PACE Act of 2015

Summary: Promoting Access, Competition, and Equity Act of 2015 or the PACE Act of 2015 This bill amends title XVIII (Medicare) of the Social Security Act to&nbsp;ease application criteria and procedures for physician-owned hospitals to expand their facilities. Under current law, expansion of physician-owned hospitals is subject to certain limitations, such as those&nbsp;regarding the extent and frequency of expansion and requiring community output. The bill suspends these limitations&nbsp;with respect to applications for expansion&nbsp;filed before October 1, 2019.  Following the end of this suspension period, hospitals with consistently high quality ratings&nbsp;are included among those hospitals that may apply to expand their facilities. The Centers for Medicare&nbsp;&amp; Medicaid&nbsp;Services may not alter the methodology for computing a hospital's quality rating before October 1, 2019.  With respect to hospitals under development as of March 23, 2010, the bill extends to May 1, 2015, the date by which a hospital may qualify for an exception to the ownership or investment prohibition on physician self-referrals. The bill also: (1) exempts physician-owned hospitals from specified documentation and coding adjustments, and (2) extends reductions in certain inflationary increases associated with Medicare payments for inpatient hospital services.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Promoting Access, Competition, and 
Equity Act of 2015'' or as the ``PACE Act of 2015''.

SEC. 2. CONFIRMING METHODOLOGY FOR HOSPITAL STAR RATING SYSTEM THROUGH 
              HOSPITAL COMPARE.

    Section 1886(b)(3)(B)(viii) of the Social Security Act (42 U.S.C. 
1395ww(b)(3)(B)(viii)) is amended by adding at the end the following 
new subclause:
    ``(XII) In order to ensure consistent longitudinal comparisons 
among calendar quarters that began before October 1, 2019, the 
Secretary shall use the same methodology as is in effect as of April 
16, 2015, for computation of the star rating for hospitals posted on 
the Internet website maintained by the Secretary under subclause (VII) 
for such calendar quarters. The Secretary may promulgate a regulation 
to change such methodology used with respect to the computation of such 
star rating for hospitals for calendar quarters beginning on or after 
October 1, 2019.''.

SEC. 3. REVISED CRITERIA FOR APPLICATION AND EXCEPTIONS TO MORATORIUM 
              ON EXPANSION AND CONSTRUCTION OF PHYSICIAN-OWNED 
              HOSPITALS.

    (a) Temporary Suspension of Limitation on Hospitals That Can Apply 
for Facility Expansions.--Section 1877(i)(3) of the Social Security Act 
(42 U.S.C. 1395nn(i)(3)) is amended--
            (1) in subparagraph (E), by adding at the end, after clause 
        (v), the following:
                ``With respect to applications filed under this 
                paragraph during the period beginning on the date of 
                the enactment of this sentence and ending on September 
                30, 2019, such term includes any hospital (other than a 
                high Medicaid facility).''; and
            (2) in subparagraph (B), by inserting before the period at 
        the end the following: ``, except that such limitation shall 
        not apply with respect to applications filed before October 1, 
        2019''.
    (b) Application of Hospital Expansion Exception to Hospitals With 
Consistently High Quality Ratings.--Section 1877(i)(3) of the Social 
Security Act (42 U.S.C. 1395nn(i)(3)) is amended--
            (1) in subparagraph (A)(i), by striking ``or is a high 
        Medicaid facility described in subparagraph (F)'' and inserting 
        ``, is a high Medicaid facility described in subparagraph (F), 
        or is a hospital with a consistently high quality rating (as 
        defined in subparagraph (H))'';
            (2) in subparagraph (E), by adding at the end, after the 
        matter added by subsection (a)(1), the following:
                ``Such term includes, with respect to subparagraphs (B) 
                through (D), a hospital with a consistently high 
                quality rating.''; and
            (3) by adding at the end, as amended by subsection (d), the 
        following new subparagraph:
                    ``(H) Hospital with a consistently high quality 
                rating defined.--In this paragraph, the term `hospital 
                with a consistently high quality rating', with respect 
                to a calendar quarter (beginning on or after October 1, 
                2019), means a hospital that has had a rating of 3 
                stars or higher under the hospital star rating system 
                posted on the Internet website maintained by the 
                Secretary under section 1886(b)(3)(B)(viii)(VII) for 
                each of the 12 calendar quarters before the calendar 
                quarter involved.''.
    (c) Exception and Special Rules for Certain Hospitals Under 
Development as of March 23, 2010.--Section 1877 of the Social Security 
Act (42 U.S.C. 1395nn) is amended--
            (1) in subsection (d)(3)(D), by inserting before the period 
        at the end the following: ``or, in the case of a hospital under 
        development as of March 23, 2010 (as defined in paragraph 
        (7)(A)), meets such requirements as of the under development 
        effective date (as defined in subsection (i)(7)(B))''; and
            (2) in subsection (i)--
                    (A) in paragraph (1), by adding at the end the 
                following new subparagraph:
                    ``(G) Special timing rule for hospitals under 
                development as of march 23, 2010.--In applying this 
                paragraph to a hospital under development as of March 
                23, 2010 (as defined in paragraph (7)(A)), any 
                reference in this paragraph to the date of enactment of 
                this subsection or to December 31, 2010, shall be 
                deemed to be a reference to May 1, 2015.'';
                    (B) in paragraph (3)(C)(iii), by striking 
                ``provider agreement).'' and inserting ``provider 
                agreement, or, in the case of a hospital under 
                development as of March 23, 2010 (as defined in 
                paragraph (7)(A)), May 1, 2015).''; and
                    (C) by adding at the end the following new 
                paragraph:
            ``(7) Definitions relating to certain hospitals under 
        development.--In this subsection:
                    ``(A) Hospital under development as of march 23, 
                2010.--The term `hospital under development as of March 
                23, 2010' means a hospital that--
                            ``(i) has a binding written agreement with 
                        an outside, unrelated party for the actual 
                        construction, renovation, lease, or demolition 
                        for a hospital under section 1886(d), and has 
                        expended, before March 23, 2010, at least 10 
                        percent of the estimated cost of the project 
                        (or, if less, $2,500,000); or
                            ``(ii) has obtained an approved certificate 
                        of need in a State where one is required on or 
                        before March 23, 2010.
                Such term includes, with respect to such a hospital, 
                any facility expansion of the hospital that is 
                completed before the under development effective date.
                    ``(B) Under development effective date.--The term 
                `under development effective date' means the date that 
                is 6 months after the date of the enactment of this 
                paragraph.''.
    (d) Change in Processing of Applications and Elimination of Appeals 
Limitation.--Section 1877(i)(3) of the Social Security Act (42 U.S.C. 
1305nn(i)(3)) is amended--
            (1) in subparagraph (A), by striking clauses (ii) through 
        (iv) and inserting the following:
                            ``(ii) Deemed receipt of complete 
                        application and approval of application.--
                        Unless the Secretary otherwise determines, an 
                        application submitted under this subparagraph 
                        shall be deemed complete as of the date that is 
                        30 days after the date the Secretary receives 
                        the complete application. Not later than 60 
                        days after the receipt of such a complete 
                        application, the Secretary shall publish a 
                        notice of the receipt of the application and a 
                        description of the expansion planned in the 
                        application. A complete application shall be 
                        deemed approved by the Secretary as of the end 
                        of the 60-day period beginning on the date of 
                        the Secretary's receipt of the application 
                        unless the Secretary provides the applicant 
                        with a notice of disapproval of the application 
                        before the end of such period.''; and
            (2) by striking subparagraphs (H) and (I).
    (e) Effective Date.--Except as otherwise provided, the amendments 
made by this section shall take effect on the date of the enactment of 
this Act and shall apply to applications made after the date of the 
enactment of this Act.

SEC. 4. SAVINGS FROM PHYSICIAN-OWNED HOSPITALS.

    (a) Documentation and Coding Adjustments Not Applicable.--Section 
7(b)(1)(B)(iii) of the TMA, Abstinence Education, and QI Programs 
Extension Act of 2007 (Public Law 110-90), as added amended by section 
414(1)(B)(iii) of the Medicare Access and CHIP Reauthorization Act of 
2015 (Public Law 114-10), is amended by inserting before the period at 
the end the following: ``, except that this clause shall not apply in 
the case of a hospital that'' ``, except that this clause shall not 
apply in the case of a hospital in which physicians (or immediate 
family members of physicians) have a substantial ownership or 
investment interest in the hospital (as determined under rules 
established by the Secretary)''.
    (b) Extension of Reductions in Market Basket Increases.--Section 
1886(b)(3)(B)(xii) of the Social Security Act (42 U.S.C. 
1395ww(b)(3)(B)(xii)) is amended--
            (1) by striking ``and'' at the end of subclause (IV);
            (2) by striking the period at the end of subclause (V) and 
        inserting ``; and''; and
            (3) by inserting after subclause (V) the following new 
        subclause:
            ``(VI) for each of fiscal years 2020 through 2025, by 0.75 
        percentage point, but only with respect to a hospital and 
        fiscal year for which the Secretary determines that physicians 
        (or immediate family members of physicians) have a substantial 
        ownership or investment interest in the hospital (as determined 
        under rules established by the Secretary).''.