Page:United States Statutes at Large Volume 79.djvu/350

 310

Ante, p. 297.

Post. p. 318.

Contracts with carriers. 41 USC 5.

Post, p. 322.

PUBLIC LAW 89-97-JULY 30, 1965

[79 STAT.

benefits under part A and under this part, the Secretary is authorized to enter into contracts with carriers, including carriers with which agreements under section 1816 are in effect, which will perform some or all of the following functions (or, to the extent provided in such contracts, will secure performance thereof by other organizations); and, with respect to any of the following functions which involve payments for physicians' services, the Secretary shall to the extent possible enter into such contracts: " (1)(A) make determinations of the rates and amounts of payments required pursuant to this part to be made to providers of services and other persons on a reasonable cost or reasonable charge basis (as may oe applicable); " (B) receive, disburse, and account for funds in making such payments; and " (C) make such audits of the records of providers of services as may be necessary to assure that proper payments are made under this part; "(2)(A) determine compliance with the requirements of section 1861(k) as to utilization review; and " (B) assist providers of services and other persons who furnish services for which payment may be made under this part in the development of procedures relating to utilization practices, make studies of the effectiveness of such procedures and methods for their improvement, assist in the application of safeguards against unnecessary utilization of services furnished by providers of services and other persons to individuals entitled to benefits under this part, and provide procedures for and assist in arranging, where necessary, the establishment of groups outside hospitals (meeting the requirements of section 1861(k)(2)) to make reviews of utilization; "(3) serve as a channel of communication of information relating to the administration of this part; and " (4) otherwise assist, in such manner as the contract may provide, in discharging administrative duties necessary to carry out the purposes of this part. " (b)(1) Contracts with carriers under subsection (a) may be entered into without regard to section 3709 of the Revised Statutes or any other provision of law requiring competitive bidding. "(2) No such contract shall be entered into with any carrier unless the Secretary finds that such carrier will perform its obligations under the contract efficiently and effectively and will meet such requirements as to financial responsibility, legal authority, and other matters as he finds pertinent. "(3) Each such contract shall provide that the carrier— " (A) will take such action as may be necessary to assure that, where payment under this part for a service is on a cost basis, the cost is reasonable cost (as''determined under section 1861(v)); " (B) will take such action as may be necessary to assure that, where payment under this part for a service is on a charge basis, (i) such charge will be reasonable and not higher than the charge applicable, for a comparable service and under comparable circumstances, to the policyholders and subscribers of the carrier, and (ii) such payment will be made on the basis of a receipted bill, or on the basis of an assignment under the terms of which the reasonable charge is the full charge for the service; " (C) will establish and maintain procedures pursuant to which an individual enrolled under this part will be granted an oppor-

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