ,,xviii ( ! ,social ,security ,act 7#db
 ,u4,s4,c4 #acie et seq47 %all deem !   
resubmission ( a specifi$ claim 7z def9$
 9 subp>agraph 7,c77 z an orig9al claim 
= purposes (--  7i7 paym5t "u "p ,b (   
su* title ,,xvii2 &  7ii7 provisions "u 
su* title relat+ to--  7,i7 ! au?ority (
 a hospital to resubmit a claim = paym5t
 "u ! appropriate section ( su* title2 &
  7,,ii7 requirem5ts = ! timely         
submission ( claims1 includ+ "u sections
 #ahad7;a71 #ahdb7;b77#c71 & #ahce7;a7 (
 su* ,act 7#db ,u4,s4,c4 #acie;f7a71    
#acieu7b77#c71 & #acien7a71             
respectively74  7,b7 ,paym5t = items &  
s]vices "u resubmitt$ claim ,paym5t %all
 be made = a specifi$ claim resubmitt$  
"u subp>agraph 7,a7 = all ! items &     
s]vices furni%$ = :i* paym5t may be made
 "u "p ,b ( su* title ,,xviii4  7,c7    
,def9itions ,9 ?is p>agraph3  7i7       

,specifi$ claim  7,i7 ,9 g5]al ,! t]m   
specifi$ claim means a claim submitt$ by
 a hospital 7z def9$ 9 section #ahfa7;e7
 ( su* ,act 7#db ,u4,s4,c4 #aciex7e777 =
 paym5t "u title ,,xviii ( su* ,act =   
inpati5t hospital s]vices :i* a         
,compreh5sive ,error ,rate ,te/+ 7,,c]t7
 program contractor 7or entity          
adjudicat+ a hospital appeal ( a ,m$ic>e
 claim d5i$ paym5t by a ,,c]t program   
contractor7 det]m9es ! inpati5t hospital
 s]vices 7 n m$ically necess>y &        
reasonable "u section #ahfb7;a77#a77;,a7
 ( su* ,act 7#db ,u4,s4,c4              
#aciey7a77#a77;,a774  7,,ii7            
,requirem5ts = det]m9ation ,a ,,c]t     
program contractor or entity adjudicat+ 
su* provid] appeal %all1 be=e complet+ a
 det]m9ation describ$ 9 subclause 7,i71 
assess & make a specific f9d+ z to :e!r 
! d5i$ inpati5t hospital s]vices 7      
m$ically necess>y & reasonable 9 an     
outpati5t sett+ ( ! hospital4  7ii7     
,resubmission ,! t]m resubmission       
includes1 ) respect to a specifi$ claim 

( a hospital1 ! submission by ! hospital
 ( a new claim or ( an adju/$ orig9al   
claim4  7iii7 ,effective date ,!        
am5dm5ts made by p>agraphs 7#a7 & 7#b71 
& ! provisions ( p>agraph 7#c71 %all    
apply to contracts ent]$ into or r5ew$ )
 recov]y audit contractors "u section   
#ahic7;h7 ( ! ,social ,security ,act    
7#db ,u4,s4,c4 #acie;ddd7h771 m$ic>e    
adm9i/rative contractors "u section     
#ahgd;,a ( ! ,social ,security ,act 7#db
 ,u4,s4,c4 #aciekk-#a7 & ,compreh5sive  
,error ,rate ,te/+ 7,,c]t7 program      
contractors1 respectively1 on or aft] ! 
date ( ! enactm5t ( ?is ,act4  7b7      
,treatm5t ( audit$ claims z reop5$  7#a7
 ,recov]y auditors ,section             
#ahic7;h77#d7 ( ! ,social ,security ,act
 7#db ,u4,s4,c4 #acie;ddd7h77#d77 is    
am5d$ by add+ aft] & bel[ subp>agraph   
7,b7 ! foll[+3 ,= purposes ( ! ability (
 a hospital to resubmit a claim = paym5t
 "u ! appropriate section ( ?is title & 
= purposes ( requirem5ts = ! timely     
submission ( claims by hospitals1       

includ+ "u sections #ahad7;a71          
#ahdb7;b77#c71 & #ahce7;a71 any claim t 
is ! subject ( an audit by a recov]y    
audit contractor ) a contract "u ?is    
section %all be deem$ to be a reop5$    
claim4 ,su* reop5$ claims are n subject 
to ! timely fil+ limitations "u su*     
sections 7& relat$ regulations7 & %all  
be adju/$ & paid )\t reg>d to su* timely
 fil+ limitations44  7#b7 ,con=m+       
am5dm5t = m$ic>e adm9i/rative           
contractors ,section #ahgd;,a7h7 ( !    
,social ,security ,act 7#db ,u4,s4,c4   
#aciekk-#a7;h771 z add$ by section      
#c7;b7 & z am5d$ by subsection 7a77#b71 
is fur!r am5d$ by add+ at ! end ! foll[+
 new p>agraph3  7#d7 ,treatm5t ( audit$ 
claims z reop5$ ,= purposes ( ! ability 
( a hospital to resubmit a claim =      
paym5t "u ! appropriate provisions ( ?is
 title & = purposes ( requirem5ts = !   
timely submission ( claims by hospitals1
 includ+ "u sections #ahad7;a71         
#ahdb7;b77#c71 & #ahce7;a71 any claim t 
is ! subject ( an audit by a m$ic>e     

adm9i/rative contractor ) a contract "u 
?is section %all be deem$ to be a reop5$
 claim4 ,su* reop5$ claims are n subject
 to ! timely fil+ limitations "u su*    
sections 7& relat$ regulations7 & %all  
be adju/$ & paid )\t reg>d to su* timely
 fil+ limitations4  4  7#c7 ,con=m+     
am5dm5t = ,,c]t contractors  7,a7       
,treatm5t ( audit$ claims z reop5$ ,any 
claim made = paym5t = s]vices furni%$ by
 a hospital "u title ,,xviii ( ! ,social
 ,security ,act 7#db ,u4,s4,c4 #acie et 
seq47 t is ! subject ( an audit by a    
,compreh5sive ,error ,rate ,te/+ 7,,c]t7
 program contractor ) a contract ) !    
,secret>y ( ,heal? & ,human ,s]vices    
%all be deem$ to be a reop5$ claim =    
purposes ( ! ability ( su* hospital to  
resubmit a claim = paym5t "u !          
appropriate provisions ( su* title      
,,xviii & = purposes ( requirem5ts = !  
timely submission ( claims by hospitals 
"u su* title ,,xviii1 includ+ "u        
sections #ahad7;a71 #ahdb7;b77#c71 &    
#ahce7;a7 ( ! ,social ,security ,act    

7#db ,u4,s4,c4 #acie;f7a71              
#acieu7b77#c71 & #acien7a71             
respectively74 ,su* reop5$ claims are n 
subject to ! timely fil+ limitations "u 
su* sections 7& relat$ regulations7 &   
%all be adju/$ & paid )\t reg>d to su*  
timely fil+ limitations4  7,b7          
,def9ition ,9 ?is p>agraph1 ! t]m       
hospital has ! mean+ giv5 su* t]m 9     
subsection 7e7 ( section #ahfa ( !      
,social ,security ,act 7#db ,u4,s4,c4   
#aciex71 & includes a psy*iatric        
hospital z def9$ 9 subsection 7f7 ( su* 
section4  7#d7 ,effective date ,!       
am5dm5ts made by p>agraphs 7#a7 & 7#b71 
& ! provisions ( p>agraph 7#c71 %all    
take effect on ! date ( ! enactm5t ( ?is
 ,act & apply to claims subject to audit
 on or aft] ,septemb] #a1 #bjaj4  #f4   
,requirem5t = physician validation =    
m$ical necessity d5ials  7a7 ,recov]y   
auditors ,section #ahic7;h7 ( ! ,social 
,security ,act 7#db ,u4,s4,c4           
#acie;ddd7h771 z am5d$ by sections      
#c7;a71 #d7;a71 & #f7;a77#a71 is fur!r  

am5d$ by add+ at ! end ! foll[+ new     
p>agraph3  7#ac7 ,physician validation (
 m$ical necessity d5ials made by        
non-physician review]s  7,a7 ,9 g5]al   
,ea* contract "u ?is section = a recov]y
 audit contractor %all require t a      
physician 7z def9$ 9 section            
#ahfa7r77#a77 review ea* d5ial ( a claim
 = m$ical necessity :5 a m$ical         
necessity review ( su* claim is p]=m$ & 
a d5ial is made by an employee ( !      
contractor :o is n a physician 7z s     
def9$74  7,b7 ,det]m9ation2 validation  
,a physician review+ a claim "u         
subp>agraph 7,a7 %all--  7i7 make a     
det]m9ation :e!r ! d5ial ( ! claim "u ! 
m$ical necessity review by !            
non-physician employee is appropriate2  
7ii7 sign & c]tify su* det]m9ation2 &   
7iii7 app5d su* sign$ & c]tifi$         
det]m9ation to ! claim file4  7,c7      
,treatm5t z m$ically necess>y ,a claim )
 respect to :i* a d5ial has be5 made z  
describ$ 9 subp>agraph 7,a7 = :i* !     
physician det]m9es ! d5ial is n         

appropriate "u subp>agraph 7,b7 %all be 
deem$ to be m$ically necess>y4  7,d7    
,m$ical necessity review def9$ ,9 ?is   
p>agraph1 ! t]m m$ical necessity review 
means1 ) respect to an audit ( a claim (
 a provid] ( s]vices or suppli]1 a      
review conduct$ by a recov]y audit      
contractor = ! purpose ( det]m9+ :e!r an
 item or s]vice furni%$ = :i* ! claim is
 fil$ by su* provid] ( s]vices or       
suppli] is reasonable & necess>y = !    
diagnosis or treatm5t ( illness or      
injury "u section #ahfb7;a77#a77;,a74  4
  7b7 ,con=m+ am5dm5t to m$ic>e         
adm9i/rative contractors ,subsection 7h7
 ( section #ahgd;,a ( ! ,social         
,security ,act 7#db ,u4,s4,c4           
#aciekk-#a71 z add$ by section #c7;b7 & 
z am5d$ by subsections 7a77#b7 & 7b77#b7
 ( section #f1 is fur!r am5d$ by add+ at
 ! end ! foll[+ new p>agraph3  7#e7     
,physician validation ( m$ical necessity
 d5ials made by non-physician review]s  
7,a7 ,9 g5]al ,a physician 7z def9$ 9   
section #ahfa7r77#a77 %all review ea*   

d5ial ( a claim = m$ical necessity :5 a 
m$ical necessity review ( su* claim is  
p]=m$ & a d5ial is made by an employee (
 ! contractor :o is n a physician 7z s  
def9$74  7,b7 ,det]m9ation2 validation  
,a physician review+ a claim "u         
subp>agraph 7,a7 %all--  7i7 make a     
det]m9ation :e!r ! d5ial ( ! claim "u ! 
m$ical necessity review by !            
non-physician employee is appropriate2  
7ii7 sign & c]tify su* det]m9ation2 &   
7iii7 app5d su* sign$ & c]tifi$         
det]m9ation to ! claim file4  7,c7      
,treatm5t z m$ically necess>y ,a claim )
 respect to :i* a d5ial has be5 made z  
describ$ 9 subp>agraph 7,a7 = :i* !     
physician det]m9es ! d5ial is n         
appropriate "u subp>agraph 7,b7 %all be 
deem$ to be m$ically necess>y4  7,d7    
,m$ical necessity review def9$ ,9 ?is   
p>agraph1 ! t]m m$ical necessity review 
means1 ) respect to an audit ( a claim (
 a provid] ( s]vices or suppli]1 a      
review conduct$ by a m$ic>e adm9i/rative
 contractor = ! purpose ( det]m9+ :e!r  

an item or s]vice furni%$ = :i* ! claim 
is fil$ by su* provid] ( s]vices or     
suppli] is reasonable & necess>y = !    
diagnosis or treatm5t ( illness or      
injury "u section #ahfb7;a77#a77;,a74  4
  7c7 ,con=m+ requirem5t = ,,c]t        
contractors  7#a7 ,contract requirem5t =
 physician validation ( m$ical necessity
 d5ials made by non-physician review]s  
,! ,secret>y ( ,heal? & ,human ,s]vices 
%all require "u ea* contract ) a        
,compreh5sive ,error ,rate ,te/+ 7,,c]t7
 program contractor to review error     
rates "u title ,,xviii ( ! ,social      
,security ,act 7#db ,u4,s4,c4 #acie et  
seq47 t ! ,,c]t program contractor      
ensure t a physician 7z def9$ 9 section 
#ahfa7r77#a7 ( su* ,act 7#db ,u4,s4,c4  
#aciex7r77#a777 reviews ea* d5ial ( a   
claim = m$ical necessity :5 a m$ical    
necessity review ( su* claim is p]=m$ & 
a d5ial is made by an employee ( !      
contractor :o is n a physician 7z s     
def9$74  7#b7 ,det]m9ation2 validation  
,a physician review+ a claim "u p>agraph

 7#a7 %all--  7,a7 make a det]m9ation   
:e!r ! d5ial ( ! claim "u ! m$ical      
necessity review by ! non-physician     
employee is appropriate2  7,b7 sign &   
c]tify su* det]m9ation2 &  7,c7 app5d   
su* sign$ & c]tifi$ det]m9ation to !    
claim file4  7#c7 ,treatm5t z m$ically  
necess>y ,a claim ) respect to :i* a    
d5ial has be5 made z describ$ 9 p>agraph
 7#a7 = :i* ! physician det]m9es ! d5ial
 is n appropriate "u p>agraph 7#b7 %all 
be deem$ to be m$ically necess>y4  7#d7 
,m$ical necessity review def9$ ,9 ?is   
subsection1 ! t]m m$ical necessity      
review means1 ) respect to an audit ( a 
claim ( a provid] ( s]vices or suppli]1 
a review conduct$ by a ,,c]t program    
contractor = ! purpose ( det]m9+ :e!r an
 item or s]vice furni%$ = :i* ! claim is
 fil$ by su* provid] ( s]vices or       
suppli] is reasonable & necess>y = !    
diagnosis or treatm5t ( illness or      
injury "u section #ahfb7;a77#a77;,a7 ( !
 ,social ,security ,act 7#db ,u4,s4,c4  
#aciey7a77#a77;,a774  7d7 ,effective    

date ,! am5dm5ts made by subsections 7a7
 & 7b71 & ! provisions ( subsection 7c71
 %all apply to contracts ent]$ into or  
r5ew$ ) recov]y audit contractors "u    
section #ahic7;h7 ( ! ,social ,security 
,act 7#db ,u4,s4,c4 #acie;ddd7h771      
m$ic>e adm9i/rative contractors "u      
section #ahgd;,a ( ! ,social ,security  
,act 7#db ,u4,s4,c4 #aciekk-#a7 &       
,compreh5sive ,error ,rate ,te/+ 7,,c]t7
 program contractors1 respectively1 on  
or aft] ! date ( ! enactm5t ( ?is ,act4 
#g4 ,assur+ due process 9 application ( 
guidel9es = reop5+ & revision (         
det]m9ations ,section #ahfi7;b77#a77;,g7
 ( ! ,social ,security ,act 7#db        
,u4,s4,c4 #acie;ff7b77#a77;,g77 is am5d$
 by add+ at ! end ! foll[+3 ,!          
,secret>y's compliance ) su* guidel9es  
%all be subject to adm9i/rative &       
judicial review "u ?is section44