,i  #aad? ,,congress  #a/ ,session  ,h4 
,r4 #aebf  ,,9 ,,! ,,h\se ,,(           
,,repres5tatives  ,m>* #bc1 #bjae ,mr4  
,mead[s introduc$ ! foll[+ bill2 :i* 0  
ref]r$ to ! ,committee on ,ways &       
,means1 & 9 addition to ! ,committee on 
,en]gy & ,comm]ce1 = 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   
modify policies relat+ to paym5t "u !   
,m$ic>e program = durable m$ical        
equipm5t1 or?otics & pro/hetics1 &      
pro/hetic devices1 & = o!r purposes4    
#a4 ,%ort title ,?is ,act may be cit$ z 
! ,m$ic>e ,audit ,improvem5t ,act (     
#bjae4  #b4 ,m$ic>e paym5t = durable    
m$ical equipm5t1 or?otics & pro/hetics1 
& pro/hetic devices  7a7 ,use (         
pro/heti/ & or?oti/ notes = det]m9ations
 ( m$ical necessity ,section            
#ahcd7;h77#a7 ( ! ,social ,security ,act
 7#db ,u4,s4,c4 #aciem7h77#a77 is am5d$ 

by add+ at ! end ! foll[+ new           
subp>agraph3  7,i7 ,use ( pro/heti/ &   
or?oti/ notes = det]m9ations ( m$ical   
necessity ,9 det]m9+ "u section         
#ahfb7;a77#a7 :e!r an or?otic or        
pro/hetic or pro/hetic device furni%$ to
 an individual on or aft] ! date ( !    
enactm5t ( ?is subp>agraph is reasonable
 & necess>y1 any records or docum5tation
 ( an or?oti/ or pro/heti/ :o furni%$   
su* or?otic or pro/hetic or pro/hetic   
device to su* individual %all be        
consid]$ "p ( ! m$ical record ( !       
individual4  4  7b7 ,au?oriz+ ,,mac &   
,,rac review = suppli] lic5se or        
accr$itation = durable m$ical equipm5t &
 or?otics & pro/hetics  7#a7 ,,mac      
review ,section #ahgd;,a7a77#d77;,a7 ( !
 ,social ,security ,act 7#db ,u4,s4,c4  
#aciekk-#a7;a77#d77;,a77 is am5d$ by    
ins]t+ 1 includ+ det]m9+ t paym5t %all n
 be made to a suppli] ( durable m$ical  
equipm5t1 or ( or?otics & pro/hetics1 = 
:i* a claim = paym5t is made on or aft] 
! date ( ! enactm5t ( ! ,m$ic>e ,audit  

,improvem5t ,act ( #bjae on acc\nt ( !  
application ( section #ahcd7;h77#a77;,f7
 7relat+ to suppli] lic5s+ or           
accr$itation by a ,national ,bo>d7 be=e 
! p]iod at ! end4  7#b7 ,,rac review    
,section #ahic7;h7 ( ! ,social ,security
 ,act 7#db ,u4,s4,c4 #acie;ddd7h77 is   
am5d$ by add+ at ! end ! foll[+ new     
p>agraph3  7#aj7 ,review ( suppli]      
lic5se or accr$itation = durable m$ical 
equipm5t & or?otics & pro/hetics ,=     
purposes ( p>agraph 7#a71 ) respect to  
durable m$ical equipm5t & or?otics &    
pro/hetics = :i* a claim = paym5t 0 made
 by a suppli] 9 #bjaa or a subsequ5t    
ye>1 a paym5t t %\ld n h be5 made to su*
 suppli] = su* durable m$ical equipm5t  
or su* or?otics & pro/hetics on acc\nt (
 ! application ( section                
#ahcd7;h77#a77;,f7 7relat+ to suppli]   
lic5s+ or accr$itation by a ,national   
,bo>d7 %all be consid]$ an ov]paym5t "u 
?is title4  4  7c7 ,exempt+ s]vices t   
receive prior au?orization f ,,rac      
review ,section #ahic7;h7 ( ! ,social   

,security ,act 7#db ,u4,s4,c4           
#acie;ddd7h771 z am5d$ by subsection    
7b77#b71 is fur!r am5d$--  7#a7 9       
p>agraph 7#a71 by ins]t+ subject to     
p>agraph 7#aa71 aft] ,program12 &  7#b7 
by add+ at ! end ! foll[+ new p>agraph3 
7#aa7 ,s]vices t receive prior          
au?orization exempt$ f review ,recov]y  
audit contractors may n conduct reviews 
) respect to paym5ts "u ?is title =     
durable m$ical equipm5t1 or?otics or    
pro/hetics1 or pro/hetic devices = :i*  
audits "u ?is subsection h n be5        
initiat$ be=e ! date ( ! enactm5t ( ?is 
p>agraph & to :i* prior au?orization "u 
?is title applies4  4  7d7 ,annual      
report on ov]turn$ ,,mac & ,,rac d5ials 
,section #ahgd;,a ( ! ,social ,security 
,act 7#db ,u4,s4,c4 #aciekk-#a7 is am5d$
 by add+ at ! end ! foll[+ new          
subsection3  7h7 ,annual report on      
ov]turn$ ,,mac & ,,rac d5ials  7#a7 ,9  
g5]al ,n lat] ?an ,m>* #a ( #bjaf1 & (  
ea* ye> !reaft]1 ! ,secret>y %all submit
 to ,congress a report t includes !     

in=mation describ$ 9 p>agraph 7#b74     
7#b7 ,in=mation describ$ ,! in=mation   
describ$ 9 ?is p>agraph1 ) respect to   
det]m9ations by m$ic>e adm9i/rative     
contractors t paym5t _c be made1 & by   
recov]y audit contractors t paym5t %\ld 
n h be5 made1 "u ?is title = items &    
s]vices1 is ! foll[+3  7,a7 ,! numb] (  
su* det]m9ations t1 9 ! prior ye>1 7    
det]m9$ on appeal to h be5 incorrect4   
7,b7 ,! ,,hcpcs codes t1 9 ! prior ye>1 
acc\nt$ =-- 7i7 ! greate/ numb] ( su*   
det]m9ations2 &  7ii7 ! greate/ total   
am\nt paym5t be+ at issue 9 su*         
det]m9ations4  7,c7 ,! numb] ( su*      
det]m9ations t1 9 ! prior ye>1 7 bas$ ^u
 a det]m9ation--  7i7 t ! items &       
s]vices 7 furni%$ to an individual z an 
inpati5t r ?an z an outpati5t2  7ii7    
reg>d+ ! application ( ! m$ical review  
activities describ$ 9 ! notice entitl$  
,select+ ,hospital ,claims = ,pati5t    
,/atus ,reviews3 ,admissions ,on or     
,aft] ,octob] #a1 #bjac1 po/$ on !      
,int]net website ( ! ,c5t]s = ,m$ic>e   

,m$icaid ,s]vices 7commonly kn[n z !    
two-midnights rule72  7iii7 t appli$ to 
a provid] ( outpati5t s]vices2 &  7iv7  
reg>d+ a claim = paym5t = or?otics or   
pro/hetics or pro/hetic devices4  4  7e7
 ,treat+ or?otics & pro/hetics sep>ately
 f m$ical equipm5t & supplies  7#a7 ,9  
g5]al ,section #ahcd ( ! ,social        
,security ,act 7#db ,u4,s4,c4 #aciem7 is
 am5d$--  7,a7 9 subsection 7j77#e7--   
7i7 by /rik+ subp>agraph 7,c72 &  7ii7  
by r$esignat+ subp>agraphs 7,d7 ?r\gh   
7,f7 z subp>agraphs 7,c7 ?r\gh 7,e71    
respectively2  7,b7 by add+ at ! end !  
foll[+ new subsection3  7r7 ,requirem5ts
 = or?oti/s & pro/heti/s  7#a7 ,issuance
 & r5ewal ( suppli] numb]  7,a7 ,paym5t 
,no paym5t may be made "u ?is "p =      
or?otics & pro/hetics 7z describ$ 9     
section #ahfa7s77#i77 furni%$ by a      
suppli] ( or?otics & pro/hetics unless  
su* suppli] obta9s 7& r5ews at su*      
int]vals z ! ,secret>y may require7 a   
suppli] numb]4  7,b7 ,/&>ds = possess+ a
 suppli] numb] ,a suppli] ( or?otics &  

pro/hetics may n obta9 a suppli] numb]  
unless ! suppli]-- 7i7 complies ) all   
applicable ,/ate & ,f$]al lic5sure &    
regulatory requirem5ts2  7ii7 acquires  
accr$itation f ! ,am]ican ,bo>d =       
,c]tification 9 ,or?otics1 ,pro/hetics &
 ,p$or?ics1 ,inc41 ! ,bo>d (            
,c]tification_/,accr$itation1           
,int]national1 or su* o!r accr$itation  
entity t ! ,secret>y det]m9es to h      
accr$itation /&>ds t are equival5t to ! 
accr$itation /&>ds ( su* bo>ds2  7iii7  
ma9ta9s a physical facility on an       
appropriate site2  7iv7 has pro( (      
appropriate liability insurance2 &  7v7 
meets su* o!r requirem5ts z ! ,secret>y 
may specify4  7,c7 ,prohibition aga9/   
multiple suppli] numb]s ,! ,secret>y may
 n issue m ?an "o suppli] numb] to any  
suppli] ( or?otics & pro/hetics unless !
 issuance ( m ?an "o numb] is           
appropriate to id5tify o!r entities "u !
 suppli]'s own]%ip or control4  7,d7    
,prohibition aga9/ delegation ( suppli] 
det]m9ations ,! ,secret>y may n delegate

 7o!r ?an by contract "u section #ahdb7 
! responsibility to det]m9e :e!r        
suppli]s meet ! /&>ds necess>y to obta9 
a suppli] numb]4  7,e7 ,con/ruction     
relat+ to previ\sly issu$ & r5ew$       
suppli] numb]s ,suppli] numb]s obta9$ "u
 subsection 7j77#a7 prior to ! enactm5t 
( ?is subsection by suppli]s ( or?otics 
& pro/hetics t meet ! /&>ds describ$ 9  
subp>agraph 7,b7 %all be consid]$ to h  
obta9$ a suppli] numb] = purposes (     
subp>agraph 7,a74  7#b7 ,c]tificates (  
m$ical necessity  7,a7 ,in=mation       
provid$ by suppli]s ( or?otics &        
pro/hetics on c]tificates ( m$ical      
necessity  7i7 ,9 g5]al ,a suppli] (    
or?otics & pro/hetics may di/ribute to  
physicians1 or to individuals entitl$ to
 b5efits "u ?is "p1 a c]tificate (      
m$ical necessity = comm]cial purposes if
 ! c]tificate conta9s ! foll[+          
in=mation3  7,i7 ,an id5tification ( !  
suppli] & ! b5efici>y to :om su*        
or?otics & pro/hetics are furni%$4      
7,,ii7 ,an id5tification ( ! treat+     

physician1 includ+ ! "n1 ,m$ic>e provid]
 numb]1 address1 & telephone numb] ( su*
 physician4  7,,iii7 ,a description (   
su* or?otics & pro/hetics4  7,,iv7 ,any 
bill+ code id5tify+ su* or?otics &      
pro/hetics1 includ+ ! ,,hcpcs codes1 &  
summ>y descriptors ( ! items & s]vices  
be+ recomm5d$4  7,v7 ,! codes us$ "u ?is
 title = paym5t = su* or?otics &        
pro/hetics1 a description ( ! m$ical &  
functional condition ( ! b5efici>y1 &   
in=mation ab\t ! ne$ ( ! b5efici>y = !  
or?otics or pro/hetics4  7,,vi7 ,any o!r
 adm9i/rative in=mation id5tifi$ by !   
,secret>y4  7ii7 ,in=mation on paym5t   
am\nt & *>ges ,if a suppli] di/ributes a
 c]tificate ( m$ical necessity =        
or?otics & pro/hetics1 ! suppli] %all   
also li/ on ! c]tificate ( m$ical       
necessity ! fee s*$ule am\nt & !        
suppli]'s *>ge = ! or?otics & pro/hetics
 be+ furni%$ prior to di/ribution ( su* 
c]tificate to ! physician4  7iii7       
,p5alty ,any suppli] ( or?otics &       
pro/hetics :o kn[+ly & willfully        

di/ributes a c]tificate ( m$ical        
necessity 9 violation ( clause 7i7 or   
fails to provide ! in=mation requir$ "u 
clause 7ii7 or 7iii7 is subject to a    
civil money p5alty 9 an am\nt n to exce$
 #a1jjj = ea* su* c]tificate ( m$ical   
necessity s di/ribut$4 ,! provisions (  
section #aabh;,a 7o!r ?an subsections   
7a7 & 7b77 %all apply to civil money    
p5alties "u ?is subp>agraph 9 ! same    
mann] z !y apply to a p5alty or proce$+ 
"u section #aabh;,a7a74  7,b7 ,signature
 ( treat+ physician requir$ ,! ,secret>y
 %all require t1 9 ord] = a c]tificate (
 m$ical necessity submitt$ to !         
,secret>y to be treat$ z %[+ t or?otics 
& pro/hetics are reasonable & necess>y =
 ! diagnosis or treatm5t ( an illness or
 injury or to improve ! function+ ( a   
mal=m$ body memb]1 ! c]tificate ( m$ical
 necessity be sign$ by ! treat+         
physician4  7,c7 ,def9ition ,= purposes 
( ?is p>agraph1 ! t]m c]tificate (      
m$ical necessity means a =m or o!r      
docum5t1 includ+ a detail$ writt5 ord]1 

conta9+ in=mation requir$ by ! ,secret>y
 to be submitt$ to %[ t or?otics &      
pro/hetics are reasonable & necess>y = !
 diagnosis or treatm5t ( illness or     
injury or to improve ! function+ ( a    
mal=m$ body memb]4  7#c7 ,cov]age &     
review crit]ia ,! ,secret>y %all        
annually review ! cov]age & utilization 
( or?otics & pro/hetics to det]m9e :e!r 
su* or?otics & pro/hetics %\ld be made  
subject to cov]age & utilization review 
crit]ia1 & if appropriate1 %all develop 
& apply su* crit]ia to su* items4  7#d7 
,limitation on pati5t liability  7,a7 ,9
 g5]al ,subject to subp>agraph 7,b71 if 
a suppli] ( or?otics & pro/hetics       
furni%es or?otics & pro/hetics to an    
individual = :i* no paym5t may be made  
"u ?is "p 7includ+1 subject to section  
#ahgi1 because ! or?otics & pro/hetics  
are n reasonable & necess>y = !         
diagnosis or treatm5t ( illness or      
injury or to improve ! function+ ( a    
mal=m$ body memb]1 z requir$ "u section 
#ahfb7;a77#a771 any exp5ses incurr$ =   

su* or?otics & pro/hetics furni%$ to an 
individual by su* a suppli] n on an     
assign$ basis %all be ! responsibility (
 su* suppli]4 ,! individual %all h no   
f9ancial responsibility = su* exp5ses & 
! suppli] %all refund on a timely basis 
to ! individual 7& %all be liable to !  
individual =7 any am\nts collect$ f !   
individual = su* items or s]vices4 ,!   
provisions ( subsection 7a77#ah7 %all   
apply to refunds requir$ "u ! previ\s   
s5t5ce 9 ! same mann] z su* provisions  
apply to refunds "u su* subsection4     
7,b7 ,exception ,if a suppli] ( or?otics
 & pro/hetics furni%es or?otics &       
pro/hetics to an individual = :i* paym5t
 is d5i$ 9 advance "u subsection        
7a77#ae71 exp5ses incurr$ = su* or?otics
 & pro/hetics %all be ! responsibility (
 ! individual4  4  7#b7 ,con=m+ am5dm5ts
 ,section #ahfe7;a77#a7 ( ! ,social     
,security ,act 7#db ,u4,s4,c4           
#acie;bb7a77#a77 is am5d$ by ins]t+ or  
section #ahcd7r71 z applicable1 aft]    
section #ahcd7;j74  7f7 ,limitation (   

competitive acquisition = (f-!-,%elf    
or?otics ,section #ahdg7;a77#g77;,a7 ( !
 ,social ,security ,act 7#db ,u4,s4,c4  
#aciew-#c7;a77#g77;,a77 is am5d$--  7#a7
 9 clause 7i71 by /rik+ or at ! end2    
7#b7 by r$esignat+ clause 7ii7 z clause 
7iii72 &  7#c7 by ins]t+ aft] clause 7i7
 ! foll[+ new clause3  7ii7 by an       
or?oti/ or pro/heti/ describ$ 9         
subclause 7,,ii7 or 7,,iii7 ( section   
#ahcd7;h77#a77;,f77iii7 to ! pati5ts ( !
 or?oti/ or pro/heti/ z "p ( !          
pr(essional s]vice ( ! or?oti/ or       
pro/heti/2 or  4  7g7 ,limit+ rec\pm5t f
 ,m$ic>e appellants until completion (  
,,alj appeals process ,section #ahfi ( !
 ,social ,security ,act 7#db ,u4,s4,c4  
#acie;ff7 is am5d$ by add+ at ! end !   
foll[+ new subsection3  7j7 ,limitation 
on rec\pm5t prior to completion ( ,,alj 
appeals process  7#a7 ,9 g5]al ,not)/&+ 
any o!r provision ( ?is section1 !      
,secret>y may n rec\p m ?an half ( !    
am\nt ( any paym5ts made to a qualify+  
provid] or suppli] ) respect to a claim 

= items or s]vices t is subject to a    
det]m9ation1 reconsid]ation1 or he>+ "u 
?is subsection1 be=e--  7,a7 ! date on  
:i* a decision has be5 r5d]$ "u         
subsection 7d77#a7 ) respect to su*     
claim2 or  7,b7 9 ! case ( a det]m9ation
 or reconsid]ation = su* claim :i* is n 
eligible = a he>+ "u subsection 7d77#a71
 ! date on :i* ! appeals process = su*  
claim "u ?is section 7o!r ?an subsection
 7h77 is treat$ z exhau/$4  7#b7        
,qualify+ provid] or suppli] def9$ ,=   
purposes ( p>agraph 7#a71 ! t]m qualify+
 provid] or suppli] means a provid] (   
s]vices or suppli] t-- 7,a7 has ma9ta9$ 
a ,m$ic>e provid] numb] = six ye>s or   
long]2  7,b7 is n "u inve/igation = any 
pot5tial violations ( applicable ,f$]al 
& ,/ate laws & regulations2  7,c7 has a 
good record ( submitt+ prop] claims =   
items or s]vices "u ?is title1 z det]m9$
 by ! ,secret>y2 &  7,d7 furni%$ ! items
 or s]vices describ$ 9 p>agraph 7#a7 to 
an individual 9 p]son4  4  7h7          
,eligibility = paym5t = suppli]s &      

provid]s bas$ on qualifications  7#a7 ,9
 g5]al ,title ,,xviii ( ! ,social       
,security ,act is am5d$ by ins]t+ aft]  
section #ahfc 7#db ,u4,s4,c4 #aciez7 !  
foll[+ new section3  #ahfc;,a4          
,eligibility = paym5t = suppli]s &      
provid]s bas$ on qualifications  7a7 ,9 
g5]al ,no paym5t may be made "u ?is     
title = an item or s]vice t is furni%$--
 7#a7 9 a ,/ate t requires a provid] or 
suppli] to be lic5s$ 9 ord] to furni%   
su* item or s]vice1 unless ! provid] or 
suppli] furni%+ su* item or s]vice      
possesses all applicable lic5sure f !   
,/ate2 or  7#b7 9 a ,/ate t does n      
require a provid] or suppli] to be      
lic5s$ 9 ord] to furni% su* item or     
s]vice1 unless ! provid] or suppli]     
meets all applicable qualifications1 z  
det]m9$ by ! ,secret>y4  7b7 ,applicable
 qualifications def9$ ,= purposes (     
subsection 7a71 ! t]m applicable        
qualifications means1 ) respect to a    
provid] or suppli]1 all applicable      
accr$itations1 c]tifications1 &         

cr$5tials requir$ ( su* provid] or      
suppli] "u ?is title 9 ord] = su*       
provid] & suppli] to receive paym5t "u  
?is title = items or s]vices furni%$ by 
su* provid] or suppli]1 includ+ !       
requirem5ts describ$ 9 ! special paym5t 
rules = c]ta9 pro/hetics &              
cu/om-fabricat$ or?otics "u section     
#ahcd7;h77#a77;,f74  4  7#b7 ,effective 
date ,?is section %all apply ) respect  
to items & s]vices furni%$ on or aft] ! 
date ( ! enactm5t ( ?is section4