I 

114TH CONGRESS 

1ST SESSION H. R. 3298 

To amend title XVIII of the Social Security Act to provide for value-based 

purchasing of post-acute care services under the Medicare program, and 

for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 29, 2015 

Mr. BRADY of Texas (for himself and Mr. KIND) introduced the following bill; 

which was referred to the Committee on Ways and Means, and in addition to the Committee on Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of 

such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To amend title XVIII of the Social Security Act to provide 

for value-based purchasing of post-acute care 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 ‘‘Medicare Post-Acute 

5 Care Value-Based Purchasing Act of 2015’’. 


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1 SEC. 2. REPEAL OF MARKET BASKET CUTS FOR POST2 ACUTE PROVIDERS. 

3 (a) SNFS.—Section 1888(e) of the Social Security 

4 Act (42 U.S.C. 1395yy(e)), as amended by section 411(a) 

5 of the Medicare Access and CHIP Reauthorization Act of 

6 2015, is amended— 

7 (1) in paragraph (5)(B)— 

8 (A) in clause (i), by striking ‘‘clauses (ii) 

9 and (iii)’’ and inserting ‘‘clause (ii)’’; 

10 (B) in clause (ii), by striking ‘‘subject to 

11 clause (iii),’’; and 

12 (C) by striking clause (iii); and 

13 (2) in paragraph (6)(A)(i), by striking ‘‘clauses 

14 (ii) and (iii) of paragraph (5)(B)’’ and inserting 

15 ‘‘paragraph (5)(B)(ii)’’. 

16 (b) IRFS.—Section 1886(j) of the Social Security Act 

17 (42 U.S.C. 1395ww(j)), as amended by section 411(b) of 

18 the Medicare Access and CHIP Reauthorization Act of 

19 2015, is amended— 

20 (1) in paragraph (3)(C)— 

21 (A) in clause (i), by striking ‘‘clauses (ii) 

22 and (iii)’’ and inserting ‘‘clause (ii)’’; 

23 (B) in clause (ii), by striking ‘‘Subject to 

24 clause (iii), after’’ and inserting ‘‘After’’ ; and 

25 (C) by striking clause (iii); and 


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1 (2) in paragraph (7)(A)(i), by striking ‘‘sub2 paragraphs (C)(iii) and (D) of paragraph (3)’’ and 

3 inserting ‘‘paragraph (3)(D)’’. 

4 (c) HHAS.—Section 1895(b)(3)(B) of the Social Se5 curity Act (42 U.S.C. 1395fff(b)(3)(B)), as amended by 

6 section 411(c) of the Medicare Access and CHIP Reau7 thorization Act of 2015, is amended— 

8 (1) in clause (iii), by striking the last sentence; 

9 and 

10 (2) in clause (vi)(I), by striking ‘‘(except 

11 2018)’’. 

12 (d) LTCHS.—Section 1886(m)(3) of the Social Secu13 rity Act (42 U.S.C. 1395ww(m)(3)), as amended by sec14 tion 411(e) of the Medicare Access and CHIP Reauthor15 ization Act of 2015, is amended— 

16 (1) in subparagraph (A), by striking ‘‘Subject 

17 to subparagraph (C), in implementing’’ and insert18 ing ‘‘In implementing’’; and 

19 (2) by striking subparagraph (C). 

20 (e) EFFECTIVE DATE.—The amendments made by 

21 this section shall be effective as if included in the enact22 ment of the Medicare Access and CHIP Reauthorization 

23 Act of 2015. 


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1 SEC. 3. POST-ACUTE CARE VALUE-BASED PURCHASING 

2 PROGRAM. 

3 (a) IN GENERAL.—Section 1899B of the Social Secu4 rity Act (42 U.S.C. 1395lll) is amended— 

5 (1) in the heading, by inserting ‘‘; POST6 ACUTE CARE VALUE-BASED PURCHASING PRO7 GRAM’’ before the period at the end; and 

8 (2) by adding at the end the following new sub9 section: 

10 ‘‘(n) POST-ACUTE CARE VALUE-BASED PURCHASING

11 PROGRAM (PAC VBP PROGRAM).— 

12 ‘‘(1) ESTABLISHMENT.— 

13 ‘‘(A) IN GENERAL.—Subject to the suc14 ceeding provisions of this subsection, the Sec15 retary shall establish a post-acute care value16 based purchasing program (in this subsection 

17 referred to as the ‘PAC VBP Program’) under 

18 which value-based incentive payments are made 

19 in a payment year to PAC providers. 

20 ‘‘(B) PROGRAM IMPLEMENTATION.—The 

21 PAC VBP Program shall apply to payments for 

22 services furnished in payment years beginning 

23 on or after October 1, 2019. 

24 ‘‘(C) TREATMENT OF NEW PAC PRO25 VIDERS.—In the case of a PAC provider that 

26 first begins participation in the program under 


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1 this title during the performance period for a 

2 payment year (and had not previously sub3 mitted claims under this title as such a provider 

4 under a different billing number or tax identi5 fier), such provider shall not be treated under 

6 this subsection as a PAC provider until the sub7 sequent payment year and performance period 

8 for such subsequent payment year. 

9 ‘‘(D) PAYMENT YEAR DEFINED.—In this 

10 subsection, the term ‘payment year’ means— 

11 ‘‘(i) for PAC providers described in 

12 clause (i) of subsection (a)(2)(A) (relating 

13 to home health agencies), a calendar year; 

14 and 

15 ‘‘(ii) for all other PAC providers, a 

16 fiscal year. 

17 ‘‘(E) TYPE OF PROVIDER DEFINED.—In 

18 this subsection, the term ‘provider type’ means, 

19 with respect to PAC providers, each of the 

20 types of PAC providers described in a clause in 

21 subsection (a)(2)(A). 

22 ‘‘(2) APPLICATION OF MEASURE.— 

23 ‘‘(A) IN GENERAL.—Under the PAC VBP 

24 Program, the Secretary shall apply the resource 

25 use measure specified under subsection 


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1 (d)(1)(A) for purposes of the PAC VBP Pro2 gram. 

3 ‘‘(B) APPLICATION ON PROVIDER AND

4 AREA BASIS.—Such measure shall be applied 

5 separately— 

6 ‘‘(i) for each PAC provider; and 

7 ‘‘(ii) for all PAC providers, regardless 

8 of type, in each hospital service area or 

9 comparable area (as determined by the 

10 Secretary) in which an individual receives 

11 a service from any PAC provider involved 

12 under this title in such area. 

13 ‘‘(3) PERFORMANCE STANDARDS.— 

14 ‘‘(A) ESTABLISHMENT.—The Secretary 

15 shall establish performance standards consistent 

16 with this paragraph with respect to the measure 

17 applied under paragraph (2) for a performance 

18 period for a payment year. 

19 ‘‘(B) HIGHER OF ACHIEVEMENT AND IM20 PROVEMENT.—The performance standards es21 tablished under subparagraph (A) shall include 

22 levels of achievement and improvement. In cal23 culating the performance score of a PAC pro24 vider (including an area) under paragraph (4), 


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1 the Secretary shall use the higher of either im2 provement or achievement. 

3 ‘‘(C) TIMING.—The Secretary shall estab4 lish and announce the performance standards 

5 established under subparagraph (A) not later 

6 than 90 days before the beginning of the per7 formance period for the payment year involved. 

8 ‘‘(4) PAC PERFORMANCE SCORES.— 

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

10 develop a methodology for assessing the total 

11 performance of each PAC provider, and of each 

12 hospital service area or comparable area (as de13 termined by the Secretary, based on perform14 ance standards established under paragraph (3) 

15 with respect to the measure applied under para16 graph (2) for a performance period for a pay17 ment year. 

18 ‘‘(B) COMPUTATION OF INDIVIDUAL, AREA, 

19 AND COMPOSITE PERFORMANCE SCORES.— 

20 Using such methodology, the Secretary shall 

21 provide for— 

22 ‘‘(i) an assessment, based on the 

23 measure applied under paragraph 

24 (2)(B)(i), for each individual PAC provider 

25 for each performance period; 


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1 ‘‘(ii) an assessment, based on the 

2 measure applied under paragraph 

3 (2)(B)(ii), for all PAC providers in each 

4 area described in such paragraph for each 

5 performance period; and 

6 ‘‘(iii) a composite assessment (in this 

7 subsection referred to as the ‘PAC com8 posite performance score’) for each PAC 

9 provider for each performance period equal 

10 to the sum of— 

11 ‘‘(I) 55 percent of the perform12 ance score under clause (i) for the pe13 riod for that PAC provider; and 

14 ‘‘(II) 45 percent of the perform15 ance score under clause (ii) for the 

16 period for all PAC providers located 

17 in the area in which the PAC provider 

18 is located. 

19 ‘‘(C) RANKING OF PAC PERFORMANCE

20 SCORES.—The Secretary shall, for the perform21 ance period for each payment year for each type 

22 of PAC provider, rank the PAC composite per23 formance scores determined under subpara24 graph (B)(iii) from low to high. 


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1 ‘‘(5) CALCULATION OF VALUE-BASED INCEN2 TIVE PAYMENTS.— 

3 ‘‘(A) IN GENERAL.—With respect to a 

4 PAC provider, based on the ranking under 

5 paragraph (4)(C) for a performance period for 

6 a payment year, the Secretary shall increase the 

7 payment basis specified in subparagraph (B) 

8 otherwise applicable to such provider for serv9 ices furnished by such provider during such 

10 payment year by the value-based incentive pay11 ment percentage specified under subparagraph 

12 (C) for the provider and payment year. 

13 ‘‘(B) PAYMENT BASIS.—The payment 

14 basis specified in this subparagraph for a type 

15 of provider is as follows, as applied after the 

16 application of paragraph (6): 

17 ‘‘(i) SKILLED NURSING FACILITIES.— 

18 For skilled nursing facilities, the adjusted 

19 Federal per diem rate under section 

20 1888(e)(4)(B). 

21 ‘‘(ii) INPATIENT REHABILITATION FA22 CILITIES.—For inpatient rehabilitation fa23 cilities, the prospective per unit payment 

24 rate under section 1886(j)(3). 


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1 ‘‘(iii) LONG-TERM CARE HOSPITALS.— 

2 For long-term care hospitals, the standard 

3 Federal rate under section 1886(m), or, if 

4 applicable, the applicable site neutral pay5 ment rate under paragraph (6) of such 

6 section. 

7 ‘‘(iv) HOME HEALTH AGENCIES.—For 

8 home health agencies, the standard pro9 spective payment amount (or amounts) 

10 under section 1895(b)(3). 

11 ‘‘(C) VALUE-BASED INCENTIVE PAYMENT

12 PERCENTAGE.—The Secretary shall specify a 

13 value-based incentive payment percentage for 

14 each PAC provider for a payment year, which 

15 may include a zero percentage but not a per16 centage below zero. In specifying the value17 based incentive payment percentage for each 

18 PAC provider for a payment year under this 

19 subparagraph, the Secretary shall ensure that— 

20 ‘‘(i) such percentage is based on the 

21 ranking of PAC composite performance 

22 score of the provider under paragraph (4) 

23 for the performance period for the pay24 ment year; 


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1 ‘‘(ii) the application of all such per2 centages for a type of PAC provider for a 

3 payment year results in an appropriate dis4 tribution of value-based incentive increases 

5 under subparagraph (A) such that— 

6 ‘‘(I) PAC providers with the 

7 highest rankings under paragraph 

8 (4)(C) receive the highest value-based 

9 incentive payment percentages under 

10 this subparagraph; and 

11 ‘‘(II) PAC providers with the 

12 lowest rankings under such paragraph 

13 receive the lowest value-based incen14 tive payment percentages under this 

15 subparagraph; and 

16 ‘‘(iii) the total amount of value-based 

17 incentive increases under this paragraph 

18 for all PAC providers for each type of pro19 vider in such payment year shall be at 

20 least 50 percent, but not greater than 70 

21 percent, of the total amount of the reduc22 tions to payments for PAC providers of 

23 such type for such payment year under 

24 paragraph (6), as estimated by the Sec25 retary. 


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1 ‘‘(6) FUNDING FOR VALUE-BASED INCENTIVE

2 PAYMENTS.— 

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

4 reduce the payment basis (as defined in para5 graph (5)(B)), not taking into account any in6 crease under paragraph (5), for each type of 

7 PAC provider for each payment year begin8 ning— 

9 ‘‘(i) during fiscal year 2020 by 3 per10 cent; 

11 ‘‘(ii) during fiscal year 2021 by 4 per12 cent; 

13 ‘‘(iii) during fiscal year 2022 by 5 

14 percent; 

15 ‘‘(iv) during fiscal year 2023 by 6 per16 cent; 

17 ‘‘(v) during fiscal year 2024 by 7 per18 cent; and 

19 ‘‘(vi) during or after fiscal year 2025 

20 by 8 percent. 

21 ‘‘(B) IMPLEMENTATION.—The Secretary 

22 shall make such reductions for all PAC pro23 viders in the payment year involved, regardless 

24 of whether or not the PAC provider has been 

25 determined by the Secretary to have earned a 


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1 value-based incentive payment increase under 

2 paragraph (5) for such payment year. 

3 ‘‘(7) ANNOUNCEMENT OF NET RESULT OF AD4 JUSTMENTS.—Under the PAC VBP Program, the 

5 Secretary shall, not later than 90 days prior to the 

6 payment year involved, inform each PAC provider of 

7 the adjustments to payments to the PAC provider 

8 for services furnished by such provider during the 

9 payment year under paragraphs (5) and (6). 

10 ‘‘(8) NO EFFECT IN SUBSEQUENT FISCAL

11 YEARS.—The value-based incentive payment increase 

12 under paragraph (5) and the payment reduction 

13 under paragraph (6) shall each apply only with re14 spect to the payment year involved, and the Sec15 retary shall not take into account such value-based 

16 incentive payment increase or payment reduction in 

17 making payments to a PAC provider under this title 

18 in a subsequent payment year. 

19 ‘‘(9) PUBLIC REPORTING.— 

20 ‘‘(A) PAC SPECIFIC INFORMATION.—The 

21 Secretary shall make available to the public, by 

22 posting on the relevant Compare Medicare 

23 website (or a successor website) in an easily un24 derstandable format, information regarding the 

25 performance of individual PAC providers under 


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1 the PAC VBP Program, with respect to a pay2 ment year, including— 

3 ‘‘(i) the PAC composite performance 

4 score of the PAC provider for such pay5 ment year; and 

6 ‘‘(ii) the ranking of the PAC provider 

7 under paragraph (4)(C) for the perform8 ance period for such payment year. 

9 ‘‘(B) AGGREGATE INFORMATION.—The 

10 Secretary shall periodically post on the relevant 

11 websites referred to in subparagraph (A) aggre12 gate information on the PAC VBP Program for 

13 the types of providers, including— 

14 ‘‘(i) the range of PAC composite per15 formance scores under paragraph (4)(B); 

16 and 

17 ‘‘(ii) the number of PAC providers of 

18 each type receiving value-based incentive 

19 payment increases under paragraph (5) 

20 and the range and total amount of such 

21 value-based incentive payment increases. 

22 ‘‘(10) LIMITATION ON REVIEW.—There shall be 

23 no administrative or judicial review under section 

24 1869, section 1878, or otherwise of the following: 


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1 ‘‘(A) The establishment of the performance 

2 standards under paragraph (3) and the per3 formance period. 

4 ‘‘(B) The methodology developed under 

5 paragraph (4) that is used to calculate PAC 

6 composite performance scores and the calcula7 tion of such scores. 

8 ‘‘(C) The ranking determinations under 

9 paragraph (4)(C). 

10 ‘‘(D) The methodology used to determine 

11 the value-based incentive payment percentages 

12 under paragraph (5). 

13 ‘‘(E) The determination of the amount of 

14 funding available for such value-based incentive 

15 payments under paragraph (5)(C)(iii).’’. 

16 (b) CONFORMING AMENDMENTS.— 

17 (1) SNF PAYMENT.—Section 1888(e)(4) of the 

18 Social Security Act (42 U.S.C. 1395yy(e)(4)) is 

19 amended by adding at the end the following new 

20 subparagraph: 

21 ‘‘(I) VALUE-BASED PURCHASING ADJUST22 MENT.—The adjusted Federal per diem rate 

23 under subparagraph (B) is subject to adjust24 ment under paragraphs (5) and (6) of section 

25 1899B(n).’’. 


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1 (2) INPATIENT REHABILITATION FACILITIES.— 

2 Section 1886(j)(3) of the Social Security Act (42 

3 U.S.C. 1395ww(j)(3)) is amended by adding at the 

4 end the following new subparagraph: 

5 ‘‘(D) VALUE-BASED PURCHASING ADJUST6 MENT.—The prospective per unit payment rate 

7 under this paragraph is subject to adjustment 

8 under paragraphs (5) and (6) of section 

9 1899B(n).’’. 

10 (3) LONG-TERM CARE HOSPITALS.—Section 

11 1886(m) of the Social Security Act (42 U.S.C. 

12 1395ww(m)) is amended by adding at the end the 

13 following new paragraph: 

14 ‘‘(7) VALUE-BASED PURCHASING ADJUST15 MENT.—The standard Federal rate under this sub16 section, or, if applicable, the applicable site neutral 

17 payment rate under paragraph (6), is subject to ad18 justment under paragraphs (5) and (6) of section 

19 1899B(n).’’. 

20 (4) HOME HEALTH AGENCIES.—Section 

21 1895(b)(3) of the Social Security Act (42 U.S.C. 

22 1395fff(b)(3)) is amended by adding at the end the 

23 following new subparagraph: 

24 ‘‘(D) VALUE-BASED PURCHASING ADJUST25 MENT.—The standard prospective payment 


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1 amount (or amounts) under this paragraph is 

2 subject to adjustment under paragraphs (5) 

3 and (6) of section 1899B(n).’’. 

4 SEC. 4. SUNSETTING OF SKILLED NURSING FACILITY 

5 VALUE-BASED PURCHASING (SNF VBP) PRO6 GRAM. 

7 Section 1888(h)(1)(B) of the Social Security Act (42 

8 U.S.C. 1395yy(h)(1)(B)) is amended— 

9 (1) in the heading, by inserting ‘‘AND TO END

10 IN FISCAL YEAR 2025’’ after ‘‘FISCAL YEAR 2019’’; 

11 and 

12 (2) by inserting ‘‘and before October 1, 2025’’ 

13 after ‘‘2018’’. 

Æ 


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