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1 (2) Section 5315 of title 5, United States Code, is 2 amended in paragraph (17) by striking out “(5)” and 3 inserting in lieu thereof “ (6)”.

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STATE MEDICAID ADMINISTRATION

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Sec. 31. (a) Section 1902 (a) is amended by adding at

6 the end the following:

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“ (37) provide

“(A) for making eligibility determinations on the basis of applications for coverage, within fortyfive days of the date of application for all individuals: (i) receiving aid or assistance (or who except for income and resources would be eligible for aid or assistance) under a plan of the State approved under title IV, part A, (ii) receiving aid or assistance (or who except for income and resources would be eligible for assistance) under any plan of the State approved under title I, X, or XVI (for the aged and the blind), or (ii) with respect to whom supplemental security income benefits are being paid (or who would except for income and resources be eligible to have paid with respect to them supplemental security income benefits) under title XVI on the basis of age or blindness; and

"(B) for making eligibility determina

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tions based upon applications for coverage, within sixty days of application for all individuals: (i) receiving aid or assistance (or who except for income and resources would be eligible for aid or assistance) on the basis of disability under any plan of the State approved under title XIV or XVI, or (ii) for whom supplemental security income benefits are being paid (or who would except for income and resources be eligible to have paid to them supplemental security income benefits) under title XVI based upon disability;

"(C) for making redeterminations of eligibility for persons specified in subparagraphs (A) and (B): (i) when required based upon information the agency has previously obtained on anticipated changes in the individual's situation, (ii) within thirty days after receiving information on changes in an individual's circumstances which may affect his eligibility, and (üi) periodically but not less often than every six months for persons specified in subparagraph (A) (i), and not less often than annually for persons specified in subparagraph (A) (ii) and (A) (iii);

“ (38) establish procedures to assure accurate determinations of eligibility and provide that the error

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rate for eligibility determinations made on or after October 1, 1977, shall not exceed the rate specified in

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section 1911 (b); and

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“ (39) establish payment procedures to assure that (A) 95 percent of claims for which no further written information or substantiation is required to make payment, be paid within thirty days of receipt of the claim from a provider, and that 99 percent of such claims be

paid within ninety days, and (B) both prepayment and postpayment claims review procedures are performed, including

“(i) review, on a reasonable sample or more extensive basis, to determine the accuracy of data submitted and processed;

“(ü) review to determine that the provider is a participating provider;

“(iii) review to determine whether the service

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is covered under the State's plan;

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“ (iv) review to determine whether the recip

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·ient is eligible;

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“(v) review of care and services provided where such review has not been assumed by an

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organization designated by the Secretary under

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part B of title XI of this Act;

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* (vi) review to determine that payments made

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do not exceed those allowable;

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“ (vii) review to determine and recover any 4

third party liability; 5

“ (viii) review which reasonably safeguards 6

against duplicate billing.”. ī (b) Section 1902 (a) (6) is amended by adding the 8 following at the end : "the reports are to be accurate and 9 filed within sixty days following the close of the reporting 10 period for monthly and quarterly reports, and within one 11 hundred and five days following the close of reporting 12 periods for yearly reports;". 13 (c) Amend section 1903 by adding at the end the 14 following subsection: 15 “ (n) (1) Effective with each calendar quarter beginning 16 October 1, 1978 the amount paid to each State under para17 graphs (a) (2), (a) (3), and (a) (6) shall be reduced or

18 terminated unless the State demonstrates to the Secretary

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“(A) 95 percent of eligibility determinations are made within the time periods specified under section 1902 (a) (37) (A) and (B), except that in determining whether a State has met the requirements of this paragraph there shall not be included eligibility determinations for persons whose eligibility is determined

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under State plans approved under title I, X, XIV; XVI, or part A of title IV, or by the Secretary under sec

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tion 1634;

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“(B) the State's eligibility determination error rate does not exceed the rate specified in section 1911 (b), except that in determining whether a State has met the requirements of this paragraph there shall not be included error rates for those persons whose eligibility is determined under a State plan approved under titles I, X, XIV, XVI, or part A of title IV or by

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11 the Secretary under section 1634;

“(C) the State is processing claims for payment 13 within the time period specified in section 1902 (a)

(39) (A) and applying prepayment and postpayment 15 claims review procedures specified in section 1902 (a) 16 (39) (B); and 17

“(D) the State is making timely and complete reports to the Secretary on the operation of its medi

cal assistance program within the time period includ20 ing the information specified in section 1902 (a) (6). 21 “(2) The Secretary shall conduct an onsite survey

in 22 each State, at least annually, of State performance in each 23 category under paragraph (1). The methodology and pro 24 cedures (which may involve onsite evaluation) employed, 25 including procedures for any necessary followup of any de

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