SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Medicare Quality Improvement Act''.

SEC. 2. MEDICARE HEALTH CARE QUALITY DEMONSTRATION PROGRAMS.

    Title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) is 
amended by inserting after section 1866B the following:

              ``health care quality demonstration program

    ``Sec. 1866C. (a) Definitions.--In this section:
            ``(1) Beneficiary.--The term `beneficiary' means a 
        beneficiary who is enrolled in the traditional fee-for-service 
        program under parts A and B or a beneficiary in a staff model 
        or dedicated group model health maintenance organization under 
        the Medicare+Choice program under part C.
            ``(2) Health care group.--
                    ``(A) In general.--The term `health care group' 
                means--
                            ``(i) a group of physicians that is 
                        organized at least in part for the purpose of 
                        providing physician's services under this 
                        title;
                            ``(ii) an integrated health care delivery 
                        system that delivers care through coordinated 
                        hospitals, clinics, home health agencies, 
                        ambulatory surgery centers, skilled nursing 
                        facilities, and employed or contracted 
                        physicians; or
                            ``(iii) an organization representing 
                        regional coalitions of groups or systems 
                        described in clause (i) or (ii).
                    ``(B) Inclusion.--As the Secretary determines 
                appropriate, a health care group may include a hospital 
                or any other individual or entity furnishing items or 
                services for which payment may be made under this title 
                that is affiliated with the health care group under an 
                arrangement structured so that such individual or 
                entity participates in a demonstration project under 
                this section.
            ``(3) Physician.--Except as otherwise provided for by the 
        Secretary, the term `physician' means any individual who 
        furnishes services that may be paid for as physicians' services 
        under this title.
    ``(b) Demonstration Projects.--The Secretary shall establish a 5-
year demonstration program under which the Secretary shall approve 
demonstration projects that examine health delivery factors that 
encourage the delivery of improved quality in patient care, including--
            ``(1) the provision of incentives to improve the safety of 
        care provided to beneficiaries;
            ``(2) the appropriate use of best practice guidelines by 
        providers and services by beneficiaries;
            ``(3) reduced scientific uncertainty in the delivery of 
        care through the examination of variations in the utilization 
        and allocation of services, and outcomes measurement and 
        research;
            ``(4) encourage shared decision-making between providers 
        and patients;
            ``(5) the provision of incentives for improving the quality 
        and safety of care and achieving the efficient allocation of 
        resources;
            ``(6) the appropriate use of culturally and ethnically 
        sensitive health care delivery; and
            ``(7) the financial effects on the health care marketplace 
        of altering the incentives for care delivery and changing the 
        allocation of resources.
    ``(c) Administration by Contract.--
            ``(1) In general.--Except as otherwise provided in this 
        section, the Secretary may administer the demonstration program 
        established under this section in the same manner as a 
        demonstration program established under section 1866A is 
        administered in accordance with section 1866B.
            ``(2) Alternative payment systems.--A health care group 
        that receives assistance under this section may, with respect 
        to the demonstration project to be carried out with such 
        assistance, include proposals for the use of alternative 
        payment systems for items and services provided to 
        beneficiaries by the group that are designed to--
                    ``(A) encourage the delivery of high quality care 
                while accomplishing the objectives described in 
                subsection (b); and
                    ``(B) streamline documentation and reporting 
                requirements otherwise required under this title.
            ``(3) Benefits.--A health care group that receives 
        assistance under this section may, with respect to the 
        demonstration project to be carried out with such assistance, 
        include modifications to the package of benefits available 
        under the traditional fee-for-service program under parts A and 
        B or the package of benefits available through a staff model or 
        a dedicated group model health maintenance organization under 
        part C. The criteria employed under the demonstration program 
        under this section to evaluate outcomes and determine best 
        practice guidelines and incentives shall not be used as a basis 
        for the denial of medicare benefits under the demonstration 
        program to patients against their wishes (or if the patient is 
        incompetent, against the wishes of the patient's surrogate) on 
        the basis of the  patient's age or expected length of life or 
of the patient's present or predicted disability, degree of medical 
dependency, or quality of life.
    ``(d) Eligibility Criteria.--To be eligible to receive assistance 
under this section, an entity shall--
            ``(1) be a health care group;
            ``(2) meet quality standards established by the Secretary, 
        including--
                    ``(A) the implementation of continuous quality 
                improvement mechanisms that are aimed at integrating 
                community-based support services, primary care, and 
                referral care;
                    ``(B) the implementation of activities to increase 
                the delivery of effective care to beneficiaries;
                    ``(C) encouraging patient participation in 
                preference-based decisions;
                    ``(D) the implementation of activities to encourage 
                the coordination and integration of medical service 
                delivery; and
                    ``(E) the implementation of activities to measure 
                and document the financial impact of altering the 
                incentives of health care delivery and changing the 
                allocation of resources, on the health care 
                marketplace; and
            ``(3) meet such other requirements as the Secretary may 
        establish.
    ``(e) Waiver Authority.--The Secretary may waive such requirements 
of titles XI and XVIII as may be necessary to carry out the purposes of 
the demonstration program established under this section.
    ``(f) Budget Neutrality.--With respect to the 5-year period of the 
demonstration program under subsection (b), the aggregate expenditures 
under this title for such period shall not exceed the aggregate 
expenditures that would have been expended under this title if the 
program established under this section had not been implemented.
    ``(g) Notice Requirements.--In the case of an individual that 
receives health care items or services under a demonstration program 
carried out under this section, the Secretary shall ensure that such 
individual is notified of any waivers of coverage or payment rules that 
are applicable to such individual under this title as a result of the 
participation of the individual in such program.
    ``(h) Participation and Support by Federal Agencies.--In carrying 
out the demonstration program under this section, the Secretary may 
direct--
            ``(1) the Director of the National Institutes of Health to 
        expand the efforts of the Institutes to evaluate current 
        medical technologies and improve the foundation for evidence-
        based practice;
            ``(2) the Administrator of the Agency for Healthcare 
        Research and Quality to, where possible and appropriate, use 
        the program under this section as a laboratory for the study of 
        quality improvement strategies and to evaluate, monitor, and 
        disseminate information relevant to such program; and
            ``(3) the Administrator of the Centers for Medicare & 
        Medicaid Services to support linkages of relevant medicare data 
        to registry information from participating health care groups 
        for the beneficiary populations served by the participating 
        groups, for analysis supporting the purposes of the 
        demonstration program, consistent with the applicable 
        provisions of the Health Insurance Portability and 
        Accountability Act.
    ``(i) National Steering Committee for Medicare Quality and Safety 
Demonstration Programs.--
            ``(1) Establishment.--The Secretary shall establish within 
        the Department of Health and Human Services a national steering 
        committee for medical excellence demonstration programs to 
        carry out the duties described in paragraph (3).
            ``(2) Membership.--The membership of the steering committee 
        established under paragraph (1) shall be appointed by the 
        Secretary and shall include--
                    ``(A) at least 1 representative from--
                            ``(i) the Assistant Secretary for Planning 
                        and Evaluation;
                            ``(ii) the Agency for Healthcare Research 
                        and Quality;
                            ``(iii) the National Institutes of Health; 
                        and
                            ``(iv) the Centers for Medicare & Medicaid 
                        Services;
                    ``(B) a nationally recognized leader from the field 
                of health care quality improvement;
                    ``(C) an employer that provides employer-based 
                health care;
                    ``(D) a health care consumer;
                    ``(E) a representative from the disability 
                community;
                    ``(F) at least 2 health care providers; and
                    ``(G) an expert in quality of health care 
                monitoring or in the evaluation of patient safety 
                standards.
            ``(3) Duties.--The steering committee shall make 
        recommendations to the Secretary regarding the design, 
        evaluation, and participation criteria of the program 
        established under this section.''.
Medicare Quality Improvement Act - Amends title XVIII (Medicare) of the Social Security Act (SSA) to provide for a health care quality demonstration program under which the Secretary of Health and Human Services (HHS) shall approve demonstration projects that examine health delivery factors that encourage the delivery of improved quality in patient care. Directs the Secretary to establish within HHS a national steering committee for medical excellence demonstration programs to make recommendations to the Secretary regarding program design, evaluation, and participation criteria.
A bill to amend title XVIII of the Social Security Act to provide for the establishment of medicare demonstration programs to improve health care quality.