42 U.S.C. § 1395kk–1 — Contracts with medicare administrative contractors
submitted 91 years ago by Pub. L. 108-173 to r/title-42-THE-PUBLIC-HEALTH-AND-WELFARE · 3,855 words · no verdicts yet
This section authorizes the Secretary to contract with eligible entities to perform Medicare administrative functions. It sets contracting, performance, information-security, liability, communication, and improper-payment education rules for those contractors.
(a) Authority
(1) Authority to enter into contracts. The Secretary* may contract with any eligible entity to act as a Medicare administrative contractor. The contract may cover all or any of the functions in paragraph (4), or only parts of those functions. If the contract allows it, the contractor may have other entities perform those functions.
(2) Eligibility of entities. An entity may contract for a particular function in paragraph (4) only if:
(A) it has shown that it can perform the function;
(B) it follows the conflict-of-interest standards generally used for Federal acquisition and procurement;
(C) it has enough assets to financially support performing the function; and
(D) it meets any other requirements the Secretary imposes.
(3) Medicare administrative contractor defined. For this subchapter and subchapter XI:
(A) In general. “Medicare administrative contractor” means an agency, organization, or other person* that has a contract under this section. This section does not otherwise define “agency,” “organization,” or “person.”
(B) Appropriate Medicare administrative contractor. For a particular function involving an individual entitled to Part A benefits or enrolled in Part B, or both, or involving a particular provider of services or supplier* (or class of them), the “appropriate” Medicare administrative contractor is the contractor whose contract under this section covers that function for that individual, provider, supplier, or class.
(4) Functions described. The functions covered by paragraphs (1) and (2) are payment functions, including developing local coverage determinations as defined in section 1395ff(f)(2)(B), provider-services functions, and functions concerning services provided to people entitled to Part A benefits or enrolled in Part B, or both. They include:
(A) Determination of payment amounts. Subject to section 1395oo and to any review by the Secretary that the contract provides for, determining the payments that this subchapter requires to be made to providers of services, suppliers, and individuals.
(B) Making payments. Making the payments described in subparagraph (A), including receiving, disbursing, and accounting for the funds used to make them.
(C) Beneficiary education and assistance. Educating and reaching out to people entitled to Part A benefits or enrolled in Part B, or both, and helping them with specific issues, concerns, or problems.
(D) Provider consultative services. Advising institutions, agencies, and other people so they can establish and keep the financial records needed for this subchapter and otherwise qualify as providers of services or suppliers.
(E) Communication with providers. Giving providers of services and suppliers information or instructions that the Secretary gives the contractor, and helping those providers and suppliers communicate with the Secretary.
(F) Provider education and technical assistance. Performing functions involving provider education, training, and technical assistance.
(G) Improper payment outreach and education program. Having the improper-payment outreach and education program described in subsection (h).
(H) Additional functions. Performing other functions needed to carry out this subchapter, including, subject to paragraph (5), functions under the Medicare Integrity Program in section 1395ddd.
(5) Relationship to MIP contracts.
(A) Nonduplication of duties. When making contracts under this section, the Secretary must make sure that Medicare administrative contractors’ activities under Parts A and B do not duplicate activities performed under a Medicare Integrity Program contract under section 1395ddd. This rule does not apply to the activity described in section 1395ddd(b)(5), concerning prior authorization of certain durable medical equipment* under section 1395m(a)(15).
(B) Construction. An entity does not become a Medicare administrative contractor merely because it has a contract with the Secretary under section 1395ddd.
(6) Application of Federal Acquisition Regulation. The Federal Acquisition Regulation applies to contracts under this section unless it conflicts with a specific requirement of this section.
(b) Contracting requirements
(1) Use of competitive procedures.
(A) In general. Except when a generally applicable Federal acquisition or procurement law, or subparagraph (B), provides otherwise, the Secretary must use competitive procedures when entering into contracts with Medicare administrative contractors. The Secretary must consider service quality, price, and other factors.
(B) Renewal of contracts. The Secretary may renew a contractor’s contract from one term to the next without following section 6101 of title 41 or another law requiring competition if the contractor has met or exceeded the performance requirements that apply to the contract and contractor. However, the Secretary must use competitive procedures for that contract at least once every 10 years.
(C) Transfer of functions. The Secretary may move functions between Medicare administrative contractors consistently with this paragraph and must consider service quality in the transfers. The Secretary must give public notice, in the Federal Register or another way, of each transfer. The notice must describe the transferred functions, the affected providers and suppliers, and contact information for the contractors involved.
(D) Incentives for quality.
(i) In general. Subject to clauses (ii) and (iii), the Secretary must give contractors incentives to provide quality service and promote efficiency.
(ii) Improper payment rate reduction incentives. The Secretary must give contractors incentives to reduce improper-payment error rates in their jurisdictions.
(iii) Incentives. The incentives under clause (ii):
(I) may include a sliding scale of award-fee payments and additional incentives for contractors that reduce improper-payment rates to thresholds set by the Secretary or complete tasks set by the Secretary that further improve payment accuracy; and
(II) may include substantial reductions in award-fee payments under cost-plus-award-fee contracts for contractors that reach an upper-end improper-payment-rate threshold or another threshold set by the Secretary, or that fail to complete tasks set by the Secretary that further improve payment accuracy.
(2) Compliance with requirements. The Secretary may not enter into a contract under this section unless the Secretary finds that the contractor will perform its obligations efficiently and effectively and will meet requirements concerning financial responsibility, legal authority, service quality, and other matters the Secretary considers relevant.
(3) Performance requirements.
(A) Development of specific performance requirements.
(i) In general. The Secretary must develop contract-performance requirements for the specific requirements under this subchapter that apply to a function in subsection (a)(4). The Secretary must also develop standards for measuring how well a contractor met those requirements. The requirements must include specific performance duties expected of a contractor’s medical director*, including duties concerning professional relations and the director’s availability to conduct medical-determination activities in the contractor’s jurisdiction.
(ii) Consultation. When developing these requirements and measurement standards, the Secretary must consult providers of services, organizations representing beneficiaries under this subchapter, and organizations and agencies that perform functions needed to carry out this section, as those requirements relate to their work.
(iii) Publication of standards. The Secretary must make the performance requirements and measurement standards available to the public.
(iv) Contractor performance transparency. As far as possible without harming the process for entering into and renewing contracts under this section, the Secretary must make the performance of each contractor under these requirements and standards available to the public.
(B) Considerations. One standard developed under subparagraph (A) must be the satisfaction levels of providers and beneficiaries.
(C) Inclusion in contracts. Every contractor-performance requirement must appear in the contract between the Secretary and the appropriate contractor. The requirements:
(i) must reflect the requirements published under subparagraph (A), but may add other requirements;
(ii) must be used to evaluate the contractor’s performance under the contract; and
(iii) must be consistent with the written statement of work in the contract.
(4) Information requirements. The Secretary may not enter into a contract under this section unless the contractor agrees:
(A) to give the Secretary the timely information and reports the Secretary finds necessary to perform the Secretary’s functions under this subchapter; and
(B) to keep the records and allow access to them that the Secretary finds necessary to ensure the information and reports under subparagraph (A) are correct and can be verified, and otherwise to carry out this subchapter.
(5) Surety bond. A contract may require the contractor, and any officer or employee who certifies payments, disburses funds under the contract, or otherwise helps carry out the contract, to give the United States* a surety bond in the amount the Secretary considers appropriate.
(c) Terms and conditions
(1) In general. A contract may contain any terms and conditions the Secretary finds necessary or appropriate. It may also provide advances of funds to the contractor so the contractor can make payments under subsection (a)(4)(B).
(2) Prohibition on mandates for certain data collection. To enter into or renew a contract, the Secretary may not require the contractor to match data obtained outside its activities under this subchapter with data used to administer this subchapter for the purpose of identifying situations in which section 1395y(b) may apply.
(d) Limitation on liability of Medicare administrative contractors and certain officers
(1) Certifying officer. A person designated under a contract as a certifying officer is not liable for payments the person certifies under this section unless the person recklessly disregarded the person’s duties or intended to defraud the United States.
(2) Disbursing officer. A disbursing officer is not liable for a payment made under this section if it was based on an authorization by a certifying officer designated under paragraph (1), and the authorization meets the applicable internal-control requirements established by the Comptroller General of the United States. This protection does not apply if the disbursing officer recklessly disregarded the officer’s duties or intended to defraud the United States.
(3) Liability of Medicare administrative contractor.
(A) In general. A contractor is not liable to the United States for a payment made by a certifying or disbursing officer unless, in connection with the payment, the contractor recklessly disregarded its obligations under its Medicare administrative contract or intended to defraud the United States.
(B) Relationship to False Claims Act. This subsection does not limit liability for conduct that would violate sections 3729 through 3731 of title 31.
(4) Indemnification by Secretary.
(A) In general. Subject to subparagraphs (B) and (D), if a contractor, or a director, officer, employee, or person engaged by the contractor to participate directly in the claims-administration* process, becomes a party to a judicial or administrative proceeding arising from or directly relating to that process under this subchapter, the Secretary may indemnify the contractor or person to the extent the Secretary considers appropriate and as the contract specifies.
(B) Conditions. The Secretary may not indemnify costs to the extent the liability for them comes directly from conduct determined by the proceeding or by the Secretary to be criminal, fraudulent, or grossly negligent. If the Secretary indemnifies a contractor before that determination, the contractor must repay the Secretary’s indemnification costs.
(C) Scope of indemnification. Indemnification may cover judgments, settlements subject to subparagraph (D), awards, and costs, including reasonable legal expenses.
(D) Written approval for settlements or compromises. A contractor or other person described in subparagraph (A) may not propose to negotiate a settlement or compromise of a covered proceeding without the Secretary’s prior written approval to negotiate it. Indemnification for amounts paid under such a settlement or compromise is conditioned on the Secretary’s prior written approval of the final settlement or compromise.
(E) Construction. This paragraph does not:
(i) change any common-law immunity that may be available to a contractor or person described in subparagraph (A); or
(ii) allow payment of costs that are not otherwise allowable, reasonable, or allocable under the Federal Acquisition Regulation.
(e) Requirements for information security
(1) Development of information security program. A contractor that determines payment amounts or makes payments under subparagraphs (A) and (B) of subsection (a)(4) must implement an information-security program covering the whole contractor. The program must protect the contractor’s information and assets involved in those functions under this subchapter. It must meet the information-security-program requirements imposed on Federal agencies by paragraphs (1) through (8) of section 3544(b) of title 44, except for paragraphs (2)(D)(i), (5)(A), and (5)(B) of that section.
(2) Independent audits.
(A) Performance of annual evaluations. Each year, a contractor that determines payment amounts or makes payments under subsection (a)(4)(A) and (B) must undergo an evaluation of its information security for those functions under this subchapter. An entity must perform the evaluation that meets any independence requirements established by the Inspector General of the Department of Health and Human Services. The evaluation must test how effective information-security controls are for an appropriate subset of the contractor’s information systems, as “information systems” is defined in section 3502(8) of title 44, relating to those functions. It must also assess compliance with this subsection and related information-security policies, procedures, standards, and guidelines, including policies and procedures prescribed by the Director of the Office of Management and Budget and applicable standards issued under section 11331 of title 40.
(B) Deadline for initial evaluation.
(i) New contractors. If a covered contractor has never before performed the payment-determination and payment-making functions as a fiscal intermediary or carrier under section 1395h or 1395u, its first independent evaluation under subparagraph (A) must be completed before it starts those functions.
(ii) Other contractors. If a covered contractor is not described in clause (i), its first independent evaluation under subparagraph (A) must be completed within 1 year after the contractor starts the functions referred to in clause (i) under this section.
(C) Reports on evaluations.
(i) To the Department of Health and Human Services. The results of independent evaluations under subparagraph (A) must be promptly submitted to the Inspector General of the Department of Health and Human Services and to the Secretary.
(ii) To Congress. The Inspector General must give Congress annual reports on those evaluation results, including assessments of the evaluations’ scope and sufficiency.
(iii) Agency reporting. The Secretary must address those evaluation results in reports required under section 3544(c) of title 44.
(f) Incentives to improve contractor performance in provider education and outreach. The Secretary must use specific claims-payment error rates, or a similar method, for contractors’ processing or review of Medicare claims. The purpose is to give contractors an incentive to put effective education and outreach programs in place for providers of services and suppliers.
(g) Communications with beneficiaries, providers of services, and suppliers
(1) Communication strategy. The Secretary must develop a communication strategy for people entitled to Part A benefits or enrolled in Part B, or both, and for providers of services and suppliers under this subchapter.
(2) Response to written inquiries. For providers and suppliers that submit claims to a contractor for processing, and for people entitled to Part A benefits or enrolled in Part B, or both, whose claims are submitted for processing, each contractor must give clear, concise, and accurate general written responses to their questions about the programs under this subchapter. The responses may be sent electronically and must be provided within 45 business days after the questions are received.
(3) Response to toll-free lines. The Secretary must ensure that each contractor provides a toll-free telephone number for those providers, suppliers, and people described in paragraph (2). They may use the number to get information under this subchapter about billing, coding, claims, coverage, and other appropriate matters.
(4) Monitoring of contractor responses.
(A) In general. Consistently with the Secretary’s standards under subparagraph (B), each contractor must:
(i) keep a system that identifies who provides the information described in paragraphs (2) and (3); and
(ii) monitor that information’s accuracy, consistency, and timeliness.
(B) Development of standards.
(i) In general. The Secretary must establish and make public standards for monitoring the accuracy, consistency, and timeliness of information given in response to written and telephone questions under this subsection. The standards must be consistent with the performance requirements under subsection (b)(3).
(ii) Evaluation. When evaluating individual contractors, the Secretary must consider the results of the monitoring under subparagraph (A), using the standards established under clause (i) as performance requirements. In consultation with organizations representing providers, suppliers, and people entitled to Part A benefits or enrolled in Part B, or both, the Secretary must establish standards for the accuracy, consistency, and timeliness of the information provided.
(C) Direct monitoring. This paragraph does not prevent the Secretary from directly monitoring the accuracy, consistency, and timeliness of the information.
(5) Authorization of appropriations. Congress may appropriate whatever amounts are necessary to carry out this subsection.
(h) Improper payment outreach and education program
(1) In general. To reduce improper payments under this subchapter, each contractor must establish and maintain an improper-payment outreach and education program. Through outreach, education, training, technical assistance, or other activities, the contractor must regularly give providers and suppliers in the region covered by its contract the information described in paragraph (2).
(2) Information to be provided through activities. The program must include information the Secretary considers appropriate. It may include:
(A) a list of the provider’s or supplier’s most frequent and most expensive payment errors during the last quarter;
(B) specific directions for correcting or avoiding those errors in the future;
(C) notice of new topics the Secretary has approved for recovery-audit-contractor audits under section 1395ddd(h);
(D) specific directions for preventing future problems related to those new audits; and
(E) other information the Secretary considers appropriate.
(3) Priority. A contractor must prioritize program activities that will reduce improper payments that are one or more of these:
(A) payments for items and services with the highest improper-payment rate;
(B) payments for items and services with the greatest total dollar amount of improper payments;
(C) payments caused by a clear misapplication or misinterpretation of Medicare policies;
(D) payments clearly caused by common and unintentional clerical or administrative errors; or
(E) payments caused by other errors that the Secretary determines the program could prevent.
(4) Information on improper payments from recovery audit contractors.
(A) In general. To help contractors run their improper-payment outreach and education programs, the Secretary must give each contractor a complete list of the types of improper payments that recovery audit contractors identified under section 1395ddd(h) for providers and suppliers in the region covered by the contract. The Secretary must provide this information on a schedule the Secretary considers appropriate, which may be quarterly.
(B) Information. The list must include information such as:
(i) providers and suppliers with the highest improper-payment rates;
(ii) providers and suppliers with the greatest total dollar amounts of improper payments;
(iii) items and services provided in the region with the highest improper-payment rates;
(iv) items and services provided in the region responsible for the greatest total dollar amount of improper payments; and
(v) other information the Secretary decides would help the contractor carry out the program.
(5) Communications. Communications with providers and suppliers under an improper-payment outreach and education program are subject to subsection (g)’s standards and requirements.
The Secretary* may enter into contracts with any eligible entity to serve as a medicare administrative contractor with respect to the performance of any or all of the functions described in paragraph (4) or parts of those functions (or, to the extent provided in a contract, to secure performance thereof by other entities).
An entity is eligible to enter into a contract with respect to the performance of a particular function described in paragraph (4) only if—
the entity has demonstrated capability to carry out such function;
the entity complies with such conflict of interest standards as are generally applicable to Federal acquisition and procurement;
the entity has sufficient assets to financially support the performance of such function; and
the entity meets such other requirements as the Secretary may impose.
For purposes of this subchapter and subchapter XI—
The term “medicare administrative contractor” means an agency, organization, or other person* with a contract under this section.
With respect to the performance of a particular function in relation to an individual entitled to benefits under part A or enrolled under part B, or both, a specific provider of services or supplier* (or class of such providers of services or suppliers), the “appropriate” medicare administrative contractor is the medicare administrative contractor that has a contract under this section with respect to the performance of that function in relation to that individual, provider of services or supplier or class of provider of services or supplier.
The functions referred to in paragraphs (1) and (2) are payment functions (including the function of developing local coverage determinations, as defined in section 1395ff(f)(2)(B) of this title), provider services functions, and functions relating to services furnished to individuals entitled to benefits under part A or enrolled under part B, or both, as follows:
Determining (subject to the provisions of section 1395oo of this title and to such review by the Secretary as may be provided for by the contracts) the amount of the payments required pursuant to this subchapter to be made to providers of services, suppliers and individuals.
Making payments described in subparagraph (A) (including receipt, disbursement, and accounting for funds in making such payments).
Providing education and outreach to individuals entitled to benefits under part A or enrolled under part B, or both, and providing assistance to those individuals with specific issues, concerns, or problems.
Providing consultative services to institutions, agencies, and other persons to enable them to establish and maintain fiscal records necessary for purposes of this subchapter and otherwise to qualify as providers of services or suppliers.
Communicating to providers of services and suppliers any information or instructions furnished to the medicare administrative contractor by the Secretary, and facilitating communication between such providers and suppliers and the Secretary.
Performing the functions relating to provider education, training, and technical assistance.
Having in place an improper payment outreach and education program described in subsection (h).
Performing such other functions, including (subject to paragraph (5)) functions under the Medicare Integrity Program under section 1395ddd of this title, as are necessary to carry out the purposes of this subchapter.
In entering into contracts under this section, the Secretary shall assure that functions of medicare administrative contractors in carrying out activities under parts A and B do not duplicate activities carried out under a contract entered into under the Medicare Integrity Program under section 1395ddd of this title. The previous sentence shall not apply with respect to the activity described in section 1395ddd(b)(5) of this title (relating to prior authorization of certain items of durable medical equipment* under section 1395m(a)(15) of this title).
An entity shall not be treated as a medicare administrative contractor merely by reason of having entered into a contract with the Secretary under section 1395ddd of this title.
Except to the extent inconsistent with a specific requirement of this section, the Federal Acquisition Regulation applies to contracts under this section.
Except as provided in laws with general applicability to Federal acquisition and procurement or in subparagraph (B), the Secretary shall use competitive procedures when entering into contracts with medicare administrative contractors under this section, taking into account performance quality as well as price and other factors.
The Secretary may renew a contract with a medicare administrative contractor under this section from term to term without regard to section 6101 of title 41 or any other provision of law requiring competition, if the medicare administrative contractor has met or exceeded the performance requirements applicable with respect to the contract and contractor, except that the Secretary shall provide for the application of competitive procedures under such a contract not less frequently than once every 10 years.
The Secretary may transfer functions among medicare administrative contractors consistent with the provisions of this paragraph. The Secretary shall ensure that performance quality is considered in such transfers. The Secretary shall provide public notice (whether in the Federal Register or otherwise) of any such transfer (including a description of the functions so transferred, a description of the providers of services and suppliers affected by such transfer, and contact information for the contractors involved).
Subject to clauses (ii) and (iii), the Secretary shall provide incentives for medicare administrative contractors to provide quality service and to promote efficiency.
The Secretary shall provide incentives for medicare administrative contractors to reduce the improper payment error rates in their jurisdictions.
The incentives provided for under clause (ii)—
may include a sliding scale of award fee payments and additional incentives to medicare administrative contractors that either reduce the improper payment rates in their jurisdictions to certain thresholds, as determined by the Secretary, or accomplish tasks, as determined by the Secretary, that further improve payment accuracy; and
may include substantial reductions in award fee payments under cost-plus-award-fee contracts, for medicare administrative contractors that reach an upper end improper payment rate threshold or other threshold as determined by the Secretary, or fail to accomplish tasks, as determined by the Secretary, that further improve payment accuracy.
No contract under this section shall be entered into with any medicare administrative contractor unless the Secretary finds that such medicare administrative contractor will perform its obligations under the contract efficiently and effectively and will meet such requirements as to financial responsibility, legal authority, quality of services provided, and other matters as the Secretary finds pertinent.
The Secretary shall develop contract performance requirements to carry out the specific requirements applicable under this subchapter to a function described in subsection (a)(4) and shall develop standards for measuring the extent to which a contractor has met such requirements. Such requirements shall include specific performance duties expected of a medical director* of a medicare administrative contractor, including requirements relating to professional relations and the availability of such director to conduct medical determination activities within the jurisdiction of such a contractor.
In developing such performance requirements and standards for measurement, the Secretary shall consult with providers of services, organizations representative of beneficiaries under this subchapter, and organizations and agencies performing functions necessary to carry out the purposes of this section with respect to such performance requirements.
The Secretary shall make such performance requirements and measurement standards available to the public.
To the extent possible without compromising the process for entering into and renewing contracts with medicare administrative contractors under this section, the Secretary shall make available to the public the performance of each medicare administrative contractor with respect to such performance requirements and measurement standards.
The Secretary shall include, as one of the standards developed under subparagraph (A), provider and beneficiary satisfaction levels.
All contractor performance requirements shall be set forth in the contract between the Secretary and the appropriate medicare administrative contractor. Such performance requirements—
shall reflect the performance requirements published under subparagraph (A), but may include additional performance requirements;
shall be used for evaluating contractor performance under the contract; and
shall be consistent with the written statement of work provided under the contract.
The Secretary shall not enter into a contract with a medicare administrative contractor under this section unless the contractor agrees—
to furnish to the Secretary such timely information and reports as the Secretary may find necessary in performing his functions under this subchapter; and
to maintain such records and afford such access thereto as the Secretary finds necessary to assure the correctness and verification of the information and reports under subparagraph (A) and otherwise to carry out the purposes of this subchapter.
A contract with a medicare administrative contractor under this section may require the medicare administrative contractor, and any of its officers or employees certifying payments or disbursing funds pursuant to the contract, or otherwise participating in carrying out the contract, to give surety bond to the United States* in such amount as the Secretary may deem appropriate.
A contract with any medicare administrative contractor under this section may contain such terms and conditions as the Secretary finds necessary or appropriate and may provide for advances of funds to the medicare administrative contractor for the making of payments by it under subsection (a)(4)(B).
The Secretary may not require, as a condition of entering into, or renewing, a contract under this section, that the medicare administrative contractor match data obtained other than in its activities under this subchapter with data used in the administration* of this subchapter for purposes of identifying situations in which the provisions of section 1395y(b) of this title may apply.
No individual designated pursuant to a contract under this section as a certifying officer shall, in the absence of the reckless disregard of the individual’s obligations or the intent by that individual to defraud the United States, be liable with respect to any payments certified by the individual under this section.
No disbursing officer shall, in the absence of the reckless disregard of the officer’s obligations or the intent by that officer to defraud the United States, be liable with respect to any payment by such officer under this section if it was based upon an authorization (which meets the applicable requirements for such internal controls established by the Comptroller General of the United States) of a certifying officer designated as provided in paragraph (1) of this subsection.
No medicare administrative contractor shall be liable to the United States for a payment by a certifying or disbursing officer unless, in connection with such payment, the medicare administrative contractor acted with reckless disregard of its obligations under its medicare administrative contract or with intent to defraud the United States.
Nothing in this subsection shall be construed to limit liability for conduct that would constitute a violation of sections 3729 through 3731 of title 31.
Subject to subparagraphs (B) and (D), in the case of a medicare administrative contractor (or a person who is a director, officer, or employee of such a contractor or who is engaged by the contractor to participate directly in the claims administration process) who is made a party to any judicial or administrative proceeding arising from or relating directly to the claims administration process under this subchapter, the Secretary may, to the extent the Secretary determines to be appropriate and as specified in the contract with the contractor, indemnify the contractor and such persons.
The Secretary may not provide indemnification under subparagraph (A) insofar as the liability for such costs arises directly from conduct that is determined by the judicial proceeding or by the Secretary to be criminal in nature, fraudulent, or grossly negligent. If indemnification is provided by the Secretary with respect to a contractor before a determination that such costs arose directly from such conduct, the contractor shall reimburse the Secretary for costs of indemnification.
Indemnification by the Secretary under subparagraph (A) may include payment of judgments, settlements (subject to subparagraph (D)), awards, and costs (including reasonable legal expenses).
A contractor or other person described in subparagraph (A) may not propose to negotiate a settlement or compromise of a proceeding described in such subparagraph without the prior written approval of the Secretary to negotiate such settlement or compromise. Any indemnification under subparagraph (A) with respect to amounts paid under a settlement or compromise of a proceeding described in such subparagraph are conditioned upon prior written approval by the Secretary of the final settlement or compromise.
Nothing in this paragraph shall be construed—
to change any common law immunity that may be available to a medicare administrative contractor or person described in subparagraph (A); or
to permit the payment of costs not otherwise allowable, reasonable, or allocable under the Federal Acquisition Regulation.
A medicare administrative contractor that performs the functions referred to in subparagraphs (A) and (B) of subsection (a)(4) (relating to determining and making payments) shall implement a contractor-wide information security program to provide information security for the operation and assets of the contractor with respect to such functions under this subchapter. An information security program under this paragraph shall meet the requirements for information security programs imposed on Federal agencies under paragraphs (1) through (8) of section 3544(b) 1 of title 44 (other than the requirements under paragraphs (2)(D)(i), (5)(A), and (5)(B) of such section).
Each year a medicare administrative contractor that performs the functions referred to in subparagraphs (A) and (B) of subsection (a)(4) (relating to determining and making payments) shall undergo an evaluation of the information security of the contractor with respect to such functions under this subchapter. The evaluation shall—
be performed by an entity that meets such requirements for independence as the Inspector General of the Department of Health and Human Services may establish; and
test the effectiveness of information security control techniques of an appropriate subset of the contractor’s information systems (as defined in section 3502(8) of title 44) relating to such functions under this subchapter and an assessment of compliance with the requirements of this subsection and related information security policies, procedures, standards and guidelines, including policies and procedures as may be prescribed by the Director of the Office of Management and Budget and applicable information security standards promulgated under section 11331 of title 40.1
In the case of a medicare administrative contractor covered by this subsection that has not previously performed the functions referred to in subparagraphs (A) and (B) of subsection (a)(4) (relating to determining and making payments) as a fiscal intermediary or carrier under section 1395h or 1395u of this title, the first independent evaluation conducted pursuant to subparagraph (A) shall be completed prior to commencing such functions.
In the case of a medicare administrative contractor covered by this subsection that is not described in clause (i), the first independent evaluation conducted pursuant to subparagraph (A) shall be completed within 1 year after the date the contractor commences functions referred to in clause (i) under this section.
The results of independent evaluations under subparagraph (A) shall be submitted promptly to the Inspector General of the Department of Health and Human Services and to the Secretary.
The Inspector General of the Department of Health and Human Services shall submit to Congress annual reports on the results of such evaluations, including assessments of the scope and sufficiency of such evaluations.
The Secretary shall address the results of such evaluations in reports required under section 3544(c) 1 of title 44.
The Secretary shall use specific claims payment error rates or similar methodology of medicare administrative contractors in the processing or reviewing of medicare claims in order to give such contractors an incentive to implement effective education and outreach programs for providers of services and suppliers.
The Secretary shall develop a strategy for communications with individuals entitled to benefits under part A or enrolled under part B, or both, and with providers of services and suppliers under this subchapter.
Each medicare administrative contractor shall, for those providers of services and suppliers which submit claims to the contractor for claims processing and for those individuals entitled to benefits under part A or enrolled under part B, or both, with respect to whom claims are submitted for claims processing, provide general written responses (which may be through electronic transmission) in a clear, concise, and accurate manner to inquiries of providers of services, suppliers, and individuals entitled to benefits under part A or enrolled under part B, or both, concerning the programs under this subchapter within 45 business days of the date of receipt of such inquiries.
The Secretary shall ensure that each medicare administrative contractor shall provide, for those providers of services and suppliers which submit claims to the contractor for claims processing and for those individuals entitled to benefits under part A or enrolled under part B, or both, with respect to whom claims are submitted for claims processing, a toll-free telephone number at which such individuals, providers of services, and suppliers may obtain information regarding billing, coding, claims, coverage, and other appropriate information under this subchapter.
Each medicare administrative contractor shall, consistent with standards developed by the Secretary under subparagraph (B)—
maintain a system for identifying who provides the information referred to in paragraphs (2) and (3); and
monitor the accuracy, consistency, and timeliness of the information so provided.
The Secretary shall establish and make public standards to monitor the accuracy, consistency, and timeliness of the information provided in response to written and telephone inquiries under this subsection. Such standards shall be consistent with the performance requirements established under subsection (b)(3).
In conducting evaluations of individual medicare administrative contractors, the Secretary shall take into account the results of the monitoring conducted under subparagraph (A) taking into account as performance requirements the standards established under clause (i). The Secretary shall, in consultation with organizations representing providers of services, suppliers, and individuals entitled to benefits under part A or enrolled under part B, or both, establish standards relating to the accuracy, consistency, and timeliness of the information so provided.
Nothing in this paragraph shall be construed as preventing the Secretary from directly monitoring the accuracy, consistency, and timeliness of the information so provided.
There are authorized to be appropriated such sums as are necessary to carry out this subsection.
In order to reduce improper payments under this subchapter, each medicare administrative contractor shall establish and have in place an improper payment outreach and education program under which the contractor, through outreach, education, training, and technical assistance or other activities, shall provide providers of services and suppliers located in the region covered by the contract under this section with the information described in paragraph (2). The activities described in the preceding sentence shall be conducted on a regular basis.
The information to be provided under such payment outreach and education program shall include information the Secretary determines to be appropriate, which may include the following information:
A list of the providers’ or suppliers’ most frequent and expensive payment errors over the last quarter.
Specific instructions regarding how to correct or avoid such errors in the future.
A notice of new topics that have been approved by the Secretary for audits conducted by recovery audit contractors under section 1395ddd(h) of this title.
Specific instructions to prevent future issues related to such new audits.
Other information determined appropriate by the Secretary.
A medicare administrative contractor shall give priority to activities under such program that will reduce improper payments that are one or more of the following:
Are for items and services that have the highest rate of improper payment.
Are for items and service 2 that have the greatest total dollar amount of improper payments.
Are due to clear misapplication or misinterpretation of Medicare policies.
Are clearly due to common and inadvertent clerical or administrative errors.
Are due to other types of errors that the Secretary determines could be prevented through activities under the program.
In order to assist medicare administrative contractors in carrying out improper payment outreach and education programs, the Secretary shall provide each contractor with a complete list of the types of improper payments identified by recovery audit contractors under section 1395ddd(h) of this title with respect to providers of services and suppliers located in the region covered by the contract under this section. Such information shall be provided on a time frame the Secretary determines appropriate which may be on a quarterly basis.
The information described in subparagraph (A) shall include information such as the following:
Providers of services and suppliers that have the highest rate of improper payments.
Providers of services and suppliers that have the greatest total dollar amounts of improper payments.
Items and services furnished in the region that have the highest rates of improper payments.
Items and services furnished in the region that are responsible for the greatest total dollar amount of improper payments.
Other information the Secretary determines would assist the contractor in carrying out the program.
Communications with providers of services and suppliers under an improper payment outreach and education program are subject to the standards and requirements of subsection (g).
Source credit: (Aug. 14, 1935, ch. 531, title XVIII, § 1874A, as added and amended Pub. L. 108–173, title IX, §§ 911(a)(1), 912(a), 921(b)(1), (c)(1), 934(a), 940A(b), Dec. 8, 2003, 117 Stat. 2378, 2387–2389, 2406, 2417; Pub. L. 111–152, title I, § 1302, Mar. 30, 2010, 124 Stat. 1057; Pub. L. 114–10, title V, §§ 505(a), 509(a), (c), Apr. 16, 2015, 129 Stat. 166, 170; Pub. L. 114–115, § 7(a), Dec. 28, 2015, 129 Stat. 3134.)
- 1935Enacted · Pub. L. 108-173 · 117 Stat. 2378, 2387
- 2010Amended · Pub. L. 111-152 · 124 Stat. 1057
- 2015Amended · Pub. L. 114-10 · 129 Stat. 166, 170
- 2015Amended · Pub. L. 114-115 · 129 Stat. 3134
A history note hasn’t been published yet. The record shows enactment by Pub. L. 108-173 on 1935-08-14.
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