Sponsor
Bill Cassidy
Senator · R-LA
Senator · R-LA
The bill makes it easier and less risky for DME suppliers to challenge incorrect Medicare denials and increases transparency, but it also raises the program's potential costs and administrative burdens while leaving some eligibility limits that create uncertainty.
Small durable medical equipment (DME) suppliers can recover reasonable attorney fees and litigation costs — including fees from multiple appeal stages — reducing the financial risk of challenging incorrect Medicare denials.
Hospitals, suppliers, and beneficiaries may face fewer improper denials over time because contractors are partially financially responsible for clearly erroneous denials, creating an incentive for more accurate initial claims decisions.
Taxpayers and policymakers gain better oversight because the Secretary must report aggregated data on fee awards, improving transparency about denial reversals and how fee awards are used.
Medicare contractors and taxpayers could face higher costs if fee awards are large or frequent, increasing Medicare program spending and fiscal pressure on the federal budget.
Small suppliers, hospitals, and contractors will incur additional administrative and compliance burdens from new application, service, response, recordkeeping, and reporting requirements, raising operating costs.
Suppliers who receive fee awards may face uncertainty because awards could be clawed back or offset if a later determination reverses the favorable appeal or finds fraud, complicating financial planning.
Based on analysis of 2 sections of legislative text.
Allows prevailing DME suppliers to recover reasonable attorney fees and costs from Medicare contractors when initial denials are found incorrect, with Secretary-set rules and safeguards.
Official title: Amend title XVIII of the Social Security Act to require medicare administrative contractors, unified program integrity contractors, and qualified independent contractors to pay the legal fees for certain durable medical equipment suppliers that were incorrectly denied payment.
Introduced July 22, 2026 by Bill Cassidy · Last progress July 22, 2026
Authorizes Medicare to pay reasonable attorney fees, costs, and certain expenses to durable medical equipment (DME) suppliers that prevail on appeal when a Medicare contractor or the Department incorrectly denied payment or reimbursement, subject to conditions and regulatory safeguards. Directs the Secretary to create procedures, eligibility criteria, fee reasonableness standards or schedules, dispute-resolution processes, recordkeeping and reporting requirements, and a reconsideration process; also permits recovery or offset of awards if later decisions reverse the favorable outcome. Specifically enables small-business DME suppliers that obtain a favorable final appeal at the Office of Medicare Hearings and Appeals to recover fees and costs when an ALJ finds the initial claim determination was clearly erroneous, unsupported by substantial evidence, or inconsistent with law/regulation/instruction; allows fees for multiple appeal stages and splits liability between implicated contractors when more than one affirmed the incorrect denial. The Secretary must set effective dates and deadlines by regulation.