42 U.S.C. § 1395kk-1 : US Code - Section 1395KK-1: Contracts with medicare administrative contractors

Search 42 U.S.C. § 1395kk-1 : US Code - Section 1395KK-1: Contracts with medicare administrative contractors

(a) Authority
(1) Authority to enter into contracts
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).
(2) Eligibility of 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 -
(A) the entity has demonstrated capability to carry out such
function;
(B) the entity complies with such conflict of interest
standards as are generally applicable to Federal acquisition
and procurement;
(C) the entity has sufficient assets to financially support
the performance of such function; and
(D) the entity meets such other requirements as the Secretary
may impose.
(3) Medicare administrative contractor defined
For purposes of this subchapter and subchapter XI of this
chapter -
(A) In general
The term "medicare administrative contractor" means an
agency, organization, or other person with a contract under
this section.
(B) Appropriate medicare administrative contractor
With respect to the performance of a particular function in
relation to an individual entitled to benefits under part A of
this subchapter or enrolled under part B of this subchapter, 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.
(4) Functions described
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 of this subchapter or enrolled under part B of this subchapter,
or both, as follows:
(A) Determination of payment amounts
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.
(B) Making payments
Making payments described in subparagraph (A) (including
receipt, disbursement, and accounting for funds in making such
payments).
(C) Beneficiary education and assistance
Providing education and outreach to individuals entitled to
benefits under part A of this subchapter or enrolled under part
B of this subchapter, or both, and providing assistance to
those individuals with specific issues, concerns, or problems.
(D) Provider consultative services
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.
(E) Communication with providers
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.
(F) Provider education and technical assistance
Performing the functions relating to provider education,
training, and technical assistance.
(G) Additional functions
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.
(5) Relationship to MIP contracts
(A) Nonduplication of duties
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 of
this subchapter 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).
(B) Construction
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.
(6) Application of Federal Acquisition Regulation
Except to the extent inconsistent with a specific requirement
of this section, the Federal Acquisition Regulation applies to
contracts under this section.
(b) Contracting requirements
(1) Use of competitive procedures
(A) In general
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.
(B) Renewal of contracts
The Secretary may renew a contract with a medicare
administrative contractor under this section from term to term
without regard to section 5 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 5 years.
(C) Transfer of functions
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).
(D) Incentives for quality
The Secretary shall provide incentives for medicare
administrative contractors to provide quality service and to
promote efficiency.
(2) Compliance with requirements
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.
(3) Performance requirements
(A) Development of specific performance requirements
(i) In general
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) of this section 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.
(ii) Consultation
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.
(iii) Publication of standards
The Secretary shall make such performance requirements and
measurement standards available to the public.
(B) Considerations
The Secretary shall include, as one of the standards
developed under subparagraph (A), provider and beneficiary
satisfaction levels.
(C) Inclusion in contracts
All contractor performance requirements shall be set forth in
the contract between the Secretary and the appropriate medicare
administrative contractor. Such performance requirements -
(i) shall reflect the performance requirements published
under subparagraph (A), but may include additional
performance requirements;
(ii) shall be used for evaluating contractor performance
under the contract; and
(iii) shall be consistent with the written statement of
work provided under the contract.
(4) Information requirements
The Secretary shall not enter into a contract with a medicare
administrative contractor under this section unless the
contractor agrees -
(A) to furnish to the Secretary such timely information and
reports as the Secretary may find necessary in performing his
functions under this subchapter; and
(B) 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.
(5) Surety bond
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.
(c) Terms and conditions
(1) In general
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) of this
section.
(2) Prohibition on mandates for certain data collection
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.
(d) Limitation on liability of medicare administrative contractors
and certain officers
(1) Certifying officer
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.
(2) Disbursing officer
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.
(3) Liability of medicare administrative contractor
(A) In general
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.
(B) Relationship to False Claims Act
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.
(4) Indemnification by Secretary
(A) In general
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.
(B) Conditions
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.
(C) Scope 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).
(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
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.
(E) Construction
Nothing in this paragraph shall be construed -
(i) to change any common law immunity that may be available
to a medicare administrative contractor or person described
in subparagraph (A); or
(ii) to permit the payment of costs not otherwise
allowable, reasonable, or allocable under the Federal
Acquisition Regulation.
(e) Requirements for information security
(1) Development of information security program
A medicare administrative contractor that performs the
functions referred to in subparagraphs (A) and (B) of subsection
(a)(4) of this section (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) of title 44 (other than the requirements
under paragraphs (2)(D)(i), (5)(A), and (5)(B) of such section).
(2) Independent audits
(A) Performance of annual evaluations
Each year a medicare administrative contractor that performs
the functions referred to in subparagraphs (A) and (B) of
subsection (a)(4) of this section (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 -
(i) 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
(ii) 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.
(B) Deadline for initial evaluation
(i) New contractors
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) of this section (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.
(ii) Other contractors
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.
(C) Reports on evaluations
(i) To the Department of Health and Human Services
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.
(ii) To Congress
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.
(iii) Agency reporting
The Secretary shall address the results of such evaluations
in reports required under section 3544(c) of title 44.
(f) Incentives to improve contractor performance in provider
education and outreach
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.
(g) Communications with beneficiaries, providers of services and
suppliers
(1) Communication strategy
The Secretary shall develop a strategy for communications with
individuals entitled to benefits under part A of this subchapter
or enrolled under part B of this subchapter, or both, and with
providers of services and suppliers under this subchapter.
(2) Response to written inquiries
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 of this subchapter or enrolled
under part B of this subchapter, 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 of this subchapter or enrolled under part B
of this subchapter, or both, concerning the programs under this
subchapter within 45 business days of the date of receipt of such
inquiries.
(3) Response to toll-free lines
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 of this subchapter or enrolled under part B of this
subchapter, 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.
(4) Monitoring of contractor responses
(A) In general
Each medicare administrative contractor shall, consistent
with standards developed by the Secretary under subparagraph
(B) -
(i) maintain a system for identifying who provides the
information referred to in paragraphs (2) and (3); and
(ii) monitor the accuracy, consistency, and timeliness of
the information so provided.
(B) Development of standards
(i) In general
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) of this section.
(ii) Evaluation
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 of this
subchapter or enrolled under part B of this subchapter, or
both, establish standards relating to the accuracy,
consistency, and timeliness of the information so provided.
(C) Direct monitoring
Nothing in this paragraph shall be construed as preventing
the Secretary from directly monitoring the accuracy,
consistency, and timeliness of the information so provided.
(5) Authorization of appropriations
There are authorized to be appropriated such sums as are
necessary to carry out this subsection.
(h) Conduct of prepayment review
(1) Conduct of random prepayment review
(A) In general
A medicare administrative contractor may conduct random
prepayment review only to develop a contractor-wide or program-
wide claims payment error rates or under such additional
circumstances as may be provided under regulations, developed
in consultation with providers of services and suppliers.
(B) Use of standard protocols when conducting prepayment
reviews
When a medicare administrative contractor conducts a random
prepayment review, the contractor may conduct such review only
in accordance with a standard protocol for random prepayment
audits developed by the Secretary.
(C) Construction
Nothing in this paragraph shall be construed as preventing
the denial of payments for claims actually reviewed under a
random prepayment review.
(D) Random prepayment review
For purposes of this subsection, the term "random prepayment
review" means a demand for the production of records or
documentation absent cause with respect to a claim.
(2) Limitations on non-random prepayment review
(A) Limitations on initiation of non-random prepayment review
A medicare administrative contractor may not initiate non-
random prepayment review of a provider of services or supplier
based on the initial identification by that provider of
services or supplier of an improper billing practice unless
there is a likelihood of sustained or high level of payment
error under section 1395ddd(f)(3)(A) of this title.
(B) Termination of non-random prepayment review
The Secretary shall issue regulations relating to the
termination, including termination dates, of non-random
prepayment review. Such regulations may vary such a termination
date based upon the differences in the circumstances triggering
prepayment review.