I 

114TH CONGRESS 

1ST SESSION H. R. 2513 

To amend title XVIII of the Social Security Act with respect to the treatment 

of hospitals under the Medicare program, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 21, 2015 

Mr. SAM JOHNSON of Texas (for himself and Mr. HINOJOSA) 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 with respect 

to the treatment of hospitals 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 ‘‘Promoting Access, 

5 Competition, and Equity Act of 2015’’ or as the ‘‘PACE 

6 Act of 2015’’. 


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1 SEC. 2. CONFIRMING METHODOLOGY FOR HOSPITAL STAR 

2 RATING SYSTEM THROUGH HOSPITAL COM3 PARE. 

4 Section 1886(b)(3)(B)(viii) of the Social Security Act 

5 (42 U.S.C. 1395ww(b)(3)(B)(viii)) is amended by adding 

6 at the end the following new subclause: 

7 ‘‘(XII) In order to ensure consistent longitudinal 

8 comparisons among calendar quarters that began before 

9 October 1, 2019, the Secretary shall use the same method10 ology as is in effect as of April 16, 2015, for computation 

11 of the star rating for hospitals posted on the Internet 

12 website maintained by the Secretary under subclause (VII) 

13 for such calendar quarters. The Secretary may promulgate 

14 a regulation to change such methodology used with respect 

15 to the computation of such star rating for hospitals for 

16 calendar quarters beginning on or after October 1, 2019.’’. 

17 SEC. 3. REVISED CRITERIA FOR APPLICATION AND EXCEP18 TIONS TO MORATORIUM ON EXPANSION AND 

19 CONSTRUCTION OF PHYSICIAN-OWNED HOS20 PITALS. 

21 (a) TEMPORARY SUSPENSION OF LIMITATION ON

22 HOSPITALS THAT CAN APPLY FOR FACILITY EXPAN23 SIONS.—Section 1877(i)(3) of the Social Security Act (42 

24 U.S.C. 1395nn(i)(3)) is amended— 

25 (1) in subparagraph (E), by adding at the end, 

26 after clause (v), the following: 


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1 ‘‘With respect to applications filed under this 

2 paragraph during the period beginning on the 

3 date of the enactment of this sentence and end4 ing on September 30, 2019, such term includes 

5 any hospital (other than a high Medicaid facil6 ity).’’; and 

7 (2) in subparagraph (B), by inserting before 

8 the period at the end the following: ‘‘, except that 

9 such limitation shall not apply with respect to appli10 cations filed before October 1, 2019’’. 

11 (b) APPLICATION OF HOSPITAL EXPANSION EXCEP12 TION TO HOSPITALS WITH CONSISTENTLY HIGH QUAL13 ITY RATINGS.—Section 1877(i)(3) of the Social Security 

14 Act (42 U.S.C. 1395nn(i)(3)) is amended— 

15 (1) in subparagraph (A)(i), by striking ‘‘or is a 

16 high Medicaid facility described in subparagraph 

17 (F)’’ and inserting ‘‘, is a high Medicaid facility de18 scribed in subparagraph (F), or is a hospital with a 

19 consistently high quality rating (as defined in sub20 paragraph (H))’’; 

21 (2) in subparagraph (E), by adding at the end, 

22 after the matter added by subsection (a)(1), the fol23 lowing: 


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1 ‘‘Such term includes, with respect to subpara2 graphs (B) through (D), a hospital with a con3 sistently high quality rating.’’; and 

4 (3) by adding at the end, as amended by sub5 section (d), the following new subparagraph: 

6 ‘‘(H) HOSPITAL WITH A CONSISTENTLY

7 HIGH QUALITY RATING DEFINED.—In this 

8 paragraph, the term ‘hospital with a consist9 ently high quality rating’, with respect to a cal10 endar quarter (beginning on or after October 1, 

11 2019), means a hospital that has had a rating 

12 of 3 stars or higher under the hospital star rat13 ing system posted on the Internet website main14 tained by the Secretary under section 

15 1886(b)(3)(B)(viii)(VII) for each of the 12 cal16 endar quarters before the calendar quarter in17 volved.’’. 

18 (c) EXCEPTION AND SPECIAL RULES FOR CERTAIN

19 HOSPITALS UNDER DEVELOPMENT AS OF MARCH 23, 

20 2010.—Section 1877 of the Social Security Act (42 

21 U.S.C. 1395nn) is amended— 

22 (1) in subsection (d)(3)(D), by inserting before 

23 the period at the end the following: ‘‘or, in the case 

24 of a hospital under development as of March 23, 

25 2010 (as defined in paragraph (7)(A)), meets such 


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1 requirements as of the under development effective 

2 date (as defined in subsection (i)(7)(B))’’; and 

3 (2) in subsection (i)— 

4 (A) in paragraph (1), by adding at the end 

5 the following new subparagraph: 

6 ‘‘(G) SPECIAL TIMING RULE FOR HOS7 PITALS UNDER DEVELOPMENT AS OF MARCH 23, 

8 2010.—In applying this paragraph to a hospital 

9 under development as of March 23, 2010 (as 

10 defined in paragraph (7)(A)), any reference in 

11 this paragraph to the date of enactment of this 

12 subsection or to December 31, 2010, shall be 

13 deemed to be a reference to May 1, 2015.’’; 

14 (B) in paragraph (3)(C)(iii), by striking 

15 ‘‘provider agreement).’’ and inserting ‘‘provider 

16 agreement, or, in the case of a hospital under 

17 development as of March 23, 2010 (as defined 

18 in paragraph (7)(A)), May 1, 2015).’’; and 

19 (C) by adding at the end the following new 

20 paragraph: 

21 ‘‘(7) DEFINITIONS RELATING TO CERTAIN HOS22 PITALS UNDER DEVELOPMENT.—In this subsection: 

23 ‘‘(A) HOSPITAL UNDER DEVELOPMENT AS

24 OF MARCH 23, 2010.—The term ‘hospital under 


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1 development as of March 23, 2010’ means a 

2 hospital that— 

3 ‘‘(i) has a binding written agreement 

4 with an outside, unrelated party for the ac5 tual construction, renovation, lease, or 

6 demolition for a hospital under section 

7 1886(d), and has expended, before March 

8 23, 2010, at least 10 percent of the esti9 mated cost of the project (or, if less, 

10 $2,500,000); or 

11 ‘‘(ii) has obtained an approved certifi12 cate of need in a State where one is re13 quired on or before March 23, 2010. 

14 Such term includes, with respect to such a hos15 pital, any facility expansion of the hospital that 

16 is completed before the under development ef17 fective date. 

18 ‘‘(B) UNDER DEVELOPMENT EFFECTIVE

19 DATE.—The term ‘under development effective 

20 date’ means the date that is 6 months after the 

21 date of the enactment of this paragraph.’’. 

22 (d) CHANGE IN PROCESSING OF APPLICATIONS AND

23 ELIMINATION OF APPEALS LIMITATION.—Section 

24 1877(i)(3) of the Social Security Act (42 U.S.C. 

25 1305nn(i)(3)) is amended— 


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1 (1) in subparagraph (A), by striking clauses (ii) 

2 through (iv) and inserting the following: 

3 ‘‘(ii) DEEMED RECEIPT OF COMPLETE

4 APPLICATION AND APPROVAL OF APPLICA5 TION.—Unless the Secretary otherwise de6 termines, an application submitted under 

7 this subparagraph shall be deemed com8 plete as of the date that is 30 days after 

9 the date the Secretary receives the com10 plete application. Not later than 60 days 

11 after the receipt of such a complete appli12 cation, the Secretary shall publish a notice 

13 of the receipt of the application and a de14 scription of the expansion planned in the 

15 application. A complete application shall be 

16 deemed approved by the Secretary as of 

17 the end of the 60-day period beginning on 

18 the date of the Secretary’s receipt of the 

19 application unless the Secretary provides 

20 the applicant with a notice of disapproval 

21 of the application before the end of such 

22 period.’’; and 

23 (2) by striking subparagraphs (H) and (I). 

24 (e) EFFECTIVE DATE.—Except as otherwise pro25 vided, the amendments made by this section shall take efVerDate Sep 11 2014 02:54 May 28, 2015 Jkt 049200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2513.IH H2513

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1 fect on the date of the enactment of this Act and shall 

2 apply to applications made after the date of the enactment 

3 of this Act. 

4 SEC. 4. SAVINGS FROM PHYSICIAN-OWNED HOSPITALS. 

5 (a) DOCUMENTATION AND CODING ADJUSTMENTS

6 NOT APPLICABLE.—Section 7(b)(1)(B)(iii) of the TMA, 

7 Abstinence Education, and QI Programs Extension Act of 

8 2007 (Public Law 110–90), as added amended by section 

9 414(1)(B)(iii) of the Medicare Access and CHIP Reau10 thorization Act of 2015 (Public Law 114–10), is amended 

11 by inserting before the period at the end the following: 

12 ‘‘, except that this clause shall not apply in the case of 

13 a hospital that’’ ‘‘, except that this clause shall not apply 

14 in the case of a hospital in which physicians (or immediate 

15 family members of physicians) have a substantial owner16 ship or investment interest in the hospital (as determined 

17 under rules established by the Secretary)’’. 

18 (b) EXTENSION OF REDUCTIONS IN MARKET BAS19 KET INCREASES.—Section 1886(b)(3)(B)(xii) of the So20 cial Security Act (42 U.S.C. 1395ww(b)(3)(B)(xii)) is 

21 amended— 

22 (1) by striking ‘‘and’’ at the end of subclause 

23 (IV); 

24 (2) by striking the period at the end of sub25 clause (V) and inserting ‘‘; and’’; and 


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1 (3) by inserting after subclause (V) the fol2 lowing new subclause: 

3 ‘‘(VI) for each of fiscal years 2020 through 

4 2025, by 0.75 percentage point, but only with re5 spect to a hospital and fiscal year for which the Sec6 retary determines that physicians (or immediate 

7 family members of physicians) have a substantial 

8 ownership or investment interest in the hospital (as 

9 determined under rules established by the Sec10 retary).’’. 

Æ 


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