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[113th Congress Public Law 93]
[From the U.S. Government Publishing Office]

[[Page 1039]]

                   PROTECTING ACCESS TO MEDICARE ACT 
                                 OF 2014

[[Page 128 STAT. 1040]]

Public Law 113-93
113th Congress

                                 An Act

 
    To amend the Social Security Act to extend Medicare payments to 
 physicians and other provisions of the Medicare and Medicaid programs, 
     and for other purposes. <<NOTE: Apr. 1, 2014 -  [H.R. 4302]>> 

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled, <<NOTE: Protecting 
Access to Medicare Act of 2014.>> 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short <<NOTE: 42 USC 1305 note.>> Title.--This Act may be cited 
as the ``Protecting Access to Medicare Act of 2014''.

    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.

                       TITLE I--MEDICARE EXTENDERS

Sec. 101. Physician payment update.
Sec. 102. Extension of work GPCI floor.
Sec. 103. Extension of therapy cap exceptions process.
Sec. 104. Extension of ambulance add-ons.
Sec. 105. Extension of increased inpatient hospital payment adjustment 
           for certain low-volume hospitals.
Sec. 106. Extension of the Medicare-dependent hospital (MDH) program.
Sec. 107. Extension for specialized Medicare Advantage plans for special 
           needs individuals.
Sec. 108. Extension of Medicare reasonable cost contracts.
Sec. 109. Extension of funding for quality measure endorsement, input, 
           and selection.
Sec. 110. Extension of funding outreach and assistance for low-income 
           programs.
Sec. 111. Extension of two-midnight rule.
Sec. 112. Technical changes to Medicare LTCH amendments.

                    TITLE II--OTHER HEALTH PROVISIONS

Sec. 201. Extension of the qualifying individual (QI) program.
Sec. 202. Temporary extension of transitional medical assistance (TMA).
Sec. 203. Extension of Medicaid and CHIP express lane option.
Sec. 204. Extension of special diabetes program for type I diabetes and 
           for Indians.
Sec. 205. Extension of abstinence education.
Sec. 206. Extension of personal responsibility education program (PREP).
Sec. 207. Extension of funding for family-to-family health information 
           centers.
Sec. 208. Extension of health workforce demonstration project for low-
           income individuals.
Sec. 209. Extension of maternal, infant, and early childhood home 
           visiting programs.
Sec. 210. Pediatric quality measures.
Sec. 211. Delay of effective date for Medicaid amendments relating to 
           beneficiary liability settlements.
Sec. 212. Delay in transition from ICD-9 to ICD-10 code sets.
Sec. 213. Elimination of limitation on deductibles for employer-
           sponsored health plans.
Sec. 214. GAO report on the Children's Hospital Graduate Medical 
           Education Program.
Sec. 215. Skilled nursing facility value-based purchasing.
Sec. 216. Improving Medicare policies for clinical diagnostic laboratory 
           tests.

[[Page 128 STAT. 1041]]

Sec. 217. Revisions under the Medicare ESRD prospective payment system.
Sec. 218. Quality incentives for computed tomography diagnostic imaging 
           and promoting evidence-based care.
Sec. 219. Using funding from Transitional Fund for Sustainable Growth 
           Rate (SGR) Reform.
Sec. 220. Ensuring accurate valuation of services under the physician 
           fee schedule.
Sec. 221. Medicaid DSH.
Sec. 222. Realignment of the Medicare sequester for fiscal year 2024.
Sec. 223. Demonstration programs to improve community mental health 
           services.
Sec. 224. Assisted outpatient treatment grant program for individuals 
           with serious mental illness.
Sec. 225. Exclusion from PAYGO scorecards.

                       TITLE I--MEDICARE EXTENDERS

SEC. 101. PHYSICIAN PAYMENT UPDATE.

    Section 1848(d) of the Social Security Act (42 U.S.C. 1395w-4(d)) is 
amended--
            (1) in paragraph (15)--
                    (A) in the heading, by striking ``January through 
                march of'';
                    (B) in subparagraph (A), by striking ``for the 
                period beginning on January 1, 2014, and ending on March 
                31, 2014''; and
                    (C) in subparagraph (B)--
                          (i) in the heading, by striking ``remaining 
                      portion of 2014 and''; and
                          (ii) by striking ``the period beginning on 
                      April 1, 2014, and ending on December 31, 2014, 
                      and for''; and
            (2) by adding at the end the following new paragraph:
            ``(16) <<NOTE: Time periods.>>  Update for january through 
        march of 2015.--
                    ``(A) In general.--Subject to paragraphs (7)(B), 
                (8)(B), (9)(B), (10)(B), (11)(B), (12)(B), (13)(B), 
                (14)(B), and (15)(B), in lieu of the update to the 
                single conversion factor established in paragraph (1)(C) 
                that would otherwise apply for 2015 for the period 
                beginning on January 1, 2015, and ending on March 31, 
                2015, the update to the single conversion factor shall 
                be 0.0 percent.
                    ``(B) No effect on computation of conversion factor 
                for remaining portion of 2015 and subsequent years.--The 
                conversion factor under this subsection shall be 
                computed under paragraph (1)(A) for the period beginning 
                on April 1, 2015, and ending on December 31, 2015, and 
                for 2016 and subsequent years as if subparagraph (A) had 
                never applied.''.
SEC. 102. EXTENSION OF WORK GPCI FLOOR.

    Section 1848(e)(1)(E) of the Social Security Act (42 U.S.C. 1395w-
4(e)(1)(E)) is amended by striking ``April 1, 2014'' and inserting 
``April 1, 2015''.
SEC. 103. EXTENSION OF THERAPY CAP EXCEPTIONS PROCESS.

    Section 1833(g) of the Social Security Act (42 U.S.C. 1395l(g)) is 
amended--
            (1) in paragraph (5)(A), in the first sentence, by striking 
        ``March 31, 2014'' and inserting ``March 31, 2015''; and
            (2) in paragraph (6)(A)--
                    (A) by striking ``March 31, 2014'' and inserting 
                ``March 31, 2015''; and

[[Page 128 STAT. 1042]]

                    (B) by striking ``2012, 2013, or the first three 
                months of 2014'' and inserting ``2012, 2013, 2014, or 
                the first three months of 2015''.
SEC. 104. EXTENSION OF AMBULANCE ADD-ONS.

    (a) Ground Ambulance.--Section 1834(l)(13)(A) of the Social Security 
Act (42 U.S.C. 1395m(l)(13)(A)) is amended by striking ``April 1, 2014'' 
and inserting ``April 1, 2015'' each place it appears.
    (b) Super Rural Ground Ambulance.--Section 1834(l)(12)(A) of the 
Social Security Act (42 U.S.C. 1395m(l)(12)(A)) is amended, in the first 
sentence, by striking ``April 1, 2014'' and inserting ``April 1, 2015''.
SEC. 105. EXTENSION OF INCREASED INPATIENT HOSPITAL PAYMENT 
                        ADJUSTMENT FOR CERTAIN LOW-VOLUME 
                        HOSPITALS.

    Section 1886(d)(12) of the Social Security Act (42 U.S.C. 
1395ww(d)(12)) is amended--
            (1) in subparagraph (B), in the matter preceding clause (i), 
        by striking ``in the portion of fiscal year 2014 beginning on 
        April 1, 2014, fiscal year 2015, and subsequent fiscal years'' 
        and inserting ``in fiscal year 2015 (beginning on April 1, 
        2015), fiscal year 2016, and subsequent fiscal years'';
            (2) in subparagraph (C)(i), by striking ``fiscal years 2011, 
        2012, and 2013, and the portion of fiscal year 2014 before'' and 
        inserting ``fiscal years 2011 through 2014 and fiscal year 2015 
        (before April 1, 2015),'' each place it appears; and
            (3) in subparagraph (D), by striking ``fiscal years 2011, 
        2012, and 2013, and the portion of fiscal year 2014 before April 
        1, 2014,'' and inserting ``fiscal years 2011 through 2014 and 
        fiscal year 2015 (before April 1, 2015),''.
SEC. 106. EXTENSION OF THE MEDICARE-DEPENDENT HOSPITAL (MDH) 
                        PROGRAM.

    (a) In General.--Section 1886(d)(5)(G) of the Social Security Act 
(42 U.S.C. 1395ww(d)(5)(G)) is amended--
            (1) in clause (i), by striking ``April 1, 2014'' and 
        inserting ``April 1, 2015''; and
            (2) in clause (ii)(II), by striking ``April 1, 2014'' and 
        inserting ``April 1, 2015''.

    (b) Conforming Amendments.--
            (1) Extension of target amount.--Section 1886(b)(3)(D) of 
        the Social Security Act (42 U.S.C. 1395ww(b)(3)(D)) is amended--
                    (A) in the matter preceding clause (i), by striking 
                ``April 1, 2014'' and inserting ``April 1, 2015''; and
                    (B) in clause (iv), by striking ``through fiscal 
                year 2013 and the portion of fiscal year 2014 before 
                April 1, 2014'' and inserting ``through fiscal year 2014 
                and the portion of fiscal year 2015 before April 1, 
                2015''.
            (2) Permitting hospitals to decline reclassification.--
        Section 13501(e)(2) of the Omnibus Budget Reconciliation Act of 
        1993 (42 U.S.C. 1395ww note) is amended by striking ``through 
        the first 2 quarters of fiscal year 2014'' and inserting 
        ``through the first 2 quarters of fiscal year 2015''.

[[Page 128 STAT. 1043]]

SEC. 107. EXTENSION FOR SPECIALIZED MEDICARE ADVANTAGE PLANS FOR 
                        SPECIAL NEEDS INDIVIDUALS.

    Section 1859(f)(1) of the Social Security Act (42 U.S.C. 1395w-
28(f)(1)) is amended by striking ``2016'' and inserting ``2017''.
SEC. 108. EXTENSION OF MEDICARE REASONABLE COST CONTRACTS.

    Section 1876(h)(5)(C)(ii) of the Social Security Act (42 U.S.C. 
1395mm(h)(5)(C)(ii)) is amended, in the matter preceding subclause (I), 
by striking ``January 1, 2015'' and inserting ``January 1, 2016''.
SEC. 109. EXTENSION OF FUNDING FOR QUALITY MEASURE ENDORSEMENT, 
                        INPUT, AND SELECTION.

    Section 1890(d) of the Social Security Act (42 U.S.C. 1395aaa(d)) is 
amended--
            (1) by inserting ``(1)'' before ``For purposes''; and
            (2) by adding at the end the following new paragraph:

    ``(2) For purposes of carrying out this section and section 1890A 
(other than subsections (e) and (f)), the Secretary shall provide for 
the transfer, from the Federal Hospital Insurance Trust Fund under 
section 1817 and the Federal Supplementary Medical Insurance Trust Fund 
under section 1841, in such proportion as the Secretary determines 
appropriate, to the Centers for Medicare & Medicaid Services Program 
Management Account of $5,000,000 for fiscal year 2014 and $15,000,000 
for the first 6 months of fiscal year 2015. Amounts transferred under 
the preceding sentence shall remain available until expended.''.
SEC. 110. EXTENSION OF FUNDING OUTREACH AND ASSISTANCE FOR LOW-
                        INCOME PROGRAMS.

    (a) Additional Funding for State Health Insurance Programs.--
Subsection (a)(1)(B) of section 119 of the Medicare Improvements for 
Patients and Providers Act of 2008 (42 U.S.C. 1395b-3 note), as amended 
by section 3306 of the Patient Protection and Affordable Care Act Public 
Law 111-148), section 610 of the American Taxpayer Relief Act of 2012 
(Public Law 112-240), and section 1110 of the Pathway for SGR Reform Act 
of 2013 (Public Law 113-67), is amended--
            (1) in clause (iii), by striking ``and'' at the end;
            (2) by striking clause (iv); and
            (3) by adding at the end the following new clauses:
                          ``(iv) for fiscal year 2014, of $7,500,000; 
                      and
                          ``(v) for the portion of fiscal year 2015 
                      before April 1, 2015, of $3,750,000.''.

    (b) Additional Funding for Area Agencies on Aging.--Subsection 
(b)(1)(B) of such section 119, as so amended, is amended--
            (1) in clause (iii), by striking ``and'' at the end;
            (2) by striking clause (iv); and
            (3) by inserting after clause (iii) the following new 
        clauses:
                          ``(iv) for fiscal year 2014, of $7,500,000; 
                      and
                          ``(v) for the portion of fiscal year 2015 
                      before April 1, 2015, of $3,750,000.''.

    (c) Additional Funding for Aging and Disability Resource Centers.--
Subsection (c)(1)(B) of such section 119, as so amended, is amended--
            (1) in clause (iii), by striking ``and'' at the end;
            (2) by striking clause (iv); and
            (3) by inserting after clause (iii) the following new 
        clauses:

[[Page 128 STAT. 1044]]

                          ``(iv) for fiscal year 2014, of $5,000,000; 
                      and
                          ``(v) for the portion of fiscal year 2015 
                      before April 1, 2015, of $2,500,000.''.

    (d) Additional Funding for Contract With the National Center for 
Benefits and Outreach Enrollment.--Subsection (d)(2) of such section 
119, as so amended, is amended--
            (1) in clause (iii), by striking ``and'' at the end;
            (2) by striking clause (iv); and
            (3) by inserting after clause (iii) the following new 
        clauses:
                          ``(iv) for fiscal year 2014, of $5,000,000; 
                      and
                          ``(v) for the portion of fiscal year 2015 
                      before April 1, 2015, of $2,500,000.''.
SEC. 111. <<NOTE: 42 USC 1395ddd note.>>  EXTENSION OF TWO-
                        MIDNIGHT RULE.

    (a) Continuation of Certain Medical Review Activities.--The 
Secretary of Health and Human Services may continue medical review 
activities described in the notice entitled ``Selecting Hospital Claims 
for Patient Status Reviews: Admissions On or After October 1, 2013'', 
posted on the Internet website of the Centers for Medicare & Medicaid 
Services, through the first 6 months of fiscal year 2015 for such 
additional hospital claims as the Secretary determines appropriate.
    (b) <<NOTE: Time period.>>  Limitation.--The Secretary of Health and 
Human Services shall not conduct patient status reviews (as described in 
such notice) on a post-payment review basis through recovery audit 
contractors under section 1893(h) of the Social Security Act (42 U.S.C. 
1395ddd(h)) for inpatient claims with dates of admission October 1, 
2013, through March 31, 2015, unless there is evidence of systematic 
gaming, fraud, abuse, or delays in the provision of care by a provider 
of services (as defined in section 1861(u) of such Act (42 U.S.C. 
1395x(u))).
SEC. 112. TECHNICAL CHANGES TO MEDICARE LTCH AMENDMENTS.

    (a) In General.--Subclauses (I) and (II) of section 
1886(m)(6)(C)(iv) of the Social Security Act (42 U.S.C. 
1395ww(m)(6)(C)(iv)) are each amended by striking ``discharges'' and 
inserting ``Medicare fee-for-service discharges''.
    (b) MMSEA Correction.--Section 114(d) of the Medicare, Medicaid, and 
SCHIP Extension Act of 2007 (42 U.S.C. 1395ww note), as amended by 
sections 3106(b) and 10312(b) of Public Law 111-148 and by section 
1206(b)(2) of the Pathway for SGR Reform Act of 2013 (division B of 
Public Law 113-67), is amended--
            (1) in paragraph (1), in the matter preceding subparagraph 
        (A), by striking ``January 1, 2015,'' and inserting ``on the 
        date of the enactment of paragraph (7) of this subsection'';
            (2) in paragraph (6), by striking ``January 1, 2015,'' and 
        inserting ``on the date of the enactment of paragraph (7) of 
        this subsection''; and
            (3) by adding at the end the following new paragraph:
            ``(7) Additional exception for certain long-term care 
        hospitals.--The moratorium under paragraph (1)(A) shall not 
        apply to a long-term care hospital that--
                    ``(A) began its qualifying period for payment as a 
                long-term care hospital under section 412.23(e) of title 
                42, Code of Federal Regulations, on or before the date 
                of enactment of this paragraph;

[[Page 128 STAT. 1045]]

                    ``(B) has a binding written agreement as of the date 
                of the enactment of this paragraph with an outside, 
                unrelated party for the actual construction, renovation, 
                lease, or demolition for a long-term care hospital, and 
                has expended, before such date of enactment, at least 10 
                percent of the estimated cost of the project (or, if 
                less, $2,500,000); or
                    ``(C) has obtained an approved certificate of need 
                in a State where one is required on or before such date 
                of enactment.''.

    (c) Additional Amendments.--Section 1206(a) of the Pathway for SGR 
Reform Act of 2013 (division B of Public Law 113-67) is amended--
            (1) in paragraph (2)(A), by striking ``Assessment'' and 
        inserting ``Advisory''; and
            (2) <<NOTE: 42 USC 1395ww note.>>  in paragraph (3)(B), by 
        striking ``shall not apply to a hospital that is classified as 
        of December 10, 2013, as a subsection (d) hospital (as defined 
        in section 1886(d)(1)(B) of the Social Security Act, 42 U.S.C. 
        1395ww(d)(1)(B))'' and inserting ``shall only apply to a 
        hospital that is classified as of December 10, 2013, as a long-
        term care hospital (as defined in section 1861(ccc) of the 
        Social Security Act, 42 U.S.C. 1395x(ccc))''.

    (d) <<NOTE: 42 USC 1395ww note.>>  Effective Date.--The amendments 
made by this section are effective as of the date of the enactment of 
this Act.

                    TITLE II--OTHER HEALTH PROVISIONS

SEC. 201. EXTENSION OF THE QUALIFYING INDIVIDUAL (QI) PROGRAM.

    (a) Extension.--Section 1902(a)(10)(E)(iv) of the Social Security 
Act (42 U.S.C. 1396a(a)(10)(E)(iv)) is amended by striking ``March 
2014'' and inserting ``March 2015''.
    (b) Extending Total Amount Available for Allocation.--Section 
1933(g) of the Social Security Act (42 U.S.C. 1396u-3(g)) is amended--
            (1) in paragraph (2)--
                    (A) in subparagraph (T), by striking ``and'' at the 
                end;
                    (B) in subparagraph (U)--
                          (i) by striking ``March 31, 2014'' and 
                      inserting ``September 30, 2014''; and
                          (ii) by striking ``$200,000,000.'' and 
                      inserting ``$485,000,000;''; and
                    (C) <<NOTE: Time periods.>>  by adding at the end 
                the following new subparagraphs:
                    ``(V) for the period that begins on October 1, 2014, 
                and ends on December 31, 2014, the total allocation 
                amount is $300,000,000; and
                    ``(W) for the period that begins on January 1, 2015, 
                and ends on March 31, 2015, the total allocation amount 
                is $250,000,000.''; and
            (2) in paragraph (3), in the matter preceding subparagraph 
        (A), by striking ``or (T)'' and inserting ``(T), or (V)''.

[[Page 128 STAT. 1046]]

SEC. 202. TEMPORARY EXTENSION OF TRANSITIONAL MEDICAL ASSISTANCE 
                        (TMA).

    Sections 1902(e)(1)(B) and 1925(f) of the Social Security Act (42 
U.S.C. 1396a(e)(1)(B), 1396r-6(f)) are each amended by striking ``March 
31, 2014'' and inserting ``March 31, 2015''.
SEC. 203. EXTENSION OF MEDICAID AND CHIP EXPRESS LANE OPTION.

    Section 1902(e)(13)(I) of the Social Security Act (42 U.S.C. 
1396a(e)(13)(I)) is amended by striking ``September 30, 2014'' and 
inserting ``September 30, 2015''.
SEC. 204. EXTENSION OF SPECIAL DIABETES PROGRAM FOR TYPE I 
                        DIABETES AND FOR INDIANS.

    (a) Special Diabetes Programs for Type I Diabetes.--Section 
330B(b)(2)(C) of the Public Health Service Act (42 U.S.C. 254c-
2(b)(2)(C)) is amended by striking ``2014'' and inserting ``2015''.
    (b) Special Diabetes Programs for Indians.--Section 330C(c)(2)(C) of 
the Public Health Service Act (42 U.S.C. 254c-3(c)(2)(C)) is amended by 
striking ``2014'' and inserting ``2015''.
SEC. 205. EXTENSION OF ABSTINENCE EDUCATION.

    Subsections (a) and (d) of section 510 of the Social Security Act 
(42 U.S.C. 710) are each amended by striking ``2014'' and inserting 
``2015''.
SEC. 206. EXTENSION OF PERSONAL RESPONSIBILITY EDUCATION PROGRAM 
                        (PREP).

    Section 513 of the Social Security Act (42 U.S.C. 713) is amended--
            (1) in paragraphs (1)(A) and (4)(A) of subsection (a), by 
        striking ``2014'' and inserting ``2015'' each place it appears;
            (2) in subsection (a)(4)(B)(i), by striking ``and 2014'' and 
        inserting ``2014, and 2015''; and
            (3) in subsection (f), by striking ``2014'' and inserting 
        ``2015''.
SEC. 207. EXTENSION OF FUNDING FOR FAMILY-TO-FAMILY HEALTH 
                        INFORMATION CENTERS.

     Section 501(c)(1)(A) of the Social Security Act (42 U.S.C. 
701(c)(1)(A)) is amended--
            (1) in clause (iii), by striking at the end ``and'';
            (2) in clause (iv), by striking the period at the end and 
        inserting a semicolon and by moving the margin to align with the 
        margin for clause (iii); and
            (3) by adding at the end the following new clauses:
            ``(v) $2,500,000 for the portion of fiscal year 2014 on or 
        after April 1, 2014; and
            ``(vi) $2,500,000 for the portion of fiscal year 2015 before 
        April 1, 2015.''.
SEC. 208. EXTENSION OF HEALTH WORKFORCE DEMONSTRATION PROJECT FOR 
                        LOW-INCOME INDIVIDUALS.

    Section 2008(c)(1) of the Social Security Act (42 U.S.C. 
1397g(c)(1)) is amended by striking ``2014'' and inserting ``2015''.
SEC. 209. EXTENSION OF MATERNAL, INFANT, AND EARLY CHILDHOOD HOME 
                        VISITING PROGRAMS.

    Section 511(j) of the Social Security Act (42 U.S.C. 711(j)) is 
amended--
            (1) in paragraph (1)--

[[Page 128 STAT. 1047]]

                    (A) by striking ``and'' at the end of subparagraph 
                (D);
                    (B) by striking the period at the end of 
                subparagraph (E) and inserting ``; and''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(F) <<NOTE: Time period.>>  for the period 
                beginning on October 1, 2014, and ending on March 31, 
                2015, an amount equal to the amount provided in 
                subparagraph (E).''; and
            (2) in paragraphs (2) and (3), by inserting ``(or portion of 
        a fiscal year)'' after ``for a fiscal year'' each place it 
        appears.
SEC. 210. PEDIATRIC QUALITY MEASURES.

    (a) Continuation of Funding for Pediatric Quality Measures for 
Improving the Quality of Children's Health Care.--Section 1139B(e) of 
the Social Security Act (42 U.S.C. 1320b-9b(e)) is amended by adding at 
the end the following: ``Of the funds appropriated under this 
subsection, not less than $15,000,000 shall be used to carry out section 
1139A(b).''.
    (b) Elimination of Restriction on Medicaid Quality Measurement 
Program.--Section 1139B(b)(5)(A) of the Social Security Act (42 U.S.C. 
1320b-9b(b)(5)(A)) is amended by striking ``The aggregate amount awarded 
by the Secretary for grants and contracts for the development, testing, 
and validation of emerging and innovative evidence-based measures under 
such program shall equal the aggregate amount awarded by the Secretary 
for grants under section 1139A(b)(4)(A)''.
SEC. 211. DELAY OF EFFECTIVE DATE FOR MEDICAID AMENDMENTS RELATING 
                        TO BENEFICIARY LIABILITY SETTLEMENTS.

    Effective as if included in the enactment of the Bipartisan Budget 
Act of 2013 (Public Law 113-67), section 202(c) of such Act <<NOTE: 42 
USC 1396a note.>>  is amended by striking ``October 1, 2014'' and 
inserting ``October 1, 2016''.
SEC. 212. DELAY IN TRANSITION FROM ICD-9 TO ICD-10 CODE SETS.

    The Secretary of Health and Human Services may not, prior to October 
1, 2015, adopt ICD-10 code sets as the standard for code sets under 
section 1173(c) of the Social Security Act (42 U.S.C. 1320d-2(c)) and 
section 162.1002 of title 45, Code of Federal Regulations.
SEC. 213. ELIMINATION OF LIMITATION ON DEDUCTIBLES FOR EMPLOYER-
                        SPONSORED HEALTH PLANS.

    (a) In General.--Section 1302(c) of the Patient Protection and 
Affordable Care Act (Public Law 111-148; 42 U.S.C. 18022(c)) is 
amended--
            (1) by striking paragraph (2); and
            (2) in paragraph (4)(A), by striking ``paragraphs (1)(B)(i) 
        and (2)(B)(i)'' and inserting ``paragraph (1)(B)(i)''.

    (b) Conforming Amendment.--Section 2707(b) of the Public Health 
Service Act (42 U.S.C. 300gg-6(b)) is amended by striking ``paragraphs 
(1) and (2)'' and inserting ``paragraph (1)''.
    (c) <<NOTE: 42 USC 300gg-6 note.>>  Effective Date.--The amendments 
made by this Act shall be effective as if included in the enactment of 
the Patient Protection and Affordable Care Act (Public Law 111-148).

[[Page 128 STAT. 1048]]

SEC. 214. GAO REPORT ON THE CHILDREN'S HOSPITAL GRADUATE MEDICAL 
                        EDUCATION PROGRAM.

    (a) <<NOTE: Evaluation.>>  In General.--In the case that the 
Children's Hospital GME Support Reauthorization Act of 2013 is enacted 
into law, the Comptroller General of the United States shall, not later 
than November 30, 2017, conduct an independent evaluation, and submit to 
the appropriate committees of Congress a report, concerning the 
implementation of section 340E(h) of the Public Health Service Act, as 
added by section 3 of the Children's Hospital GME Support 
Reauthorization Act of 2013.

    (b) Content.--The report described in subsection (a) shall review 
and assess each of the following, with respect to hospitals receiving 
payments under such section 340E(h) during the period of fiscal years 
2015 through 2017:
            (1) The number and type of such hospitals that applied for 
        such payments.
            (2) The number and type of such hospitals receiving such 
        payments.
            (3) The amount of such payments awarded to such hospitals.
            (4) How such hospitals used such payments.
            (5) The impact of such payments on--
                    (A) the number of pediatric providers; and
                    (B) health care needs of children.
SEC. 215. SKILLED NURSING FACILITY VALUE-BASED PURCHASING.

    (a) In General.--Section 1888 of the Social Security Act (42 U.S.C. 
1395yy) is amended by adding at the end the following new subsection:
    ``(g) Skilled Nursing Facility Readmission Measure.--
            ``(1) <<NOTE: Deadline.>>  Readmission measure.--Not later 
        than October 1, 2015, the Secretary shall specify a skilled 
        nursing facility all-cause all-condition hospital readmission 
        measure (or any successor to such a measure).
            ``(2) <<NOTE: Deadline.>>  Resource use measure.--Not later 
        than October 1, 2016, the Secretary shall specify a measure to 
        reflect an all-condition risk-adjusted potentially preventable 
        hospital readmission rate for skilled nursing facilities.
            ``(3) Measure adjustments.--When specifying the measures 
        under paragraphs (1) and (2), the Secretary shall devise a 
        methodology to achieve a high level of reliability and validity, 
        especially for skilled nursing facilities with a low volume of 
        readmissions.
            ``(4) Pre-rulemaking process (measure application 
        partnership process).--The application of the provisions of 
        section 1890A shall be optional in the case of a measure 
        specified under paragraph (1) and a measure specified under 
        paragraph (2).
            ``(5)  Feedback reports to skilled nursing facilities.--
        Beginning <<NOTE: Effective date.>> October 1, 2016, and every 
        quarter thereafter, the Secretary shall provide confidential 
        feedback reports to skilled nursing facilities on the 
        performance of such facilities with respect to a measure 
        specified under paragraph (1) or (2).
            ``(6) Public reporting of skilled nursing facilities.--
                    ``(A) <<NOTE: Procedures. Web posting.>>  In 
                general.--Subject to subparagraphs (B) and (C), the 
                Secretary shall establish procedures for making 
                available to the public by posting on the Nursing Home

[[Page 128 STAT. 1049]]

                Compare Medicare website (or a successor website) 
                described in section 1819(i) information on the 
                performance of skilled nursing facilities with respect 
                to a measure specified under paragraph (1) and a measure 
                specified under paragraph (2).
                    ``(B) Opportunity to review.--The procedures under 
                subparagraph (A) shall ensure that a skilled nursing 
                facility has the opportunity to review and submit 
                corrections to the information that is to be made public 
                with respect to the facility prior to such information 
                being made public.
                    ``(C) Timing.--Such procedures shall provide that 
                the information described in subparagraph (A) is made 
                publicly available beginning not later than October 1, 
                2017.
            ``(7) Non-application of paperwork reduction act.--Chapter 
        35 of title 44, United States Code (commonly referred to as the 
        `Paperwork Reduction Act of 1995') shall not apply to this 
        subsection.''.

    (b) Value-Based Purchasing Program for Skilled Nursing Facilities.--
Section 1888 of the Social Security Act (42 U.S.C. 1395yy), as amended 
by subsection (a), is further amended by adding at the end the following 
new subsection:
    ``(h) Skilled Nursing Facility Value-Based Purchasing Program.--
            ``(1) Establishment.--
                    ``(A) In general.--Subject to the succeeding 
                provisions of this subsection, the Secretary shall 
                establish a skilled nursing facility value-based 
                purchasing program (in this subsection referred to as 
                the `SNF VBP Program') under which value-based incentive 
                payments are made in a fiscal year to skilled nursing 
                facilities.
                    ``(B) <<NOTE: Applicability.>>  Program to begin in 
                fiscal year 2019.--The SNF VBP Program shall apply to 
                payments for services furnished on or after October 1, 
                2018.
            ``(2) Application of measures.--
                    ``(A) In general.--The Secretary shall apply the 
                measure specified under subsection (g)(1) for purposes 
                of the SNF VBP Program.
                    ``(B) Replacement.--For purposes of the SNF VBP 
                Program, the Secretary shall apply the measure specified 
                under (g)(2) instead of the measure specified under 
                (g)(1) as soon as practicable.
            ``(3) Performance standards.--
                    ``(A) Establishment.--The Secretary shall establish 
                performance standards with respect to the measure 
                applied under paragraph (2) for a performance period for 
                a fiscal year.
                    ``(B) Higher of achievement and improvement.--The 
                performance standards established under subparagraph (A) 
                shall include levels of achievement and improvement. In 
                calculating the SNF performance score under paragraph 
                (4), the Secretary shall use the higher of either 
                improvement or achievement.
                    ``(C) Timing.--The Secretary shall establish and 
                announce the performance standards established under 
                subparagraph (A) not later than 60 days prior to the 
                beginning of the performance period for the fiscal year 
                involved.

[[Page 128 STAT. 1050]]

            ``(4) <<NOTE: Assessment.>>  SNF performance score.--
                    ``(A) In general.--The Secretary shall develop a 
                methodology for assessing the total performance of each 
                skilled nursing facility based on performance standards 
                established under paragraph (3) with respect to the 
                measure applied under paragraph (2). Using such 
                methodology, the Secretary shall provide for an 
                assessment (in this subsection referred to as the `SNF 
                performance score') for each skilled nursing facility 
                for each such performance period.
                    ``(B) Ranking of snf performance scores.--The 
                Secretary shall, for the performance period for each 
                fiscal year, rank the SNF performance scores determined 
                under subparagraph (A) from low to high.
            ``(5) Calculation of value-based incentive payments.--
                    ``(A) In general.--With respect to a skilled nursing 
                facility, based on the ranking under paragraph (4)(B) 
                for a performance period for a fiscal year, the 
                Secretary shall increase the adjusted Federal per diem 
                rate determined under subsection (e)(4)(G) otherwise 
                applicable to such skilled nursing facility (and after 
                application of paragraph (6)) for services furnished by 
                such facility during such fiscal year by the value-based 
                incentive payment amount under subparagraph (B).
                    ``(B) Value-based incentive payment amount.--The 
                value-based incentive payment amount for services 
                furnished by a skilled nursing facility in a fiscal year 
                shall be equal to the product of--
                          ``(i) the adjusted Federal per diem rate 
                      determined under subsection (e)(4)(G) otherwise 
                      applicable to such skilled nursing facility for 
                      such services furnished by the skilled nursing 
                      facility during such fiscal year; and
                          ``(ii) the value-based incentive payment 
                      percentage specified under subparagraph (C) for 
                      the skilled nursing facility for such fiscal year.
                    ``(C) Value-based incentive payment percentage.--
                          ``(i) In general.--The Secretary shall specify 
                      a value-based incentive payment percentage for a 
                      skilled nursing facility for a fiscal year which 
                      may include a zero percentage.
                          ``(ii) Requirements.--In specifying the value-
                      based incentive payment percentage for each 
                      skilled nursing facility for a fiscal year under 
                      clause (i), the Secretary shall ensure that--
                                    ``(I) such percentage is based on 
                                the SNF performance score of the skilled 
                                nursing facility provided under 
                                paragraph (4) for the performance period 
                                for such fiscal year;
                                    ``(II) the application of all such 
                                percentages in such fiscal year results 
                                in an appropriate distribution of value-
                                based incentive payments under 
                                subparagraph (B) such that--
                                            ``(aa) skilled nursing 
                                        facilities with the highest 
                                        rankings under paragraph (4)(B) 
                                        receive the highest value-based 
                                        incentive payment amounts under 
                                        subparagraph (B);

[[Page 128 STAT. 1051]]

                                            ``(bb) skilled nursing 
                                        facilities with the lowest 
                                        rankings under paragraph (4)(B) 
                                        receive the lowest value-based 
                                        incentive payment amounts under 
                                        subparagraph (B); and
                                            ``(cc) in the case of 
                                        skilled nursing facilities in 
                                        the lowest 40 percent of the 
                                        ranking under paragraph (4)(B), 
                                        the payment rate under 
                                        subparagraph (A) for services 
                                        furnished by such facility 
                                        during such fiscal year shall be 
                                        less than the payment rate for 
                                        such services for such fiscal 
                                        year that would otherwise apply 
                                        under subsection (e)(4)(G) 
                                        without application of this 
                                        subsection; and
                                    ``(III) the total amount of value-
                                based incentive payments under this 
                                paragraph for all skilled nursing 
                                facilities in such fiscal year shall be 
                                greater than or equal to 50 percent, but 
                                not greater than 70 percent, of the 
                                total amount of the reductions to 
                                payments for such fiscal year under 
                                paragraph (6), as estimated by the 
                                Secretary.
            ``(6) Funding for value-based incentive payments.--
                    ``(A) In general.--The Secretary shall reduce the 
                adjusted Federal per diem rate determined under 
                subsection (e)(4)(G) otherwise applicable to a skilled 
                nursing facility for services furnished by such facility 
                during a fiscal year (beginning with fiscal year 2019) 
                by the applicable percent (as defined in subparagraph 
                (B)). The Secretary shall make such reductions for all 
                skilled nursing facilities in the fiscal year involved, 
                regardless of whether or not the skilled nursing 
                facility has been determined by the Secretary to have 
                earned a value-based incentive payment under paragraph 
                (5) for such fiscal year.
                    ``(B) Applicable percent.--For purposes of 
                subparagraph (A), the term `applicable percent' means, 
                with respect to fiscal year 2019 and succeeding fiscal 
                years, 2 percent.
            ``(7) Announcement of net result of adjustments.--
        Under <<NOTE: Deadline.>> the SNF VBP Program, the Secretary 
        shall, not later than 60 days prior to the fiscal year involved, 
        inform each skilled nursing facility of the adjustments to 
        payments to the skilled nursing facility for services furnished 
        by such facility during the fiscal year under paragraphs (5) and 
        (6).
            ``(8) <<NOTE: Applicability.>>  No effect in subsequent 
        fiscal years.--The value-based incentive payment under paragraph 
        (5) and the payment reduction under paragraph (6) shall each 
        apply only with respect to the fiscal year involved, and the 
        Secretary shall not take into account such value-based incentive 
        payment or payment reduction in making payments to a skilled 
        nursing facility under this section in a subsequent fiscal year.
            ``(9) <<NOTE: Web posting.>>  Public reporting.--
                    ``(A) SNF specific information.--The Secretary shall 
                make available to the public, by posting on the Nursing 
                Home Compare Medicare website (or a successor website) 
                described in section 1819(i) in an easily understandable 
                format, information regarding the performance of 
                individual skilled nursing facilities under the SNF VBP 
                Program, with respect to a fiscal year, including--

[[Page 128 STAT. 1052]]

                          ``(i) the SNF performance score of the skilled 
                      nursing facility for such fiscal year; and
                          ``(ii) the ranking of the skilled nursing 
                      facility under paragraph (4)(B) for the 
                      performance period for such fiscal year.
                    ``(B)  Aggregate information.--The Secretary shall 
                periodically post on the Nursing Home Compare Medicare 
                website (or a successor website) described in section 
                1819(i) aggregate information on the SNF VBP Program, 
                including--
                          ``(i) the range of SNF performance scores 
                      provided under paragraph (4)(A); and
                          ``(ii) the number of skilled nursing 
                      facilities receiving value-based incentive 
                      payments under paragraph (5) and the range and 
                      total amount of such value-based incentive 
                      payments.
            ``(10) Limitation on review.--There shall be no 
        administrative or judicial review under section 1869, section 
        1878, or otherwise of the following:
                    ``(A) The methodology used to determine the value-
                based incentive payment percentage and the amount of the 
                value-based incentive payment under paragraph (5).
                    ``(B) The determination of the amount of funding 
                available for such value-based incentive payments under 
                paragraph (5)(C)(ii)(III) and the payment reduction 
                under paragraph (6).
                    ``(C) The establishment of the performance standards 
                under paragraph (3) and the performance period.
                    ``(D) The methodology developed under paragraph (4) 
                that is used to calculate SNF performance scores and the 
                calculation of such scores.
                    ``(E) The ranking determinations under paragraph 
                (4)(B).
            ``(11) Funding for program management.--The Secretary shall 
        provide for the one time transfer from the Federal Hospital 
        Insurance Trust Fund established under section 1817 to the 
        Centers for Medicare & Medicaid Services Program Management 
        Account of--
                    ``(A) for purposes of subsection (g)(2), $2,000,000; 
                and
                    ``(B) for purposes of implementing this subsection, 
                $10,000,000.
        Such funds shall remain available until expended.''.

    (c) <<NOTE: Deadline. Reports. Recommenda- tions.>>  MedPAC Study.--
Not later than June 30, 2021, the Medicare Payment Advisory Commission 
shall submit to Congress a report that reviews the progress of the 
skilled nursing facility value-based purchasing program established 
under section 1888(h) of the Social Security Act, as added by subsection 
(b), and makes recommendations, as appropriate, on any improvements that 
should be made to such program. For purposes of the previous sentence, 
the Medicare Payment Advisory Commission shall consider any unintended 
consequences with respect to such skilled nursing facility value-based 
purchasing program and any potential adjustments to the readmission 
measure specified under section 1888(g)(1) of such Act, as added by 
subsection (a), for purposes of determining the effect of the socio-
economic status of a beneficiary under the Medicare program under title 
XVIII of the Social Security Act

[[Page 128 STAT. 1053]]

for the SNF performance score of a skilled nursing facility provided 
under section 1888(h)(4) of such Act, as added by subsection (b).
SEC. 216. IMPROVING MEDICARE POLICIES FOR CLINICAL DIAGNOSTIC 
                        LABORATORY TESTS.

    (a) In General.--Title XVIII of the Social Security Act is amended 
by inserting after section 1834 (42 U.S.C. 1395m) the following new 
section:
``SEC. 1834A. <<NOTE: 42 USC 1395m-1.>> IMPROVING POLICIES FOR 
                            CLINICAL DIAGNOSTIC LABORATORY TESTS.

    ``(a) Reporting of Private Sector Payment Rates for Establishment of 
Medicare Payment Rates.--
            ``(1) <<NOTE: Effective date.>>  In general.--Beginning 
        January 1, 2016, and every 3 years thereafter (or, annually, in 
        the case of reporting with respect to an advanced diagnostic 
        laboratory test, as defined in subsection (d)(5)), an applicable 
        laboratory (as defined in paragraph (2)) shall report to the 
        Secretary, at a time specified by the Secretary, applicable 
        information (as defined in paragraph (3)) for a data collection 
        period (as defined in paragraph (4)) for each clinical 
        diagnostic laboratory test that the laboratory furnishes during 
        such period for which payment is made under this part.
            ``(2) Definition of applicable laboratory.--In this section, 
        the term `applicable laboratory' means a laboratory that, with 
        respect to its revenues under this title, a majority of such 
        revenues are from this section, section 1833(h), or section 
        1848. The Secretary may establish a low volume or low 
        expenditure threshold for excluding a laboratory from the 
        definition of applicable laboratory under this paragraph, as the 
        Secretary determines appropriate.
            ``(3) Applicable information defined.--
                    ``(A) In general.--In this section, subject to 
                subparagraph (B), the term `applicable information' 
                means, with respect to a laboratory test for a data 
                collection period, the following:
                          ``(i) The payment rate (as determined in 
                      accordance with paragraph (5)) that was paid by 
                      each private payor for the test during the period.
                          ``(ii) The volume of such tests for each such 
                      payor for the period.
                    ``(B) Exception for certain contractual 
                arrangements.--Such term shall not include information 
                with respect to a laboratory test for which payment is 
                made on a capitated basis or other similar payment basis 
                during the data collection period.
            ``(4) Data collection period defined.--In this section, the 
        term `data collection period' means a period of time, such as a 
        previous 12 month period, specified by the Secretary.
            ``(5) Treatment of discounts.--The payment rate reported by 
        a laboratory under this subsection shall reflect all discounts, 
        rebates, coupons, and other price concessions, including those 
        described in section 1847A(c)(3).
            ``(6) Ensuring complete reporting.--In the case where an 
        applicable laboratory has more than one payment rate for the 
        same payor for the same test or more than one payment rate for 
        different payors for the same test, the applicable laboratory 
        shall report each such payment rate and the volume for

[[Page 128 STAT. 1054]]

        the test at each such rate under this 
        subsection. <<NOTE: Effective date.>> Beginning with January 1, 
        2019, the Secretary may establish rules to aggregate reporting 
        with respect to the situations described in the preceding 
        sentence.
            ``(7) Certification.--An officer of the laboratory shall 
        certify the accuracy and completeness of the information 
        reported under this subsection.
            ``(8) Private payor defined.--In this section, the term 
        `private payor' means the following:
                    ``(A) A health insurance issuer and a group health 
                plan (as such terms are defined in section 2791 of the 
                Public Health Service Act).
                    ``(B) A Medicare Advantage plan under part C.
                    ``(C) A medicaid managed care organization (as 
                defined in section 1903(m)).
            ``(9) Civil money penalty.--
                    ``(A) <<NOTE: Determination.>>  In general.--If the 
                Secretary determines that an applicable laboratory has 
                failed to report or made a misrepresentation or omission 
                in reporting information under this subsection with 
                respect to a clinical diagnostic laboratory test, the 
                Secretary may apply a civil money penalty in an amount 
                of up to $10,000 per day for each failure to report or 
                each such misrepresentation or omission.
                    ``(B) Application.--The provisions of section 1128A 
                (other than subsections (a) and (b)) shall apply to a 
                civil money penalty under this paragraph in the same 
                manner as they apply to a civil money penalty or 
                proceeding under section 1128A(a).
            ``(10) Confidentiality of information.--Notwithstanding any 
        other provision of law, information disclosed by a laboratory 
        under this subsection is confidential and shall not be disclosed 
        by the Secretary or a Medicare contractor in a form that 
        discloses the identity of a specific payor or laboratory, or 
        prices charged or payments made to any such laboratory, except--
                    ``(A) as the Secretary determines to be necessary to 
                carry out this section;
                    ``(B) to permit the Comptroller General to review 
                the information provided;
                    ``(C) to permit the Director of the Congressional 
                Budget Office to review the information provided; and
                    ``(D) to permit the Medicare Payment Advisory 
                Commission to review the information provided.
            ``(11) Protection from public disclosure.--A payor shall not 
        be identified on information reported under this subsection. The 
        name of an applicable laboratory under this subsection shall be 
        exempt from disclosure under section 552(b)(3) of title 5, 
        United States Code.
            ``(12) <<NOTE: Deadline. Notice.>>  Regulations.--Not later 
        than June 30, 2015, the Secretary shall establish through notice 
        and comment rulemaking parameters for data collection under this 
        subsection.

    ``(b) Payment for Clinical Diagnostic Laboratory Tests.--
            ``(1) Use of private payor rate information to determine 
        medicare payment rates.--
                    ``(A) In general.--Subject to paragraph (3) and 
                subsections (c) and (d), in the case of a clinical 
                diagnostic laboratory test furnished on or after January 
                1, 2017, the

[[Page 128 STAT. 1055]]

                payment amount under this section shall be equal to the 
                weighted median determined for the test under paragraph 
                (2) for the most recent data collection period.
                    ``(B) Application of payment amounts to hospital 
                laboratories.--The payment amounts established under 
                this section shall apply to a clinical diagnostic 
                laboratory test furnished by a hospital laboratory if 
                such test is paid for separately, and not as part of a 
                bundled payment under section 1833(t).
            ``(2) Calculation of weighted median.--For each laboratory 
        test with respect to which information is reported under 
        subsection (a) for a data collection period, the Secretary shall 
        calculate a weighted median for the test for the period, by 
        arraying the distribution of all payment rates reported for the 
        period for each test weighted by volume for each payor and each 
        laboratory.
            ``(3) Phase-in of reductions from private payor rate 
        implementation.--
                    ``(A) In general.--Payment amounts determined under 
                this subsection for a clinical diagnostic laboratory 
                test for each of 2017 through 2022 shall not result in a 
                reduction in payments for a clinical diagnostic 
                laboratory test for the year of greater than the 
                applicable percent (as defined in subparagraph (B)) of 
                the amount of payment for the test for the preceding 
                year.
                    ``(B) Applicable percent defined.--In this 
                paragraph, the term `applicable percent' means--
                          ``(i) for each of 2017 through 2019, 10 
                      percent; and
                          ``(ii) for each of 2020 through 2022, 15 
                      percent.
                    ``(C) No application to new tests.--This paragraph 
                shall not apply to payment amounts determined under this 
                section for either of the following.
                          ``(i) A new test under subsection (c).
                          ``(ii) A new advanced diagnostic test (as 
                      defined in subsection (d)(5)) under subsection 
                      (d).
            ``(4) Application of market rates.--
                    ``(A) In general.--Subject to paragraph (3), once 
                established for a year following a data collection 
                period, the payment amounts under this subsection shall 
                continue to apply until the year following the next data 
                collection period.
                    ``(B) Other adjustments not applicable.--The payment 
                amounts under this section shall not be subject to any 
                adjustment (including any geographic adjustment, budget 
                neutrality adjustment, annual update, or other 
                adjustment).
            ``(5) Sample collection fee.--In the case of a sample 
        collected from an individual in a skilled nursing facility or by 
        a laboratory on behalf of a home health agency, the nominal fee 
        that would otherwise apply under section 1833(h)(3)(A) shall be 
        increased by $2.

    ``(c) Payment for New Tests That Are Not Advanced Diagnostic 
Laboratory Tests.--
            ``(1) Payment during initial period.--In the case of a 
        clinical diagnostic laboratory test that is assigned a new or

[[Page 128 STAT. 1056]]

        substantially revised HCPCS code on or after the date of 
        enactment of this section, and which is not an advanced 
        diagnostic laboratory test (as defined in subsection (d)(5)), 
        during an initial period until payment rates under subsection 
        (b) are established for the test, payment for the test shall be 
        determined--
                    ``(A) using cross-walking (as described in section 
                414.508(a) of title 42, Code of Federal Regulations, or 
                any successor regulation) to the most appropriate 
                existing test under the fee schedule under this section 
                during that period; or
                    ``(B) if no existing test is comparable to the new 
                test, according to the gapfilling process described in 
                paragraph (2).
            ``(2) Gapfilling process described.--The gapfilling process 
        described in this paragraph shall take into account the 
        following sources of information to determine gapfill amounts, 
        if available:
                    ``(A) Charges for the test and routine discounts to 
                charges.
                    ``(B) Resources required to perform the test.
                    ``(C) Payment amounts determined by other payors.
                    ``(D) Charges, payment amounts, and resources 
                required for other tests that may be comparable or 
                otherwise relevant.
                    ``(E) Other criteria the Secretary determines 
                appropriate.
            ``(3) Additional consideration.--In determining the payment 
        amount under crosswalking or gapfilling processes under this 
        subsection, the Secretary shall consider recommendations from 
        the panel established under subsection (f)(1).
            ``(4) <<NOTE: Public information.>>  Explanation of payment 
        rates.--In the case of a clinical diagnostic laboratory test for 
        which payment is made under this subsection, the Secretary shall 
        make available to the public an explanation of the payment rate 
        for the test, including an explanation of how the criteria 
        described in paragraph (2) and paragraph (3) are applied.

    ``(d) Payment for New Advanced Diagnostic Laboratory Tests.--
            ``(1) Payment during initial period.--
                    ``(A) In general.--In the case of an advanced 
                diagnostic laboratory test for which payment has not 
                been made under the fee schedule under section 1833(h) 
                prior to the date of enactment of this section, during 
                an initial period of three quarters, the payment amount 
                for the test for such period shall be based on the 
                actual list charge for the laboratory test.
                    ``(B) <<NOTE: Definition.>>  Actual list charge.--
                For purposes of subparagraph (A), the term `actual list 
                charge', with respect to a laboratory test furnished 
                during such period, means the publicly available rate on 
                the first day at which the test is available for 
                purchase by a private payor.
            ``(2) Special rule for timing of initial reporting.--With 
        respect to an advanced diagnostic laboratory test described in 
        paragraph (1)(A), an applicable laboratory shall initially be 
        required to report under subsection (a) not later than the last 
        day of the second quarter of the initial period under such 
        paragraph.

[[Page 128 STAT. 1057]]

            ``(3) Application of market rates after initial period.--
        Subject to paragraph (4), data reported under paragraph (2) 
        shall be used to establish the payment amount for an advanced 
        diagnostic laboratory test after the initial period under 
        paragraph (1)(A) using the methodology described in subsection 
        (b). Such payment amount shall continue to apply until the year 
        following the next data collection period.
            ``(4) Recoupment if actual list charge exceeds market 
        rate.--With <<NOTE: Determination.>> respect to the initial 
        period described in paragraph (1)(A), if, after such period, the 
        Secretary determines that the payment amount for an advanced 
        diagnostic laboratory test under paragraph (1)(A) that was 
        applicable during the period was greater than 130 percent of the 
        payment amount for the test established using the methodology 
        described in subsection (b) that is applicable after such 
        period, the Secretary shall recoup the difference between such 
        payment amounts for tests furnished during such period.
            ``(5) Advanced diagnostic laboratory test defined.--In this 
        subsection, the term `advanced diagnostic laboratory test' means 
        a clinical diagnostic laboratory test covered under this part 
        that is offered and furnished only by a single laboratory and 
        not sold for use by a laboratory other than the original 
        developing laboratory (or a successor owner) and meets one of 
        the following criteria:
                    ``(A) The test is an analysis of multiple biomarkers 
                of DNA, RNA, or proteins combined with a unique 
                algorithm to yield a single patient-specific result.
                    ``(B) The test is cleared or approved by the Food 
                and Drug Administration.
                    ``(C) The test meets other similar criteria 
                established by the Secretary.

    ``(e) Coding.--
            ``(1) Temporary codes for certain new tests.--
                    ``(A) In general.--The Secretary shall adopt 
                temporary HCPCS codes to identify new advanced 
                diagnostic laboratory tests (as defined in subsection 
                (d)(5)) and new laboratory tests that are cleared or 
                approved by the Food and Drug Administration.
                    ``(B) Duration.--
                          ``(i) In general.--Subject to clause (ii), the 
                      temporary code shall be effective until a 
                      permanent HCPCS code is established (but not to 
                      exceed 2 years).
                          ``(ii) Exception.--The Secretary may extend 
                      the temporary code or establish a permanent HCPCS 
                      code, as the Secretary determines appropriate.
            ``(2) <<NOTE: Deadline.>>  Existing tests.--Not later than 
        January 1, 2016, for each existing advanced diagnostic 
        laboratory test (as so defined) and each existing clinical 
        diagnostic laboratory test that is cleared or approved by the 
        Food and Drug Administration for which payment is made under 
        this part as of the date of enactment of this section, if such 
        test has not already been assigned a unique HCPCS code, the 
        Secretary shall--
                    ``(A) assign a unique HCPCS code for the test; and
                    ``(B) <<NOTE: Public information.>>  publicly report 
                the payment rate for the test.
            ``(3) Establishment of unique identifier for certain 
        tests.--For purposes of tracking and monitoring, if a laboratory 
        or a manufacturer requests a unique identifier for an advanced

[[Page 128 STAT. 1058]]

        diagnostic laboratory test (as so defined) or a laboratory test 
        that is cleared or approved by the Food and Drug Administration, 
        the Secretary shall utilize a means to uniquely track such test 
        through a mechanism such as a HCPCS code or modifier.

    ``(f) Input From Clinicians and Technical Experts.--
            ``(1) <<NOTE: Consultation. Establishment. Deadline.>>  In 
        general.--The Secretary shall consult with an expert outside 
        advisory panel, established by the Secretary not later than July 
        1, 2015, composed of an appropriate selection of individuals 
        with expertise, which may include molecular pathologists, 
        researchers, and individuals with expertise in laboratory 
        science or health economics, in issues related to clinical 
        diagnostic laboratory tests, which may include the development, 
        validation, performance, and application of such tests, to 
        provide--
                    ``(A) input on--
                          ``(i) the establishment of payment rates under 
                      this section for new clinical diagnostic 
                      laboratory tests, including whether to use 
                      crosswalking or gapfilling processes to determine 
                      payment for a specific new test; and
                          ``(ii) the factors used in determining 
                      coverage and payment processes for new clinical 
                      diagnostic laboratory tests; and
                    ``(B) recommendations to the Secretary under this 
                section.
            ``(2) Compliance with faca.--The panel shall be subject to 
        the Federal Advisory Committee Act (5 U.S.C. App.).
            ``(3) Continuation of annual meeting.--The Secretary shall 
        continue to convene the annual meeting described in section 
        1833(h)(8)(B)(iii) after the implementation of this section for 
        purposes of receiving comments and recommendations (and data on 
        which the recommendations are based) as described in such 
        section on the establishment of payment amounts under this 
        section.

    ``(g) Coverage.--
            ``(1) Issuance of coverage policies.--
                    ``(A) In general.--A medicare administrative 
                contractor shall only issue a coverage policy with 
                respect to a clinical diagnostic laboratory test in 
                accordance with the process for making a local coverage 
                determination (as defined in section 1869(f)(2)(B)), 
                including the appeals and review process for local 
                coverage determinations under part 426 of title 42, Code 
                of Federal Regulations (or successor regulations).
                    ``(B) No effect on national coverage determination 
                process.--This paragraph shall not apply to the national 
                coverage determination process (as defined in section 
                1869(f)(1)(B)).
                    ``(C) Effective date.--This paragraph shall apply to 
                coverage policies issued on or after January 1, 2015.
            ``(2) Designation of one or more medicare administrative 
        contractors for clinical diagnostic laboratory tests.--The 
        Secretary may designate one or more (not to exceed 4) medicare 
        administrative contractors to either establish coverage policies 
        or establish coverage policies and process claims

[[Page 128 STAT. 1059]]

        for payment for clinical diagnostic laboratory tests, as 
        determined appropriate by the Secretary.

    ``(h) Implementation.--
            ``(1) Implementation.--There shall be no administrative or 
        judicial review under section 1869, section 1878, or otherwise, 
        of the establishment of payment amounts under this section.
            ``(2) Administration.--Chapter 35 of title 44, United States 
        Code, shall not apply to information collected under this 
        section.
            ``(3) Funding.--For purposes of implementing this section, 
        the Secretary shall provide for the transfer, from the Federal 
        Supplementary Medical Insurance Trust Fund under section 1841, 
        to the Centers for Medicare & Medicaid Services Program 
        Management Account, for each of fiscal years 2014 through 2018, 
        $4,000,000, and for each of fiscal years 2019 through 2023, 
        $3,000,000. Amounts transferred under the preceding sentence 
        shall remain available until expended.

    ``(i) <<NOTE: Time period.>>  Transitional Rule.--During the period 
beginning on the date of enactment of this section and ending on 
December 31, 2016, with respect to advanced diagnostic laboratory tests 
under this part, the Secretary shall use the methodologies for pricing, 
coding, and coverage in effect on the day before such date of enactment, 
which may include cross-walking or gapfilling methods.''.

    (b) Conforming Amendments.--
            (1) Section 1833(a) of the Social Security Act (42 U.S.C. 
        1395l(a)) is amended--
                    (A) in paragraph (1)(D)--
                          (i) by striking ``(i) on the basis'' and 
                      inserting ``(i)(I) on the basis'';
                          (ii) in subclause (I), as added by clause (i), 
                      by striking ``subsection (h)(1)'' and inserting 
                      ``subsection (h)(1) (for tests furnished before 
                      January 1, 2017)'';
                          (iii) by striking ``or (ii)'' and inserting 
                      ``or (II) under section 1834A (for tests furnished 
                      on or after January 1, 2017), the amount paid 
                      shall be equal to 80 percent (or 100 percent, in 
                      the case of such tests for which payment is made 
                      on an assignment-related basis) of the lesser of 
                      the amount determined under such section or the 
                      amount of the charges billed for the tests, or 
                      (ii)''; and
                          (iv) in clause (ii), by striking ``on the 
                      basis'' and inserting ``for tests furnished before 
                      January 1, 2017, on the basis'';
                    (B) in paragraph (2)(D)--
                          (i) by striking ``(i) on the basis'' and 
                      inserting ``(i)(I) on the basis'';
                          (ii) in subclause (I), as added by clause (i), 
                      by striking ``subsection (h)(1)'' and inserting 
                      ``subsection (h)(1) (for tests furnished before 
                      January 1, 2017)'';
                          (iii) by striking ``or (ii)'' and inserting 
                      ``or (II) under section 1834A (for tests furnished 
                      on or after January 1, 2017), the amount paid 
                      shall be equal to 80 percent (or 100 percent, in 
                      the case of such tests for which payment is made 
                      on an assignment-related basis or to a provider 
                      having an agreement under section 1866) of the 
                      lesser of the amount determined under such

[[Page 128 STAT. 1060]]

                      section or the amount of the charges billed for 
                      the tests, or (ii)''; and
                          (iv) in clause (ii), by striking ``on the 
                      basis'' and inserting ``for tests furnished before 
                      January 1, 2017, on the basis'';
                    (C) in subsection (b)(3)(B), by striking ``on the 
                basis'' and inserting ``for tests furnished before 
                January 1, 2017, on the basis'';
                    (D) in subsection (h)(2)(A)(i), by striking ``and 
                subject to'' and inserting ``and, for tests furnished 
                before the date of enactment of section 1834A, subject 
                to'';
                    (E) in subsection (h)(3), in the matter preceding 
                subparagraph (A), by striking ``fee schedules'' and 
                inserting ``fee schedules (for tests furnished before 
                January 1, 2017) or under section 1834A (for tests 
                furnished on or after January 1, 2017), subject to 
                subsection (b)(5) of such section'';
                    (F) in subsection (h)(6), by striking ``In the 
                case'' and inserting ``For tests furnished before 
                January 1, 2017, in the case''; and
                    (G) in subsection (h)(7), in the first sentence--
                          (i) by striking ``and (4)'' and inserting 
                      ``and (4) and section 1834A''; and
                          (ii) by striking ``under this subsection'' and 
                      inserting ``under this part''.
            (2) Section 1869(f)(2) of the Social Security Act (42 U.S.C. 
        1395ff(f)(2)) is amended by adding at the end the following new 
        subparagraph:
                    ``(C) Local coverage determinations for clinical 
                diagnostic laboratory tests.--For provisions relating to 
                local coverage determinations for clinical diagnostic 
                laboratory tests, see section 1834A(g).''.

    (c) GAO Study and Report; Monitoring of Medicare Expenditures and 
Implementation of New Payment System for Laboratory Tests.--
            (1) GAO study and report on implementation of new payment 
        rates for clinical diagnostic laboratory tests.--
                    (A) Study.--The Comptroller General of the United 
                States (in this subsection referred to as the 
                ``Comptroller General'') shall conduct a study on the 
                implementation of section 1834A of the Social Security 
                Act, as added by subsection (a). The study shall include 
                an analysis of--
                          (i) payment rates paid by private payors for 
                      laboratory tests furnished in various settings, 
                      including--
                                    (I) how such payment rates compare 
                                across settings;
                                    (II) the trend in payment rates over 
                                time; and
                                    (III) trends by private payors to 
                                move to alternative payment 
                                methodologies for laboratory tests;
                          (ii) the conversion to the new payment rate 
                      for laboratory tests under such section;
                          (iii) the impact of such implementation on 
                      beneficiary access under title XVIII of the Social 
                      Security Act;

[[Page 128 STAT. 1061]]

                          (iv) the impact of the new payment system on 
                      laboratories that furnish a low volume of services 
                      and laboratories that specialize in a small number 
                      of tests;
                          (v) the number of new Healthcare Common 
                      Procedure Coding System (HCPCS) codes issued for 
                      laboratory tests;
                          (vi) the spending trend for laboratory tests 
                      under such title;
                          (vii) whether the information reported by 
                      laboratories and the new payment rates for 
                      laboratory tests under such section accurately 
                      reflect market prices;
                          (viii) the initial list price for new 
                      laboratory tests and the subsequent reported rates 
                      for such tests under such section;
                          (ix) changes in the number of advanced 
                      diagnostic laboratory tests and laboratory tests 
                      cleared or approved by the Food and Drug 
                      Administration for which payment is made under 
                      such section; and
                          (x) healthcare economic information on 
                      downstream cost impacts for such tests and 
                      decision making based on accepted methodologies.
                    (B) Report.--Not later than October 1, 2018, the 
                Comptroller General shall submit to the Committee on 
                Ways and Means and the Committee on Energy and Commerce 
                of the House of Representatives and the Committee on 
                Finance of the Senate a report on the study under 
                subparagraph (A), including recommendations for such 
                legislation and administrative action as the Comptroller 
                General determines appropriate.
            (2) <<NOTE: Analysis. 42 USC 1395m-1 note.>>  Monitoring of 
        medicare expenditures and implementation of new payment system 
        for laboratory tests.--The Inspector General of the Department 
        of Health and Human Services shall--
                    (A) <<NOTE: Public information. Deadline.>>  
                publicly release an annual analysis of the top 25 
                laboratory tests by expenditures under title XVIII of 
                the Social Security Act; and
                    (B) conduct analyses the Inspector General 
                determines appropriate with respect to the 
                implementation and effect of the new payment system for 
                laboratory tests under section 1834A of the Social 
                Security Act, as added by subsection (a).
SEC. 217. REVISIONS UNDER THE MEDICARE ESRD PROSPECTIVE PAYMENT 
                        SYSTEM.

    (a) Delay of Implementation of Oral-Only Policy.--Section 632(b)(1) 
of the American Taxpayer Relief Act of 2012 (42 U.S.C. 1395rr note) is 
amended--
            (1) by striking ``2016'' and inserting ``2024''; and
            (2) by adding at the end the following new sentence: 
        ``Notwithstanding section 1881(b)(14)(A)(ii) of the Social 
        Security Act (42 U.S.C. 1395rr(b)(14)(A)(ii)), implementation of 
        the policy described in the previous sentence shall be based on 
        data from the most recent year available.''.

    (b) Mitigation of the Application of Adjustment to ESRD Bundled 
Payment Rate To Account for Changes in the Utilization of Certain Drugs 
and Biologicals.--

[[Page 128 STAT. 1062]]

            (1) In general.--Section 1881(b)(14)(I) of the Social 
        Security Act (42 U.S.C. 1395rr(b)(14)(I)) is amended by 
        inserting ``and before January 1, 2015,'' after ``January 1, 
        2014,''.
            (2) Market basket.--Section 1881(b)(14)(F)(i) of the Social 
        Security Act (42 U.S.C. 1395rr(b)(14)(F)(i)) is amended--
                    (A) in subclause (I)--
                          (i) by striking ``subclause (II)'' and 
                      inserting ``subclauses (II) and (III)''; and
                          (ii) by adding at the end the following new 
                      sentence: ``In order to accomplish the purposes of 
                      subparagraph (I) with respect to 2016, 2017, and 
                      2018, after determining the increase factor 
                      described in the preceding sentence for each of 
                      2016, 2017, and 2018, the Secretary shall reduce 
                      such increase factor by 1.25 percentage points for 
                      each of 2016 and 2017 and by 1 percentage point 
                      for 2018.'';
                    (B) in subclause (II), by striking ``For 2012'' and 
                inserting ``Subject to subclause (III), for 2012''; and
                    (C) by adding at the end the following new 
                subclause:
            ``(III) Notwithstanding subclauses (I) and (II), in order to 
        accomplish the purposes of subparagraph (I) with respect to 
        2015, the increase factor described in subclause (I) for 2015 
        shall be 0.0 percent pursuant to the regulation issued by the 
        Secretary on December 2, 2013, entitled `Medicare Program; End-
        Stage Renal Disease Prospective Payment System, Quality 
        Incentive Program, and Durable Medical Equipment, Prosthetics, 
        Orthotics, and Supplies; Final Rule' (78 Fed. Reg. 72156).''.

    (c) <<NOTE: Process. 42 USC 1395rr note.>>  Drug Designations.--As 
part of the promulgation of annual rule for the Medicare end stage renal 
disease prospective payment system under section 1881(b)(14) of the 
Social Security Act (42 U.S.C. 1395rr(b)(14)) for calendar year 2016, 
the Secretary of Health and Human Services (in this subsection referred 
to as the ``Secretary'') shall establish a process for--
            (1) determining when a product is no longer an oral-only 
        drug; and
            (2) including new injectable and intravenous products into 
        the bundled payment under such system.

    (d) Quality Measures Related to Conditions Treated by Oral-Only 
Drugs Under the ESRD Quality Incentive Program.--Section 1881(h)(2) of 
the Social Security Act (42 U.S.C. 1395rr(h)(2)) is amended--
            (1) in subparagraph (A)--
                    (A) in clause (ii), by striking ``and'' at the end;
                    (B) by redesignating clause (iii) as clause (iv); 
                and
                    (C) by inserting after clause (ii) the following new 
                clause:
                          ``(iii) for 2016 and subsequent years, 
                      measures described in subparagraph (E)(i); and'';
            (2) in subparagraph (B)(i), by striking ``(A)(iii)'' and 
        inserting ``(A)(iv)''; and
            (3) by adding at the end the following new subparagraph:
                    ``(E) Measures specific to the conditions treated 
                with oral-only drugs.--
                          ``(i) In general.--The measures described in 
                      this subparagraph are measures specified by the 
                      Secretary that are specific to the conditions 
                      treated with oral-

[[Page 128 STAT. 1063]]

                      only drugs. To the extent feasible, such measures 
                      shall be outcomes-based measures.
                          ``(ii) Consultation.--In specifying the 
                      measures under clause (i), the Secretary shall 
                      consult with interested stakeholders.
                          ``(iii) Use of endorsed measures.--
                                    ``(I) In general.--Subject to 
                                subclause (I), any measures specified 
                                under clause (i) must have been endorsed 
                                by the entity with a contract under 
                                section 1890(a).
                                    ``(II) Exception.--If the entity 
                                with a contract under section 1890(a) 
                                has not endorsed a measure for a 
                                specified area or topic related to 
                                measures described in clause (i) that 
                                the Secretary determines appropriate, 
                                the Secretary may specify a measure that 
                                is endorsed or adopted by a consensus 
                                organization recognized by the Secretary 
                                that has expertise in clinical 
                                guidelines for kidney disease.''.

    (e) <<NOTE: 42 USC 1395rr note.>>  Audits of Cost Reports of ESRD 
Providers as Recommended by MedPAC.--
            (1) In general.--The Secretary of Health and Human Services 
        shall conduct audits of Medicare cost reports beginning during 
        2012 for a representative sample of providers of services and 
        renal dialysis facilities furnishing renal dialysis services.
            (2) Funding.--For purposes of carrying out paragraph (1), 
        the Secretary of Health and Human Services shall provide for the 
        transfer from the Federal Supplementary Medical Insurance Trust 
        Fund established under section 1841 of the Social Security Act 
        (42 U.S.C. 1395t) to the Centers for Medicare & Medicaid 
        Services Program Management Account of $18,000,000 for fiscal 
        year 2014. Amounts transferred under this paragraph for a fiscal 
        year shall be available until expended.
SEC. 218. QUALITY INCENTIVES FOR COMPUTED TOMOGRAPHY DIAGNOSTIC 
                        IMAGING AND PROMOTING EVIDENCE-BASED CARE.

    (a) Quality Incentives To Promote Patient Safety and Public Health 
in Computed Tomography Diagnostic Imaging.--
            (1) In general.--Section 1834 of the Social Security Act (42 
        U.S.C. 1395m) is amended by adding at the end the following new 
        subsection:

    ``(p) Quality Incentives To Promote Patient Safety and Public Health 
in Computed Tomography.--
            ``(1) Quality incentives.--In the case of an applicable 
        computed tomography service (as defined in paragraph (2)) for 
        which payment is made under an applicable payment system (as 
        defined in paragraph (3)) and that is furnished on or after 
        January 1, 2016, using equipment that is not consistent with the 
        CT equipment standard (described in paragraph (4)), the payment 
        amount for such service shall be reduced by the applicable 
        percentage (as defined in paragraph (5)).
            ``(2) Applicable computed tomography services defined.--In 
        this subsection, the term `applicable computed tomography 
        service' means a service billed using diagnostic radiological 
        imaging codes for computed tomography (identified

[[Page 128 STAT. 1064]]

        as of January 1, 2014, by HCPCS codes 70450-70498, 71250-71275, 
        72125-72133, 72191-72194, 73200-73206, 73700-73706, 74150-74178, 
        74261-74263, and 75571-75574 (and any succeeding codes).
            ``(3) Applicable payment system defined.--In this 
        subsection, the term `applicable payment system' means the 
        following:
                    ``(A) The technical component and the technical 
                component of the global fee under the fee schedule 
                established under section 1848(b).
                    ``(B) The prospective payment system for hospital 
                outpatient department services under section 1833(t).
            ``(4) <<NOTE: Definition.>>  Consistency with ct equipment 
        standard.--In this subsection, the term `not consistent with the 
        CT equipment standard' means, with respect to an applicable 
        computed tomography service, that the service was furnished 
        using equipment that does not meet each of the attributes of the 
        National Electrical Manufacturers Association (NEMA) Standard 
        XR-29-2013, entitled `Standard Attributes on CT Equipment 
        Related to Dose Optimization and Management'. Through 
        rulemaking, the Secretary may apply successor standards.
            ``(5) Applicable percentage defined.--In this subsection, 
        the term `applicable percentage' means--
                    ``(A) for 2016, 5 percent; and
                    ``(B) for 2017 and subsequent years, 15 percent.
            ``(6) Implementation.--
                    ``(A) Information.--The Secretary shall require that 
                information be provided and attested to by a supplier 
                and a hospital outpatient department that indicates 
                whether an applicable computed tomography service was 
                furnished that was not consistent with the CT equipment 
                standard (described in paragraph (4)). Such information 
                may be included on a claim and may be 
                a <<NOTE: Verification.>> modifier. Such information 
                shall be verified, as appropriate, as part of the 
                periodic accreditation of suppliers under section 
                1834(e) and hospitals under section 1865(a).
                    ``(B) Administration.--Chapter 35 of title 44, 
                United States Code, shall not apply to information 
                described in subparagraph (A).''.
            (2) Conforming amendments.--
                    (A) Prospective payment system for hospital 
                outpatient department services.--Section 1833(t) of the 
                Social Security Act (42 1395l(t)) is amended by adding 
                at the end the following new paragraph:
            ``(20) Not budget neutral application of reduced 
        expenditures resulting from quality incentives for computed 
        tomography.--The Secretary shall not take into account the 
        reduced expenditures that result from the application of section 
        1834(p) in making any budget neutrality adjustments this 
        subsection.''.
                    (B) Physician fee schedule.--Section 
                1848(c)(2)(B)(v) of the Social Security Act (42 U.S.C. 
                1395w-4(c)(2)(B)(v)) is amended by adding at the end the 
                following new subclause:
                                    ``(VIII) Reduced expenditures 
                                attributable to application of quality 
                                incentives for computed tomography.--
                                Effective <<NOTE: Effective date.>> for 
                                fee schedules

[[Page 128 STAT. 1065]]

                                established beginning with 2016, reduced 
                                expenditures attributable to the 
                                application of the quality incentives 
                                for computed tomography under section 
                                1834(p)''.

    (b) Promoting Evidence-Based Care.--
            (1) In general.--Section 1834 of the Social Security Act (42 
        U.S.C. 1395m), as amended by subsection (a), is amended by 
        adding at the end the following new subsection:

    ``(q) Recognizing Appropriate Use Criteria for Certain Imaging 
Services.--
            ``(1) Program established.--
                    ``(A) In general.--The Secretary shall establish a 
                program to promote the use of appropriate use criteria 
                (as defined in subparagraph (B)) for applicable imaging 
                services (as defined in subparagraph (C)) furnished in 
                an applicable setting (as defined in subparagraph (D)) 
                by ordering professionals and furnishing professionals 
                (as defined in subparagraphs (E) and (F), respectively).
                    ``(B) Appropriate use criteria defined.--In this 
                subsection, the term `appropriate use criteria' means 
                criteria, only developed or endorsed by national 
                professional medical specialty societies or other 
                provider-led entities, to assist ordering professionals 
                and furnishing professionals in making the most 
                appropriate treatment decision for a specific clinical 
                condition for an individual. To the extent feasible, 
                such criteria shall be evidence-based.
                    ``(C) Applicable imaging service defined.--In this 
                subsection, the term `applicable imaging service' means 
                an advanced diagnostic imaging service (as defined in 
                subsection (e)(1)(B)) for which the Secretary 
                determines--
                          ``(i) one or more applicable appropriate use 
                      criteria specified under paragraph (2) apply;
                          ``(ii) there are one or more qualified 
                      clinical decision support mechanisms listed under 
                      paragraph (3)(C); and
                          ``(iii) one or more of such mechanisms is 
                      available free of charge.
                    ``(D) Applicable setting defined.--In this 
                subsection, the term `applicable setting' means a 
                physician's office, a hospital outpatient department 
                (including an emergency department), an ambulatory 
                surgical center, and any other provider-led outpatient 
                setting determined appropriate by the Secretary.
                    ``(E) Ordering professional defined.--In this 
                subsection, the term `ordering professional' means a 
                physician (as defined in section 1861(r)) or a 
                practitioner described in section 1842(b)(18)(C) who 
                orders an applicable imaging service.
                    ``(F) Furnishing professional defined.--In this 
                subsection, the term `furnishing professional' means a 
                physician (as defined in section 1861(r)) or a 
                practitioner described in section 1842(b)(18)(C) who 
                furnishes an applicable imaging service.
            ``(2) Establishment of applicable appropriate use 
        criteria.--

[[Page 128 STAT. 1066]]

                    
                ``(A) <<NOTE: Deadline. Regulations. Consultation.>>  In 
                general.--Not later than November 15, 2015, the 
                Secretary shall through rulemaking, and in consultation 
                with physicians, practitioners, and other stakeholders, 
                specify applicable appropriate use criteria for 
                applicable imaging services only from among appropriate 
                use criteria developed or endorsed by national 
                professional medical specialty societies or other 
                provider-led entities.
                    ``(B) Considerations.--In specifying applicable 
                appropriate use criteria under subparagraph (A), the 
                Secretary shall take into account whether the criteria--
                          ``(i) have stakeholder consensus;
                          ``(ii) are scientifically valid and evidence 
                      based; and
                          ``(iii) are based on studies that are 
                      published and reviewable by stakeholders.
                    ``(C) <<NOTE: Review. Deadline.>>  Revisions.--The 
                Secretary shall review, on an annual basis, the 
                specified applicable appropriate use criteria to 
                determine if there is a need to update or revise (as 
                appropriate) such specification of applicable 
                appropriate use criteria and make such updates or 
                revisions through rulemaking.
                    ``(D) Treatment of multiple applicable appropriate 
                use criteria.--In the case where the Secretary 
                determines that more than one appropriate use criterion 
                applies with respect to an applicable imaging service, 
                the Secretary shall apply one or more applicable 
                appropriate use criteria under this paragraph for the 
                service.
            ``(3) Mechanisms for consultation with applicable 
        appropriate use criteria.--
                    ``(A) Identification of mechanisms to consult with 
                applicable appropriate use criteria.--
                          ``(i) In general.--The Secretary shall specify 
                      qualified clinical decision support mechanisms 
                      that could be used by ordering professionals to 
                      consult with applicable appropriate use criteria 
                      for applicable imaging services.
                          ``(ii) Consultation.--The Secretary shall 
                      consult with physicians, practitioners, health 
                      care technology experts, and other stakeholders in 
                      specifying mechanisms under this paragraph.
                          ``(iii) Inclusion of certain mechanisms.--
                      Mechanisms specified under this paragraph may 
                      include any or all of the following that meet the 
                      requirements described in subparagraph (B)(ii):
                                    ``(I) Use of clinical decision 
                                support modules in certified EHR 
                                technology (as defined in section 
                                1848(o)(4)).
                                    ``(II) Use of private sector 
                                clinical decision support mechanisms 
                                that are independent from certified EHR 
                                technology, which may include use of 
                                clinical decision support mechanisms 
                                available from medical specialty 
                                organizations.
                                    ``(III) Use of a clinical decision 
                                support mechanism established by the 
                                Secretary.
                    ``(B) Qualified clinical decision support 
                mechanisms.--

[[Page 128 STAT. 1067]]

                          ``(i) In general.--For purposes of this 
                      subsection, a qualified clinical decision support 
                      mechanism is a mechanism that the Secretary 
                      determines meets the requirements described in 
                      clause (ii).
                          ``(ii) Requirements.--The requirements 
                      described in this clause are the following:
                                    ``(I) The mechanism makes available 
                                to the ordering professional applicable 
                                appropriate use criteria specified under 
                                paragraph (2) and the supporting 
                                documentation for the applicable imaging 
                                service ordered.
                                    ``(II) In the case where there is 
                                more than one applicable appropriate use 
                                criterion specified under such paragraph 
                                for an applicable imaging service, the 
                                mechanism indicates the criteria that it 
                                uses for the service.
                                    ``(III) The mechanism determines the 
                                extent to which an applicable imaging 
                                service ordered is consistent with the 
                                applicable appropriate use criteria so 
                                specified.
                                    ``(IV) The mechanism generates and 
                                provides to the ordering professional a 
                                certification or documentation that 
                                documents that the qualified clinical 
                                decision support mechanism was consulted 
                                by the ordering professional.
                                    ``(V) The mechanism is updated on a 
                                timely basis to reflect revisions to the 
                                specification of applicable appropriate 
                                use criteria under such paragraph.
                                    ``(VI) The mechanism meets privacy 
                                and security standards under applicable 
                                provisions of law.
                                    ``(VII) The mechanism performs such 
                                other functions as specified by the 
                                Secretary, which may include a 
                                requirement to provide aggregate 
                                feedback to the ordering professional.
                    ``(C) <<NOTE: Deadlines.>>  List of mechanisms for 
                consultation with applicable appropriate use criteria.--
                          ``(i) <<NOTE: Publication.>>  Initial list.--
                      Not later than April 1, 2016, the Secretary shall 
                      publish a list of mechanisms specified under this 
                      paragraph.
                          ``(ii) Periodic updating of list.--The 
                      Secretary shall identify on an annual basis the 
                      list of qualified clinical decision support 
                      mechanisms specified under this paragraph.
            ``(4) Consultation with applicable appropriate use 
        criteria.--
                    ``(A) Consultation by ordering professional.--
                Beginning <<NOTE: Effective date.>> with January 1, 
                2017, subject to subparagraph (C), with respect to an 
                applicable imaging service ordered by an ordering 
                professional that would be furnished in an applicable 
                setting and paid for under an applicable payment system 
                (as defined in subparagraph (D)), an ordering 
                professional shall--
                          ``(i) consult with a qualified decision 
                      support mechanism listed under paragraph (3)(C); 
                      and

[[Page 128 STAT. 1068]]

                          ``(ii) provide to the furnishing professional 
                      the information described in clauses (i) through 
                      (iii) of subparagraph (B).
                    ``(B) <<NOTE: Effective date.>>  Reporting by 
                furnishing professional.--Beginning with January 1, 
                2017, subject to subparagraph (C), with respect to an 
                applicable imaging service furnished in an applicable 
                setting and paid for under an applicable payment system 
                (as defined in subparagraph (D)), payment for such 
                service may only be made if the claim for the service 
                includes the following:
                          ``(i) Information about which qualified 
                      clinical decision support mechanism was consulted 
                      by the ordering professional for the service.
                          ``(ii) Information regarding--
                                    ``(I) whether the service ordered 
                                would adhere to the applicable 
                                appropriate use criteria specified under 
                                paragraph (2);
                                    ``(II) whether the service ordered 
                                would not adhere to such criteria; or
                                    ``(III) whether such criteria was 
                                not applicable to the service ordered.
                          ``(iii) The national provider identifier of 
                      the ordering professional (if different from the 
                      furnishing professional).
                    ``(C) Exceptions.--The provisions of subparagraphs 
                (A) and (B) and paragraph (6)(A) shall not apply to the 
                following:
                          ``(i) Emergency services.--An applicable 
                      imaging service ordered for an individual with an 
                      emergency medical condition (as defined in section 
                      1867(e)(1)).
                          ``(ii) Inpatient services.--An applicable 
                      imaging service ordered for an inpatient and for 
                      which payment is made under part A.
                          ``(iii) Significant hardship.--An applicable 
                      imaging service ordered by an ordering 
                      professional who the Secretary may, on a case-by-
                      case basis, exempt from the application of such 
                      provisions if the Secretary determines, subject to 
                      annual renewal, that consultation with applicable 
                      appropriate use criteria would result in a 
                      significant hardship, such as in the case of a 
                      professional who practices in a rural area without 
                      sufficient Internet access.
                    ``(D) Applicable payment system defined.--In this 
                subsection, the term `applicable payment system' means 
                the following:
                          ``(i) The physician fee schedule established 
                      under section 1848(b).
                          ``(ii) The prospective payment system for 
                      hospital outpatient department services under 
                      section 1833(t).
                          ``(iii) The ambulatory surgical center payment 
                      systems under section 1833(i).
            ``(5) Identification of outlier ordering professionals.--
                    ``(A) <<NOTE: Effective date. Determination.>>  In 
                general.--With respect to applicable imaging services 
                furnished beginning with 2017, the Secretary shall 
                determine, on an annual basis, no more than five percent

[[Page 128 STAT. 1069]]

                of the total number of ordering professionals who are 
                outlier ordering professionals.
                    ``(B) Outlier ordering professionals.--The 
                determination of an outlier ordering professional 
                shall--
                          ``(i) be based on low adherence to applicable 
                      appropriate use criteria specified under paragraph 
                      (2), which may be based on comparison to other 
                      ordering professionals; and
                          ``(ii) include data for ordering professionals 
                      for whom prior authorization under paragraph 
                      (6)(A) applies.
                    ``(C) Use of two years of data.--The Secretary shall 
                use two years of data to identify outlier ordering 
                professionals under this paragraph.
                    ``(D) Process.--The Secretary shall establish a 
                process for determining when an outlier ordering 
                professional is no longer an outlier ordering 
                professional.
                    ``(E) Consultation with stakeholders.--The Secretary 
                shall consult with physicians, practitioners and other 
                stakeholders in developing methods to identify outlier 
                ordering professionals under this paragraph.
            ``(6) Prior authorization for ordering professionals who are 
        outliers.--
                    ``(A) <<NOTE: Effective date.>>  In general.--
                Beginning January 1, 2020, subject to paragraph (4)(C), 
                with respect to services furnished during a year, the 
                Secretary shall, for a period determined appropriate by 
                the Secretary, apply prior authorization for applicable 
                imaging services that are ordered by an outlier ordering 
                professional identified under paragraph (5).
                    ``(B) Appropriate use criteria in prior 
                authorization.--In applying prior authorization under 
                subparagraph (A), the Secretary shall utilize only the 
                applicable appropriate use criteria specified under this 
                subsection.
                    ``(C) Funding.--For purposes of carrying out this 
                paragraph, the Secretary shall provide for the transfer, 
                from the Federal Supplementary Medical Insurance Trust 
                Fund under section 1841, of $5,000,000 to the Centers 
                for Medicare & Medicaid Services Program Management 
                Account for each of fiscal years 2019 through 2021. 
                Amounts transferred under the preceding sentence shall 
                remain available until expended.
            ``(7) Construction.--Nothing in this subsection shall be 
        construed as granting the Secretary the authority to develop or 
        initiate the development of clinical practice guidelines or 
        appropriate use criteria.''.
            (2) Conforming amendment.--Section 1833(t)(16) of the Social 
        Security Act (42 U.S.C. 1395l(t)(16)) is amended by adding at 
        the end the following new subparagraph:
                    ``(E) Application of appropriate use criteria for 
                certain imaging services.--For provisions relating to 
                the application of appropriate use criteria for certain 
                imaging services, see section 1834(q).''.
            (3) Report on experience of imaging appropriate use criteria 
        program.--Not later than 18 months after the date of the 
        enactment of this Act, the Comptroller General of the United 
        States shall submit to Congress a report that includes

[[Page 128 STAT. 1070]]

        a description of the extent to which appropriate use criteria 
        could be used for other services under part B of title XVIII of 
        the Social Security Act (42 U.S.C. 1395j et seq.), such as 
        radiation therapy and clinical diagnostic laboratory services.
SEC. 219. USING FUNDING FROM TRANSITIONAL FUND FOR SUSTAINABLE 
                        GROWTH RATE (SGR) REFORM.

    Section 1898(b)(1) of the Social Security Act (42 U.S.C. 
1395iii(b)(1)) is amended by striking ``$2,300,000,000'' and inserting 
``$0''.
SEC. 220. ENSURING ACCURATE VALUATION OF SERVICES UNDER THE 
                        PHYSICIAN FEE SCHEDULE.

    (a) Authority To Collect and Use Information on Physicians' Services 
in the Determination of Relative Values.--
            (1) In general.--Section 1848(c)(2) of the Social Security 
        Act (42 U.S.C. 1395w-4(c)(2)) is amended by adding at the end 
        the following new subparagraph:
                    ``(M) Authority to collect and use information on 
                physicians' services in the determination of relative 
                values.--
                          ``(i) Collection of information.--
                      Notwithstanding any other provision of law, the 
                      Secretary may collect or obtain information on the 
                      resources directly or indirectly related to 
                      furnishing services for which payment is made 
                      under the fee schedule established under 
                      subsection (b). Such information may be collected 
                      or obtained from any eligible professional or any 
                      other source.
                          ``(ii) Use of information.--Notwithstanding 
                      any other provision of law, subject to clause (v), 
                      the Secretary may (as the Secretary determines 
                      appropriate) use information collected or obtained 
                      pursuant to clause (i) in the determination of 
                      relative values for services under this section.
                          ``(iii) Types of information.--The types of 
                      information described in clauses (i) and (ii) may, 
                      at the Secretary's discretion, include any or all 
                      of the following:
                                    ``(I) Time involved in furnishing 
                                services.
                                    ``(II) Amounts and types of practice 
                                expense inputs involved with furnishing 
                                services.
                                    ``(III) Prices (net of any 
                                discounts) for practice expense inputs, 
                                which may include paid invoice prices or 
                                other documentation or records.
                                    ``(IV) Overhead and accounting 
                                information for practices of physicians 
                                and other suppliers.
                                    ``(V) Any other element that would 
                                improve the valuation of services under 
                                this section.
                          ``(iv) Information collection mechanisms.--
                      Information may be collected or obtained pursuant 
                      to this subparagraph from any or all of the 
                      following:
                                    ``(I) Surveys of physicians, other 
                                suppliers, providers of services, 
                                manufacturers, and vendors.
                                    ``(II) Surgical logs, billing 
                                systems, or other practice or facility 
                                records.
                                    ``(III) Electronic health records.

[[Page 128 STAT. 1071]]

                                    ``(IV) Any other mechanism 
                                determined appropriate by the Secretary.
                          ``(v) Transparency of use of information.--
                                    ``(I) <<NOTE: Notice. Comments.>>  
                                In general.--Subject to subclauses (II) 
                                and (III), if the Secretary uses 
                                information collected or obtained under 
                                this subparagraph in the determination 
                                of relative values under this 
                                subsection, the Secretary shall disclose 
                                the information source and discuss the 
                                use of such information in such 
                                determination of relative values through 
                                notice and comment rulemaking.
                                    ``(II) Thresholds for use.--The 
                                Secretary may establish thresholds in 
                                order to use such information, including 
                                the exclusion of information collected 
                                or obtained from eligible professionals 
                                who use very high resources (as 
                                determined by the Secretary) in 
                                furnishing a service.
                                    ``(III) Disclosure of information.--
                                The Secretary shall make aggregate 
                                information available under this 
                                subparagraph but shall not disclose 
                                information in a form or manner that 
                                identifies an eligible professional or a 
                                group practice, or information collected 
                                or obtained pursuant to a nondisclosure 
                                agreement.
                          ``(vi) Incentive to participate.--The 
                      Secretary may provide for such payments under this 
                      part to an eligible professional that submits such 
                      solicited information under this subparagraph as 
                      the Secretary determines appropriate in order to 
                      compensate such eligible professional for such 
                      submission. Such payments shall be provided in a 
                      form and manner specified by the Secretary.
                          ``(vii) Administration.--Chapter 35 of title 
                      44, United States Code, shall not apply to 
                      information collected or obtained under this 
                      subparagraph.
                          ``(viii) Definition of eligible 
                      professional.--In this subparagraph, the term 
                      `eligible professional' has the meaning given such 
                      term in subsection (k)(3)(B).
                          ``(ix) Funding.--For purposes of carrying out 
                      this subparagraph, in addition to funds otherwise 
                      appropriated, the Secretary shall provide for the 
                      transfer, from the Federal Supplementary Medical 
                      Insurance Trust Fund under section 1841, of 
                      $2,000,000 to the Centers for Medicare & Medicaid 
                      Services Program Management Account for each 
                      fiscal year beginning with fiscal year 2014. 
                      Amounts transferred under the preceding sentence 
                      for a fiscal year shall be available until 
                      expended.''.
            (2) Limitation on review.--Section 1848(i)(1) of the Social 
        Security Act (42 U.S.C. 1395w-4(i)(1)) is amended--
                    (A) in subparagraph (D), by striking ``and'' at the 
                end;
                    (B) in subparagraph (E), by striking the period at 
                the end and inserting ``, and''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(F) the collection and use of information in the 
                determination of relative values under subsection 
                (c)(2)(M).''.

[[Page 128 STAT. 1072]]

    (b) Authority for Alternative Approaches To Establishing Practice 
Expense Relative Values.--Section 1848(c)(2) of the Social Security Act 
(42 U.S.C. 1395w-4(c)(2)), as amended by subsection (a), is amended by 
adding at the end the following new subparagraph:
                    ``(N) Authority for alternative approaches to 
                establishing practice expense relative values.--The 
                Secretary may establish or adjust practice expense 
                relative values under this subsection using cost, 
                charge, or other data from suppliers or providers of 
                services, including information collected or obtained 
                under subparagraph (M).''.

    (c) Revised and Expanded Identification of Potentially Misvalued 
Codes.--Section 1848(c)(2)(K)(ii) of the Social Security Act (42 U.S.C. 
1395w-4(c)(2)(K)(ii)) is amended to read as follows:
                          ``(ii) Identification of potentially misvalued 
                      codes.--For purposes of identifying potentially 
                      misvalued codes pursuant to clause (i)(I), the 
                      Secretary shall examine codes (and families of 
                      codes as appropriate) based on any or all of the 
                      following criteria:
                                    ``(I) Codes that have experienced 
                                the fastest growth.
                                    ``(II) Codes that have experienced 
                                substantial changes in practice 
                                expenses.
                                    ``(III) Codes that describe new 
                                technologies or services within an 
                                appropriate time period (such as 3 
                                years) after the relative values are 
                                initially established for such codes.
                                    ``(IV) Codes which are multiple 
                                codes that are frequently billed in 
                                conjunction with furnishing a single 
                                service.
                                    ``(V) Codes with low relative 
                                values, particularly those that are 
                                often billed multiple times for a single 
                                treatment.
                                    ``(VI) Codes that have not been 
                                subject to review since implementation 
                                of the fee schedule.
                                    ``(VII) Codes that account for the 
                                majority of spending under the physician 
                                fee schedule.
                                    ``(VIII) Codes for services that 
                                have experienced a substantial change in 
                                the hospital length of stay or procedure 
                                time.
                                    ``(IX) Codes for which there may be 
                                a change in the typical site of service 
                                since the code was last valued.
                                    ``(X) Codes for which there is a 
                                significant difference in payment for 
                                the same service between different sites 
                                of service.
                                    ``(XI) Codes for which there may be 
                                anomalies in relative values within a 
                                family of codes.
                                    ``(XII) Codes for services where 
                                there may be efficiencies when a service 
                                is furnished at the same time as other 
                                services.
                                    ``(XIII) Codes with high intra-
                                service work per unit of time.
                                    ``(XIV) Codes with high practice 
                                expense relative value units.
                                    ``(XV) Codes with high cost 
                                supplies.

[[Page 128 STAT. 1073]]

                                    ``(XVI) Codes as determined 
                                appropriate by the Secretary.''.

    (d) Target for Relative Value Adjustments for Misvalued Services.--
            (1) In general.--Section 1848(c)(2) of the Social Security 
        Act (42 U.S.C. 1395w-4(c)(2)), as amended by subsections (a) and 
        (b), is amended by adding at the end the following new 
        subparagraph:
                    ``(O) Target for relative value adjustments for 
                misvalued services.--With respect 
                to <<NOTE: Applicability.>> fee schedules established 
                for each of 2017 through 2020, the following shall 
                apply:
                          ``(i) Determination of net reduction in 
                      expenditures.--For each year, the Secretary shall 
                      determine the estimated net reduction in 
                      expenditures under the fee schedule under this 
                      section with respect to the year as a result of 
                      adjustments to the relative values established 
                      under this paragraph for misvalued codes.
                          ``(ii) Budget neutral redistribution of funds 
                      if target met and counting overages towards the 
                      target for the succeeding year.--If the estimated 
                      net reduction in expenditures determined under 
                      clause (i) for the year is equal to or greater 
                      than the target for the year--
                                    ``(I) reduced expenditures 
                                attributable to such adjustments shall 
                                be redistributed for the year in a 
                                budget neutral manner in accordance with 
                                subparagraph (B)(ii)(II); and
                                    ``(II) the amount by which such 
                                reduced expenditures exceeds the target 
                                for the year shall be treated as a 
                                reduction in expenditures described in 
                                clause (i) for the succeeding year, for 
                                purposes of determining whether the 
                                target has or has not been met under 
                                this subparagraph with respect to that 
                                year.
                          ``(iii) Exemption from budget neutrality if 
                      target not met.--If the estimated net reduction in 
                      expenditures determined under clause (i) for the 
                      year is less than the target for the year, reduced 
                      expenditures in an amount equal to the target 
                      recapture amount shall not be taken into account 
                      in applying subparagraph (B)(ii)(II) with respect 
                      to fee schedules beginning with 2017.
                          ``(iv) Target recapture amount.--For purposes 
                      of clause (iii), the target recapture amount is, 
                      with respect to a year, an amount equal to the 
                      difference between--
                                    ``(I) the target for the year; and
                                    ``(II) the estimated net reduction 
                                in expenditures determined under clause 
                                (i) for the year.
                          ``(v) Target.--For purposes of this 
                      subparagraph, with respect to a year, the target 
                      is calculated as 0.5 percent of the estimated 
                      amount of expenditures under the fee schedule 
                      under this section for the year.''.
            (2) Conforming amendment.--Section 1848(c)(2)(B)(v) of the 
        Social Security Act (42 U.S.C. 1395w-4(c)(2)(B)(v)) is amended 
        by adding at the end the following new subclause:

[[Page 128 STAT. 1074]]

                                    ``(VIII) Reductions for misvalued 
                                services if target not met.--Effective 
                                for <<NOTE: Effective date. Time 
                                period.>> fee schedules beginning with 
                                2017, reduced expenditures attributable 
                                to the application of the target 
                                recapture amount described in 
                                subparagraph (O)(iii).''.

    (e) Phase-In of Significant Relative Value Unit (RVU) Reductions.--
            (1) In general.--Section 1848(c) of the Social Security Act 
        (42 U.S.C. 1395w-4(c)) is amended by adding at the end the 
        following new paragraph:
            ``(7) Phase-in of significant relative value unit (rvu) 
        reductions.--Effective for <<NOTE: Effective date.>> fee 
        schedules established beginning with 2017, for services that are 
        not new or revised codes, if the total relative value units for 
        a service for a year would otherwise be decreased by an 
        estimated amount equal to or greater than 20 percent as compared 
        to the total relative value units for the previous year, the 
        applicable adjustments in work, practice expense, and 
        malpractice relative value units shall be phased-in over a 2-
        year period.''.
            (2) Conforming amendments.--Section 1848(c)(2) of the Social 
        Security Act (42 U.S.C. 1395w-4(c)(2)) is amended--
                    (A) in subparagraph (B)(ii)(I), by striking 
                ``subclause (II)'' and inserting ``subclause (II) and 
                paragraph (7)''; and
                    (B) in subparagraph (K)(iii)(VI)--
                          (i) by striking ``provisions of subparagraph 
                      (B)(ii)(II)'' and inserting ``provisions of 
                      subparagraph (B)(ii)(II) and paragraph (7)''; and
                          (ii) by striking ``under subparagraph 
                      (B)(ii)(II)'' and inserting ``under subparagraph 
                      (B)(ii)(I)''.

    (f) Authority To Smooth Relative Values Within Groups of Services.--
Section 1848(c)(2)(C) of the Social Security Act (42 U.S.C. 1395w-
4(c)(2)(C)) is amended--
            (1) in each of clauses (i) and (iii), by striking ``the 
        service'' and inserting ``the service or group of services'' 
        each place it appears; and
            (2) in the first sentence of clause (ii), by inserting ``or 
        group of services'' before the period.

    (g) GAO Study and Report on Relative Value Scale Update Committee.--
            (1) Study.--The Comptroller General of the United States (in 
        this subsection referred to as the ``Comptroller General'') 
        shall conduct a study of the processes used by the Relative 
        Value Scale Update Committee (RUC) to provide recommendations to 
        the Secretary of Health and Human Services regarding relative 
        values for specific services under the Medicare physician fee 
        schedule under section 1848 of the Social Security Act (42 
        U.S.C. 1395w-4).
            (2) Report.--Not later than 1 year after the date of the 
        enactment of this Act, the Comptroller General shall submit to 
        Congress a report containing the results of the study conducted 
        under paragraph (1).

    (h) Adjustment to Medicare Payment Localities.--
            (1) In general.--Section 1848(e) of the Social Security Act 
        (42 U.S.C. 1395w-4(e)) is amended by adding at the end the 
        following new paragraph:
            ``(6) Use of msas as fee schedule areas in california.--

[[Page 128 STAT. 1075]]

                    ``(A) <<NOTE: Applicability.>>  In general.--Subject 
                to the succeeding provisions of this paragraph and 
                notwithstanding the previous provisions of this 
                subsection, for services furnished on or after January 
                1, 2017, the fee schedule areas used for payment under 
                this section applicable to California shall be the 
                following:
                          ``(i) Each Metropolitan Statistical Area (each 
                      in this paragraph referred to as an `MSA'), as 
                      defined by the Director of the Office of 
                      Management and Budget as of December 31 of the 
                      previous year, shall be a fee schedule area.
                          ``(ii) All areas not included in an MSA shall 
                      be treated as a single rest-of-State fee schedule 
                      area.
                    ``(B) Transition for msas previously in rest-of-
                state payment locality or in locality 3.--
                          ``(i) <<NOTE: Time period.>>  In general.--For 
                      services furnished in California during a year 
                      beginning with 2017 and ending with 2021 in an MSA 
                      in a transition area (as defined in subparagraph 
                      (D)), subject to subparagraph (C), the geographic 
                      index values to be applied under this subsection 
                      for such year shall be equal to the sum of the 
                      following:
                                    ``(I) Current law component.--The 
                                old weighting factor (described in 
                                clause (ii)) for such year multiplied by 
                                the geographic index values under this 
                                subsection for the fee schedule area 
                                that included such MSA that would have 
                                applied in such area (as estimated by 
                                the Secretary) if this paragraph did not 
                                apply.
                                    ``(II) MSA-based component.--The 
                                MSA-based weighting factor (described in 
                                clause (iii)) for such year multiplied 
                                by the geographic index values computed 
                                for the fee schedule area under 
                                subparagraph (A) for the year 
                                (determined without regard to this 
                                subparagraph).
                          ``(ii) Old weighting factor.--The old 
                      weighting factor described in this clause--
                                    ``(I) for 2017, is \5/6\; and
                                    ``(II) for each succeeding year, is 
                                the old weighting factor described in 
                                this clause for the previous year minus 
                                \1/6\.
                          ``(iii) MSA-based weighting factor.--The MSA-
                      based weighting factor described in this clause 
                      for a year is 1 minus the old weighting factor 
                      under clause (ii) for that year.
                    ``(C) <<NOTE: Applicability.>>  Hold harmless.--For 
                services furnished in a transition area in California 
                during a year beginning with 2017, the geographic index 
                values to be applied under this subsection for such year 
                shall not be less than the corresponding geographic 
                index values that would have applied in such transition 
                area (as estimated by the Secretary) if this paragraph 
                did not apply.
                    ``(D) Transition area defined.--In this paragraph, 
                the term `transition area' means each of the following 
                fee schedule areas for 2013:
                          ``(i) The rest-of-State payment locality.
                          ``(ii) Payment locality 3.

[[Page 128 STAT. 1076]]

                    ``(E) <<NOTE: Effective date.>>  References to fee 
                schedule areas.--Effective for services furnished on or 
                after January 1, 2017, for California, any reference in 
                this section to a fee schedule area shall be deemed a 
                reference to a fee schedule area established in 
                accordance with this paragraph.''.
            (2) Conforming amendment to definition of fee schedule 
        area.--Section 1848(j)(2) of the Social Security Act (42 U.S.C. 
        1395w-4(j)(2)) is amended by striking ``The term'' and inserting 
        ``Except as provided in subsection (e)(6)(D), the term''.

    (i) <<NOTE: 42 USC 1395w-4 note. Public information.>>  Disclosure 
of Data Used To Establish Multiple Procedure Payment Reduction Policy.--
The Secretary of Health and Human Services shall make publicly available 
the information used to establish the multiple procedure payment 
reduction policy to the professional component of imaging services in 
the final rule published in the Federal Register, v. 77, n. 222, 
November 16, 2012, pages 68891-69380 under the physician fee schedule 
under section 1848 of the Social Security Act (42 U.S.C. 1395w-4).
SEC. 221. MEDICAID DSH.

    (a) Modifications of Reductions to Allotments.--Section 1923(f) of 
the Social Security Act (42 U.S.C. 1396r-4(f)) is amended--
            (1) in paragraph (7)(A)--
                    (A) in clause (i), by striking ``2016 through 2020'' 
                and inserting ``2017 through 2024''; and
                    (B) in clause (ii), by striking subclauses (I) 
                through (IV), and inserting the following:
                                    ``(I) $1,800,000,000 for fiscal year 
                                2017;
                                    ``(II) $4,700,000,000 for fiscal 
                                year 2018;
                                    ``(III) $4,700,000,000 for fiscal 
                                year 2019;
                                    ``(IV) $4,700,000,000 for fiscal 
                                year 2020;
                                    ``(V) $4,800,000,000 for fiscal year 
                                2021;
                                    ``(VI) $5,000,000,000 for fiscal 
                                year 2022;
                                    ``(VII) $5,000,000,000 for fiscal 
                                year 2023; and
                                    ``(VIII) $4,400,000,000 for fiscal 
                                year 2024.''; and
            (2) by striking paragraph (8) and inserting the following:
            ``(8) Calculation of DSH allotments after reductions 
        period.--The DSH allotment for a State for fiscal years after 
        fiscal year 2024 shall be calculated under paragraph (3) without 
        regard to paragraph (7).''.

    (b) MACPAC Review and Report.--Section 1900(b)(6) of the Social 
Security Act (42 U.S.C. 1396(b)(6)) is amended--
            (1) by striking ``MACPAC shall consult'' and inserting the 
        following:
                    ``(A) In general.--MACPAC shall consult''; and
            (2) by adding at the end the following:
                    ``(B) Review and reports regarding medicaid dsh.--
                          ``(i) In general.--MACPAC shall review and 
                      submit an annual report to Congress on 
                      disproportionate share hospital payments under 
                      section 1923. Each report shall include the 
                      information specified in clause (ii).
                          ``(ii) Required report information.--Each 
                      report required under this subparagraph shall 
                      include the following:

[[Page 128 STAT. 1077]]

                                    ``(I) Data relating to changes in 
                                the number of uninsured individuals.
                                    ``(II) Data relating to the amount 
                                and sources of hospitals' uncompensated 
                                care costs, including the amount of such 
                                costs that are the result of providing 
                                unreimbursed or under-reimbursed 
                                services, charity care, or bad debt.
                                    ``(III) Data identifying hospitals 
                                with high levels of uncompensated care 
                                that also provide access to essential 
                                community services for low-income, 
                                uninsured, and vulnerable populations, 
                                such as graduate medical education, and 
                                the continuum of primary through 
                                quarternary care, including the 
                                provision of trauma care and public 
                                health services.
                                    ``(IV) State-specific analyses 
                                regarding the relationship between the 
                                most recent State DSH allotment and the 
                                projected State DSH allotment for the 
                                succeeding year and the data reported 
                                under subclauses (I), (II), and (III) 
                                for the State.
                          ``(iii) Data.--Notwithstanding any other 
                      provision of law, the Secretary regularly shall 
                      provide MACPAC with the most recent State reports 
                      and most recent independent certified audits 
                      submitted under section 1923(j), cost reports 
                      submitted under title XVIII, and such other data 
                      as MACPAC may request for purposes of conducting 
                      the reviews and preparing and submitting the 
                      annual reports required under this subparagraph.
                          ``(iv) Submission deadlines.--The first report 
                      required under this subparagraph shall be 
                      submitted to Congress not later than February 1, 
                      2016. Subsequent reports shall be submitted as 
                      part of, or with, each annual report required 
                      under paragraph (1)(C) during the period of fiscal 
                      years 2017 through 2024.''.
SEC. 222. REALIGNMENT OF THE MEDICARE SEQUESTER FOR FISCAL YEAR 
                        2024.

    Paragraph (6) (relating to implementing direct spending reductions) 
of section 251A of the Balanced Budget and Emergency Deficit Control Act 
of 1985 (2 U.S.C. 901a) is amended by adding at the end the following 
new subparagraph:
            ``(D) <<NOTE: Applicability.>>  Notwithstanding the 2 
        percent limit specified in subparagraph (A) for payments for the 
        Medicare programs specified in section 256(d), the sequestration 
        order of the President under such subparagraph for fiscal year 
        2024 shall be applied to such payments so that--
                    ``(i) with respect to the first 6 months in which 
                such order is effective for such fiscal year, the 
                payment reduction shall be 4.0 percent; and
                    ``(ii) with respect to the second 6 months in which 
                such order is so effective for such fiscal year, the 
                payment reduction shall be 0.0 percent.''.
SEC. 223. <<NOTE: 42 USC 1396a note.>>  DEMONSTRATION PROGRAMS TO 
                        IMPROVE COMMUNITY MENTAL HEALTH SERVICES.

    (a) Criteria for Certified Community Behavioral Health Clinics To 
Participate in Demonstration Programs.--

[[Page 128 STAT. 1078]]

            (1) <<NOTE: Deadline.>>  Publication.--Not later than 
        September 1, 2015, the Secretary shall publish criteria for a 
        clinic to be certified by a State as a certified community 
        behavioral health clinic for purposes of participating in a 
        demonstration program conducted under subsection (d).
            (2) Requirements.--The criteria published under this 
        subsection shall include criteria with respect to the following:
                    (A) Staffing.--Staffing requirements, including 
                criteria that staff have diverse disciplinary 
                backgrounds, have necessary State-required license and 
                accreditation, and are culturally and linguistically 
                trained to serve the needs of the clinic's patient 
                population.
                    (B) Availability and accessibility of services.--
                Availability and accessibility of services, including 
                crisis management services that are available and 
                accessible 24 hours a day, the use of a sliding scale 
                for payment, and no rejection for services or limiting 
                of services on the basis of a patient's ability to pay 
                or a place of residence.
                    (C) Care coordination.--Care coordination, including 
                requirements to coordinate care across settings and 
                providers to ensure seamless transitions for patients 
                across the full spectrum of health services including 
                acute, chronic, and behavioral health needs. Care 
                coordination requirements shall include partnerships or 
                formal contracts with the following:
                          (i) Federally-qualified health centers (and as 
                      applicable, rural health clinics) to provide 
                      Federally-qualified health center services (and as 
                      applicable, rural health clinic services) to the 
                      extent such services are not provided directly 
                      through the certified community behavioral health 
                      clinic.
                          (ii) Inpatient psychiatric facilities and 
                      substance use detoxification, post-detoxification 
                      step-down services, and residential programs.
                          (iii) Other community or regional services, 
                      supports, and providers, including schools, child 
                      welfare agencies, juvenile and criminal justice 
                      agencies and facilities, Indian Health Service 
                      youth regional treatment centers, State licensed 
                      and nationally accredited child placing agencies 
                      for therapeutic foster care service, and other 
                      social and human services.
                          (iv) Department of Veterans Affairs medical 
                      centers, independent outpatient clinics, drop-in 
                      centers, and other facilities of the Department as 
                      defined in section 1801 of title 38, United States 
                      Code.
                          (v) Inpatient acute care hospitals and 
                      hospital outpatient clinics.
                    (D) Scope of services.--Provision (in a manner 
                reflecting person-centered care) of the following 
                services which, if not available directly through the 
                certified community behavioral health clinic, are 
                provided or referred through formal relationships with 
                other providers:
                          (i) Crisis mental health services, including 
                      24-hour mobile crisis teams, emergency crisis 
                      intervention services, and crisis stabilization.
                          (ii) Screening, assessment, and diagnosis, 
                      including risk assessment.

[[Page 128 STAT. 1079]]

                          (iii) Patient-centered treatment planning or 
                      similar processes, including risk assessment and 
                      crisis planning.
                          (iv) Outpatient mental health and substance 
                      use services.
                          (v) Outpatient clinic primary care screening 
                      and monitoring of key health indicators and health 
                      risk.
                          (vi) Targeted case management.
                          (vii) Psychiatric rehabilitation services.
                          (viii) Peer support and counselor services and 
                      family supports.
                          (ix) Intensive, community-based mental health 
                      care for members of the armed forces and veterans, 
                      particularly those members and veterans located in 
                      rural areas, provided the care is consistent with 
                      minimum clinical mental health guidelines 
                      promulgated by the Veterans Health Administration 
                      including clinical guidelines contained in the 
                      Uniform Mental Health Services Handbook of such 
                      Administration.
                    (E) Quality and other reporting.--Reporting of 
                encounter data, clinical outcomes data, quality data, 
                and such other data as the Secretary requires.
                    (F) Organizational authority.--Criteria that a 
                clinic be a non-profit or part of a local government 
                behavioral health authority or operated under the 
                authority of the Indian Health Service, an Indian tribe 
                or tribal organization pursuant to a contract, grant, 
                cooperative agreement, or compact with the Indian Health 
                Service pursuant to the Indian Self-Determination Act 
                (25 U.S.C. 450 et seq.), or an urban Indian organization 
                pursuant to a grant or contract with the Indian Health 
                Service under title V of the Indian Health Care 
                Improvement Act (25 U.S.C. 1601 et seq.).

    (b) Guidance on Development of Prospective Payment System for 
Testing Under Demonstration Programs.--
            (1) <<NOTE: Deadline. Applicability.>>  In general.--Not 
        later than September 1, 2015, the Secretary, through the 
        Administrator of the Centers for Medicare & Medicaid Services, 
        shall issue guidance for the establishment of a prospective 
        payment system that shall only apply to medical assistance for 
        mental health services furnished by a certified community 
        behavioral health clinic participating in a demonstration 
        program under subsection (d).
            (2) Requirements.--The guidance issued by the Secretary 
        under paragraph (1) shall provide that--
                    (A) no payment shall be made for inpatient care, 
                residential treatment, room and board expenses, or any 
                other non-ambulatory services, as determined by the 
                Secretary; and
                    (B) no payment shall be made to satellite facilities 
                of certified community behavioral health clinics if such 
                facilities are established after the date of enactment 
                of this Act.

    (c) Planning Grants.--
            (1) <<NOTE: Deadline.>>  In general.--Not later than January 
        1, 2016, the Secretary shall award planning grants to States for 
        the purpose of developing proposals to participate in time-
        limited demonstration programs described in subsection (d).

[[Page 128 STAT. 1080]]

            (2) Use of funds.--A State awarded a planning grant under 
        this subsection shall--
                    (A) solicit input with respect to the development of 
                such a demonstration program from patients, providers, 
                and other stakeholders;
                    (B) <<NOTE: Certification.>>  certify clinics as 
                certified community behavioral health clinics for 
                purposes of participating in a demonstration program 
                conducted under subsection (d); and
                    (C) establish a prospective payment system for 
                mental health services furnished by a certified 
                community behavioral health clinic participating in a 
                demonstration program under subsection (d) in accordance 
                with the guidance issued under subsection (b).

    (d) Demonstration Programs.--
            (1) <<NOTE: Deadline.>>  In general.--Not later than 
        September 1, 2017, the Secretary shall select States to 
        participate in demonstration programs that are developed through 
        planning grants awarded under subsection (c), meet the 
        requirements of this subsection, and represent a diverse 
        selection of geographic areas, including rural and underserved 
        areas.
            (2) Application requirements.--
                    (A) In general.--The Secretary shall solicit 
                applications to participate in demonstration programs 
                under this subsection solely from States awarded 
                planning grants under subsection (c).
                    (B) Required information.--An application for a 
                demonstration program under this subsection shall 
                include the following:
                          (i) The target Medicaid population to be 
                      served under the demonstration program.
                          (ii) A list of participating certified 
                      community behavioral health clinics.
                          (iii) Verification that the State has 
                      certified a participating clinic as a certified 
                      community behavioral health clinic in accordance 
                      with the requirements of subsection (b).
                          (iv) A description of the scope of the mental 
                      health services available under the State Medicaid 
                      program that will be paid for under the 
                      prospective payment system tested in the 
                      demonstration program.
                          (v) Verification that the State has agreed to 
                      pay for such services at the rate established 
                      under the prospective payment system.
                          (vi) Such other information as the Secretary 
                      may require relating to the demonstration program 
                      including with respect to determining the 
                      soundness of the proposed prospective payment 
                      system.
            (3) Number and length of demonstration programs.--Not more 
        than 8 States shall be selected for 2-year demonstration 
        programs under this subsection.
            (4) Requirements for selecting demonstration programs.--
                    (A) In general.--The Secretary shall give preference 
                to selecting demonstration programs where participating 
                certified community behavioral health clinics--
                          (i) provide the most complete scope of 
                      services described in subsection (a)(2)(D) to 
                      individuals eligible

[[Page 128 STAT. 1081]]

                      for medical assistance under the State Medicaid 
                      program;
                          (ii) will improve availability of, access to, 
                      and participation in, services described in 
                      subsection (a)(2)(D) to individuals eligible for 
                      medical assistance under the State Medicaid 
                      program;
                          (iii) will improve availability of, access to, 
                      and participation in assisted outpatient mental 
                      health treatment in the State; or
                          (iv) demonstrate the potential to expand 
                      available mental health services in a 
                      demonstration area and increase the quality of 
                      such services without increasing net Federal 
                      spending.
            (5) Payment for medical assistance for mental health 
        services provided by certified community behavioral health 
        clinics.--
                    (A) In general.--The Secretary shall pay a State 
                participating in a demonstration program under this 
                subsection the Federal matching percentage specified in 
                subparagraph (B) for amounts expended by the State to 
                provide medical assistance for mental health services 
                described in the demonstration program application in 
                accordance with paragraph (2)(B)(iv) that are provided 
                by certified community behavioral health clinics to 
                individuals who are enrolled in the State Medicaid 
                program. Payments to States made under this paragraph 
                shall be considered to have been under, and are subject 
                to the requirements of, section 1903 of the Social 
                Security Act (42 U.S.C. 1396b).
                    (B) Federal matching percentage.--The Federal 
                matching percentage specified in this subparagraph is 
                with respect to medical assistance described in 
                subparagraph (A) that is furnished--
                          (i) to a newly eligible individual described 
                      in paragraph (2) of section 1905(y) of the Social 
                      Security Act (42 U.S.C. 1396d(y)), the matching 
                      rate applicable under paragraph (1) of that 
                      section; and
                          (ii) to an individual who is not a newly 
                      eligible individual (as so described) but who is 
                      eligible for medical assistance under the State 
                      Medicaid program, the enhanced FMAP applicable to 
                      the State.
                    (C) Limitations.--
                          (i) In general.--Payments shall be made under 
                      this paragraph to a State only for mental health 
                      services--
                                    (I) that are described in the 
                                demonstration program application in 
                                accordance with paragraph (2)(iv);
                                    (II) for which payment is available 
                                under the State Medicaid program; and
                                    (III) that are provided to an 
                                individual who is eligible for medical 
                                assistance under the State Medicaid 
                                program.
                          (ii) Prohibited payments.--No payment shall be 
                      made under this paragraph--
                                    (I) for inpatient care, residential 
                                treatment, room and board expenses, or 
                                any other non-

[[Page 128 STAT. 1082]]

                                ambulatory services, as determined by 
                                the Secretary; or
                                    (II) with respect to payments made 
                                to satellite facilities of certified 
                                community behavioral health clinics if 
                                such facilities are established after 
                                the date of enactment of this Act.
            (6) Waiver of statewideness requirement.--The Secretary 
        shall waive section 1902(a)(1) of the Social Security Act (42 
        U.S.C. 1396a(a)(1)) (relating to statewideness) as may be 
        necessary to conduct demonstration programs in accordance with 
        the requirements of this subsection.
            (7) Annual reports.--
                    (A) In general.--Not later than 1 year after the 
                date on which the first State is selected for a 
                demonstration program under this subsection, and 
                annually thereafter, the Secretary shall submit to 
                Congress an annual report on the use of funds provided 
                under all demonstration programs conducted under this 
                subsection. Each such report shall include--
                          (i) an assessment of access to community-based 
                      mental health services under the Medicaid program 
                      in the area or areas of a State targeted by a 
                      demonstration program compared to other areas of 
                      the State;
                          (ii) an assessment of the quality and scope of 
                      services provided by certified community 
                      behavioral health clinics compared to community-
                      based mental health services provided in States 
                      not participating in a demonstration program under 
                      this subsection and in areas of a demonstration 
                      State that are not participating in the 
                      demonstration program; and
                          (iii) an assessment of the impact of the 
                      demonstration programs on the Federal and State 
                      costs of a full range of mental health services 
                      (including inpatient, emergency and ambulatory 
                      services).
                    (B) Recommendations.--Not later than December 31, 
                2021, the Secretary shall submit to Congress 
                recommendations concerning whether the demonstration 
                programs under this section should be continued, 
                expanded, modified, or terminated.

    (e) Definitions.--In this section:
            (1) Federally-qualified health center services; federally-
        qualified health center; rural health clinic services; rural 
        health clinic.--The terms ``Federally-qualified health center 
        services'', ``Federally-qualified health center'', ``rural 
        health clinic services'', and ``rural health clinic'' have the 
        meanings given those terms in section 1905(l) of the Social 
        Security Act (42 U.S.C. 1396d(l)).
            (2) Enhanced fmap.--The term ``enhanced FMAP'' has the 
        meaning given that term in section 2105(b) of the Social 
        Security Act (42 U.S.C. 1397dd(b)) but without regard to the 
        second and third sentences of that section.
            (3) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (4) State.--The term ``State'' has the meaning given such 
        term for purposes of title XIX of the Social Security Act (42 
        U.S.C. 1396 et seq.).

    (f) Funding.--

[[Page 128 STAT. 1083]]

            (1) In general.--Out of any funds in the Treasury not 
        otherwise appropriated, there is appropriated to the Secretary--
                    (A) for purposes of carrying out subsections (a), 
                (b), and (d)(7), $2,000,000 for fiscal year 2014; and
                    (B) for purposes of awarding planning grants under 
                subsection (c), $25,000,000 for fiscal year 2016.
            (2) Availability.--Funds appropriated under paragraph (1) 
        shall remain available until expended.
SEC. 224. <<NOTE: 42 USC 290aa note.>>  ASSISTED OUTPATIENT 
                        TREATMENT GRANT PROGRAM FOR INDIVIDUALS 
                        WITH SERIOUS MENTAL ILLNESS.

    (a) In General.--The Secretary shall establish a 4-year pilot 
program to award not more than 50 grants each year to eligible entities 
for assisted outpatient treatment programs for individuals with serious 
mental illness.
    (b) Consultation.--The Secretary shall carry out this section in 
consultation with the Director of the National Institute of Mental 
Health, the Attorney General of the United States, the Administrator of 
the Administration for Community Living, and the Administrator of the 
Substance Abuse and Mental Health Services Administration.
    (c) Selecting Among Applicants.--The Secretary--
            (1) may only award grants under this section to applicants 
        that have not previously implemented an assisted outpatient 
        treatment program; and
            (2) shall evaluate applicants based on their potential to 
        reduce hospitalization, homelessness, incarceration, and 
        interaction with the criminal justice system while improving the 
        health and social outcomes of the patient.

    (d) Use of Grant.--An assisted outpatient treatment program funded 
with a grant awarded under this section shall include--
            (1) evaluating the medical and social needs of the patients 
        who are participating in the program;
            (2) preparing and executing treatment plans for such 
        patients that--
                    (A) include criteria for completion of court-ordered 
                treatment; and
                    (B) provide for monitoring of the patient's 
                compliance with the treatment plan, including compliance 
                with medication and other treatment regimens;
            (3) providing for such patients case management services 
        that support the treatment plan;
            (4) ensuring appropriate referrals to medical and social 
        service providers;
            (5) evaluating the process for implementing the program to 
        ensure consistency with the patient's needs and State law; and
            (6) measuring treatment outcomes, including health and 
        social outcomes such as rates of incarceration, health care 
        utilization, and homelessness.

    (e) Report.--Not later than the end of each of fiscal years 2016, 
2017, and 2018, the Secretary shall submit a report to the appropriate 
congressional committees on the grant program under this section. 
Each <<NOTE: Evaluation.>>  such report shall include an evaluation of 
the following:

[[Page 128 STAT. 1084]]

            (1) Cost savings and public health outcomes such as 
        mortality, suicide, substance abuse, hospitalization, and use of 
        services.
            (2) Rates of incarceration by patients.
            (3) Rates of homelessness among patients.
            (4) Patient and family satisfaction with program 
        participation.

    (f) Definitions.--In this section:
            (1) The term ``assisted outpatient treatment'' means 
        medically prescribed mental health treatment that a patient 
        receives while living in a community under the terms of a law 
        authorizing a State or local court to order such treatment.
            (2) The term ``eligible entity'' means a county, city, 
        mental health system, mental health court, or any other entity 
        with authority under the law of the State in which the grantee 
        is located to implement, monitor, and oversee assisted 
        outpatient treatment programs.
            (3) The term ``Secretary'' means the Secretary of Health and 
        Human Services.

    (g) Funding.--
            (1) <<NOTE: Determination.>>  Amount of grants.--A grant 
        under this section shall be in an amount that is not more than 
        $1,000,000 for each of fiscal years 2015 through 2018. Subject 
        to the preceding sentence, the Secretary shall determine the 
        amount of each grant based on the population of the area, 
        including estimated patients, to be served under the grant.
            (2) Authorization of appropriations.--There is authorized to 
        be appropriated to carry out this section $15,000,000 for each 
        of fiscal years 2015 through 2018.
SEC. 225. EXCLUSION FROM PAYGO SCORECARDS.

    (a) Statutory Pay-As-You-Go Scorecards.--The budgetary effects of 
this Act shall not be entered on either PAYGO scorecard maintained 
pursuant to section 4(d) of the Statutory Pay-As-You-Go Act of 2010.
    (b) Senate PAYGO Scorecards.--The budgetary effects of this Act 
shall not be entered on any PAYGO scorecard maintained for purposes of 
section 201 of S. Con. Res. 21 (110th Congress).

    Approved April 1, 2014.

LEGISLATIVE HISTORY--H.R. 4302:
---------------------------------------------------------------------------

CONGRESSIONAL RECORD, Vol. 160 (2014):
            Mar. 27, considered and passed House.
            Mar. 31, considered and passed Senate.

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