I 

111TH CONGRESS 

1ST SESSION H. R. 1776 

To amend title XVIII of the Social Security Act to expand the development 

of quality measures for inpatient hospital services, to implement a performance-based payment methodology for the provision of such services 

under the Medicare Program, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 30, 2009 

Mr. ALTMIRE introduced the following bill; which was referred to the 

Committee on Ways and Means 

A BILL 

To amend title XVIII of the Social Security Act to expand 

the development of quality measures for inpatient hospital services, to implement a performance-based payment methodology for the provision of such services 

under the Medicare Program, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Quality FIRST (From 

5 Incentives, Reporting, Standards, and Technology) Act of 

6 2009’’. 

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1 SEC. 2. EXPANSION OF REPORTING AND DEVELOPMENT OF 

2 QUALITY MEASURES FOR INPATIENT HOS3 PITAL SERVICES; IMPLEMENTATION OF PER4 FORMANCE-BASED PAYMENT UNDER THE 

5 PROSPECTIVE PAYMENT SYSTEM FOR SUCH 

6 SERVICES. 

7 (a) IN GENERAL.—Title XVIII of the Social Security 

8 Act (42 U.S.C. 1395 et seq.) is amended by inserting after 

9 section 1886 the following new section: 

10 ‘‘PERFORMANCE-BASED PAYMENT SYSTEM FOR

11 INPATIENT HOSPITAL SERVICES

12 ‘‘SEC. 1886A. (a) EXPANSION OF REPORTING AND

13 DEVELOPMENT OF QUALITY MEASURES.— 

14 ‘‘(1) REQUIREMENT TO REPORT DATA ON

15 QUALITY MEASURES.—For purposes of section 

16 1886(b)(3)(B)(i) for fiscal year 2010 and each sub17 sequent fiscal year before fiscal year 2014, in the 

18 case of a hospital that does not submit, to the Sec19 retary in accordance with this section, data required 

20 to be submitted on specified quality measures (as de21 fined in paragraph (4)(A)) with respect to such fis22 cal year, the applicable percentage increase under 

23 section 1886(b)(3)(B)(i) for such fiscal year shall be 

24 reduced by 2.0 percentage points (or 1.5, 1.0, and 

25 0.5 percentage points in the case of fiscal years 

26 2011, 2012, and 2013, respectively). 

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1 ‘‘(2) APPLICATION OF REDUCTION ONLY TO

2 FISCAL YEAR INVOLVED.—Any reduction under 

3 paragraph (1) shall apply only with respect to the 

4 fiscal year involved. The Secretary shall not take 

5 into account such reduction in computing the appli6 cable percentage increase under section 

7 1886(b)(3)(B)(i) for a subsequent fiscal year. 

8 ‘‘(3) DATA SUBMISSION.—Each hospital shall 

9 submit to the Secretary the required data on speci10 fied quality measures under this section in the form 

11 and manner provided under subsection (h). 

12 ‘‘(4) DEFINITIONS.—In this section: 

13 ‘‘(A) The term ‘specified quality measures’ 

14 means quality measures— 

15 ‘‘(i) specified under clause (vii)(II) of 

16 section 1886(b)(3)(B); 

17 ‘‘(ii) selected under clause (viii) of 

18 such section; and 

19 ‘‘(iii) selected under subsection (b). 

20 ‘‘(B) The term ‘hospital’ means a sub21 section (d) hospital (as defined in section 

22 1886(d)(1)(B)). 

23 ‘‘(b) ADDITION OF NEW QUALITY MEASURES.— 

24 ‘‘(1) IN GENERAL.—In addition to the specified 

25 quality measures described in clauses (i) and (ii) of 

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1 subsection (a)(4)(A), the Secretary shall select under 

2 this subsection such quality measures as the Sec3 retary determines to be appropriate for the measure4 ment of the quality of care furnished by hospitals in 

5 inpatient settings. 

6 ‘‘(2) EXPANSION AND REFINEMENT OF PER7 FORMANCE MEASURES.—Effective for payments be8 ginning with fiscal year 2009, in selecting additional 

9 quality measures under paragraph (1), the Secretary 

10 shall expand and revise the baseline set of perform11 ance measures adopted under section 

12 1886(b)(3)(B)(viii)(IV). Subject to the succeeding 

13 provisions of this subsection, the Secretary shall add 

14 such additional measures that reflect consensus 

15 among affected parties and, to the extent feasible 

16 and practicable, shall include measures set forth by 

17 one or more national consensus-building organiza18 tions (as defined in paragraph (4)(B)). 

19 ‘‘(3) REQUIREMENT FOR EVIDENCE-BASED

20 MEASURES.— 

21 ‘‘(A) IN GENERAL.—With respect to fiscal 

22 year 2009 and each subsequent fiscal year, the 

23 Secretary may not add any quality measure 

24 under this subsection unless that quality meas25 ure— 

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1 ‘‘(i) is evidence-based and statistically 

2 valid; 

3 ‘‘(ii) subject to paragraph (7)(C), is 

4 endorsed by the National Quality Forum 

5 or such other similar consensus-building 

6 organization as the Secretary may des7 ignate; 

8 ‘‘(iii) is recommended for use by the 

9 Hospital Quality Alliance; and 

10 ‘‘(iv) has been sufficiently field tested, 

11 as provided in subparagraph (C), to ensure 

12 the measure is accurate and efficacious 

13 and to determine the resources required of 

14 a hospital to collect and report data on the 

15 measure. 

16 ‘‘(B) PROHIBITION ON USE OF QUALITY

17 MEASURE FOR PUBLIC REPORTING OR PER18 FORMANCE-BASED PAYMENT UNLESS EN19 DORSED AND RECOMMENDED.—A quality meas20 ure proposed to be added under this subsection 

21 may not be made available to the public under 

22 subsection (e) or otherwise, or used in the per23 formance-based payment program under sub24 section (f), before the date on which the meas25 ure has been endorsed as provided in subparamstockstill on PROD1PC66 with BILLS

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1 graph (A)(ii) and recommended as provided in 

2 subparagraph (A)(iii). 

3 ‘‘(C) FIELD TESTING.—The Secretary may 

4 not specify a measure under this paragraph for 

5 use in the determination of performance-based 

6 payments under this section unless there has 

7 been a field test of the measure for a period of 

8 not less than six months. For purposes of the 

9 preceding sentence, the term ‘field test’ means, 

10 with respect to a measure, the voluntary imple11 mentation of the measure by hospitals to test 

12 the feasibility, usefulness, and costs associated 

13 with implementing the measure, including— 

14 ‘‘(i) validating the accuracy, precision, 

15 sensitivity, specificity, predictive value, and 

16 efficacy of the measure; 

17 ‘‘(ii) determining whether the measure 

18 is useful for the internal quality improve19 ment efforts of hospitals; 

20 ‘‘(iii) evaluating the training, staffing, 

21 and time required for data collection and 

22 submission; 

23 ‘‘(iv) assessing the unintended con24 sequences, if any, associated with the use 

25 of the measure; 

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1 ‘‘(v) assessing issues relating to data 

2 quality (such as accuracy and completeness 

3 of data), comparability across hospitals, 

4 and data sources; and 

5 ‘‘(vi) determining whether all data ele6 ments required on the measure are capable 

7 of being transmitted to the Secretary on a 

8 timely basis and evaluating the ability of 

9 automated data capture through health in10 formation technology systems. 

11 ‘‘(4) REQUIREMENT FOR COLLABORATION WITH

12 CONSENSUS ORGANIZATIONS.— 

13 ‘‘(A) IN GENERAL.—With respect to fiscal 

14 year 2010 and each subsequent fiscal year, the 

15 Secretary shall collaborate with consensus16 building organizations to develop new quality 

17 measures in each of the following areas of inpa18 tient hospital services: 

19 ‘‘(i) Efficiency. 

20 ‘‘(ii) Clinical effectiveness. 

21 ‘‘(iii) Patient-centeredness. 

22 ‘‘(iv) Care coordination. 

23 ‘‘(v) Patient safety. 

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1 ‘‘(vi) Performance in areas where the 

2 Secretary identifies a need for an appro3 priate quality measure. 

4 ‘‘(B) CONSENSUS-BUILDING ORGANIZA5 TION.—For purposes of this subsection, the 

6 term ‘consensus-building organization’ means 

7 an organization, such as the National Quality 

8 Forum, that the Secretary identifies as— 

9 ‘‘(i) having experience in using a 

10 transparent process for reaching a group 

11 consensus with respect to measures relat12 ing to performance of hospitals providing 

13 inpatient hospital services; and 

14 ‘‘(ii) including in such process rep15 resentatives of the Secretary, hospitals, 

16 physicians’ organizations, individuals enti17 tled to benefits under part A, experts in 

18 health care quality, experts in measure de19 velopment, organizations with experience in 

20 measure implementation, and individuals 

21 with experience in the delivery of health 

22 care in urban, rural, and frontier areas 

23 and to underserved populations and those 

24 who serve a disproportionate share of mi25 nority patients. 

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1 ‘‘(5) ALTERNATIVE MEASURES FOR PATIENT

2 OUTCOMES AND EXPERIENCE.— 

3 ‘‘(A) IN GENERAL.—In addition to the 

4 quality measures for clinical process selected by 

5 the Secretary under section 1886(b)(3)(B)(viii), 

6 the Secretary shall consider alternative meth7 odologies to measure quality that reflect patient 

8 outcomes and patient experience of care meas9 ures. Of the alternative methodologies available 

10 for the consideration of the Secretary, quality 

11 measures under this paragraph shall be based 

12 on a set of criteria that include importance, fea13 sibility, scientific acceptability, improvability, 

14 usability, controllability, potential for unin15 tended consequences, and contribution to com16 prehensiveness. 

17 ‘‘(B) RISK-ADJUSTMENT.—With respect to 

18 quality measures for outcomes of care, the Sec19 retary shall provide for an appropriate adjust20 ment for such risk factors as age, disability sta21 tus, gender, institutional status, and such other 

22 factors as the Secretary determines to be appro23 priate to maintain incentives for hospitals to 

24 treat patients with severe illnesses or condi25 tions. 

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1 ‘‘(6) SUBMISSION OF DATA ON PROPOSED NEW

2 QUALITY MEASURES.— 

3 ‘‘(A) PRELIMINARY DATA SUBMISSION PE4 RIOD.—With respect to any proposed new qual5 ity measure identified by the Secretary as a 

6 possible addition to specified quality measures 

7 in effect, data that are required to be submitted 

8 by hospitals for that new quality measure shall 

9 be submitted for a preliminary period of such 

10 length as the Secretary may specify. 

11 ‘‘(B) CONFIDENTIALITY OF INFORMA12 TION.—Any data submitted under subpara13 graph (A) during the preliminary data submis14 sion period shall be treated as a confidential 

15 submission of information and may not be made 

16 available to the public. 

17 ‘‘(C) APPLICATION TO PERFORMANCE18 BASED PAYMENTS.—A new quality measure 

19 may not be incorporated in the performance20 based payment program established under sub21 section (f) unless— 

22 ‘‘(i) the preliminary data submission 

23 period under subparagraph (A) is com24 pleted; 

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1 ‘‘(ii) the Secretary ensures that data 

2 have been made available to the public 

3 under subsection (e) for such period as the 

4 Secretary determines to be appropriate to 

5 provide adequate notice to the parties con6 cerned; and 

7 ‘‘(iii) the requirements of paragraph 

8 (3) have been met. 

9 ‘‘(7) ALIGNMENT OF INPATIENT HOSPITAL

10 QUALITY MEASURES WITH QUALITY MEASURES OF

11 OTHER PROVIDERS AND SUPPLIERS.— 

12 ‘‘(A) IN GENERAL.—The Secretary shall 

13 ensure that the specified quality measures ap14 plicable to hospitals are coordinated with qual15 ity measures applicable to physicians under sec16 tion 1848(k) and with quality measures applica17 ble to other providers of services and suppliers 

18 under this title. 

19 ‘‘(B) USE OF QUALITY MEASUREMENT DE20 VELOPMENT ORGANIZATIONS.—If the Secretary 

21 determines that there is evidence that a com22 plementary quality measure in a particular cir23 cumstance would improve the quality of patient 

24 care, the Secretary shall enter into arrange25 ments with quality measurement development 

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1 organizations for the development of com2 plementary quality measures for hospitals, phy3 sicians, and other providers of services and sup4 pliers. 

5 ‘‘(C) CONDITION FOR SELECTION.—For 

6 purposes of paragraph (3), the Secretary may 

7 not accept the endorsement of a quality meas8 ure by the National Quality Forum or such 

9 other similar organization designated by the 

10 Secretary under paragraph (3)(A)(ii) unless the 

11 National Quality Forum or other organization 

12 has ensured the alignment of the quality meas13 ure for inpatient hospital services with one or 

14 more related quality measures for physicians’ 

15 services (if any). 

16 ‘‘(c) DISCONTINUED USE OF MEASURES.— 

17 ‘‘(1) AUTHORITY TO DISCONTINUE USE OF

18 MEASURE.—The Secretary may terminate the use of 

19 a specified quality measure under this section if the 

20 Secretary determines that the continued use of the 

21 measure is inappropriate or unnecessary by reason 

22 of one or more of the following rationale: 

23 ‘‘(A) A change in science, technology, or 

24 practice patterns. 

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1 ‘‘(B) Subject to paragraph (2), a deter2 mination by the Secretary that hospitals have 

3 achieved uniformly high performance with re4 spect to that measure (commonly referred to as 

5 a ‘topped out measure’). 

6 ‘‘(C) A determination by the Secretary 

7 that the measure has been subsequently shown 

8 not to represent the best clinical practice. 

9 ‘‘(D) Such other considerations as the Sec10 retary determines to be appropriate. 

11 ‘‘(2) PROVISIONS RELATING TO TOPPED OUT

12 MEASURES.— 

13 ‘‘(A) CONTINUED REPORTING.—In the 

14 case of a specified quality measure referred to 

15 in paragraph (1)(B), the Secretary shall require 

16 the submission of data from hospitals on such 

17 a measure notwithstanding that such measures 

18 shall not be used for purposes of the perform19 ance-based payment program under subsection 

20 (f). 

21 ‘‘(B) REVIEW OF HOSPITAL PERFORM22 ANCE.—In the case of a specified quality meas23 ure referred to in paragraph (1)(B), the Sec24 retary shall monitor performance of hospitals 

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1 on such measure to ensure that hospitals main2 tain high levels of performance. 

3 ‘‘(C) AUTHORITY TO REINSTATE.— 

4 ‘‘(i) IN GENERAL.—Subject to clause 

5 (ii), for purposes of the performance-based 

6 payment program under subsection (f), the 

7 Secretary may reinstate the use of a speci8 fied quality measure referred to in para9 graph (1)(B) that has been terminated 

10 under paragraph (1) if the Secretary deter11 mines that a significant percentage of hos12 pitals fails to meet the performance thresh13 old for that quality measure. 

14 ‘‘(ii) NOTICE.—The authority under 

15 clause (i) shall not apply before the conclu16 sion of a period, of not less than one year, 

17 of notice to the public indicating the intent 

18 of the Secretary to reinstate such specified 

19 quality measure. 

20 ‘‘(3) REGULAR REVIEW OF MEASURES.—The 

21 Secretary shall periodically reassess specified quality 

22 measures to determine whether the continued use of 

23 such measures is appropriate and necessary for pur24 poses of public reporting under subsection (e) and 

25 performance-based payment under subsection (f). 

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1 ‘‘(d) DEVELOPMENT OF COMPOSITE MEASURES.— 

2 ‘‘(1) IN GENERAL.—The Secretary shall com3 bine individual specified quality measures into com4 posite measures that assess the overall quality of 

5 care for a clinical condition or in a performance 

6 area. 

7 ‘‘(2) CONSIDERATIONS.—In carrying out para8 graph (1), the Secretary shall— 

9 ‘‘(A) evaluate the adequacy of individual 

10 specified quality measures in each significant 

11 clinical condition or performance area, including 

12 the validity of such measures for the creation of 

13 a composite measure; and 

14 ‘‘(B) determine the best methodology to re15 port composite quality measures for those areas 

16 of clinical practice with a limited number of 

17 specified quality measures, including how to in18 corporate such composite measures in the per19 formance-based payment program under sub20 section (f). 

21 ‘‘(e) PUBLIC REPORTING.— 

22 ‘‘(1) CONTINUATION OF PUBLIC REPORTING RE23 QUIREMENTS.—Procedures established under sub24 clause (VII) of section 1886(b)(3)(B)(viii) for mak25 ing data submitted by a hospital under subclause (I) 

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1 of such section available to the public shall, as modi2 fied by the succeeding provisions of this subsection, 

3 apply to data required to be submitted under this 

4 section on all specified quality measures. 

5 ‘‘(2) GENERAL REPORTING REQUIREMENTS.— 

6 The Secretary shall report quality measures of proc7 ess, structure, outcome, patient perspectives on care, 

8 efficiency, and costs of care that relate to services 

9 furnished in inpatient hospital settings on the Hos10 pital Compare Internet website maintained by the 

11 Department of Health and Human Services. 

12 ‘‘(3) PROMPT DISSEMINATION OF INFORMATION

13 ON QUALITY.—The Secretary shall review ways in 

14 which information on the quality of inpatient hos15 pital services can be used more effectively by hos16 pitals to increase the quality of patient care and to 

17 improve performance in the delivery of inpatient hos18 pital services. The Secretary shall provide for the 

19 dissemination of appropriate and timely quality in20 formation to such hospitals in a manner that most 

21 effectively contributes to continuous quality improve22 ment by the hospitals. 

23 ‘‘(4) DISSEMINATION ON QUALITY INFORMA24 TION TO PATIENTS.— 

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1 ‘‘(A) IN GENERAL.—The Secretary shall 

2 make available to the public information on the 

3 quality of inpatient hospital services provided 

4 by hospitals to patients in a manner that facili5 tates informed and balanced decisionmaking by 

6 patients and physicians. 

7 ‘‘(B) REQUIREMENTS FOR COMPARATIVE

8 INFORMATION.—Insofar as the Secretary makes 

9 information on the quality of inpatient hospital 

10 services provided by hospitals to patients avail11 able for purposes of comparison among hos12 pitals, the Secretary shall only present such in13 formation by specific clinical condition or per14 formance area and may not aggregate results 

15 across clinical conditions or performance areas 

16 or otherwise make available information indi17 cating an overall ranking of hospitals. 

18 ‘‘(5) WEBSITE IMPROVEMENTS.— 

19 ‘‘(A) TAILORED STANDARD REPORTS.— 

20 The Secretary shall develop a series of standard 

21 Internet website reports tailored to respond to 

22 the differing needs of hospitals, patients, re23 searchers, policymakers, and such other stake24 holders as the Secretary may identify. The Sec25 retary shall seek input from such stakeholders 

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1 through such means as the Secretary deter2 mines to be most effective, including meetings 

3 and surveys, to determine the type of informa4 tion that is useful to the various stakeholders 

5 and the format that best facilitates use of the 

6 reports and of the Hospital Compare Internet 

7 website maintained by the Department of 

8 Health and Human Services. 

9 ‘‘(B) INFORMATION AND FORMAT.—The 

10 Secretary shall modify the Hospital Compare 

11 Internet website maintained by the Department 

12 of Health and Human Services to make the use 

13 and navigation of that website readily available 

14 to individuals accessing it. The Secretary shall 

15 develop a flexible format to meet the differing 

16 needs of the various stakeholders and shall 

17 modify the website to permit a user to easily 

18 customize queries. 

19 ‘‘(f) PERFORMANCE-BASED PAYMENT PROGRAM.— 

20 ‘‘(1) ESTABLISHMENT.—The Secretary shall es21 tablish a program under which performance-based 

22 payments are made each fiscal year to hospitals that 

23 provide high quality inpatient hospital services to in24 dividuals who are entitled to benefits under part A 

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1 retary shall implement the program under this sub2 section so that performance-based payments are 

3 made to such hospitals in fiscal year 2011 and each 

4 subsequent fiscal year. 

5 ‘‘(2) ADJUSTMENT IN PAYMENT BASED ON

6 QUALITY PERFORMANCE.— 

7 ‘‘(A) PAYMENT BASED ON PERFORM8 ANCE.— 

9 ‘‘(i) INCREASE IN AMOUNT OF PAY10 MENT FOR OPERATING COSTS OF INPA11 TIENT HOSPITAL SERVICES.—Subject to 

12 subparagraph (B), from payment amounts 

13 reduced by the Secretary for operational 

14 costs of inpatient hospital services of a 

15 hospital for specified diagnosis-related 

16 groups under section 1886(d)(1)(F)(i) with 

17 respect to a fiscal year, the Secretary shall 

18 make a performance-based payment to that 

19 hospital for such costs for that fiscal year 

20 in the amount determined under clause (ii) 

21 and in the manner specified in section 

22 1886(d)(1)(F)(iv). 

23 ‘‘(ii) METHODOLOGY TO DETERMINE

24 THE AMOUNT OF PAYMENT.—The Sec25 retary shall determine the amount of the 

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1 performance-based payment based on the 

2 hospital’s performance on each specified 

3 clinical condition or performance area dur4 ing the preceding year to individuals who 

5 are entitled to benefits under part A and 

6 are inpatients of the hospital using the 

7 payment and scoring methodologies con8 tained in the Report to Congress submitted 

9 by the Centers for Medicare & Medicaid 

10 Services on November 21, 2007, as modi11 fied by the succeeding provisions of this 

12 subsection. 

13 ‘‘(B) REQUIREMENT TO SUBMIT DATA.—In 

14 order for a hospital to be eligible for a perform15 ance-based payment with respect to a fiscal 

16 year, the hospital must have complied with the 

17 requirements under subsection (a)(1) to submit 

18 data for specified quality measures. 

19 ‘‘(C) MEASURED CLINICAL CONDITIONS

20 FOR PERFORMANCE-BASED PAYMENTS IN FIS21 CAL YEAR 2011.— 

22 ‘‘(i) CONDITIONS MEASURED.—With 

23 respect to performance-based payments 

24 made to a hospital under this paragraph in 

25 fiscal year 2011, the Secretary shall measmstockstill on PROD1PC66 with BILLS

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1 ure quality performance only for the fol2 lowing four specific conditions or clinical 

3 performance areas: acute myocardial in4 farction (AMI), heart failure, pneumonia, 

5 and Surgical Care Improvement Project 

6 (formerly referred to as ‘Surgical Infection 

7 Prevention’ for discharges occurring before 

8 July 2006). 

9 ‘‘(ii) MEASURES CITED IN NOVEMBER

10 2007 CMS REPORT TO CONGRESS.—In 

11 measuring quality performance for the con12 ditions specified under clause (i), the Sec13 retary shall use the specified quality meas14 ures identified as initial performance meas15 ures in the report referred to in subpara16 graph (A)(ii). 

17 ‘‘(iii) HCAHPS MEASURES EX18 CLUDED FROM INITIAL PERFORMANCE19 BASED PAYMENTS.— 

20 ‘‘(I) IN GENERAL.—In measuring 

21 quality performance under clause (i), 

22 except as provided in subclause (II), 

23 the Secretary may not include speci24 fied quality measures with respect to 

25 the Hospital Consumer Assessment of 

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1 Healthcare Providers and Systems 

2 Survey (HCAHPS). 

3 ‘‘(II) USE IN SUBSEQUENT

4 YEARS.—Subject to subparagraph 

5 (D)(ii), the Secretary shall collect 

6 data on measures relating to assess7 ment of care by consumers and make 

8 refinements to such measures for use 

9 in measuring performance for fiscal 

10 years after fiscal year 2011 for per11 formance-based payments under this 

12 paragraph. 

13 ‘‘(iv) 30-DAY MORTALITY MEASURES

14 EXCLUDED FROM INITIAL PERFORMANCE15 BASED PAYMENTS.— 

16 ‘‘(I) IN GENERAL.—In measuring 

17 quality performance under clause (i), 

18 except as provided in subclause (II), 

19 the Secretary may not include speci20 fied quality measures with respect to 

21 mortality. 

22 ‘‘(II) USE IN SUBSEQUENT

23 YEARS.—Subject to subparagraph 

24 (D)(ii), the Secretary may include 

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1 spect to 30-day mortality rates for use 

2 in measuring performance for fiscal 

3 years after fiscal year 2011 for per4 formance-based payments under this 

5 paragraph insofar as the Secretary es6 tablishes a mechanism for hospitals to 

7 receive timely information from the 

8 Secretary to enable hospitals to evalu9 ate performance on such measures. 

10 ‘‘(D) MEASURED CLINICAL CONDITIONS

11 AND PERFORMANCE AREAS FOR FISCAL YEARS

12 AFTER FISCAL YEAR 2011.— 

13 ‘‘(i) IN GENERAL.—Subject to clause 

14 (ii), with respect to performance-based 

15 payments made to a hospital under this 

16 paragraph during a fiscal year after fiscal 

17 year 2011, the Secretary may expand the 

18 specified quality measures used in meas19 uring performance under subparagraph (C) 

20 for performance-based payments under this 

21 paragraph for fiscal year 2011. 

22 ‘‘(ii) REQUIREMENT FOR NOTICE AND

23 COMMENT RULEMAKING.—The Secretary 

24 may only exercise the authority under 

25 clause (i) by regulation, after notice of the 

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1 proposed regulation in the Federal Reg2 ister and a period of not less than 60 days 

3 for public comment thereon. 

4 ‘‘(E) ADVANCE PUBLICATION OF FULL-IN5 CENTIVE BENCHMARKS.—The Secretary shall 

6 provide for the publication of full-incentive 

7 quality benchmarks (determined under para8 graph (4)(C)) sufficiently in advance of a fiscal 

9 year so that hospitals may make such changes 

10 as are required to meet full-incentive quality 

11 benchmarks applicable during the fiscal year in12 volved, and in no case shall the publication of 

13 the full-incentive quality benchmark be later 

14 than two years before the start of the fiscal 

15 year involved. 

16 ‘‘(3) DETERMINATION OF HOSPITAL PERFORM17 ANCE.— 

18 ‘‘(A) METHODOLOGY FOR SCORES.—The 

19 Secretary shall evaluate the performance of 

20 each hospital for the purpose of determining 

21 performance-based payments under paragraph 

22 (2). Subject to subparagraph (B), the Secretary 

23 shall determine a set of performance scores for 

24 each such hospital based on the performance 

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1 scoring methodology described in the report re2 ferred to in paragraph (2)(A)(ii). 

3 ‘‘(B) CALCULATION OF SEPARATE SCORES

4 BY CLINICAL CONDITION OR PERFORMANCE

5 AREA.—The Secretary shall calculate composite 

6 performance scores separately for each specified 

7 clinical condition or performance area. The Sec8 retary may not calculate a single overall per9 formance score for each hospital. 

10 ‘‘(C) CONSIDERATION OF RESULTS AND

11 IMPROVEMENT.—In calculating performance 

12 scores for each specified quality measure for 

13 each specified clinical condition or performance 

14 area, the Secretary shall determine a score for 

15 both the performance level attained by the hos16 pital and the degree of improvement of the per17 formance of the hospital. The final score for 

18 each such measure shall be equal to the greater 

19 of such attainment or such degree of improve20 ment on the measure. 

21 ‘‘(D) EQUAL WEIGHT FOR INDIVIDUAL

22 MEASURES.—In calculating a composite per23 formance score for each specified clinical condi24 tion or performance area, the Secretary shall 

25 weight equally the individual specified quality 

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1 measures involved in assessing performance for 

2 such clinical condition or area. 

3 ‘‘(E) REQUIREMENT FOR NOTICE AND

4 COMMENT RULEMAKING.—The Secretary shall 

5 describe in detail the methodology to be used to 

6 calculate performance scores under this sub7 paragraph by regulation, after notice of the pro8 posed regulation in the Federal Register and a 

9 period of not less than 60 days for public com10 ment thereon. 

11 ‘‘(4) CALCULATION OF PERFORMANCE-BASED

12 PAYMENT AMOUNT.— 

13 ‘‘(A) METHODOLOGY.— 

14 ‘‘(i) REPORT PROPOSAL.—Subject to 

15 the succeeding provisions of this sub16 section, the Secretary shall calculate the 

17 amount of performance-based payment 

18 under paragraph (2) for a hospital by con19 verting performance scores of a hospital to 

20 a payment amount for that hospital using 

21 the methodology contained in the report 

22 referred to in paragraph (2)(A)(ii). 

23 ‘‘(ii) REQUIREMENT FOR NOTICE AND

24 COMMENT RULEMAKING.—The Secretary 

25 shall describe in detail the methodology to 

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1 be used to calculate the amount of per2 formance-based payment under paragraph 

3 (2) by regulation, after notice of the pro4 posed regulation in the Federal Register 

5 and a period of not less than 60 days for 

6 public comment thereon. 

7 ‘‘(B) MINIMUM THRESHOLD.— 

8 ‘‘(i) IN GENERAL.—The Secretary 

9 shall establish a performance threshold for 

10 a fiscal year of zero for all specified clinical 

11 conditions or performance areas. 

12 ‘‘(ii) PERFORMANCE THRESHOLD.— 

13 No amount of performance-based payment 

14 under paragraph (2) for a fiscal year may 

15 be made to a hospital unless the perform16 ance score of that hospital with respect a 

17 specified clinical condition or performance 

18 area during the preceding fiscal year ex19 ceeds the performance threshold estab20 lished under clause (i). 

21 ‘‘(C) FULL-INCENTIVE QUALITY BENCH22 MARK.— 

23 ‘‘(i) IN GENERAL.—The Secretary 

24 shall determine for each fiscal year a per25 formance level for each clinical condition or 

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1 performance area under a quality bench2 mark which, if met by a hospital, would 

3 qualify the hospital to receive 100 percent 

4 of the performance-based payment amount 

5 available under paragraph (2) for the asso6 ciated diagnosis-related groups. 

7 ‘‘(ii) DETERMINATION OF LEVELS.— 

8 ‘‘(I) INITIAL LEVEL.—The per9 formance level referred to in clause (i) 

10 shall be initially set at a level that the 

11 Secretary determines that all hospitals 

12 can reasonably achieve. 

13 ‘‘(II) MODIFICATION OF LEV14 ELS.—The Secretary may revise the 

15 performance level set under subclause 

16 (I) to a higher level from time to time 

17 as hospital performance improves. 

18 ‘‘(iii) CONSIDERATIONS IN SETTING

19 LEVELS.—In determining such perform20 ance level, the Secretary shall take into ac21 count practical experience with specified 

22 quality measures involved, historical per23 formance levels, improvement rates, the 

24 opportunity for continued improvement, 

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1 and the results of the review of bench2 marks conducted under paragraph (5). 

3 ‘‘(5) REVIEW AND MODIFICATION OF BENCH4 MARKS.— 

5 ‘‘(A) IN GENERAL.—The Secretary shall 

6 reevaluate a quality benchmark established 

7 under this subsection if the Secretary deter8 mines with respect to a fiscal year that a sig9 nificant proportion of hospitals failed to meet 

10 the benchmark. The Secretary shall determine 

11 whether extenuating circumstances, such as 

12 measure definition changes, prevented hospitals 

13 from meeting the benchmark. 

14 ‘‘(B) MODIFICATION FOR PERFORMANCE15 BASED PAYMENTS.—The Secretary may make 

16 modifications to a benchmark described in sub17 paragraph (A), as applied to measure hospital 

18 performance in a fiscal year, and reassess such 

19 hospital performance in that fiscal year using 

20 such modified benchmark for purposes of calcu21 lating the amount of performance-based pay22 ment under paragraph (2). 

23 ‘‘(6) BUDGET NEUTRALITY FOR PAYMENTS.— 

24 ‘‘(A) REQUIREMENT FOR BUDGET NEU25 TRALITY.—The aggregate amount of performmstockstill on PROD1PC66 with BILLS

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1 ance-based payments made to hospitals under 

2 paragraphs (2) and (7) for a fiscal year shall be 

3 equal to the aggregate amount of reductions 

4 under section 1886(d)(1)(F)(i) for that fiscal 

5 year. 

6 ‘‘(B) METHOD AND TIMING.—Perform7 ance-based payments to hospitals under this 

8 subsection shall be made from the Federal Hos9 pital Insurance Trust Fund under section 1817. 

10 Performance-based payments shall be made to a 

11 hospital under this subsection with respect to a 

12 fiscal year based on quality performance for the 

13 12-month period ending June 30th of the prior 

14 fiscal year. 

15 ‘‘(7) PERFORMANCE-BASED BONUS PAYMENT

16 FOR HIGHEST PERFORMING HOSPITALS.— 

17 ‘‘(A) IN GENERAL.—The Secretary shall 

18 establish a program to reward those hospitals 

19 with high performance scores, as determined by 

20 the Secretary, in a fiscal year through the mak21 ing of performance-based bonus payments. 

22 ‘‘(B) ADDITIONAL PAYMENT.—Perform23 ance-based bonus payments made under the 

24 program established in subparagraph (A) in a 

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1 based payments made under paragraph (2) in 

2 that fiscal year. 

3 ‘‘(C) DETERMINATION OF PAYMENT

4 AMOUNT.—Performance-based bonus payments 

5 under the program established in subparagraph 

6 (A) shall be made in such amount as the Sec7 retary determines to be appropriate. 

8 ‘‘(D) REQUIRED AGGREGATE AMOUNT OF

9 PAYMENTS.—The Secretary shall make aggre10 gate payments in a fiscal year under the per11 formance-based bonus payment program estab12 lished in subparagraph (A) in an amount equal 

13 to the difference between the aggregate amount 

14 of reductions under section 1886(d)(1)(F)(i) for 

15 the fiscal year involved and the aggregate 

16 amount of performance-based payments made 

17 under paragraph (2) for such fiscal year. 

18 ‘‘(8) ADDITIONAL PERFORMANCE-BASED INCEN19 TIVE PAYMENTS.— 

20 ‘‘(A) INDEPENDENT ACTUARIAL ESTIMATE

21 OF SAVINGS.—With respect to each fiscal year 

22 beginning after fiscal year 2009, the Secretary 

23 shall enter into arrangements for the analysis 

24 by a qualified independent entity or organiza25 tion of the actuarial value of cost savings under 

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1 part A attributable to the improvement in the 

2 delivery of inpatient hospital services by hos3 pitals by reason of this section. 

4 ‘‘(B) PERFORMANCE-BASED INCENTIVE

5 PAYMENT FUND.— 

6 ‘‘(i) IN GENERAL.—Amounts identi7 fied as savings under subparagraph (A) for 

8 a fiscal year shall be available to the Sec9 retary to make performance-based pay10 ments in addition to those available under 

11 paragraphs (2) and (7) as incentives to 

12 hospitals to continue to improve the quality 

13 of inpatient hospital services provided to 

14 patients. 

15 ‘‘(ii) INCENTIVE PAYMENTS.—Addi16 tional payments under clause (i) shall be 

17 made in such form, manner, and perio18 dicity as the Secretary may specify. 

19 ‘‘(9) ALTERNATIVE PERFORMANCE MEASURE.— 

20 ‘‘(A) IN GENERAL.—The Secretary shall 

21 evaluate the appropriateness of applying an al22 ternative method for the measurement of the 

23 quality of care provided by hospitals to individ24 uals who are entitled to benefits under part A 

25 and who are inpatients of the hospitals. 

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1 ‘‘(B) METHODOLOGY.—The alternative 

2 method under subparagraph (A) shall measure 

3 the extent to which such individuals are reliably 

4 being provided evidence-based care by hospitals, 

5 expressed as the percentage of occasions on 

6 which a hospital provides the individual with all 

7 of the appropriate actions identified under qual8 ity measures during a fiscal year. 

9 ‘‘(C) PUBLIC AVAILABILITY.—The Sec10 retary shall measure the performance of hos11 pitals using the alternative method under sub12 paragraph (A), and shall make the results of 

13 such performance measurement available to the 

14 public. 

15 ‘‘(D) USE FOR EVALUATION OF FUTURE

16 MEASURES.—The Secretary shall evaluate the 

17 appropriateness of using the alternative meas18 ure under subparagraph (A) for the purpose of 

19 making performance-based payments under this 

20 subsection. 

21 ‘‘(g) FINANCING.— 

22 ‘‘(1) REDUCTION IN DRG PAYMENT AMOUNT.— 

23 The Secretary shall make performance-based pay24 ments under paragraphs (2) and (7) of subsection 

25 (f) from amounts credited to the Federal Hospital 

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1 Insurance Trust Fund under section 1817 in the fis2 cal year by reason of the application of the reduction 

3 under section 1886(d)(1)(F)(i). 

4 ‘‘(2) NO EFFECT ON ADJUSTMENTS FOR

5 OUTLIER, IME, DSH, OR CAPITAL-RELATED COSTS.— 

6 The adjustments under paragraphs (5)(A), (5)(B), 

7 and (5)(F) of section 1886(d), and payments for 

8 capital-related costs under section 1886(g), shall be 

9 computed without regard to the adjustments made 

10 by reason of section 1886(d)(1)(F). 

11 ‘‘(h) PROVISIONS RELATING TO DATA SUBMIS12 SION.— 

13 ‘‘(1) IN GENERAL.—Subject to the succeeding 

14 provisions of this subsection, each hospital shall sub15 mit data on measures selected under this section to 

16 the Secretary in a form and manner, and at a time, 

17 specified by the Secretary for purposes of subsection 

18 (a). 

19 ‘‘(2) DATA SUBMISSION AND RESUBMISSION.— 

20 ‘‘(A) PERIOD FOR SUBMISSION AND VALI21 DATION.—The Secretary shall provide a 135- 

22 day period after the close of a calendar quarter 

23 for hospitals to submit data required under sub24 section (a) for such quarter. 

25 ‘‘(B) RESUBMISSION PERIOD.— 

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1 ‘‘(i) IN GENERAL.—Subject to clause 

2 (ii), insofar as an additional period of time 

3 is required after the end of the 135-day 

4 period referred to in subparagraph (A) to 

5 correct errors with respect to the data sub6 mitted by hospitals, the Secretary shall 

7 provide for an additional 30-day period, 

8 beginning on the day after the date of the 

9 end of such 135-day period, for the correc10 tion of such errors and resubmission of the 

11 revised data. 

12 ‘‘(ii) EXCEPTION.—The Secretary 

13 may not provide for an additional 30-day 

14 period under clause (i) if the data sub15 mitted by the hospital have been used to 

16 determine an amount performance-based 

17 payments under subsection (f) for that 

18 hospital. 

19 ‘‘(C) REPORT ON SHORTER TIMEFRAME.— 

20 The Secretary shall submit to Congress a report 

21 on the feasibility and advisability of reducing 

22 the length of the 135-day period under subpara23 graph (A) to 60 days for the submission and 

24 validation of data. 

25 ‘‘(3) VALIDATION OF DATA.— 

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1 ‘‘(A) IMPLEMENTATION OF PROCESS.—The 

2 Secretary shall implement a process for the val3 idation of data submitted by hospitals under 

4 subsection (a). Such process shall provide for 

5 the selection of hospitals with respect to data 

6 submitted by such hospitals on both a random 

7 basis and on the basis of specific criteria, and 

8 shall include standards for the validation of 

9 data at the level of specified quality measures. 

10 ‘‘(B) VALIDATION FOR NEW QUALITY

11 MEASURES.—With respect to proposed new 

12 quality measures, the Secretary shall not estab13 lish standards for the validation of data for the 

14 period of time that the Secretary determines 

15 hospitals require to gain experience with the 

16 new quality measures to properly report data 

17 with respect to such measure. The Secretary 

18 may use processes such as re-abstraction and 

19 validation as a learning tool for hospitals in20 stead of establishing such standards. 

21 ‘‘(4) OPPORTUNITY TO REVIEW DATA.—The 

22 Secretary shall provide a hospital the opportunity to 

23 review data reported by the hospital before such 

24 data is made available to the public under subsection 

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1 (e) or used for purposes of the performance-based 

2 payment program under subsection (f). 

3 ‘‘(i) RULE OF CONSTRUCTION WITH RESPECT TO

4 APPEAL RIGHTS.—Nothing in this section shall be con5 strued as effecting the right of a subsection (d) hospital 

6 to seek reconsideration or judicial review under section 

7 1869, 1878, or otherwise of a determination of the Sec8 retary with respect to the provisions of this section, includ9 ing the application of the performance-based payment pro10 gram. 

11 ‘‘(j) REPORTS TO CONGRESS.— 

12 ‘‘(1) QUALITY ASSESSMENTS.—The Secretary 

13 shall conduct assessments of the quality measure14 ment and performance-based payment program 

15 under this section, which shall be used in developing 

16 the reports under paragraph (2). 

17 ‘‘(2) REPORTS BASED ON ASSESSMENTS.—The 

18 Secretary shall submit to Congress by not later than 

19 March 31, 2012, and every 18 months thereafter, a 

20 report that— 

21 ‘‘(A) identifies the accomplishments of the 

22 program under this section; 

23 ‘‘(B) identifies any unintended con24 sequences of such program for hospitals and 

25 patients; 

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1 ‘‘(C) provides recommendations for legisla2 tive and other modifications to the program; 

3 ‘‘(D) includes evidence indicating changes 

4 in access to, quality of, and efficiency and out5 comes in care related to the program; 

6 ‘‘(E) assesses the program’s impact on dis7 parities in care by race and ethnicity; and 

8 ‘‘(F) identifies the impact of the program 

9 on hospitals of differing size and patient acuity 

10 levels, including safety net hospitals and hos11 pitals with a substantial medical education com12 mitment. 

13 ‘‘(3) GAO EVALUATION.—Not later than Sep14 tember 30, 2012, the Comptroller General shall con15 duct an independent evaluation of the impact of the 

16 program under this section on hospitals and pa17 tients. Such evaluation shall include the items de18 scribed in paragraph (2) as well as barriers to the 

19 program achieving its full potential.’’. 

20 (b) CONFORMING AMENDMENTS TO QUALITY RE21 PORTING AND PAYMENT UNDER INPATIENT HOSPITAL

22 PROSPECTIVE PAYMENT SYSTEM.— 

23 (1) REPORTING OF QUALITY DATA.—Section 

24 1886(b)(3)(B) of the Social Security Act (42 U.S.C. 

25 1395ww(b)(3)(B)) is amended— 

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1 (A) in clause (i), by inserting ‘‘and subject 

2 to section 1886A(a)(1),’’ after ‘‘during a fiscal 

3 year,’’; and 

4 (B) in clause (viii)(I), by striking ‘‘fiscal 

5 year 2007 and each subsequent fiscal year’’ and 

6 inserting ‘‘fiscal years 2007, 2008, and 2009’’. 

7 (2) ADJUSTMENT TO PAYMENTS FOR OPER8 ATING COSTS OF INPATIENT HOSPITAL SERVICES.— 

9 Section 1886(d)(1) of such Act (42 U.S.C. 

10 1395ww(d)(1)) is amended by adding at the end the 

11 following new subparagraph: 

12 ‘‘(F) ADJUSTMENT FOR PERFORMANCE13 BASED PAYMENT PROGRAM.— 

14 ‘‘(i) TARGETED REDUCTIONS.— 

15 ‘‘(I) IN GENERAL.—Subject to 

16 subclause (II), in the case of a sub17 section (d) hospital that complies with 

18 the data submission requirements 

19 under section 1886A(a)(1) for a fiscal 

20 year, beginning with fiscal year 2011, 

21 the Secretary shall reduce the amount 

22 of the payment with respect to the op23 erating costs of inpatient hospital 

24 services determined under subpara25 graph (A) for specified diagnosis-remstockstill on PROD1PC66 with BILLS

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1 lated groups (as defined in clause (ii)) 

2 for that fiscal year by the perform3 ance-based payment offset percent (as 

4 defined in clause (iii)). 

5 ‘‘(II) EXCEPTION.—There shall 

6 be no reduction under subclause (I) 

7 by reason of clause (ii)(II) before fis8 cal year 2012. 

9 ‘‘(ii) SPECIFIED DIAGNOSIS-RELATED

10 GROUPS DEFINED.— 

11 ‘‘(I) DIAGNOSIS-RELATED

12 GROUPS EVALUATED UNDER COM13 POSITE PERFORMANCE MEASURES.— 

14 For purposes of clause (i) and subject 

15 to subclause (II), the term ‘specified 

16 diagnosis-related groups’ means only 

17 those diagnosis-related groups that 

18 are evaluated through specified qual19 ity measures (as defined in section 

20 1886A(a)(4)(A))— 

21 ‘‘(aa) that are used for a fis22 cal year to measure the perform23 ance of a subsection (d) hospital 

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1 ments to that hospital under 

2 paragraph (2) or (7) of such sec3 tion; 

4 ‘‘(bb) that have been rec5 ommended by the Hospital Qual6 ity Alliance; and 

7 ‘‘(cc) data from which are 

8 made publicly available through 

9 the use of the Hospital Compare 

10 Internet website maintained by 

11 the Department of Health and 

12 Human Services (or such similar 

13 website of the Department) as 

14 meets the requirements of section 

15 1886A(e). 

16 ‘‘(II) ACROSS THE BOARD APPLI17 CATION FOR HCAHPS.—With respect 

18 only to specified quality measures re19 lating to the Hospital Consumer As20 sessment of Healthcare Providers and 

21 Systems Survey (HCAHPS) and for 

22 which a diagnosis-related group is eli23 gible to report, such term includes a 

24 group. Nothing in this subclause shall 

25 be construed as applying a reduction 

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1 under this subparagraph to hospitals 

2 that are not subsection (d) hospitals. 

3 ‘‘(iii) PERFORMANCE-BASED PAYMENT

4 OFFSET PERCENT.— 

5 ‘‘(I) IN GENERAL.—For purposes 

6 of clause (i) and subject to subclauses 

7 (II) and (III), the term ‘performance8 based payment offset percent’ means 

9 the percent determined by the Sec10 retary for a fiscal year that results in 

11 aggregate reductions in payments 

12 under clause (i) in that fiscal year in 

13 an amount equal to the aggregate 

14 amount of performance-based pay15 ments that the Secretary elects to 

16 make under section 1886A(f)(2) for 

17 that fiscal year. 

18 ‘‘(II) INDIVIDUAL MAXIMUM OFF19 SETS.—Subject to subclause (III), in 

20 no case may the percent determined 

21 under subclause (I) for a fiscal year 

22 exceed— 

23 ‘‘(aa) with respect to speci24 fied quality measures described 

25 in clause (ii)(I), 2.0 percent; and 

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1 ‘‘(bb) with respect to speci2 fied quality measures described 

3 in clause (ii)(II), 0.25 percent. 

4 ‘‘(III) AGGREGATE MAXIMUM

5 OFFSET.—In no case may the percent 

6 determined under subclause (I) for a 

7 fiscal year exceed— 

8 ‘‘(aa) 0.50 percent for fiscal 

9 year 2011; 

10 ‘‘(bb) 1.0 percent for fiscal 

11 year 2012; 

12 ‘‘(cc) 1.5 percent for fiscal 

13 year 2013; and 

14 ‘‘(dd) 2.0 percent for fiscal 

15 year 2014 and succeeding years. 

16 ‘‘(iv) INCREASE IN PPS PAYMENT

17 AMOUNT FOR PERFORMANCE-BASED PAY18 MENT.—In the case of a subsection (d) 

19 hospital that received a performance-based 

20 payment under paragraph (2) or (7), or 

21 both, of section 1886A(f) for a fiscal year 

22 for a specified diagnosis-related group, the 

23 amount of the payment with respect to the 

24 operating costs of inpatient hospital serv25 ices determined under subparagraph (A) 

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1 for such specified diagnosis-related group 

2 shall be increased by the amount of such 

3 performance-based payment or payments 

4 for that fiscal year.’’. 

5 SEC. 3. CONSULTATION FOR APPROPRIATE APPLICATION 

6 OF PERFORMANCE-BASED PAYMENTS TO 

7 SMALL HOSPITALS. 

8 (a) CONSULTATION.—The Secretary of Health and 

9 Human Services shall consult with representatives of small 

10 hospitals, including critical access hospitals under section 

11 1820 of the Social Security Act (42 U.S.C. 1395i–4), to 

12 determine appropriate and effective methods for such hos13 pitals to participate in programs for performance-based 

14 payments for inpatient hospital services (or inpatient crit15 ical access hospital services) furnished to individuals who 

16 are entitled to benefits under part A of title XVIII of the 

17 Social Security Act (42 U.S.C. 1395c et seq.) and who 

18 are inpatients of the hospitals. 

19 (b) CONSIDERATION.—The Secretary shall consider 

20 innovative methods of measuring and rewarding quality 

21 inpatient hospital services furnished by small hospitals, in22 cluding critical access hospitals, which may be difficult to 

23 quantify due to the low volume of services provided by 

24 such hospitals for which quality measures have been devel25 oped. 

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1 (c) REPORT TO CONGRESS.—Not later than two 

2 years after the date of enactment of this Act, the Sec3 retary shall submit to Congress a report on the consulta4 tion required under this section. The report shall include 

5 recommendations of the Secretary with respect to the ap6 propriate application of performance-based payment and 

7 payment incentive programs to small hospitals, including 

8 critical access hospitals, for the provision of quality inpa9 tient hospital services. 

10 SEC. 4. PRIORITY OF ASSISTANCE FROM QUALITY IM11 PROVEMENT ORGANIZATIONS AND OTHER 

12 QUALITY ORGANIZATIONS FOR HOSPITALS 

13 WITH RESULTS BELOW PERFORMANCE14 BASED PAYMENT BENCHMARKS. 

15 (a) PRIORITY OF ASSISTANCE TO LOW-PERFORMING

16 HOSPITALS.—Section 1154(a) of the Social Security Act 

17 (42 U.S.C. 1320c–3(a)) is amended by adding at the end 

18 the following new paragraph: 

19 ‘‘(18)(A) The organization shall give priority in 

20 the provision of quality improvement assistance to 

21 subsection (d) hospitals that fail to meet quality 

22 benchmarks established under section 1886A(f). 

23 ‘‘(B) In this paragraph, the term ‘quality im24 provement assistance’ includes the following: 

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1 ‘‘(i) Education on quality improvement ini2 tiatives, strategies, and techniques. 

3 ‘‘(ii) Instruction on how to collect, submit, 

4 aggregate, and interpret data on measures used 

5 for quality improvement, public reporting, and 

6 payment under section 1886A. 

7 ‘‘(iii) Technical assistance to support qual8 ity improvement. 

9 ‘‘(iv) Technical assistance and instruction 

10 in the conduct of root-cause analyses. 

11 ‘‘(v) Facilitating adoption of procedures 

12 that encourage timely candid feedback from pa13 tients and their families concerning perceived 

14 problems. 

15 ‘‘(vi) Guidance on redesigning clinical proc16 esses, including the adoption and effective use 

17 of health information technology, to improve the 

18 coordination, effectiveness, and safety of care.’’. 

19 (b) EVALUATION OF QUALITY IMPROVEMENT ORGA20 NIZATIONS.—Section 1153(c)(2) of such Act (42 U.S.C. 

21 1320c–2(c)(2)) is amended by inserting before the semi22 colon at the end the following: ‘‘, including the effective23 ness of the organization in improving the ability of a hos24 pital referred to in section 1154(a)(18)(A) to meet quality 

25 benchmarks established under section 1886A(f)’’. 

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1 (c) ASSISTANCE FROM ALTERNATIVE QUALITY OR2 GANIZATIONS.—Section 1886A of the Social Security Act, 

3 as inserted by section 2(a), is amended— 

4 (1) by redesignating subsection (j) as sub5 section (k); and 

6 (2) by inserting after subsection (i) the fol7 lowing new subsection (j): 

8 ‘‘(j) ASSISTANCE FROM ALTERNATIVE QUALITY OR9 GANIZATIONS.— 

10 ‘‘(1) PRIVATE QUALITY ORGANIZATIONS.—The 

11 Secretary shall establish a program under which a 

12 hospital seeking to improve the quality of the provi13 sion of inpatient hospital services based on the re14 sults of a performance evaluation under this section 

15 may apply to the Secretary to receive quality im16 provement assistance from a private quality organi17 zation with expertise in supporting improvement in 

18 the quality of the provision of inpatient hospital 

19 services. 

20 ‘‘(2) ACCREDITATION.—Before entering into ar21 rangements with a private quality organization for 

22 the provision of assistance under paragraph (1), the 

23 Secretary shall ensure that the organization has 

24 been accredited or certified by a recognized accredi25 tation or certification agency or body. 

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1 ‘‘(3) PAYMENT.—The rate of payment for qual2 ity assistance services provided by a private quality 

3 organization under paragraph (1) shall be negotiated 

4 by the Secretary. Payment shall be made by the Sec5 retary from funds made available under part B of 

6 title XI title for the payment of organizations with 

7 contracts with the Secretary under such part.’’. 

Æ 

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