113TH CONGRESS 

2D SESSION H. R. 4302 

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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 
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1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

2 (a) SHORT TITLE.—This Act may be cited as the 

3 ‘‘Protecting Access to Medicare Act of 2014’’. 

4 (b) TABLE OF CONTENTS.—The table of contents of 

5 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. 
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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. 

1 TITLE I—MEDICARE EXTENDERS 

2 SEC. 101. PHYSICIAN PAYMENT UPDATE. 

3 Section 1848(d) of the Social Security Act (42 U.S.C. 

4 1395w–4(d)) is amended— 

5 (1) in paragraph (15)— 

6 (A) in the heading, by striking ‘‘JANUARY

7 THROUGH MARCH OF’’; 

8 (B) in subparagraph (A), by striking ‘‘for 

9 the period beginning on January 1, 2014, and 

10 ending on March 31, 2014’’; and 

11 (C) in subparagraph (B)— 

12 (i) in the heading, by striking ‘‘RE13 MAINING PORTION OF 2014 AND’’; and 

14 (ii) by striking ‘‘the period beginning 

15 on April 1, 2014, and ending on December 

16 31, 2014, and for’’; and 

17 (2) by adding at the end the following new 

18 paragraph: 
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1 ‘‘(16) UPDATE FOR JANUARY THROUGH MARCH

2 OF 2015.— 

3 ‘‘(A) IN GENERAL.—Subject to paragraphs 

4 (7)(B), (8)(B), (9)(B), (10)(B), (11)(B), 

5 (12)(B), (13)(B), (14)(B), and (15)(B), in lieu 

6 of the update to the single conversion factor es7 tablished in paragraph (1)(C) that would other8 wise apply for 2015 for the period beginning on 

9 January 1, 2015, and ending on March 31, 

10 2015, the update to the single conversion factor 

11 shall be 0.0 percent. 

12 ‘‘(B) NO EFFECT ON COMPUTATION OF

13 CONVERSION FACTOR FOR REMAINING PORTION

14 OF 2015 AND SUBSEQUENT YEARS.—The con15 version factor under this subsection shall be 

16 computed under paragraph (1)(A) for the pe17 riod beginning on April 1, 2015, and ending on 

18 December 31, 2015, and for 2016 and subse19 quent years as if subparagraph (A) had never 

20 applied.’’. 

21 SEC. 102. EXTENSION OF WORK GPCI FLOOR. 

22 Section 1848(e)(1)(E) of the Social Security Act (42 

23 U.S.C. 1395w–4(e)(1)(E)) is amended by striking ‘‘April 

24 1, 2014’’ and inserting ‘‘April 1, 2015’’. 
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1 SEC. 103. EXTENSION OF THERAPY CAP EXCEPTIONS PROC2 ESS. 

3 Section 1833(g) of the Social Security Act (42 U.S.C. 

4 1395l(g)) is amended— 

5 (1) in paragraph (5)(A), in the first sentence, 

6 by striking ‘‘March 31, 2014’’ and inserting ‘‘March 

7 31, 2015’’; and 

8 (2) in paragraph (6)(A)— 

9 (A) by striking ‘‘March 31, 2014’’ and in10 serting ‘‘March 31, 2015’’; and 

11 (B) by striking ‘‘2012, 2013, or the first 

12 three months of 2014’’ and inserting ‘‘2012, 

13 2013, 2014, or the first three months of 2015’’. 

14 SEC. 104. EXTENSION OF AMBULANCE ADD-ONS. 

15 (a) GROUND AMBULANCE.—Section 1834(l)(13)(A) 

16 of the Social Security Act (42 U.S.C. 1395m(l)(13)(A)) 

17 is amended by striking ‘‘April 1, 2014’’ and inserting 

18 ‘‘April 1, 2015’’ each place it appears. 

19 (b) SUPER RURAL GROUND AMBULANCE.—Section 

20 1834(l)(12)(A) of the Social Security Act (42 U.S.C. 

21 1395m(l)(12)(A)) is amended, in the first sentence, by 

22 striking ‘‘April 1, 2014’’ and inserting ‘‘April 1, 2015’’. 
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1 SEC. 105. EXTENSION OF INCREASED INPATIENT HOSPITAL 

2 PAYMENT ADJUSTMENT FOR CERTAIN LOW3 VOLUME HOSPITALS. 

4 Section 1886(d)(12) of the Social Security Act (42 

5 U.S.C. 1395ww(d)(12)) is amended— 

6 (1) in subparagraph (B), in the matter pre7 ceding clause (i), by striking ‘‘in the portion of fiscal 

8 year 2014 beginning on April 1, 2014, fiscal year 

9 2015, and subsequent fiscal years’’ and inserting ‘‘in 

10 fiscal year 2015 (beginning on April 1, 2015), fiscal 

11 year 2016, and subsequent fiscal years’’; 

12 (2) in subparagraph (C)(i), by striking ‘‘fiscal 

13 years 2011, 2012, and 2013, and the portion of fis14 cal year 2014 before’’ and inserting ‘‘fiscal years 

15 2011 through 2014 and fiscal year 2015 (before 

16 April 1, 2015),’’ each place it appears; and 

17 (3) in subparagraph (D), by striking ‘‘fiscal 

18 years 2011, 2012, and 2013, and the portion of fis19 cal year 2014 before April 1, 2014,’’ and inserting 

20 ‘‘fiscal years 2011 through 2014 and fiscal year 

21 2015 (before April 1, 2015),’’. 

22 SEC. 106. EXTENSION OF THE MEDICARE-DEPENDENT HOS23 PITAL (MDH) PROGRAM. 

24 (a) IN GENERAL.—Section 1886(d)(5)(G) of the So25 cial Security Act (42 U.S.C. 1395ww(d)(5)(G)) is amend26 ed— 
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1 (1) in clause (i), by striking ‘‘April 1, 2014’’ 

2 and inserting ‘‘April 1, 2015’’; and 

3 (2) in clause (ii)(II), by striking ‘‘April 1, 

4 2014’’ and inserting ‘‘April 1, 2015’’. 

5 (b) CONFORMING AMENDMENTS.— 

6 (1) EXTENSION OF TARGET AMOUNT.—Section 

7 1886(b)(3)(D) of the Social Security Act (42 U.S.C. 

8 1395ww(b)(3)(D)) is amended— 

9 (A) in the matter preceding clause (i), by 

10 striking ‘‘April 1, 2014’’ and inserting ‘‘April 1, 

11 2015’’; and 

12 (B) in clause (iv), by striking ‘‘through fis13 cal year 2013 and the portion of fiscal year 

14 2014 before April 1, 2014’’ and inserting 

15 ‘‘through fiscal year 2014 and the portion of 

16 fiscal year 2015 before April 1, 2015’’. 

17 (2) PERMITTING HOSPITALS TO DECLINE RE18 CLASSIFICATION.—Section 13501(e)(2) of the Omni19 bus Budget Reconciliation Act of 1993 (42 U.S.C. 

20 1395ww note) is amended by striking ‘‘through the 

21 first 2 quarters of fiscal year 2014’’ and inserting 

22 ‘‘through the first 2 quarters of fiscal year 2015’’. 
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1 SEC. 107. EXTENSION FOR SPECIALIZED MEDICARE ADVAN2 TAGE PLANS FOR SPECIAL NEEDS INDIVID3 UALS. 

4 Section 1859(f)(1) of the Social Security Act (42 

5 U.S.C. 1395w–28(f)(1)) is amended by striking ‘‘2016’’ 

6 and inserting ‘‘2017’’. 

7 SEC. 108. EXTENSION OF MEDICARE REASONABLE COST 

8 CONTRACTS. 

9 Section 1876(h)(5)(C)(ii) of the Social Security Act 

10 (42 U.S.C. 1395mm(h)(5)(C)(ii)) is amended, in the mat11 ter preceding subclause (I), by striking ‘‘January 1, 2015’’ 

12 and inserting ‘‘January 1, 2016’’. 

13 SEC. 109. EXTENSION OF FUNDING FOR QUALITY MEASURE 

14 ENDORSEMENT, INPUT, AND SELECTION. 

15 Section 1890(d) of the Social Security Act (42 U.S.C. 

16 1395aaa(d)) is amended— 

17 (1) by inserting ‘‘(1)’’ before ‘‘For purposes’’; 

18 and 

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

20 paragraph: 

21 ‘‘(2) For purposes of carrying out this section and 

22 section 1890A (other than subsections (e) and (f)), the 

23 Secretary shall provide for the transfer, from the Federal 

24 Hospital Insurance Trust Fund under section 1817 and 

25 the Federal Supplementary Medical Insurance Trust 

26 Fund under section 1841, in such proportion as the Sec-
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1 retary determines appropriate, to the Centers for Medicare 

2 & Medicaid Services Program Management Account of 

3 $5,000,000 for fiscal year 2014 and $15,000,000 for the 

4 first 6 months of fiscal year 2015. Amounts transferred 

5 under the preceding sentence shall remain available until 

6 expended.’’. 

7 SEC. 110. EXTENSION OF FUNDING OUTREACH AND ASSIST8 ANCE FOR LOW-INCOME PROGRAMS. 

9 (a) ADDITIONAL FUNDING FOR STATE HEALTH IN10 SURANCE PROGRAMS.—Subsection (a)(1)(B) of section 

11 119 of the Medicare Improvements for Patients and Pro12 viders Act of 2008 (42 U.S.C. 1395b–3 note), as amended 

13 by section 3306 of the Patient Protection and Affordable 

14 Care Act Public Law 111–148), section 610 of the Amer15 ican Taxpayer Relief Act of 2012 (Public Law 112–240), 

16 and section 1110 of the Pathway for SGR Reform Act 

17 of 2013 (Public Law 113–67), is amended— 

18 (1) in clause (iii), by striking ‘‘and’’ at the end; 

19 (2) by striking clause (iv); and 

20 (3) by adding at the end the following new 

21 clauses: 

22 ‘‘(iv) for fiscal year 2014, of 

23 $7,500,000; and 
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1 ‘‘(v) for the portion of fiscal year 

2 2015 before April 1, 2015, of 

3 $3,750,000.’’. 

4 (b) ADDITIONAL FUNDING FOR AREA AGENCIES ON

5 AGING.—Subsection (b)(1)(B) of such section 119, as so 

6 amended, is amended— 

7 (1) in clause (iii), by striking ‘‘and’’ at the end; 

8 (2) by striking clause (iv); and 

9 (3) by inserting after clause (iii) the following 

10 new clauses: 

11 ‘‘(iv) for fiscal year 2014, of 

12 $7,500,000; and 

13 ‘‘(v) for the portion of fiscal year 

14 2015 before April 1, 2015, of 

15 $3,750,000.’’. 

16 (c) ADDITIONAL FUNDING FOR AGING AND DIS17 ABILITY RESOURCE CENTERS.—Subsection (c)(1)(B) of 

18 such section 119, as so amended, is amended— 

19 (1) in clause (iii), by striking ‘‘and’’ at the end; 

20 (2) by striking clause (iv); and 

21 (3) by inserting after clause (iii) the following 

22 new clauses: 

23 ‘‘(iv) for fiscal year 2014, of 

24 $5,000,000; and 
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1 ‘‘(v) for the portion of fiscal year 

2 2015 before April 1, 2015, of 

3 $2,500,000.’’. 

4 (d) ADDITIONAL FUNDING FOR CONTRACT WITH

5 THE NATIONAL CENTER FOR BENEFITS AND OUTREACH

6 ENROLLMENT.—Subsection (d)(2) of such section 119, as 

7 so amended, is amended— 

8 (1) in clause (iii), by striking ‘‘and’’ at the end; 

9 (2) by striking clause (iv); and 

10 (3) by inserting after clause (iii) the following 

11 new clauses: 

12 ‘‘(iv) for fiscal year 2014, of 

13 $5,000,000; and 

14 ‘‘(v) for the portion of fiscal year 

15 2015 before April 1, 2015, of 

16 $2,500,000.’’. 

17 SEC. 111. EXTENSION OF TWO-MIDNIGHT RULE. 

18 (a) CONTINUATION OF CERTAIN MEDICAL REVIEW

19 ACTIVITIES.—The Secretary of Health and Human Serv20 ices may continue medical review activities described in 

21 the notice entitled ‘‘Selecting Hospital Claims for Patient 

22 Status Reviews: Admissions On or After October 1, 

23 2013’’, posted on the Internet website of the Centers for 

24 Medicare & Medicaid Services, through the first 6 months 
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1 of fiscal year 2015 for such additional hospital claims as 

2 the Secretary determines appropriate. 

3 (b) LIMITATION.—The Secretary of Health and 

4 Human Services shall not conduct patient status reviews 

5 (as described in such notice) on a post-payment review 

6 basis through recovery audit contractors under section 

7 1893(h) of the Social Security Act (42 U.S.C. 

8 1395ddd(h)) for inpatient claims with dates of admission 

9 October 1, 2013, through March 31, 2015, unless there 

10 is evidence of systematic gaming, fraud, abuse, or delays 

11 in the provision of care by a provider of services (as de12 fined in section 1861(u) of such Act (42 U.S.C. 

13 1395x(u))). 

14 SEC. 112. TECHNICAL CHANGES TO MEDICARE LTCH 

15 AMENDMENTS. 

16 (a) IN GENERAL.—Subclauses (I) and (II) of section 

17 1886(m)(6)(C)(iv) of the Social Security Act (42 U.S.C. 

18 1395ww(m)(6)(C)(iv)) are each amended by striking ‘‘dis19 charges’’ and inserting ‘‘Medicare fee-for-service dis20 charges’’. 

21 (b) MMSEA CORRECTION.—Section 114(d) of the 

22 Medicare, Medicaid, and SCHIP Extension Act of 2007 

23 (42 U.S.C. 1395ww note), as amended by sections 3106(b) 

24 and 10312(b) of Public Law 111–148 and by section 
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1 1206(b)(2) of the Pathway for SGR Reform Act of 2013 

2 (division B of Public Law 113–67), is amended— 

3 (1) in paragraph (1), in the matter preceding 

4 subparagraph (A), by striking ‘‘January 1, 2015,’’ 

5 and inserting ‘‘on the date of the enactment of para6 graph (7) of this subsection’’; 

7 (2) in paragraph (6), by striking ‘‘January 1, 

8 2015,’’ and inserting ‘‘on the date of the enactment 

9 of paragraph (7) of this subsection’’; and 

10 (3) by adding at the end the following new 

11 paragraph: 

12 ‘‘(7) ADDITIONAL EXCEPTION FOR CERTAIN

13 LONG-TERM CARE HOSPITALS.—The moratorium 

14 under paragraph (1)(A) shall not apply to a long15 term care hospital that— 

16 ‘‘(A) began its qualifying period for pay17 ment as a long-term care hospital under section 

18 412.23(e) of title 42, Code of Federal Regula19 tions, on or before the date of enactment of this 

20 paragraph; 

21 ‘‘(B) has a binding written agreement as 

22 of the date of the enactment of this paragraph 

23 with an outside, unrelated party for the actual 

24 construction, renovation, lease, or demolition 

25 for a long-term care hospital, and has ex-
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1 pended, before such date of enactment, at least 

2 10 percent of the estimated cost of the project 

3 (or, if less, $2,500,000); or 

4 ‘‘(C) has obtained an approved certificate 

5 of need in a State where one is required on or 

6 before such date of enactment.’’. 

7 (c) ADDITIONAL AMENDMENTS.—Section 1206(a) of 

8 the Pathway for SGR Reform Act of 2013 (division B of 

9 Public Law 113–67) is amended— 

10 (1) in paragraph (2)(A), by striking ‘‘Assess11 ment’’ and inserting ‘‘Advisory’’; and 

12 (2) in paragraph (3)(B), by striking ‘‘shall not 

13 apply to a hospital that is classified as of December 

14 10, 2013, as a subsection (d) hospital (as defined in 

15 section 1886(d)(1)(B) of the Social Security Act, 42 

16 U.S.C. 1395ww(d)(1)(B))’’ and inserting ‘‘shall only 

17 apply to a hospital that is classified as of December 

18 10, 2013, as a long-term care hospital (as defined 

19 in section 1861(ccc) of the Social Security Act, 42 

20 U.S.C. 1395x(ccc))’’. 

21 (d) EFFECTIVE DATE.—The amendments made by 

22 this section are effective as of the date of the enactment 

23 of this Act. 
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1 TITLE II—OTHER HEALTH 

2 PROVISIONS 

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

4 PROGRAM. 

5 (a) EXTENSION.—Section 1902(a)(10)(E)(iv) of the 

6 Social Security Act (42 U.S.C. 1396a(a)(10)(E)(iv)) is 

7 amended by striking ‘‘March 2014’’ and inserting ‘‘March 

8 2015’’. 

9 (b) EXTENDING TOTAL AMOUNT AVAILABLE FOR

10 ALLOCATION.—Section 1933(g) of the Social Security Act 

11 (42 U.S.C. 1396u–3(g)) is amended— 

12 (1) in paragraph (2)— 

13 (A) in subparagraph (T), by striking 

14 ‘‘and’’ at the end; 

15 (B) in subparagraph (U)— 

16 (i) by striking ‘‘March 31, 2014’’ and 

17 inserting ‘‘September 30, 2014’’; and 

18 (ii) by striking ‘‘$200,000,000.’’ and 

19 inserting ‘‘$485,000,000;’’; and 

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

21 subparagraphs: 

22 ‘‘(V) for the period that begins on October 

23 1, 2014, and ends on December 31, 2014, the 

24 total allocation amount is $300,000,000; and 
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1 ‘‘(W) for the period that begins on Janu2 ary 1, 2015, and ends on March 31, 2015, the 

3 total allocation amount is $250,000,000.’’; and 

4 (2) in paragraph (3), in the matter preceding 

5 subparagraph (A), by striking ‘‘or (T)’’ and insert6 ing ‘‘(T), or (V)’’. 

7 SEC. 202. TEMPORARY EXTENSION OF TRANSITIONAL MED8 ICAL ASSISTANCE (TMA). 

9 Sections 1902(e)(1)(B) and 1925(f) of the Social Se10 curity Act (42 U.S.C. 1396a(e)(1)(B), 1396r–6(f)) are 

11 each amended by striking ‘‘March 31, 2014’’ and inserting 

12 ‘‘March 31, 2015’’. 

13 SEC. 203. EXTENSION OF MEDICAID AND CHIP EXPRESS 

14 LANE OPTION. 

15 Section 1902(e)(13)(I) of the Social Security Act (42 

16 U.S.C. 1396a(e)(13)(I)) is amended by striking ‘‘Sep17 tember 30, 2014’’ and inserting ‘‘September 30, 2015’’. 

18 SEC. 204. EXTENSION OF SPECIAL DIABETES PROGRAM 

19 FOR TYPE I DIABETES AND FOR INDIANS. 

20 (a) SPECIAL DIABETES PROGRAMS FOR TYPE I DIA21 BETES.—Section 330B(b)(2)(C) of the Public Health 

22 Service Act (42 U.S.C. 254c–2(b)(2)(C)) is amended by 

23 striking ‘‘2014’’ and inserting ‘‘2015’’. 

24 (b) SPECIAL DIABETES PROGRAMS FOR INDIANS.— 

25 Section 330C(c)(2)(C) of the Public Health Service Act 
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1 (42 U.S.C. 254c–3(c)(2)(C)) is amended by striking 

2 ‘‘2014’’ and inserting ‘‘2015’’. 

3 SEC. 205. EXTENSION OF ABSTINENCE EDUCATION. 

4 Subsections (a) and (d) of section 510 of the Social 

5 Security Act (42 U.S.C. 710) are each amended by strik6 ing ‘‘2014’’ and inserting ‘‘2015’’. 

7 SEC. 206. EXTENSION OF PERSONAL RESPONSIBILITY EDU8 CATION PROGRAM (PREP). 

9 Section 513 of the Social Security Act (42 U.S.C. 

10 713) is amended— 

11 (1) in paragraphs (1)(A) and (4)(A) of sub12 section (a), by striking ‘‘2014’’ and inserting 

13 ‘‘2015’’ each place it appears; 

14 (2) in subsection (a)(4)(B)(i), by striking ‘‘and 

15 2014’’ and inserting ‘‘2014, and 2015’’; and 

16 (3) in subsection (f), by striking ‘‘2014’’ and 

17 inserting ‘‘2015’’. 

18 SEC. 207. EXTENSION OF FUNDING FOR FAMILY-TO-FAMILY 

19 HEALTH INFORMATION CENTERS. 

20 Section 501(c)(1)(A) of the Social Security Act (42 

21 U.S.C. 701(c)(1)(A)) is amended— 

22 (1) in clause (iii), by striking at the end ‘‘and’’; 

23 (2) in clause (iv), by striking the period at the 

24 end and inserting a semicolon and by moving the 

25 margin to align with the margin for clause (iii); and 
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1 (3) by adding at the end the following new 

2 clauses: 

3 ‘‘(v) $2,500,000 for the portion of fiscal year 

4 2014 on or after April 1, 2014; and 

5 ‘‘(vi) $2,500,000 for the portion of fiscal year 

6 2015 before April 1, 2015.’’. 

7 SEC. 208. EXTENSION OF HEALTH WORKFORCE DEM8 ONSTRATION PROJECT FOR LOW-INCOME IN9 DIVIDUALS. 

10 Section 2008(c)(1) of the Social Security Act (42 

11 U.S.C. 1397g(c)(1)) is amended by striking ‘‘2014’’ and 

12 inserting ‘‘2015’’. 

13 SEC. 209. EXTENSION OF MATERNAL, INFANT, AND EARLY 

14 CHILDHOOD HOME VISITING PROGRAMS. 

15 Section 511(j) of the Social Security Act (42 U.S.C. 

16 711(j)) is amended— 

17 (1) in paragraph (1)— 

18 (A) by striking ‘‘and’’ at the end of sub19 paragraph (D); 

20 (B) by striking the period at the end of 

21 subparagraph (E) and inserting ‘‘; and’’; and 

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

23 subparagraph: 

24 ‘‘(F) for the period beginning on October 

25 1, 2014, and ending on March 31, 2015, an 
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1 amount equal to the amount provided in sub2 paragraph (E).’’; and 

3 (2) in paragraphs (2) and (3), by inserting ‘‘(or 

4 portion of a fiscal year)’’ after ‘‘for a fiscal year’’ 

5 each place it appears. 

6 SEC. 210. PEDIATRIC QUALITY MEASURES. 

7 (a) CONTINUATION OF FUNDING FOR PEDIATRIC

8 QUALITY MEASURES FOR IMPROVING THE QUALITY OF

9 CHILDREN’S HEALTH CARE.—Section 1139B(e) of the 

10 Social Security Act (42 U.S.C. 1320b–9b(e)) is amended 

11 by adding at the end the following: ‘‘Of the funds appro12 priated under this subsection, not less than $15,000,000 

13 shall be used to carry out section 1139A(b).’’. 

14 (b) ELIMINATION OF RESTRICTION ON MEDICAID

15 QUALITY MEASUREMENT PROGRAM.—Section 

16 1139B(b)(5)(A) of the Social Security Act (42 U.S.C. 

17 1320b–9b(b)(5)(A)) is amended by striking ‘‘The aggre18 gate amount awarded by the Secretary for grants and con19 tracts for the development, testing, and validation of 

20 emerging and innovative evidence-based measures under 

21 such program shall equal the aggregate amount awarded 

22 by the Secretary for grants under section 

23 1139A(b)(4)(A)’’. 
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1 SEC. 211. DELAY OF EFFECTIVE DATE FOR MEDICAID 

2 AMENDMENTS RELATING TO BENEFICIARY 

3 LIABILITY SETTLEMENTS. 

4 Effective as if included in the enactment of the Bipar5 tisan Budget Act of 2013 (Public Law 113–67), section 

6 202(c) of such Act is amended by striking ‘‘October 1, 

7 2014’’ and inserting ‘‘October 1, 2016’’. 

8 SEC. 212. DELAY IN TRANSITION FROM ICD–9 TO ICD–10 

9 CODE SETS. 

10 The Secretary of Health and Human Services may 

11 not, prior to October 1, 2015, adopt ICD–10 code sets 

12 as the standard for code sets under section 1173(c) of the 

13 Social Security Act (42 U.S.C. 1320d–2(c)) and section 

14 162.1002 of title 45, Code of Federal Regulations. 

15 SEC. 213. ELIMINATION OF LIMITATION ON DEDUCTIBLES 

16 FOR EMPLOYER-SPONSORED HEALTH PLANS. 

17 (a) IN GENERAL.—Section 1302(c) of the Patient 

18 Protection and Affordable Care Act (Public Law 111–148; 

19 42 U.S.C. 18022(c)) is amended— 

20 (1) by striking paragraph (2); and 

21 (2) in paragraph (4)(A), by striking ‘‘para22 graphs (1)(B)(i) and (2)(B)(i)’’ and inserting ‘‘para23 graph (1)(B)(i)’’. 

24 (b) CONFORMING AMENDMENT.—Section 2707(b) of 

25 the Public Health Service Act (42 U.S.C. 300gg–6(b)) is 
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1 amended by striking ‘‘paragraphs (1) and (2)’’ and insert2 ing ‘‘paragraph (1)’’. 

3 (c) EFFECTIVE DATE.—The amendments made by 

4 this Act shall be effective as if included in the enactment 

5 of the Patient Protection and Affordable Care Act (Public 

6 Law 111–148). 

7 SEC. 214. GAO REPORT ON THE CHILDREN’S HOSPITAL 

8 GRADUATE MEDICAL EDUCATION PROGRAM. 

9 (a) IN GENERAL.—In the case that the Children’s 

10 Hospital GME Support Reauthorization Act of 2013 is en11 acted into law, the Comptroller General of the United 

12 States shall, not later than November 30, 2017, conduct 

13 an independent evaluation, and submit to the appropriate 

14 committees of Congress a report, concerning the imple15 mentation of section 340E(h) of the Public Health Service 

16 Act, as added by section 3 of the Children’s Hospital GME 

17 Support Reauthorization Act of 2013. 

18 (b) CONTENT.—The report described in subsection 

19 (a) shall review and assess each of the following, with re20 spect to hospitals receiving payments under such section 

21 340E(h) during the period of fiscal years 2015 through 

22 2017: 

23 (1) The number and type of such hospitals that 

24 applied for such payments. 
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1 (2) The number and type of such hospitals re2 ceiving such payments. 

3 (3) The amount of such payments awarded to 

4 such hospitals. 

5 (4) How such hospitals used such payments. 

6 (5) The impact of such payments on— 

7 (A) the number of pediatric providers; and 

8 (B) health care needs of children. 

9 SEC. 215. SKILLED NURSING FACILITY VALUE-BASED PUR10 CHASING. 

11 (a) IN GENERAL.—Section 1888 of the Social Secu12 rity Act (42 U.S.C. 1395yy) is amended by adding at the 

13 end the following new subsection: 

14 ‘‘(g) SKILLED NURSING FACILITY READMISSION

15 MEASURE.— 

16 ‘‘(1) READMISSION MEASURE.—Not later than 

17 October 1, 2015, the Secretary shall specify a skilled 

18 nursing facility all-cause all-condition hospital read19 mission measure (or any successor to such a meas20 ure). 

21 ‘‘(2) RESOURCE USE MEASURE.—Not later than 

22 October 1, 2016, the Secretary shall specify a meas23 ure to reflect an all-condition risk-adjusted poten24 tially preventable hospital readmission rate for 

25 skilled nursing facilities. 
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1 ‘‘(3) MEASURE ADJUSTMENTS.—When speci2 fying the measures under paragraphs (1) and (2), 

3 the Secretary shall devise a methodology to achieve 

4 a high level of reliability and validity, especially for 

5 skilled nursing facilities with a low volume of re6 admissions. 

7 ‘‘(4) PRE-RULEMAKING PROCESS (MEASURE AP8 PLICATION PARTNERSHIP PROCESS).—The applica9 tion of the provisions of section 1890A shall be op10 tional in the case of a measure specified under para11 graph (1) and a measure specified under paragraph 

12 (2). 

13 ‘‘(5) FEEDBACK REPORTS TO SKILLED NURS14 ING FACILITIES.—Beginning October 1, 2016, and 

15 every quarter thereafter, the Secretary shall provide 

16 confidential feedback reports to skilled nursing fa17 cilities on the performance of such facilities with re18 spect to a measure specified under paragraph (1) or 

19 (2). 

20 ‘‘(6) PUBLIC REPORTING OF SKILLED NURSING

21 FACILITIES.— 

22 ‘‘(A) IN GENERAL.—Subject to subpara23 graphs (B) and (C), the Secretary shall estab24 lish procedures for making available to the pub25 lic by posting on the Nursing Home Compare 
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1 Medicare website (or a successor website) de2 scribed in section 1819(i) information on the 

3 performance of skilled nursing facilities with re4 spect to a measure specified under paragraph 

5 (1) and a measure specified under paragraph 

6 (2). 

7 ‘‘(B) OPPORTUNITY TO REVIEW.—The pro8 cedures under subparagraph (A) shall ensure 

9 that a skilled nursing facility has the oppor10 tunity to review and submit corrections to the 

11 information that is to be made public with re12 spect to the facility prior to such information 

13 being made public. 

14 ‘‘(C) TIMING.—Such procedures shall pro15 vide that the information described in subpara16 graph (A) is made publicly available beginning 

17 not later than October 1, 2017. 

18 ‘‘(7) NON-APPLICATION OF PAPERWORK REDUC19 TION ACT.—Chapter 35 of title 44, United States 

20 Code (commonly referred to as the ‘Paperwork Re21 duction Act of 1995’) shall not apply to this sub22 section.’’. 

23 (b) VALUE-BASED PURCHASING PROGRAM FOR

24 SKILLED NURSING FACILITIES.—Section 1888 of the So25 cial Security Act (42 U.S.C. 1395yy), as amended by sub-
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1 section (a), is further amended by adding at the end the 

2 following new subsection: 

3 ‘‘(h) SKILLED NURSING FACILITY VALUE-BASED

4 PURCHASING PROGRAM.— 

5 ‘‘(1) ESTABLISHMENT.— 

6 ‘‘(A) IN GENERAL.—Subject to the suc7 ceeding provisions of this subsection, the Sec8 retary shall establish a skilled nursing facility 

9 value-based purchasing program (in this sub10 section referred to as the ‘SNF VBP Program’) 

11 under which value-based incentive payments are 

12 made in a fiscal year to skilled nursing facili13 ties. 

14 ‘‘(B) PROGRAM TO BEGIN IN FISCAL YEAR

15 2019.—The SNF VBP Program shall apply to 

16 payments for services furnished on or after Oc17 tober 1, 2018. 

18 ‘‘(2) APPLICATION OF MEASURES.— 

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

20 apply the measure specified under subsection 

21 (g)(1) for purposes of the SNF VBP Program. 

22 ‘‘(B) REPLACEMENT.—For purposes of the 

23 SNF VBP Program, the Secretary shall apply 

24 the measure specified under (g)(2) instead of 
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1 the measure specified under (g)(1) as soon as 

2 practicable. 

3 ‘‘(3) PERFORMANCE STANDARDS.— 

4 ‘‘(A) ESTABLISHMENT.—The Secretary 

5 shall establish performance standards with re6 spect to the measure applied under paragraph 

7 (2) for a performance period for a fiscal year. 

8 ‘‘(B) HIGHER OF ACHIEVEMENT AND IM9 PROVEMENT.—The performance standards es10 tablished under subparagraph (A) shall include 

11 levels of achievement and improvement. In cal12 culating the SNF performance score under 

13 paragraph (4), the Secretary shall use the high14 er of either improvement or achievement. 

15 ‘‘(C) TIMING.—The Secretary shall estab16 lish and announce the performance standards 

17 established under subparagraph (A) not later 

18 than 60 days prior to the beginning of the per19 formance period for the fiscal year involved. 

20 ‘‘(4) SNF PERFORMANCE SCORE.— 

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

22 develop a methodology for assessing the total 

23 performance of each skilled nursing facility 

24 based on performance standards established 

25 under paragraph (3) with respect to the meas-
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1 ure applied under paragraph (2). Using such 

2 methodology, the Secretary shall provide for an 

3 assessment (in this subsection referred to as the 

4 ‘SNF performance score’) for each skilled nurs5 ing facility for each such performance period. 

6 ‘‘(B) RANKING OF SNF PERFORMANCE

7 SCORES.—The Secretary shall, for the perform8 ance period for each fiscal year, rank the SNF 

9 performance scores determined under subpara10 graph (A) from low to high. 

11 ‘‘(5) CALCULATION OF VALUE-BASED INCEN12 TIVE PAYMENTS.— 

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

14 skilled nursing facility, based on the ranking 

15 under paragraph (4)(B) for a performance pe16 riod for a fiscal year, the Secretary shall in17 crease the adjusted Federal per diem rate de18 termined under subsection (e)(4)(G) otherwise 

19 applicable to such skilled nursing facility (and 

20 after application of paragraph (6)) for services 

21 furnished by such facility during such fiscal 

22 year by the value-based incentive payment 

23 amount under subparagraph (B). 

24 ‘‘(B) VALUE-BASED INCENTIVE PAYMENT

25 AMOUNT.—The value-based incentive payment 
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1 amount for services furnished by a skilled nurs2 ing facility in a fiscal year shall be equal to the 

3 product of— 

4 ‘‘(i) the adjusted Federal per diem 

5 rate determined under subsection (e)(4)(G) 

6 otherwise applicable to such skilled nursing 

7 facility for such services furnished by the 

8 skilled nursing facility during such fiscal 

9 year; and 

10 ‘‘(ii) the value-based incentive pay11 ment percentage specified under subpara12 graph (C) for the skilled nursing facility 

13 for such fiscal year. 

14 ‘‘(C) VALUE-BASED INCENTIVE PAYMENT

15 PERCENTAGE.— 

16 ‘‘(i) IN GENERAL.—The Secretary 

17 shall specify a value-based incentive pay18 ment percentage for a skilled nursing facil19 ity for a fiscal year which may include a 

20 zero percentage. 

21 ‘‘(ii) REQUIREMENTS.—In specifying 

22 the value-based incentive payment percent23 age for each skilled nursing facility for a 

24 fiscal year under clause (i), the Secretary 

25 shall ensure that— 
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1 ‘‘(I) such percentage is based on 

2 the SNF performance score of the 

3 skilled nursing facility provided under 

4 paragraph (4) for the performance pe5 riod for such fiscal year; 

6 ‘‘(II) the application of all such 

7 percentages in such fiscal year results 

8 in an appropriate distribution of 

9 value-based incentive payments under 

10 subparagraph (B) such that— 

11 ‘‘(aa) skilled nursing facili12 ties with the highest rankings 

13 under paragraph (4)(B) receive 

14 the highest value-based incentive 

15 payment amounts under subpara16 graph (B); 

17 ‘‘(bb) skilled nursing facili18 ties with the lowest rankings 

19 under paragraph (4)(B) receive 

20 the lowest value-based incentive 

21 payment amounts under subpara22 graph (B); and 

23 ‘‘(cc) in the case of skilled 

24 nursing facilities in the lowest 40 

25 percent of the ranking under 
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1 paragraph (4)(B), the payment 

2 rate under subparagraph (A) for 

3 services furnished by such facility 

4 during such fiscal year shall be 

5 less than the payment rate for 

6 such services for such fiscal year 

7 that would otherwise apply under 

8 subsection (e)(4)(G) without ap9 plication of this subsection; and 

10 ‘‘(III) the total amount of value11 based incentive payments under this 

12 paragraph for all skilled nursing fa13 cilities in such fiscal year shall be 

14 greater than or equal to 50 percent, 

15 but not greater than 70 percent, of 

16 the total amount of the reductions to 

17 payments for such fiscal year under 

18 paragraph (6), as estimated by the 

19 Secretary. 

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

21 PAYMENTS.— 

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

23 reduce the adjusted Federal per diem rate de24 termined under subsection (e)(4)(G) otherwise 

25 applicable to a skilled nursing facility for serv-
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1 ices furnished by such facility during a fiscal 

2 year (beginning with fiscal year 2019) by the 

3 applicable percent (as defined in subparagraph 

4 (B)). The Secretary shall make such reductions 

5 for all skilled nursing facilities in the fiscal year 

6 involved, regardless of whether or not the 

7 skilled nursing facility has been determined by 

8 the Secretary to have earned a value-based in9 centive payment under paragraph (5) for such 

10 fiscal year. 

11 ‘‘(B) APPLICABLE PERCENT.—For pur12 poses of subparagraph (A), the term ‘applicable 

13 percent’ means, with respect to fiscal year 2019 

14 and succeeding fiscal years, 2 percent. 

15 ‘‘(7) ANNOUNCEMENT OF NET RESULT OF AD16 JUSTMENTS.—Under the SNF VBP Program, the 

17 Secretary shall, not later than 60 days prior to the 

18 fiscal year involved, inform each skilled nursing fa19 cility of the adjustments to payments to the skilled 

20 nursing facility for services furnished by such facility 

21 during the fiscal year under paragraphs (5) and (6). 

22 ‘‘(8) NO EFFECT IN SUBSEQUENT FISCAL

23 YEARS.—The value-based incentive payment under 

24 paragraph (5) and the payment reduction under 

25 paragraph (6) shall each apply only with respect to 
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1 the fiscal year involved, and the Secretary shall not 

2 take into account such value-based incentive pay3 ment or payment reduction in making payments to 

4 a skilled nursing facility under this section in a sub5 sequent fiscal year. 

6 ‘‘(9) PUBLIC REPORTING.— 

7 ‘‘(A) SNF SPECIFIC INFORMATION.—The 

8 Secretary shall make available to the public, by 

9 posting on the Nursing Home Compare Medi10 care website (or a successor website) described 

11 in section 1819(i) in an easily understandable 

12 format, information regarding the performance 

13 of individual skilled nursing facilities under the 

14 SNF VBP Program, with respect to a fiscal 

15 year, including— 

16 ‘‘(i) the SNF performance score of the 

17 skilled nursing facility for such fiscal year; 

18 and 

19 ‘‘(ii) the ranking of the skilled nursing 

20 facility under paragraph (4)(B) for the 

21 performance period for such fiscal year. 

22 ‘‘(B) AGGREGATE INFORMATION.—The 

23 Secretary shall periodically post on the Nursing 

24 Home Compare Medicare website (or a suc25 cessor website) described in section 1819(i) ag-
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1 gregate information on the SNF VBP Program, 

2 including— 

3 ‘‘(i) the range of SNF performance 

4 scores provided under paragraph (4)(A); 

5 and 

6 ‘‘(ii) the number of skilled nursing fa7 cilities receiving value-based incentive pay8 ments under paragraph (5) and the range 

9 and total amount of such value-based in10 centive payments. 

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

12 no administrative or judicial review under section 

13 1869, section 1878, or otherwise of the following: 

14 ‘‘(A) The methodology used to determine 

15 the value-based incentive payment percentage 

16 and the amount of the value-based incentive 

17 payment under paragraph (5). 

18 ‘‘(B) The determination of the amount of 

19 funding available for such value-based incentive 

20 payments under paragraph (5)(C)(ii)(III) and 

21 the payment reduction under paragraph (6). 

22 ‘‘(C) The establishment of the performance 

23 standards under paragraph (3) and the per24 formance period. 
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1 ‘‘(D) The methodology developed under 

2 paragraph (4) that is used to calculate SNF 

3 performance scores and the calculation of such 

4 scores. 

5 ‘‘(E) The ranking determinations under 

6 paragraph (4)(B). 

7 ‘‘(11) FUNDING FOR PROGRAM MANAGE8 MENT.—The Secretary shall provide for the one time 

9 transfer from the Federal Hospital Insurance Trust 

10 Fund established under section 1817 to the Centers 

11 for Medicare & Medicaid Services Program Manage12 ment Account of— 

13 ‘‘(A) for purposes of subsection (g)(2), 

14 $2,000,000; and 

15 ‘‘(B) for purposes of implementing this 

16 subsection, $10,000,000. 

17 Such funds shall remain available until expended.’’. 

18 (c) MEDPAC STUDY.—Not later than June 30, 

19 2021, the Medicare Payment Advisory Commission shall 

20 submit to Congress a report that reviews the progress of 

21 the skilled nursing facility value-based purchasing pro22 gram established under section 1888(h) of the Social Se23 curity Act, as added by subsection (b), and makes rec24 ommendations, as appropriate, on any improvements that 

25 should be made to such program. For purposes of the pre-
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1 vious sentence, the Medicare Payment Advisory Commis2 sion shall consider any unintended consequences with re3 spect to such skilled nursing facility value-based pur4 chasing program and any potential adjustments to the re5 admission measure specified under section 1888(g)(1) of 

6 such Act, as added by subsection (a), for purposes of de7 termining the effect of the socio-economic status of a bene8 ficiary under the Medicare program under title XVIII of 

9 the Social Security Act for the SNF performance score 

10 of a skilled nursing facility provided under section 

11 1888(h)(4) of such Act, as added by subsection (b). 

12 SEC. 216. IMPROVING MEDICARE POLICIES FOR CLINICAL 

13 DIAGNOSTIC LABORATORY TESTS. 

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

15 Act is amended by inserting after section 1834 (42 U.S.C. 

16 1395m) the following new section: 

17 ‘‘SEC. 1834A. IMPROVING POLICIES FOR CLINICAL DIAG18 NOSTIC LABORATORY TESTS. 

19 ‘‘(a) REPORTING OF PRIVATE SECTOR PAYMENT

20 RATES FOR ESTABLISHMENT OF MEDICARE PAYMENT

21 RATES.— 

22 ‘‘(1) IN GENERAL.—Beginning January 1, 

23 2016, and every 3 years thereafter (or, annually, in 

24 the case of reporting with respect to an advanced di25 agnostic laboratory test, as defined in subsection 
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1 (d)(5)), an applicable laboratory (as defined in para2 graph (2)) shall report to the Secretary, at a time 

3 specified by the Secretary, applicable information (as 

4 defined in paragraph (3)) for a data collection pe5 riod (as defined in paragraph (4)) for each clinical 

6 diagnostic laboratory test that the laboratory fur7 nishes during such period for which payment is 

8 made under this part. 

9 ‘‘(2) DEFINITION OF APPLICABLE LABORA10 TORY.—In this section, the term ‘applicable labora11 tory’ means a laboratory that, with respect to its 

12 revenues under this title, a majority of such reve13 nues are from this section, section 1833(h), or sec14 tion 1848. The Secretary may establish a low vol15 ume or low expenditure threshold for excluding a 

16 laboratory from the definition of applicable labora17 tory under this paragraph, as the Secretary deter18 mines appropriate. 

19 ‘‘(3) APPLICABLE INFORMATION DEFINED.— 

20 ‘‘(A) IN GENERAL.—In this section, sub21 ject to subparagraph (B), the term ‘applicable 

22 information’ means, with respect to a labora23 tory test for a data collection period, the fol24 lowing: 
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1 ‘‘(i) The payment rate (as determined 

2 in accordance with paragraph (5)) that 

3 was paid by each private payor for the test 

4 during the period. 

5 ‘‘(ii) The volume of such tests for 

6 each such payor for the period. 

7 ‘‘(B) EXCEPTION FOR CERTAIN CONTRAC8 TUAL ARRANGEMENTS.—Such term shall not 

9 include information with respect to a laboratory 

10 test for which payment is made on a capitated 

11 basis or other similar payment basis during the 

12 data collection period. 

13 ‘‘(4) DATA COLLECTION PERIOD DEFINED.—In 

14 this section, the term ‘data collection period’ means 

15 a period of time, such as a previous 12 month pe16 riod, specified by the Secretary. 

17 ‘‘(5) TREATMENT OF DISCOUNTS.—The pay18 ment rate reported by a laboratory under this sub19 section shall reflect all discounts, rebates, coupons, 

20 and other price concessions, including those de21 scribed in section 1847A(c)(3). 

22 ‘‘(6) ENSURING COMPLETE REPORTING.—In 

23 the case where an applicable laboratory has more 

24 than one payment rate for the same payor for the 

25 same test or more than one payment rate for dif-
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1 ferent payors for the same test, the applicable lab2 oratory shall report each such payment rate and the 

3 volume for the test at each such rate under this sub4 section. Beginning with January 1, 2019, the Sec5 retary may establish rules to aggregate reporting 

6 with respect to the situations described in the pre7 ceding sentence. 

8 ‘‘(7) CERTIFICATION.—An officer of the labora9 tory shall certify the accuracy and completeness of 

10 the information reported under this subsection. 

11 ‘‘(8) PRIVATE PAYOR DEFINED.—In this sec12 tion, the term ‘private payor’ means the following: 

13 ‘‘(A) A health insurance issuer and a 

14 group health plan (as such terms are defined in 

15 section 2791 of the Public Health Service Act). 

16 ‘‘(B) A Medicare Advantage plan under 

17 part C. 

18 ‘‘(C) A medicaid managed care organiza19 tion (as defined in section 1903(m)). 

20 ‘‘(9) CIVIL MONEY PENALTY.— 

21 ‘‘(A) IN GENERAL.—If the Secretary deter22 mines that an applicable laboratory has failed 

23 to report or made a misrepresentation or omis24 sion in reporting information under this sub25 section with respect to a clinical diagnostic lab-
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1 oratory test, the Secretary may apply a civil 

2 money penalty in an amount of up to $10,000 

3 per day for each failure to report or each such 

4 misrepresentation or omission. 

5 ‘‘(B) APPLICATION.—The provisions of 

6 section 1128A (other than subsections (a) and 

7 (b)) shall apply to a civil money penalty under 

8 this paragraph in the same manner as they 

9 apply to a civil money penalty or proceeding 

10 under section 1128A(a). 

11 ‘‘(10) CONFIDENTIALITY OF INFORMATION.— 

12 Notwithstanding any other provision of law, infor13 mation disclosed by a laboratory under this sub14 section is confidential and shall not be disclosed by 

15 the Secretary or a Medicare contractor in a form 

16 that discloses the identity of a specific payor or lab17 oratory, or prices charged or payments made to any 

18 such laboratory, except— 

19 ‘‘(A) as the Secretary determines to be 

20 necessary to carry out this section; 

21 ‘‘(B) to permit the Comptroller General to 

22 review the information provided; 

23 ‘‘(C) to permit the Director of the Con24 gressional Budget Office to review the informa25 tion provided; and 
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1 ‘‘(D) to permit the Medicare Payment Ad2 visory Commission to review the information 

3 provided. 

4 ‘‘(11) PROTECTION FROM PUBLIC DISCLO5 SURE.—A payor shall not be identified on informa6 tion reported under this subsection. The name of an 

7 applicable laboratory under this subsection shall be 

8 exempt from disclosure under section 552(b)(3) of 

9 title 5, United States Code. 

10 ‘‘(12) REGULATIONS.—Not later than June 30, 

11 2015, the Secretary shall establish through notice 

12 and comment rulemaking parameters for data collec13 tion under this subsection. 

14 ‘‘(b) PAYMENT FOR CLINICAL DIAGNOSTIC LABORA15 TORY TESTS.— 

16 ‘‘(1) USE OF PRIVATE PAYOR RATE INFORMA17 TION TO DETERMINE MEDICARE PAYMENT RATES.— 

18 ‘‘(A) IN GENERAL.—Subject to paragraph 

19 (3) and subsections (c) and (d), in the case of 

20 a clinical diagnostic laboratory test furnished on 

21 or after January 1, 2017, the payment amount 

22 under this section shall be equal to the weighted 

23 median determined for the test under para24 graph (2) for the most recent data collection 

25 period. 
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1 ‘‘(B) APPLICATION OF PAYMENT AMOUNTS

2 TO HOSPITAL LABORATORIES.—The payment 

3 amounts established under this section shall 

4 apply to a clinical diagnostic laboratory test 

5 furnished by a hospital laboratory if such test 

6 is paid for separately, and not as part of a bun7 dled payment under section 1833(t). 

8 ‘‘(2) CALCULATION OF WEIGHTED MEDIAN.— 

9 For each laboratory test with respect to which infor10 mation is reported under subsection (a) for a data 

11 collection period, the Secretary shall calculate a 

12 weighted median for the test for the period, by 

13 arraying the distribution of all payment rates re14 ported for the period for each test weighted by vol15 ume for each payor and each laboratory. 

16 ‘‘(3) PHASE-IN OF REDUCTIONS FROM PRIVATE

17 PAYOR RATE IMPLEMENTATION.— 

18 ‘‘(A) IN GENERAL.—Payment amounts de19 termined under this subsection for a clinical di20 agnostic laboratory test for each of 2017 

21 through 2022 shall not result in a reduction in 

22 payments for a clinical diagnostic laboratory 

23 test for the year of greater than the applicable 

24 percent (as defined in subparagraph (B)) of the 
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1 amount of payment for the test for the pre2 ceding year. 

3 ‘‘(B) APPLICABLE PERCENT DEFINED.—In 

4 this paragraph, the term ‘applicable percent’ 

5 means— 

6 ‘‘(i) for each of 2017 through 2019, 

7 10 percent; and 

8 ‘‘(ii) for each of 2020 through 2022, 

9 15 percent. 

10 ‘‘(C) NO APPLICATION TO NEW TESTS.— 

11 This paragraph shall not apply to payment 

12 amounts determined under this section for ei13 ther of the following. 

14 ‘‘(i) A new test under subsection (c). 

15 ‘‘(ii) A new advanced diagnostic test 

16 (as defined in subsection (d)(5)) under 

17 subsection (d). 

18 ‘‘(4) APPLICATION OF MARKET RATES.— 

19 ‘‘(A) IN GENERAL.—Subject to paragraph 

20 (3), once established for a year following a data 

21 collection period, the payment amounts under 

22 this subsection shall continue to apply until the 

23 year following the next data collection period. 

24 ‘‘(B) OTHER ADJUSTMENTS NOT APPLICA25 BLE.—The payment amounts under this section 
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1 shall not be subject to any adjustment (includ2 ing any geographic adjustment, budget neu3 trality adjustment, annual update, or other ad4 justment). 

5 ‘‘(5) SAMPLE COLLECTION FEE.—In the case of 

6 a sample collected from an individual in a skilled 

7 nursing facility or by a laboratory on behalf of a 

8 home health agency, the nominal fee that would oth9 erwise apply under section 1833(h)(3)(A) shall be 

10 increased by $2. 

11 ‘‘(c) PAYMENT FOR NEW TESTS THAT ARE NOT AD12 VANCED DIAGNOSTIC LABORATORY TESTS.— 

13 ‘‘(1) PAYMENT DURING INITIAL PERIOD.—In 

14 the case of a clinical diagnostic laboratory test that 

15 is assigned a new or substantially revised HCPCS 

16 code on or after the date of enactment of this sec17 tion, and which is not an advanced diagnostic lab18 oratory test (as defined in subsection (d)(5)), during 

19 an initial period until payment rates under sub20 section (b) are established for the test, payment for 

21 the test shall be determined— 

22 ‘‘(A) using cross-walking (as described in 

23 section 414.508(a) of title 42, Code of Federal 

24 Regulations, or any successor regulation) to the 

25 most appropriate existing test under the fee 
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1 schedule under this section during that period; 

2 or 

3 ‘‘(B) if no existing test is comparable to 

4 the new test, according to the gapfilling process 

5 described in paragraph (2). 

6 ‘‘(2) GAPFILLING PROCESS DESCRIBED.—The 

7 gapfilling process described in this paragraph shall 

8 take into account the following sources of informa9 tion to determine gapfill amounts, if available: 

10 ‘‘(A) Charges for the test and routine dis11 counts to charges. 

12 ‘‘(B) Resources required to perform the 

13 test. 

14 ‘‘(C) Payment amounts determined by 

15 other payors. 

16 ‘‘(D) Charges, payment amounts, and re17 sources required for other tests that may be 

18 comparable or otherwise relevant. 

19 ‘‘(E) Other criteria the Secretary deter20 mines appropriate. 

21 ‘‘(3) ADDITIONAL CONSIDERATION.—In deter22 mining the payment amount under crosswalking or 

23 gapfilling processes under this subsection, the Sec24 retary shall consider recommendations from the 

25 panel established under subsection (f)(1). 
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1 ‘‘(4) EXPLANATION OF PAYMENT RATES.—In 

2 the case of a clinical diagnostic laboratory test for 

3 which payment is made under this subsection, the 

4 Secretary shall make available to the public an ex5 planation of the payment rate for the test, including 

6 an explanation of how the criteria described in para7 graph (2) and paragraph (3) are applied. 

8 ‘‘(d) PAYMENT FOR NEW ADVANCED DIAGNOSTIC

9 LABORATORY TESTS.— 

10 ‘‘(1) PAYMENT DURING INITIAL PERIOD.— 

11 ‘‘(A) IN GENERAL.—In the case of an ad12 vanced diagnostic laboratory test for which pay13 ment has not been made under the fee schedule 

14 under section 1833(h) prior to the date of en15 actment of this section, during an initial period 

16 of three quarters, the payment amount for the 

17 test for such period shall be based on the actual 

18 list charge for the laboratory test. 

19 ‘‘(B) ACTUAL LIST CHARGE.—For pur20 poses of subparagraph (A), the term ‘actual list 

21 charge’, with respect to a laboratory test fur22 nished during such period, means the publicly 

23 available rate on the first day at which the test 

24 is available for purchase by a private payor. 
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1 ‘‘(2) SPECIAL RULE FOR TIMING OF INITIAL

2 REPORTING.—With respect to an advanced diag3 nostic laboratory test described in paragraph (1)(A), 

4 an applicable laboratory shall initially be required to 

5 report under subsection (a) not later than the last 

6 day of the second quarter of the initial period under 

7 such paragraph. 

8 ‘‘(3) APPLICATION OF MARKET RATES AFTER

9 INITIAL PERIOD.—Subject to paragraph (4), data re10 ported under paragraph (2) shall be used to estab11 lish the payment amount for an advanced diagnostic 

12 laboratory test after the initial period under para13 graph (1)(A) using the methodology described in 

14 subsection (b). Such payment amount shall continue 

15 to apply until the year following the next data collec16 tion period. 

17 ‘‘(4) RECOUPMENT IF ACTUAL LIST CHARGE

18 EXCEEDS MARKET RATE.—With respect to the initial 

19 period described in paragraph (1)(A), if, after such 

20 period, the Secretary determines that the payment 

21 amount for an advanced diagnostic laboratory test 

22 under paragraph (1)(A) that was applicable during 

23 the period was greater than 130 percent of the pay24 ment amount for the test established using the 

25 methodology described in subsection (b) that is ap-
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1 plicable after such period, the Secretary shall recoup 

2 the difference between such payment amounts for 

3 tests furnished during such period. 

4 ‘‘(5) ADVANCED DIAGNOSTIC LABORATORY

5 TEST DEFINED.—In this subsection, the term ‘ad6 vanced diagnostic laboratory test’ means a clinical 

7 diagnostic laboratory test covered under this part 

8 that is offered and furnished only by a single labora9 tory and not sold for use by a laboratory other than 

10 the original developing laboratory (or a successor 

11 owner) and meets one of the following criteria: 

12 ‘‘(A) The test is an analysis of multiple 

13 biomarkers of DNA, RNA, or proteins com14 bined with a unique algorithm to yield a single 

15 patient-specific result. 

16 ‘‘(B) The test is cleared or approved by the 

17 Food and Drug Administration. 

18 ‘‘(C) The test meets other similar criteria 

19 established by the Secretary. 

20 ‘‘(e) CODING.— 

21 ‘‘(1) TEMPORARY CODES FOR CERTAIN NEW

22 TESTS.— 

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

24 adopt temporary HCPCS codes to identify new 

25 advanced diagnostic laboratory tests (as defined 
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1 in subsection (d)(5)) and new laboratory tests 

2 that are cleared or approved by the Food and 

3 Drug Administration. 

4 ‘‘(B) DURATION.— 

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

6 (ii), the temporary code shall be effective 

7 until a permanent HCPCS code is estab8 lished (but not to exceed 2 years). 

9 ‘‘(ii) EXCEPTION.—The Secretary 

10 may extend the temporary code or estab11 lish a permanent HCPCS code, as the Sec12 retary determines appropriate. 

13 ‘‘(2) EXISTING TESTS.—Not later than January 

14 1, 2016, for each existing advanced diagnostic lab15 oratory test (as so defined) and each existing clinical 

16 diagnostic laboratory test that is cleared or approved 

17 by the Food and Drug Administration for which 

18 payment is made under this part as of the date of 

19 enactment of this section, if such test has not al20 ready been assigned a unique HCPCS code, the Sec21 retary shall— 

22 ‘‘(A) assign a unique HCPCS code for the 

23 test; and 

24 ‘‘(B) publicly report the payment rate for 

25 the test. 
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1 ‘‘(3) ESTABLISHMENT OF UNIQUE IDENTIFIER

2 FOR CERTAIN TESTS.—For purposes of tracking and 

3 monitoring, if a laboratory or a manufacturer re4 quests a unique identifier for an advanced diagnostic 

5 laboratory test (as so defined) or a laboratory test 

6 that is cleared or approved by the Food and Drug 

7 Administration, the Secretary shall utilize a means 

8 to uniquely track such test through a mechanism 

9 such as a HCPCS code or modifier. 

10 ‘‘(f) INPUT FROM CLINICIANS AND TECHNICAL EX11 PERTS.— 

12 ‘‘(1) IN GENERAL.—The Secretary shall consult 

13 with an expert outside advisory panel, established by 

14 the Secretary not later than July 1, 2015, composed 

15 of an appropriate selection of individuals with exper16 tise, which may include molecular pathologists, re17 searchers, and individuals with expertise in labora18 tory science or health economics, in issues related to 

19 clinical diagnostic laboratory tests, which may in20 clude the development, validation, performance, and 

21 application of such tests, to provide— 

22 ‘‘(A) input on— 

23 ‘‘(i) the establishment of payment 

24 rates under this section for new clinical di25 agnostic laboratory tests, including wheth-
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1 er to use crosswalking or gapfilling proc2 esses to determine payment for a specific 

3 new test; and 

4 ‘‘(ii) the factors used in determining 

5 coverage and payment processes for new 

6 clinical diagnostic laboratory tests; and 

7 ‘‘(B) recommendations to the Secretary 

8 under this section. 

9 ‘‘(2) COMPLIANCE WITH FACA.—The panel 

10 shall be subject to the Federal Advisory Committee 

11 Act (5 U.S.C. App.). 

12 ‘‘(3) CONTINUATION OF ANNUAL MEETING.— 

13 The Secretary shall continue to convene the annual 

14 meeting described in section 1833(h)(8)(B)(iii) after 

15 the implementation of this section for purposes of 

16 receiving comments and recommendations (and data 

17 on which the recommendations are based) as de18 scribed in such section on the establishment of pay19 ment amounts under this section. 

20 ‘‘(g) COVERAGE.— 

21 ‘‘(1) ISSUANCE OF COVERAGE POLICIES.— 

22 ‘‘(A) IN GENERAL.—A medicare adminis23 trative contractor shall only issue a coverage 

24 policy with respect to a clinical diagnostic lab25 oratory test in accordance with the process for 
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1 making a local coverage determination (as de2 fined in section 1869(f)(2)(B)), including the 

3 appeals and review process for local coverage 

4 determinations under part 426 of title 42, Code 

5 of Federal Regulations (or successor regula6 tions). 

7 ‘‘(B) NO EFFECT ON NATIONAL COVERAGE

8 DETERMINATION PROCESS.—This paragraph 

9 shall not apply to the national coverage deter10 mination process (as defined in section 

11 1869(f)(1)(B)). 

12 ‘‘(C) EFFECTIVE DATE.—This paragraph 

13 shall apply to coverage policies issued on or 

14 after January 1, 2015. 

15 ‘‘(2) DESIGNATION OF ONE OR MORE MEDICARE

16 ADMINISTRATIVE CONTRACTORS FOR CLINICAL DIAG17 NOSTIC LABORATORY TESTS.—The Secretary may 

18 designate one or more (not to exceed 4) medicare 

19 administrative contractors to either establish cov20 erage policies or establish coverage policies and proc21 ess claims for payment for clinical diagnostic labora22 tory tests, as determined appropriate by the Sec23 retary. 

24 ‘‘(h) IMPLEMENTATION.— 
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1 ‘‘(1) IMPLEMENTATION.—There shall be no ad2 ministrative or judicial review under section 1869, 

3 section 1878, or otherwise, of the establishment of 

4 payment amounts under this section. 

5 ‘‘(2) ADMINISTRATION.—Chapter 35 of title 44, 

6 United States Code, shall not apply to information 

7 collected under this section. 

8 ‘‘(3) FUNDING.—For purposes of implementing 

9 this section, the Secretary shall provide for the 

10 transfer, from the Federal Supplementary Medical 

11 Insurance Trust Fund under section 1841, to the 

12 Centers for Medicare & Medicaid Services Program 

13 Management Account, for each of fiscal years 2014 

14 through 2018, $4,000,000, and for each of fiscal 

15 years 2019 through 2023, $3,000,000. Amounts 

16 transferred under the preceding sentence shall re17 main available until expended. 

18 ‘‘(i) TRANSITIONAL RULE.—During the period begin19 ning on the date of enactment of this section and ending 

20 on December 31, 2016, with respect to advanced diag21 nostic laboratory tests under this part, the Secretary shall 

22 use the methodologies for pricing, coding, and coverage 

23 in effect on the day before such date of enactment, which 

24 may include cross-walking or gapfilling methods.’’. 

25 (b) CONFORMING AMENDMENTS.— 
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1 (1) Section 1833(a) of the Social Security Act 

2 (42 U.S.C. 1395l(a)) is amended— 

3 (A) in paragraph (1)(D)— 

4 (i) by striking ‘‘(i) on the basis’’ and 

5 inserting ‘‘(i)(I) on the basis’’; 

6 (ii) in subclause (I), as added by 

7 clause (i), by striking ‘‘subsection (h)(1)’’ 

8 and inserting ‘‘subsection (h)(1) (for tests 

9 furnished before January 1, 2017)’’; 

10 (iii) by striking ‘‘or (ii)’’ and inserting 

11 ‘‘or (II) under section 1834A (for tests 

12 furnished on or after January 1, 2017), 

13 the amount paid shall be equal to 80 per14 cent (or 100 percent, in the case of such 

15 tests for which payment is made on an as16 signment-related basis) of the lesser of the 

17 amount determined under such section or 

18 the amount of the charges billed for the 

19 tests, or (ii)’’; and 

20 (iv) in clause (ii), by striking ‘‘on the 

21 basis’’ and inserting ‘‘for tests furnished 

22 before January 1, 2017, on the basis’’; 

23 (B) in paragraph (2)(D)— 

24 (i) by striking ‘‘(i) on the basis’’ and 

25 inserting ‘‘(i)(I) on the basis’’; 
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1 (ii) in subclause (I), as added by 

2 clause (i), by striking ‘‘subsection (h)(1)’’ 

3 and inserting ‘‘subsection (h)(1) (for tests 

4 furnished before January 1, 2017)’’; 

5 (iii) by striking ‘‘or (ii)’’ and inserting 

6 ‘‘or (II) under section 1834A (for tests 

7 furnished on or after January 1, 2017), 

8 the amount paid shall be equal to 80 per9 cent (or 100 percent, in the case of such 

10 tests for which payment is made on an as11 signment-related basis or to a provider 

12 having an agreement under section 1866) 

13 of the lesser of the amount determined 

14 under such section or the amount of the 

15 charges billed for the tests, or (ii)’’; and 

16 (iv) in clause (ii), by striking ‘‘on the 

17 basis’’ and inserting ‘‘for tests furnished 

18 before January 1, 2017, on the basis’’; 

19 (C) in subsection (b)(3)(B), by striking 

20 ‘‘on the basis’’ and inserting ‘‘for tests fur21 nished before January 1, 2017, on the basis’’; 

22 (D) in subsection (h)(2)(A)(i), by striking 

23 ‘‘and subject to’’ and inserting ‘‘and, for tests 

24 furnished before the date of enactment of sec25 tion 1834A, subject to’’; 
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1 (E) in subsection (h)(3), in the matter pre2 ceding subparagraph (A), by striking ‘‘fee 

3 schedules’’ and inserting ‘‘fee schedules (for 

4 tests furnished before January 1, 2017) or 

5 under section 1834A (for tests furnished on or 

6 after January 1, 2017), subject to subsection 

7 (b)(5) of such section’’; 

8 (F) in subsection (h)(6), by striking ‘‘In 

9 the case’’ and inserting ‘‘For tests furnished be10 fore January 1, 2017, in the case’’; and 

11 (G) in subsection (h)(7), in the first sen12 tence— 

13 (i) by striking ‘‘and (4)’’ and inserting 

14 ‘‘and (4) and section 1834A’’; and 

15 (ii) by striking ‘‘under this sub16 section’’ and inserting ‘‘under this part’’. 

17 (2) Section 1869(f)(2) of the Social Security 

18 Act (42 U.S.C. 1395ff(f)(2)) is amended by adding 

19 at the end the following new subparagraph: 

20 ‘‘(C) LOCAL COVERAGE DETERMINATIONS

21 FOR CLINICAL DIAGNOSTIC LABORATORY

22 TESTS.—For provisions relating to local cov23 erage determinations for clinical diagnostic lab24 oratory tests, see section 1834A(g).’’. 
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1 (c) GAO STUDY AND REPORT; MONITORING OF

2 MEDICARE EXPENDITURES AND IMPLEMENTATION OF

3 NEW PAYMENT SYSTEM FOR LABORATORY TESTS.— 

4 (1) GAO STUDY AND REPORT ON IMPLEMENTA5 TION OF NEW PAYMENT RATES FOR CLINICAL DIAG6 NOSTIC LABORATORY TESTS.— 

7 (A) STUDY.—The Comptroller General of 

8 the United States (in this subsection referred to 

9 as the ‘‘Comptroller General’’) shall conduct a 

10 study on the implementation of section 1834A 

11 of the Social Security Act, as added by sub12 section (a). The study shall include an analysis 

13 of— 

14 (i) payment rates paid by private 

15 payors for laboratory tests furnished in 

16 various settings, including— 

17 (I) how such payment rates com18 pare across settings; 

19 (II) the trend in payment rates 

20 over time; and 

21 (III) trends by private payors to 

22 move to alternative payment meth23 odologies for laboratory tests; 
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1 (ii) the conversion to the new payment 

2 rate for laboratory tests under such sec3 tion; 

4 (iii) the impact of such implementa5 tion on beneficiary access under title 

6 XVIII of the Social Security Act; 

7 (iv) the impact of the new payment 

8 system on laboratories that furnish a low 

9 volume of services and laboratories that 

10 specialize in a small number of tests; 

11 (v) the number of new Healthcare 

12 Common Procedure Coding System 

13 (HCPCS) codes issued for laboratory tests; 

14 (vi) the spending trend for laboratory 

15 tests under such title; 

16 (vii) whether the information reported 

17 by laboratories and the new payment rates 

18 for laboratory tests under such section ac19 curately reflect market prices; 

20 (viii) the initial list price for new lab21 oratory tests and the subsequent reported 

22 rates for such tests under such section; 

23 (ix) changes in the number of ad24 vanced diagnostic laboratory tests and lab25 oratory tests cleared or approved by the 
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1 Food and Drug Administration for which 

2 payment is made under such section; and 

3 (x) healthcare economic information 

4 on downstream cost impacts for such tests 

5 and decision making based on accepted 

6 methodologies. 

7 (B) REPORT.—Not later than October 1, 

8 2018, the Comptroller General shall submit to 

9 the Committee on Ways and Means and the 

10 Committee on Energy and Commerce of the 

11 House of Representatives and the Committee 

12 on Finance of the Senate a report on the study 

13 under subparagraph (A), including rec14 ommendations for such legislation and adminis15 trative action as the Comptroller General deter16 mines appropriate. 

17 (2) MONITORING OF MEDICARE EXPENDITURES

18 AND IMPLEMENTATION OF NEW PAYMENT SYSTEM

19 FOR LABORATORY TESTS.—The Inspector General of 

20 the Department of Health and Human Services 

21 shall— 

22 (A) publicly release an annual analysis of 

23 the top 25 laboratory tests by expenditures 

24 under title XVIII of the Social Security Act; 

25 and 
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1 (B) conduct analyses the Inspector General 

2 determines appropriate with respect to the im3 plementation and effect of the new payment 

4 system for laboratory tests under section 1834A 

5 of the Social Security Act, as added by sub6 section (a). 

7 SEC. 217. REVISIONS UNDER THE MEDICARE ESRD PRO8 SPECTIVE PAYMENT SYSTEM. 

9 (a) DELAY OF IMPLEMENTATION OF ORAL-ONLY

10 POLICY.—Section 632(b)(1) of the American Taxpayer 

11 Relief Act of 2012 (42 U.S.C. 1395rr note) is amended— 

12 (1) by striking ‘‘2016’’ and inserting ‘‘2024’’; 

13 and 

14 (2) by adding at the end the following new sen15 tence: ‘‘Notwithstanding section 1881(b)(14)(A)(ii) 

16 of the Social Security Act (42 U.S.C. 

17 1395rr(b)(14)(A)(ii)), implementation of the policy 

18 described in the previous sentence shall be based on 

19 data from the most recent year available.’’. 

20 (b) MITIGATION OF THE APPLICATION OF ADJUST21 MENT TO ESRD BUNDLED PAYMENT RATE TO ACCOUNT

22 FOR CHANGES IN THE UTILIZATION OF CERTAIN DRUGS

23 AND BIOLOGICALS.— 

24 (1) IN GENERAL.—Section 1881(b)(14)(I) of 

25 the Social Security Act (42 U.S.C. 1395rr(b)(14)(I)) 
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1 is amended by inserting ‘‘and before January 1, 

2 2015,’’ after ‘‘January 1, 2014,’’. 

3 (2) MARKET BASKET.—Section 

4 1881(b)(14)(F)(i) of the Social Security Act (42 

5 U.S.C. 1395rr(b)(14)(F)(i)) is amended— 

6 (A) in subclause (I)— 

7 (i) by striking ‘‘subclause (II)’’ and 

8 inserting ‘‘subclauses (II) and (III)’’; and 

9 (ii) by adding at the end the following 

10 new sentence: ‘‘In order to accomplish the 

11 purposes of subparagraph (I) with respect 

12 to 2016, 2017, and 2018, after deter13 mining the increase factor described in the 

14 preceding sentence for each of 2016, 2017, 

15 and 2018, the Secretary shall reduce such 

16 increase factor by 1.25 percentage points 

17 for each of 2016 and 2017 and by 1 per18 centage point for 2018.’’; 

19 (B) in subclause (II), by striking ‘‘For 

20 2012’’ and inserting ‘‘Subject to subclause 

21 (III), for 2012’’; and 

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

23 subclause: 

24 ‘‘(III) Notwithstanding subclauses (I) and (II), 

25 in order to accomplish the purposes of subparagraph 
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1 (I) with respect to 2015, the increase factor de2 scribed in subclause (I) for 2015 shall be 0.0 percent 

3 pursuant to the regulation issued by the Secretary 

4 on December 2, 2013, entitled ‘Medicare Program; 

5 End-Stage Renal Disease Prospective Payment Sys6 tem, Quality Incentive Program, and Durable Med7 ical Equipment, Prosthetics, Orthotics, and Supplies; 

8 Final Rule’ (78 Fed. Reg. 72156).’’. 

9 (c) DRUG DESIGNATIONS.—As part of the promulga10 tion of annual rule for the Medicare end stage renal dis11 ease prospective payment system under section 

12 1881(b)(14) of the Social Security Act (42 U.S.C. 

13 1395rr(b)(14)) for calendar year 2016, the Secretary of 

14 Health and Human Services (in this subsection referred 

15 to as the ‘‘Secretary’’) shall establish a process for— 

16 (1) determining when a product is no longer an 

17 oral-only drug; and 

18 (2) including new injectable and intravenous 

19 products into the bundled payment under such sys20 tem. 

21 (d) QUALITY MEASURES RELATED TO CONDITIONS

22 TREATED BY ORAL-ONLY DRUGS UNDER THE ESRD 

23 QUALITY INCENTIVE PROGRAM.—Section 1881(h)(2) of 

24 the Social Security Act (42 U.S.C. 1395rr(h)(2)) is 

25 amended— 
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1 (1) in subparagraph (A)— 

2 (A) in clause (ii), by striking ‘‘and’’ at the 

3 end; 

4 (B) by redesignating clause (iii) as clause 

5 (iv); and 

6 (C) by inserting after clause (ii) the fol7 lowing new clause: 

8 ‘‘(iii) for 2016 and subsequent years, 

9 measures described in subparagraph 

10 (E)(i); and’’; 

11 (2) in subparagraph (B)(i), by striking 

12 ‘‘(A)(iii)’’ and inserting ‘‘(A)(iv)’’; and 

13 (3) by adding at the end the following new sub14 paragraph: 

15 ‘‘(E) MEASURES SPECIFIC TO THE CONDI16 TIONS TREATED WITH ORAL-ONLY DRUGS.— 

17 ‘‘(i) IN GENERAL.—The measures de18 scribed in this subparagraph are measures 

19 specified by the Secretary that are specific 

20 to the conditions treated with oral-only 

21 drugs. To the extent feasible, such meas22 ures shall be outcomes-based measures. 

23 ‘‘(ii) CONSULTATION.—In specifying 

24 the measures under clause (i), the Sec-
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1 retary shall consult with interested stake2 holders. 

3 ‘‘(iii) USE OF ENDORSED MEAS4 URES.— 

5 ‘‘(I) IN GENERAL.—Subject to 

6 subclause (I), any measures specified 

7 under clause (i) must have been en8 dorsed by the entity with a contract 

9 under section 1890(a). 

10 ‘‘(II) EXCEPTION.—If the entity 

11 with a contract under section 1890(a) 

12 has not endorsed a measure for a 

13 specified area or topic related to 

14 measures described in clause (i) that 

15 the Secretary determines appropriate, 

16 the Secretary may specify a measure 

17 that is endorsed or adopted by a con18 sensus organization recognized by the 

19 Secretary that has expertise in clinical 

20 guidelines for kidney disease.’’. 

21 (e) AUDITS OF COST REPORTS OF ESRD PROVIDERS

22 AS RECOMMENDED BY MEDPAC.— 

23 (1) IN GENERAL.—The Secretary of Health and 

24 Human Services shall conduct audits of Medicare 

25 cost reports beginning during 2012 for a representa-
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1 tive sample of providers of services and renal dialysis 

2 facilities furnishing renal dialysis services. 

3 (2) FUNDING.—For purposes of carrying out 

4 paragraph (1), the Secretary of Health and Human 

5 Services shall provide for the transfer from the Fed6 eral Supplementary Medical Insurance Trust Fund 

7 established under section 1841 of the Social Security 

8 Act (42 U.S.C. 1395t) to the Centers for Medicare 

9 & Medicaid Services Program Management Account 

10 of $18,000,000 for fiscal year 2014. Amounts trans11 ferred under this paragraph for a fiscal year shall be 

12 available until expended. 

13 SEC. 218. QUALITY INCENTIVES FOR COMPUTED TOMOG14 RAPHY DIAGNOSTIC IMAGING AND PRO15 MOTING EVIDENCE-BASED CARE. 

16 (a) QUALITY INCENTIVES TO PROMOTE PATIENT

17 SAFETY AND PUBLIC HEALTH IN COMPUTED TOMOG18 RAPHY DIAGNOSTIC IMAGING.— 

19 (1) IN GENERAL.—Section 1834 of the Social 

20 Security Act (42 U.S.C. 1395m) is amended by add21 ing at the end the following new subsection: 

22 ‘‘(p) QUALITY INCENTIVES TO PROMOTE PATIENT

23 SAFETY AND PUBLIC HEALTH IN COMPUTED TOMOG24 RAPHY.— 
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1 ‘‘(1) QUALITY INCENTIVES.—In the case of an 

2 applicable computed tomography service (as defined 

3 in paragraph (2)) for which payment is made under 

4 an applicable payment system (as defined in para5 graph (3)) and that is furnished on or after January 

6 1, 2016, using equipment that is not consistent with 

7 the CT equipment standard (described in paragraph 

8 (4)), the payment amount for such service shall be 

9 reduced by the applicable percentage (as defined in 

10 paragraph (5)). 

11 ‘‘(2) APPLICABLE COMPUTED TOMOGRAPHY

12 SERVICES DEFINED.—In this subsection, the term 

13 ‘applicable computed tomography service’ means a 

14 service billed using diagnostic radiological imaging 

15 codes for computed tomography (identified as of 

16 January 1, 2014, by HCPCS codes 70450–70498, 

17 71250–71275, 72125–72133, 72191–72194, 73200– 

18 73206, 73700–73706, 74150–74178, 74261–74263, 

19 and 75571–75574 (and any succeeding codes). 

20 ‘‘(3) APPLICABLE PAYMENT SYSTEM DE21 FINED.—In this subsection, the term ‘applicable 

22 payment system’ means the following: 

23 ‘‘(A) The technical component and the 

24 technical component of the global fee under the 

25 fee schedule established under section 1848(b). 
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1 ‘‘(B) The prospective payment system for 

2 hospital outpatient department services under 

3 section 1833(t). 

4 ‘‘(4) CONSISTENCY WITH CT EQUIPMENT

5 STANDARD.—In this subsection, the term ‘not con6 sistent with the CT equipment standard’ means, 

7 with respect to an applicable computed tomography 

8 service, that the service was furnished using equip9 ment that does not meet each of the attributes of 

10 the National Electrical Manufacturers Association 

11 (NEMA) Standard XR–29–2013, entitled ‘Standard 

12 Attributes on CT Equipment Related to Dose Opti13 mization and Management’. Through rulemaking, 

14 the Secretary may apply successor standards. 

15 ‘‘(5) APPLICABLE PERCENTAGE DEFINED.—In 

16 this subsection, the term ‘applicable percentage’ 

17 means— 

18 ‘‘(A) for 2016, 5 percent; and 

19 ‘‘(B) for 2017 and subsequent years, 15 

20 percent. 

21 ‘‘(6) IMPLEMENTATION.— 

22 ‘‘(A) INFORMATION.—The Secretary shall 

23 require that information be provided and at24 tested to by a supplier and a hospital outpatient 

25 department that indicates whether an applicable 
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1 computed tomography service was furnished 

2 that was not consistent with the CT equipment 

3 standard (described in paragraph (4)). Such in4 formation may be included on a claim and may 

5 be a modifier. Such information shall be 

6 verified, as appropriate, as part of the periodic 

7 accreditation of suppliers under section 1834(e) 

8 and hospitals under section 1865(a). 

9 ‘‘(B) ADMINISTRATION.—Chapter 35 of 

10 title 44, United States Code, shall not apply to 

11 information described in subparagraph (A).’’. 

12 (2) CONFORMING AMENDMENTS.— 

13 (A) PROSPECTIVE PAYMENT SYSTEM FOR

14 HOSPITAL OUTPATIENT DEPARTMENT SERV15 ICES.—Section 1833(t) of the Social Security 

16 Act (42 1395l(t)) is amended by adding at the 

17 end the following new paragraph: 

18 ‘‘(20) NOT BUDGET NEUTRAL APPLICATION OF

19 REDUCED EXPENDITURES RESULTING FROM QUAL20 ITY INCENTIVES FOR COMPUTED TOMOGRAPHY.— 

21 The Secretary shall not take into account the re22 duced expenditures that result from the application 

23 of section 1834(p) in making any budget neutrality 

24 adjustments this subsection.’’. 
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1 (B) PHYSICIAN FEE SCHEDULE.—Section 

2 1848(c)(2)(B)(v) of the Social Security Act (42 

3 U.S.C. 1395w–4(c)(2)(B)(v)) is amended by 

4 adding at the end the following new subclause: 

5 ‘‘(VIII) REDUCED EXPENDI6 TURES ATTRIBUTABLE TO APPLICA7 TION OF QUALITY INCENTIVES FOR

8 COMPUTED TOMOGRAPHY.—Effective 

9 for fee schedules established beginning 

10 with 2016, reduced expenditures at11 tributable to the application of the 

12 quality incentives for computed to13 mography under section 1834(p)’’. 

14 (b) PROMOTING EVIDENCE-BASED CARE.— 

15 (1) IN GENERAL.—Section 1834 of the Social 

16 Security Act (42 U.S.C. 1395m), as amended by 

17 subsection (a), is amended by adding at the end the 

18 following new subsection: 

19 ‘‘(q) RECOGNIZING APPROPRIATE USE CRITERIA FOR

20 CERTAIN IMAGING SERVICES.— 

21 ‘‘(1) PROGRAM ESTABLISHED.— 

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

23 establish a program to promote the use of ap24 propriate use criteria (as defined in subpara25 graph (B)) for applicable imaging services (as 
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1 defined in subparagraph (C)) furnished in an 

2 applicable setting (as defined in subparagraph 

3 (D)) by ordering professionals and furnishing 

4 professionals (as defined in subparagraphs (E) 

5 and (F), respectively). 

6 ‘‘(B) APPROPRIATE USE CRITERIA DE7 FINED.—In this subsection, the term ‘appro8 priate use criteria’ means criteria, only devel9 oped or endorsed by national professional med10 ical specialty societies or other provider-led enti11 ties, to assist ordering professionals and fur12 nishing professionals in making the most appro13 priate treatment decision for a specific clinical 

14 condition for an individual. To the extent fea15 sible, such criteria shall be evidence-based. 

16 ‘‘(C) APPLICABLE IMAGING SERVICE DE17 FINED.—In this subsection, the term ‘applicable 

18 imaging service’ means an advanced diagnostic 

19 imaging service (as defined in subsection 

20 (e)(1)(B)) for which the Secretary determines— 

21 ‘‘(i) one or more applicable appro22 priate use criteria specified under para23 graph (2) apply; 
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1 ‘‘(ii) there are one or more qualified 

2 clinical decision support mechanisms listed 

3 under paragraph (3)(C); and 

4 ‘‘(iii) one or more of such mechanisms 

5 is available free of charge. 

6 ‘‘(D) APPLICABLE SETTING DEFINED.—In 

7 this subsection, the term ‘applicable setting’ 

8 means a physician’s office, a hospital outpatient 

9 department (including an emergency depart10 ment), an ambulatory surgical center, and any 

11 other provider-led outpatient setting determined 

12 appropriate by the Secretary. 

13 ‘‘(E) ORDERING PROFESSIONAL DE14 FINED.—In this subsection, the term ‘ordering 

15 professional’ means a physician (as defined in 

16 section 1861(r)) or a practitioner described in 

17 section 1842(b)(18)(C) who orders an applica18 ble imaging service. 

19 ‘‘(F) FURNISHING PROFESSIONAL DE20 FINED.—In this subsection, the term ‘fur21 nishing professional’ means a physician (as de22 fined in section 1861(r)) or a practitioner de23 scribed in section 1842(b)(18)(C) who furnishes 

24 an applicable imaging service. 
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1 ‘‘(2) ESTABLISHMENT OF APPLICABLE APPRO2 PRIATE USE CRITERIA.— 

3 ‘‘(A) IN GENERAL.—Not later than No4 vember 15, 2015, the Secretary shall through 

5 rulemaking, and in consultation with physi6 cians, practitioners, and other stakeholders, 

7 specify applicable appropriate use criteria for 

8 applicable imaging services only from among 

9 appropriate use criteria developed or endorsed 

10 by national professional medical specialty soci11 eties or other provider-led entities. 

12 ‘‘(B) CONSIDERATIONS.—In specifying ap13 plicable appropriate use criteria under subpara14 graph (A), the Secretary shall take into account 

15 whether the criteria— 

16 ‘‘(i) have stakeholder consensus; 

17 ‘‘(ii) are scientifically valid and evi18 dence based; and 

19 ‘‘(iii) are based on studies that are 

20 published and reviewable by stakeholders. 

21 ‘‘(C) REVISIONS.—The Secretary shall re22 view, on an annual basis, the specified applica23 ble appropriate use criteria to determine if 

24 there is a need to update or revise (as appro25 priate) such specification of applicable appro-
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1 priate use criteria and make such updates or 

2 revisions through rulemaking. 

3 ‘‘(D) TREATMENT OF MULTIPLE APPLICA4 BLE APPROPRIATE USE CRITERIA.—In the case 

5 where the Secretary determines that more than 

6 one appropriate use criterion applies with re7 spect to an applicable imaging service, the Sec8 retary shall apply one or more applicable appro9 priate use criteria under this paragraph for the 

10 service. 

11 ‘‘(3) MECHANISMS FOR CONSULTATION WITH

12 APPLICABLE APPROPRIATE USE CRITERIA.— 

13 ‘‘(A) IDENTIFICATION OF MECHANISMS TO

14 CONSULT WITH APPLICABLE APPROPRIATE USE

15 CRITERIA.— 

16 ‘‘(i) IN GENERAL.—The Secretary 

17 shall specify qualified clinical decision sup18 port mechanisms that could be used by or19 dering professionals to consult with appli20 cable appropriate use criteria for applicable 

21 imaging services. 

22 ‘‘(ii) CONSULTATION.—The Secretary 

23 shall consult with physicians, practitioners, 

24 health care technology experts, and other 
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1 stakeholders in specifying mechanisms 

2 under this paragraph. 

3 ‘‘(iii) INCLUSION OF CERTAIN MECHA4 NISMS.—Mechanisms specified under this 

5 paragraph may include any or all of the 

6 following that meet the requirements de7 scribed in subparagraph (B)(ii): 

8 ‘‘(I) Use of clinical decision sup9 port modules in certified EHR tech10 nology (as defined in section 

11 1848(o)(4)). 

12 ‘‘(II) Use of private sector clin13 ical decision support mechanisms that 

14 are independent from certified EHR 

15 technology, which may include use of 

16 clinical decision support mechanisms 

17 available from medical specialty orga18 nizations. 

19 ‘‘(III) Use of a clinical decision 

20 support mechanism established by the 

21 Secretary. 

22 ‘‘(B) QUALIFIED CLINICAL DECISION SUP23 PORT MECHANISMS.— 

24 ‘‘(i) IN GENERAL.—For purposes of 

25 this subsection, a qualified clinical decision 
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1 support mechanism is a mechanism that 

2 the Secretary determines meets the re3 quirements described in clause (ii). 

4 ‘‘(ii) REQUIREMENTS.—The require5 ments described in this clause are the fol6 lowing: 

7 ‘‘(I) The mechanism makes avail8 able to the ordering professional appli9 cable appropriate use criteria specified 

10 under paragraph (2) and the sup11 porting documentation for the applica12 ble imaging service ordered. 

13 ‘‘(II) In the case where there is 

14 more than one applicable appropriate 

15 use criterion specified under such 

16 paragraph for an applicable imaging 

17 service, the mechanism indicates the 

18 criteria that it uses for the service. 

19 ‘‘(III) The mechanism determines 

20 the extent to which an applicable im21 aging service ordered is consistent 

22 with the applicable appropriate use 

23 criteria so specified. 

24 ‘‘(IV) The mechanism generates 

25 and provides to the ordering profes-
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1 sional a certification or documentation 

2 that documents that the qualified clin3 ical decision support mechanism was 

4 consulted by the ordering professional. 

5 ‘‘(V) The mechanism is updated 

6 on a timely basis to reflect revisions 

7 to the specification of applicable ap8 propriate use criteria under such 

9 paragraph. 

10 ‘‘(VI) The mechanism meets pri11 vacy and security standards under ap12 plicable provisions of law. 

13 ‘‘(VII) The mechanism performs 

14 such other functions as specified by 

15 the Secretary, which may include a re16 quirement to provide aggregate feed17 back to the ordering professional. 

18 ‘‘(C) LIST OF MECHANISMS FOR CON19 SULTATION WITH APPLICABLE APPROPRIATE

20 USE CRITERIA.— 

21 ‘‘(i) INITIAL LIST.—Not later than 

22 April 1, 2016, the Secretary shall publish 

23 a list of mechanisms specified under this 

24 paragraph. 
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1 ‘‘(ii) PERIODIC UPDATING OF LIST.— 

2 The Secretary shall identify on an annual 

3 basis the list of qualified clinical decision 

4 support mechanisms specified under this 

5 paragraph. 

6 ‘‘(4) CONSULTATION WITH APPLICABLE APPRO7 PRIATE USE CRITERIA.— 

8 ‘‘(A) CONSULTATION BY ORDERING PRO9 FESSIONAL.—Beginning with January 1, 2017, 

10 subject to subparagraph (C), with respect to an 

11 applicable imaging service ordered by an order12 ing professional that would be furnished in an 

13 applicable setting and paid for under an appli14 cable payment system (as defined in subpara15 graph (D)), an ordering professional shall— 

16 ‘‘(i) consult with a qualified decision 

17 support mechanism listed under paragraph 

18 (3)(C); and 

19 ‘‘(ii) provide to the furnishing profes20 sional the information described in clauses 

21 (i) through (iii) of subparagraph (B). 

22 ‘‘(B) REPORTING BY FURNISHING PROFES23 SIONAL.—Beginning with January 1, 2017, 

24 subject to subparagraph (C), with respect to an 

25 applicable imaging service furnished in an ap-
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1 plicable setting and paid for under an applica2 ble payment system (as defined in subpara3 graph (D)), payment for such service may only 

4 be made if the claim for the service includes the 

5 following: 

6 ‘‘(i) Information about which qualified 

7 clinical decision support mechanism was 

8 consulted by the ordering professional for 

9 the service. 

10 ‘‘(ii) Information regarding— 

11 ‘‘(I) whether the service ordered 

12 would adhere to the applicable appro13 priate use criteria specified under 

14 paragraph (2); 

15 ‘‘(II) whether the service ordered 

16 would not adhere to such criteria; or 

17 ‘‘(III) whether such criteria was 

18 not applicable to the service ordered. 

19 ‘‘(iii) The national provider identifier 

20 of the ordering professional (if different 

21 from the furnishing professional). 

22 ‘‘(C) EXCEPTIONS.—The provisions of sub23 paragraphs (A) and (B) and paragraph (6)(A) 

24 shall not apply to the following: 
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1 ‘‘(i) EMERGENCY SERVICES.—An ap2 plicable imaging service ordered for an in3 dividual with an emergency medical condi4 tion (as defined in section 1867(e)(1)). 

5 ‘‘(ii) INPATIENT SERVICES.—An appli6 cable imaging service ordered for an inpa7 tient and for which payment is made under 

8 part A. 

9 ‘‘(iii) SIGNIFICANT HARDSHIP.—An 

10 applicable imaging service ordered by an 

11 ordering professional who the Secretary 

12 may, on a case-by-case basis, exempt from 

13 the application of such provisions if the 

14 Secretary determines, subject to annual re15 newal, that consultation with applicable ap16 propriate use criteria would result in a sig17 nificant hardship, such as in the case of a 

18 professional who practices in a rural area 

19 without sufficient Internet access. 

20 ‘‘(D) APPLICABLE PAYMENT SYSTEM DE21 FINED.—In this subsection, the term ‘applicable 

22 payment system’ means the following: 

23 ‘‘(i) The physician fee schedule estab24 lished under section 1848(b). 
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1 ‘‘(ii) The prospective payment system 

2 for hospital outpatient department services 

3 under section 1833(t). 

4 ‘‘(iii) The ambulatory surgical center 

5 payment systems under section 1833(i). 

6 ‘‘(5) IDENTIFICATION OF OUTLIER ORDERING

7 PROFESSIONALS.— 

8 ‘‘(A) IN GENERAL.—With respect to appli9 cable imaging services furnished beginning with 

10 2017, the Secretary shall determine, on an an11 nual basis, no more than five percent of the 

12 total number of ordering professionals who are 

13 outlier ordering professionals. 

14 ‘‘(B) OUTLIER ORDERING PROFES15 SIONALS.—The determination of an outlier or16 dering professional shall— 

17 ‘‘(i) be based on low adherence to ap18 plicable appropriate use criteria specified 

19 under paragraph (2), which may be based 

20 on comparison to other ordering profes21 sionals; and 

22 ‘‘(ii) include data for ordering profes23 sionals for whom prior authorization under 

24 paragraph (6)(A) applies. 
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1 ‘‘(C) USE OF TWO YEARS OF DATA.—The 

2 Secretary shall use two years of data to identify 

3 outlier ordering professionals under this para4 graph. 

5 ‘‘(D) PROCESS.—The Secretary shall es6 tablish a process for determining when an 

7 outlier ordering professional is no longer an 

8 outlier ordering professional. 

9 ‘‘(E) CONSULTATION WITH STAKE10 HOLDERS.—The Secretary shall consult with 

11 physicians, practitioners and other stakeholders 

12 in developing methods to identify outlier order13 ing professionals under this paragraph. 

14 ‘‘(6) PRIOR AUTHORIZATION FOR ORDERING

15 PROFESSIONALS WHO ARE OUTLIERS.— 

16 ‘‘(A) IN GENERAL.—Beginning January 1, 

17 2020, subject to paragraph (4)(C), with respect 

18 to services furnished during a year, the Sec19 retary shall, for a period determined appro20 priate by the Secretary, apply prior authoriza21 tion for applicable imaging services that are or22 dered by an outlier ordering professional identi23 fied under paragraph (5). 

24 ‘‘(B) APPROPRIATE USE CRITERIA IN

25 PRIOR AUTHORIZATION.—In applying prior au-
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1 thorization under subparagraph (A), the Sec2 retary shall utilize only the applicable appro3 priate use criteria specified under this sub4 section. 

5 ‘‘(C) FUNDING.—For purposes of carrying 

6 out this paragraph, the Secretary shall provide 

7 for the transfer, from the Federal Supple8 mentary Medical Insurance Trust Fund under 

9 section 1841, of $5,000,000 to the Centers for 

10 Medicare & Medicaid Services Program Man11 agement Account for each of fiscal years 2019 

12 through 2021. Amounts transferred under the 

13 preceding sentence shall remain available until 

14 expended. 

15 ‘‘(7) CONSTRUCTION.—Nothing in this sub16 section shall be construed as granting the Secretary 

17 the authority to develop or initiate the development 

18 of clinical practice guidelines or appropriate use cri19 teria.’’. 

20 (2) CONFORMING AMENDMENT.—Section 

21 1833(t)(16) of the Social Security Act (42 U.S.C. 

22 1395l(t)(16)) is amended by adding at the end the 

23 following new subparagraph: 

24 ‘‘(E) APPLICATION OF APPROPRIATE USE

25 CRITERIA FOR CERTAIN IMAGING SERVICES.— 
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1 For provisions relating to the application of ap2 propriate use criteria for certain imaging serv3 ices, see section 1834(q).’’. 

4 (3) REPORT ON EXPERIENCE OF IMAGING AP5 PROPRIATE USE CRITERIA PROGRAM.—Not later 

6 than 18 months after the date of the enactment of 

7 this Act, the Comptroller General of the United 

8 States shall submit to Congress a report that in9 cludes a description of the extent to which appro10 priate use criteria could be used for other services 

11 under part B of title XVIII of the Social Security 

12 Act (42 U.S.C. 1395j et seq.), such as radiation 

13 therapy and clinical diagnostic laboratory services. 

14 SEC. 219. USING FUNDING FROM TRANSITIONAL FUND FOR 

15 SUSTAINABLE GROWTH RATE (SGR) REFORM. 

16 Section 1898(b)(1) of the Social Security Act (42 

17 U.S.C. 1395iii(b)(1)) is amended by striking 

18 ‘‘$2,300,000,000’’ and inserting ‘‘$0’’. 

19 SEC. 220. ENSURING ACCURATE VALUATION OF SERVICES 

20 UNDER THE PHYSICIAN FEE SCHEDULE. 

21 (a) AUTHORITY TO COLLECT AND USE INFORMA22 TION ON PHYSICIANS’ SERVICES IN THE DETERMINATION

23 OF RELATIVE VALUES.— 

24 (1) IN GENERAL.—Section 1848(c)(2) of the 

25 Social Security Act (42 U.S.C. 1395w–4(c)(2)) is 
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1 amended by adding at the end the following new 

2 subparagraph: 

3 ‘‘(M) AUTHORITY TO COLLECT AND USE

4 INFORMATION ON PHYSICIANS’ SERVICES IN

5 THE DETERMINATION OF RELATIVE VALUES.— 

6 ‘‘(i) COLLECTION OF INFORMATION.— 

7 Notwithstanding any other provision of 

8 law, the Secretary may collect or obtain in9 formation on the resources directly or indi10 rectly related to furnishing services for 

11 which payment is made under the fee 

12 schedule established under subsection (b). 

13 Such information may be collected or ob14 tained from any eligible professional or any 

15 other source. 

16 ‘‘(ii) USE OF INFORMATION.—Not17 withstanding any other provision of law, 

18 subject to clause (v), the Secretary may 

19 (as the Secretary determines appropriate) 

20 use information collected or obtained pur21 suant to clause (i) in the determination of 

22 relative values for services under this sec23 tion. 

24 ‘‘(iii) TYPES OF INFORMATION.—The 

25 types of information described in clauses 
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1 (i) and (ii) may, at the Secretary’s discre2 tion, include any or all of the following: 

3 ‘‘(I) Time involved in furnishing 

4 services. 

5 ‘‘(II) Amounts and types of prac6 tice expense inputs involved with fur7 nishing services. 

8 ‘‘(III) Prices (net of any dis9 counts) for practice expense inputs, 

10 which may include paid invoice prices 

11 or other documentation or records. 

12 ‘‘(IV) Overhead and accounting 

13 information for practices of physicians 

14 and other suppliers. 

15 ‘‘(V) Any other element that 

16 would improve the valuation of serv17 ices under this section. 

18 ‘‘(iv) INFORMATION COLLECTION

19 MECHANISMS.—Information may be col20 lected or obtained pursuant to this sub21 paragraph from any or all of the following: 

22 ‘‘(I) Surveys of physicians, other 

23 suppliers, providers of services, manu24 facturers, and vendors. 
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1 ‘‘(II) Surgical logs, billing sys2 tems, or other practice or facility 

3 records. 

4 ‘‘(III) Electronic health records. 

5 ‘‘(IV) Any other mechanism de6 termined appropriate by the Sec7 retary. 

8 ‘‘(v) TRANSPARENCY OF USE OF IN9 FORMATION.— 

10 ‘‘(I) IN GENERAL.—Subject to 

11 subclauses (II) and (III), if the Sec12 retary uses information collected or 

13 obtained under this subparagraph in 

14 the determination of relative values 

15 under this subsection, the Secretary 

16 shall disclose the information source 

17 and discuss the use of such informa18 tion in such determination of relative 

19 values through notice and comment 

20 rulemaking. 

21 ‘‘(II) THRESHOLDS FOR USE.— 

22 The Secretary may establish thresh23 olds in order to use such information, 

24 including the exclusion of information 

25 collected or obtained from eligible pro-
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1 fessionals who use very high resources 

2 (as determined by the Secretary) in 

3 furnishing a service. 

4 ‘‘(III) DISCLOSURE OF INFORMA5 TION.—The Secretary shall make ag6 gregate information available under 

7 this subparagraph but shall not dis8 close information in a form or manner 

9 that identifies an eligible professional 

10 or a group practice, or information 

11 collected or obtained pursuant to a 

12 nondisclosure agreement. 

13 ‘‘(vi) INCENTIVE TO PARTICIPATE.— 

14 The Secretary may provide for such pay15 ments under this part to an eligible profes16 sional that submits such solicited informa17 tion under this subparagraph as the Sec18 retary determines appropriate in order to 

19 compensate such eligible professional for 

20 such submission. Such payments shall be 

21 provided in a form and manner specified 

22 by the Secretary. 

23 ‘‘(vii) ADMINISTRATION.—Chapter 35 

24 of title 44, United States Code, shall not 
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1 apply to information collected or obtained 

2 under this subparagraph. 

3 ‘‘(viii) DEFINITION OF ELIGIBLE PRO4 FESSIONAL.—In this subparagraph, the 

5 term ‘eligible professional’ has the meaning 

6 given such term in subsection (k)(3)(B). 

7 ‘‘(ix) FUNDING.—For purposes of car8 rying out this subparagraph, in addition to 

9 funds otherwise appropriated, the Sec10 retary shall provide for the transfer, from 

11 the Federal Supplementary Medical Insur12 ance Trust Fund under section 1841, of 

13 $2,000,000 to the Centers for Medicare & 

14 Medicaid Services Program Management 

15 Account for each fiscal year beginning with 

16 fiscal year 2014. Amounts transferred 

17 under the preceding sentence for a fiscal 

18 year shall be available until expended.’’. 

19 (2) LIMITATION ON REVIEW.—Section 

20 1848(i)(1) of the Social Security Act (42 U.S.C. 

21 1395w–4(i)(1)) is amended— 

22 (A) in subparagraph (D), by striking 

23 ‘‘and’’ at the end; 

24 (B) in subparagraph (E), by striking the 

25 period at the end and inserting ‘‘, and’’; and 
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1 (C) by adding at the end the following new 

2 subparagraph: 

3 ‘‘(F) the collection and use of information 

4 in the determination of relative values under 

5 subsection (c)(2)(M).’’. 

6 (b) AUTHORITY FOR ALTERNATIVE APPROACHES TO

7 ESTABLISHING PRACTICE EXPENSE RELATIVE VAL8 UES.—Section 1848(c)(2) of the Social Security Act (42 

9 U.S.C. 1395w–4(c)(2)), as amended by subsection (a), is 

10 amended by adding at the end the following new subpara11 graph: 

12 ‘‘(N) AUTHORITY FOR ALTERNATIVE AP13 PROACHES TO ESTABLISHING PRACTICE EX14 PENSE RELATIVE VALUES.—The Secretary may 

15 establish or adjust practice expense relative val16 ues under this subsection using cost, charge, or 

17 other data from suppliers or providers of serv18 ices, including information collected or obtained 

19 under subparagraph (M).’’. 

20 (c) REVISED AND EXPANDED IDENTIFICATION OF

21 POTENTIALLY MISVALUED CODES.—Section 

22 1848(c)(2)(K)(ii) of the Social Security Act (42 U.S.C. 

23 1395w–4(c)(2)(K)(ii)) is amended to read as follows: 

24 ‘‘(ii) IDENTIFICATION OF POTEN25 TIALLY MISVALUED CODES.—For purposes 
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1 of identifying potentially misvalued codes 

2 pursuant to clause (i)(I), the Secretary 

3 shall examine codes (and families of codes 

4 as appropriate) based on any or all of the 

5 following criteria: 

6 ‘‘(I) Codes that have experienced 

7 the fastest growth. 

8 ‘‘(II) Codes that have experi9 enced substantial changes in practice 

10 expenses. 

11 ‘‘(III) Codes that describe new 

12 technologies or services within an ap13 propriate time period (such as 3 

14 years) after the relative values are ini15 tially established for such codes. 

16 ‘‘(IV) Codes which are multiple 

17 codes that are frequently billed in con18 junction with furnishing a single serv19 ice. 

20 ‘‘(V) Codes with low relative val21 ues, particularly those that are often 

22 billed multiple times for a single treat23 ment. 
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1 ‘‘(VI) Codes that have not been 

2 subject to review since implementation 

3 of the fee schedule. 

4 ‘‘(VII) Codes that account for 

5 the majority of spending under the 

6 physician fee schedule. 

7 ‘‘(VIII) Codes for services that 

8 have experienced a substantial change 

9 in the hospital length of stay or proce10 dure time. 

11 ‘‘(IX) Codes for which there may 

12 be a change in the typical site of serv13 ice since the code was last valued. 

14 ‘‘(X) Codes for which there is a 

15 significant difference in payment for 

16 the same service between different 

17 sites of service. 

18 ‘‘(XI) Codes for which there may 

19 be anomalies in relative values within 

20 a family of codes. 

21 ‘‘(XII) Codes for services where 

22 there may be efficiencies when a serv23 ice is furnished at the same time as 

24 other services. 
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1 ‘‘(XIII) Codes with high intra2 service work per unit of time. 

3 ‘‘(XIV) Codes with high practice 

4 expense relative value units. 

5 ‘‘(XV) Codes with high cost sup6 plies. 

7 ‘‘(XVI) Codes as determined ap8 propriate by the Secretary.’’. 

9 (d) TARGET FOR RELATIVE VALUE ADJUSTMENTS

10 FOR MISVALUED SERVICES.— 

11 (1) IN GENERAL.—Section 1848(c)(2) of the 

12 Social Security Act (42 U.S.C. 1395w–4(c)(2)), as 

13 amended by subsections (a) and (b), is amended by 

14 adding at the end the following new subparagraph: 

15 ‘‘(O) TARGET FOR RELATIVE VALUE AD16 JUSTMENTS FOR MISVALUED SERVICES.—With 

17 respect to fee schedules established for each of 

18 2017 through 2020, the following shall apply: 

19 ‘‘(i) DETERMINATION OF NET REDUC20 TION IN EXPENDITURES.—For each year, 

21 the Secretary shall determine the esti22 mated net reduction in expenditures under 

23 the fee schedule under this section with re24 spect to the year as a result of adjust-
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1 ments to the relative values established 

2 under this paragraph for misvalued codes. 

3 ‘‘(ii) BUDGET NEUTRAL REDISTRIBU4 TION OF FUNDS IF TARGET MET AND

5 COUNTING OVERAGES TOWARDS THE TAR6 GET FOR THE SUCCEEDING YEAR.—If the 

7 estimated net reduction in expenditures de8 termined under clause (i) for the year is 

9 equal to or greater than the target for the 

10 year— 

11 ‘‘(I) reduced expenditures attrib12 utable to such adjustments shall be 

13 redistributed for the year in a budget 

14 neutral manner in accordance with 

15 subparagraph (B)(ii)(II); and 

16 ‘‘(II) the amount by which such 

17 reduced expenditures exceeds the tar18 get for the year shall be treated as a 

19 reduction in expenditures described in 

20 clause (i) for the succeeding year, for 

21 purposes of determining whether the 

22 target has or has not been met under 

23 this subparagraph with respect to that 

24 year. 
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1 ‘‘(iii) EXEMPTION FROM BUDGET

2 NEUTRALITY IF TARGET NOT MET.—If the 

3 estimated net reduction in expenditures de4 termined under clause (i) for the year is 

5 less than the target for the year, reduced 

6 expenditures in an amount equal to the 

7 target recapture amount shall not be taken 

8 into account in applying subparagraph 

9 (B)(ii)(II) with respect to fee schedules be10 ginning with 2017. 

11 ‘‘(iv) TARGET RECAPTURE AMOUNT.— 

12 For purposes of clause (iii), the target re13 capture amount is, with respect to a year, 

14 an amount equal to the difference be15 tween— 

16 ‘‘(I) the target for the year; and 

17 ‘‘(II) the estimated net reduction 

18 in expenditures determined under 

19 clause (i) for the year. 

20 ‘‘(v) TARGET.—For purposes of this 

21 subparagraph, with respect to a year, the 

22 target is calculated as 0.5 percent of the 

23 estimated amount of expenditures under 

24 the fee schedule under this section for the 

25 year.’’. 
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1 (2) CONFORMING AMENDMENT.—Section 

2 1848(c)(2)(B)(v) of the Social Security Act (42 

3 U.S.C. 1395w–4(c)(2)(B)(v)) is amended by adding 

4 at the end the following new subclause: 

5 ‘‘(VIII) REDUCTIONS FOR

6 MISVALUED SERVICES IF TARGET NOT

7 MET.—Effective for fee schedules be8 ginning with 2017, reduced expendi9 tures attributable to the application of 

10 the target recapture amount described 

11 in subparagraph (O)(iii).’’. 

12 (e) PHASE-IN OF SIGNIFICANT RELATIVE VALUE

13 UNIT (RVU) REDUCTIONS.— 

14 (1) IN GENERAL.—Section 1848(c) of the So15 cial Security Act (42 U.S.C. 1395w–4(c)) is amend16 ed by adding at the end the following new para17 graph: 

18 ‘‘(7) PHASE-IN OF SIGNIFICANT RELATIVE

19 VALUE UNIT (RVU) REDUCTIONS.—Effective for fee 

20 schedules established beginning with 2017, for serv21 ices that are not new or revised codes, if the total 

22 relative value units for a service for a year would 

23 otherwise be decreased by an estimated amount 

24 equal to or greater than 20 percent as compared to 

25 the total relative value units for the previous year, 
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1 the applicable adjustments in work, practice expense, 

2 and malpractice relative value units shall be phased3 in over a 2-year period.’’. 

4 (2) CONFORMING AMENDMENTS.—Section 

5 1848(c)(2) of the Social Security Act (42 U.S.C. 

6 1395w–4(c)(2)) is amended— 

7 (A) in subparagraph (B)(ii)(I), by striking 

8 ‘‘subclause (II)’’ and inserting ‘‘subclause (II) 

9 and paragraph (7)’’; and 

10 (B) in subparagraph (K)(iii)(VI)— 

11 (i) by striking ‘‘provisions of subpara12 graph (B)(ii)(II)’’ and inserting ‘‘provi13 sions of subparagraph (B)(ii)(II) and para14 graph (7)’’; and 

15 (ii) by striking ‘‘under subparagraph 

16 (B)(ii)(II)’’ and inserting ‘‘under subpara17 graph (B)(ii)(I)’’. 

18 (f) AUTHORITY TO SMOOTH RELATIVE VALUES

19 WITHIN GROUPS OF SERVICES.—Section 1848(c)(2)(C) of 

20 the Social Security Act (42 U.S.C. 1395w–4(c)(2)(C)) is 

21 amended— 

22 (1) in each of clauses (i) and (iii), by striking 

23 ‘‘the service’’ and inserting ‘‘the service or group of 

24 services’’ each place it appears; and 
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1 (2) in the first sentence of clause (ii), by insert2 ing ‘‘or group of services’’ before the period. 

3 (g) GAO STUDY AND REPORT ON RELATIVE VALUE

4 SCALE UPDATE COMMITTEE.— 

5 (1) STUDY.—The Comptroller General of the 

6 United States (in this subsection referred to as the 

7 ‘‘Comptroller General’’) shall conduct a study of the 

8 processes used by the Relative Value Scale Update 

9 Committee (RUC) to provide recommendations to 

10 the Secretary of Health and Human Services regard11 ing relative values for specific services under the 

12 Medicare physician fee schedule under section 1848 

13 of the Social Security Act (42 U.S.C. 1395w–4). 

14 (2) REPORT.—Not later than 1 year after the 

15 date of the enactment of this Act, the Comptroller 

16 General shall submit to Congress a report containing 

17 the results of the study conducted under paragraph 

18 (1). 

19 (h) ADJUSTMENT TO MEDICARE PAYMENT LOCAL20 ITIES.— 

21 (1) IN GENERAL.—Section 1848(e) of the So22 cial Security Act (42 U.S.C. 1395w–4(e)) is amend23 ed by adding at the end the following new para24 graph: 
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1 ‘‘(6) USE OF MSAS AS FEE SCHEDULE AREAS IN

2 CALIFORNIA.— 

3 ‘‘(A) IN GENERAL.—Subject to the suc4 ceeding provisions of this paragraph and not5 withstanding the previous provisions of this 

6 subsection, for services furnished on or after 

7 January 1, 2017, the fee schedule areas used 

8 for payment under this section applicable to 

9 California shall be the following: 

10 ‘‘(i) Each Metropolitan Statistical 

11 Area (each in this paragraph referred to as 

12 an ‘MSA’), as defined by the Director of 

13 the Office of Management and Budget as 

14 of December 31 of the previous year, shall 

15 be a fee schedule area. 

16 ‘‘(ii) All areas not included in an MSA 

17 shall be treated as a single rest-of-State 

18 fee schedule area. 

19 ‘‘(B) TRANSITION FOR MSAS PREVIOUSLY

20 IN REST-OF-STATE PAYMENT LOCALITY OR IN

21 LOCALITY 3.— 

22 ‘‘(i) IN GENERAL.—For services fur23 nished in California during a year begin24 ning with 2017 and ending with 2021 in 

25 an MSA in a transition area (as defined in 
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1 subparagraph (D)), subject to subpara2 graph (C), the geographic index values to 

3 be applied under this subsection for such 

4 year shall be equal to the sum of the fol5 lowing: 

6 ‘‘(I) CURRENT LAW COMPO7 NENT.—The old weighting factor (de8 scribed in clause (ii)) for such year 

9 multiplied by the geographic index 

10 values under this subsection for the 

11 fee schedule area that included such 

12 MSA that would have applied in such 

13 area (as estimated by the Secretary) 

14 if this paragraph did not apply. 

15 ‘‘(II) MSA-BASED COMPO16 NENT.—The MSA-based weighting 

17 factor (described in clause (iii)) for 

18 such year multiplied by the geographic 

19 index values computed for the fee 

20 schedule area under subparagraph (A) 

21 for the year (determined without re22 gard to this subparagraph). 

23 ‘‘(ii) OLD WEIGHTING FACTOR.—The 

24 old weighting factor described in this 

25 clause— 
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‘‘(I) for 2017, is 5 1 ⁄6; and 

2 ‘‘(II) for each succeeding year, is 

3 the old weighting factor described in 

4 this clause for the previous year 

minus 1 5 ⁄6. 

6 ‘‘(iii) MSA-BASED WEIGHTING FAC7 TOR.—The MSA-based weighting factor 

8 described in this clause for a year is 1 

9 minus the old weighting factor under 

10 clause (ii) for that year. 

11 ‘‘(C) HOLD HARMLESS.—For services fur12 nished in a transition area in California during 

13 a year beginning with 2017, the geographic 

14 index values to be applied under this subsection 

15 for such year shall not be less than the cor16 responding geographic index values that would 

17 have applied in such transition area (as esti18 mated by the Secretary) if this paragraph did 

19 not apply. 

20 ‘‘(D) TRANSITION AREA DEFINED.—In 

21 this paragraph, the term ‘transition area’ 

22 means each of the following fee schedule areas 

23 for 2013: 

24 ‘‘(i) The rest-of-State payment local25 ity. 
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1 ‘‘(ii) Payment locality 3. 

2 ‘‘(E) REFERENCES TO FEE SCHEDULE

3 AREAS.—Effective for services furnished on or 

4 after January 1, 2017, for California, any ref5 erence in this section to a fee schedule area 

6 shall be deemed a reference to a fee schedule 

7 area established in accordance with this para8 graph.’’. 

9 (2) CONFORMING AMENDMENT TO DEFINITION

10 OF FEE SCHEDULE AREA.—Section 1848(j)(2) of the 

11 Social Security Act (42 U.S.C. 1395w–4(j)(2)) is 

12 amended by striking ‘‘The term’’ and inserting ‘‘Ex13 cept as provided in subsection (e)(6)(D), the term’’. 

14 (i) DISCLOSURE OF DATA USED TO ESTABLISH

15 MULTIPLE PROCEDURE PAYMENT REDUCTION POLICY.— 

16 The Secretary of Health and Human Services shall make 

17 publicly available the information used to establish the 

18 multiple procedure payment reduction policy to the profes19 sional component of imaging services in the final rule pub20 lished in the Federal Register, v. 77, n. 222, November 

21 16, 2012, pages 68891–69380 under the physician fee 

22 schedule under section 1848 of the Social Security Act (42 

23 U.S.C. 1395w–4). 
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1 SEC. 221. MEDICAID DSH. 

2 (a) MODIFICATIONS OF REDUCTIONS TO ALLOT3 MENTS.—Section 1923(f) of the Social Security Act (42 

4 U.S.C. 1396r–4(f)) is amended— 

5 (1) in paragraph (7)(A)— 

6 (A) in clause (i), by striking ‘‘2016 

7 through 2020’’ and inserting ‘‘2017 through 

8 2024’’; and 

9 (B) in clause (ii), by striking subclauses 

10 (I) through (IV), and inserting the following: 

11 ‘‘(I) $1,800,000,000 for fiscal 

12 year 2017; 

13 ‘‘(II) $4,700,000,000 for fiscal 

14 year 2018; 

15 ‘‘(III) $4,700,000,000 for fiscal 

16 year 2019; 

17 ‘‘(IV) $4,700,000,000 for fiscal 

18 year 2020; 

19 ‘‘(V) $4,800,000,000 for fiscal 

20 year 2021; 

21 ‘‘(VI) $5,000,000,000 for fiscal 

22 year 2022; 

23 ‘‘(VII) $5,000,000,000 for fiscal 

24 year 2023; and 

25 ‘‘(VIII) $4,400,000,000 for fiscal 

26 year 2024.’’; and 
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1 (2) by striking paragraph (8) and inserting the 

2 following: 

3 ‘‘(8) CALCULATION OF DSH ALLOTMENTS

4 AFTER REDUCTIONS PERIOD.—The DSH allotment 

5 for a State for fiscal years after fiscal year 2024 

6 shall be calculated under paragraph (3) without re7 gard to paragraph (7).’’. 

8 (b) MACPAC REVIEW AND REPORT.—Section 

9 1900(b)(6) of the Social Security Act (42 U.S.C. 

10 1396(b)(6)) is amended— 

11 (1) by striking ‘‘MACPAC shall consult’’ and 

12 inserting the following: 

13 ‘‘(A) IN GENERAL.—MACPAC shall con14 sult’’; and 

15 (2) by adding at the end the following: 

16 ‘‘(B) REVIEW AND REPORTS REGARDING

17 MEDICAID DSH.— 

18 ‘‘(i) IN GENERAL.—MACPAC shall 

19 review and submit an annual report to 

20 Congress on disproportionate share hos21 pital payments under section 1923. Each 

22 report shall include the information speci23 fied in clause (ii). 
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1 ‘‘(ii) REQUIRED REPORT INFORMA2 TION.—Each report required under this 

3 subparagraph shall include the following: 

4 ‘‘(I) Data relating to changes in 

5 the number of uninsured individuals. 

6 ‘‘(II) Data relating to the 

7 amount and sources of hospitals’ un8 compensated care costs, including the 

9 amount of such costs that are the re10 sult of providing unreimbursed or 

11 under-reimbursed services, charity 

12 care, or bad debt. 

13 ‘‘(III) Data identifying hospitals 

14 with high levels of uncompensated 

15 care that also provide access to essen16 tial community services for low-in17 come, uninsured, and vulnerable popu18 lations, such as graduate medical edu19 cation, and the continuum of primary 

20 through quarternary care, including 

21 the provision of trauma care and pub22 lic health services. 

23 ‘‘(IV) State-specific analyses re24 garding the relationship between the 

25 most recent State DSH allotment and 
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1 the projected State DSH allotment for 

2 the succeeding year and the data re3 ported under subclauses (I), (II), and 

4 (III) for the State. 

5 ‘‘(iii) DATA.—Notwithstanding any 

6 other provision of law, the Secretary regu7 larly shall provide MACPAC with the most 

8 recent State reports and most recent inde9 pendent certified audits submitted under 

10 section 1923(j), cost reports submitted 

11 under title XVIII, and such other data as 

12 MACPAC may request for purposes of con13 ducting the reviews and preparing and sub14 mitting the annual reports required under 

15 this subparagraph. 

16 ‘‘(iv) SUBMISSION DEADLINES.—The 

17 first report required under this subpara18 graph shall be submitted to Congress not 

19 later than February 1, 2016. Subsequent 

20 reports shall be submitted as part of, or 

21 with, each annual report required under 

22 paragraph (1)(C) during the period of fis23 cal years 2017 through 2024.’’. 
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1 SEC. 222. REALIGNMENT OF THE MEDICARE SEQUESTER 

2 FOR FISCAL YEAR 2024. 

3 Paragraph (6) (relating to implementing direct 

4 spending reductions) of section 251A of the Balanced 

5 Budget and Emergency Deficit Control Act of 1985 (2 

6 U.S.C. 901a) is amended by adding at the end the fol7 lowing new subparagraph: 

8 ‘‘(D) Notwithstanding the 2 percent limit speci9 fied in subparagraph (A) for payments for the Medi10 care programs specified in section 256(d), the se11 questration order of the President under such sub12 paragraph for fiscal year 2024 shall be applied to 

13 such payments so that— 

14 ‘‘(i) with respect to the first 6 months in 

15 which such order is effective for such fiscal 

16 year, the payment reduction shall be 4.0 per17 cent; and 

18 ‘‘(ii) with respect to the second 6 months 

19 in which such order is so effective for such fis20 cal year, the payment reduction shall be 0.0 

21 percent.’’. 

22 SEC. 223. DEMONSTRATION PROGRAMS TO IMPROVE COM23 MUNITY MENTAL HEALTH SERVICES. 

24 (a) CRITERIA FOR CERTIFIED COMMUNITY BEHAV25 IORAL HEALTH CLINICS TO PARTICIPATE IN DEM26 ONSTRATION PROGRAMS.— 
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1 (1) PUBLICATION.—Not later than September 

2 1, 2015, the Secretary shall publish criteria for a 

3 clinic to be certified by a State as a certified com4 munity behavioral health clinic for purposes of par5 ticipating in a demonstration program conducted 

6 under subsection (d). 

7 (2) REQUIREMENTS.—The criteria published 

8 under this subsection shall include criteria with re9 spect to the following: 

10 (A) STAFFING.—Staffing requirements, in11 cluding criteria that staff have diverse discipli12 nary backgrounds, have necessary State-re13 quired license and accreditation, and are cul14 turally and linguistically trained to serve the 

15 needs of the clinic’s patient population. 

16 (B) AVAILABILITY AND ACCESSIBILITY OF

17 SERVICES.—Availability and accessibility of 

18 services, including crisis management services 

19 that are available and accessible 24 hours a 

20 day, the use of a sliding scale for payment, and 

21 no rejection for services or limiting of services 

22 on the basis of a patient’s ability to pay or a 

23 place of residence. 

24 (C) CARE COORDINATION.—Care coordina25 tion, including requirements to coordinate care 
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1 across settings and providers to ensure seamless 

2 transitions for patients across the full spectrum 

3 of health services including acute, chronic, and 

4 behavioral health needs. Care coordination re5 quirements shall include partnerships or formal 

6 contracts with the following: 

7 (i) Federally-qualified health centers 

8 (and as applicable, rural health clinics) to 

9 provide Federally-qualified health center 

10 services (and as applicable, rural health 

11 clinic services) to the extent such services 

12 are not provided directly through the cer13 tified community behavioral health clinic. 

14 (ii) Inpatient psychiatric facilities and 

15 substance use detoxification, post-detoxi16 fication step-down services, and residential 

17 programs. 

18 (iii) Other community or regional 

19 services, supports, and providers, including 

20 schools, child welfare agencies, juvenile and 

21 criminal justice agencies and facilities, In22 dian Health Service youth regional treat23 ment centers, State licensed and nationally 

24 accredited child placing agencies for thera-
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1 peutic foster care service, and other social 

2 and human services. 

3 (iv) Department of Veterans Affairs 

4 medical centers, independent outpatient 

5 clinics, drop-in centers, and other facilities 

6 of the Department as defined in section 

7 1801 of title 38, United States Code. 

8 (v) Inpatient acute care hospitals and 

9 hospital outpatient clinics. 

10 (D) SCOPE OF SERVICES.—Provision (in a 

11 manner reflecting person-centered care) of the 

12 following services which, if not available directly 

13 through the certified community behavioral 

14 health clinic, are provided or referred through 

15 formal relationships with other providers: 

16 (i) Crisis mental health services, in17 cluding 24-hour mobile crisis teams, emer18 gency crisis intervention services, and cri19 sis stabilization. 

20 (ii) Screening, assessment, and diag21 nosis, including risk assessment. 

22 (iii) Patient-centered treatment plan23 ning or similar processes, including risk as24 sessment and crisis planning. 
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1 (iv) Outpatient mental health and 

2 substance use services. 

3 (v) Outpatient clinic primary care 

4 screening and monitoring of key health in5 dicators and health risk. 

6 (vi) Targeted case management. 

7 (vii) Psychiatric rehabilitation serv8 ices. 

9 (viii) Peer support and counselor serv10 ices and family supports. 

11 (ix) Intensive, community-based men12 tal health care for members of the armed 

13 forces and veterans, particularly those 

14 members and veterans located in rural 

15 areas, provided the care is consistent with 

16 minimum clinical mental health guidelines 

17 promulgated by the Veterans Health Ad18 ministration including clinical guidelines 

19 contained in the Uniform Mental Health 

20 Services Handbook of such Administration. 

21 (E) QUALITY AND OTHER REPORTING.— 

22 Reporting of encounter data, clinical outcomes 

23 data, quality data, and such other data as the 

24 Secretary requires. 
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1 (F) ORGANIZATIONAL AUTHORITY.—Cri2 teria that a clinic be a non-profit or part of a 

3 local government behavioral health authority or 

4 operated under the authority of the Indian 

5 Health Service, an Indian tribe or tribal organi6 zation pursuant to a contract, grant, coopera7 tive agreement, or compact with the Indian 

8 Health Service pursuant to the Indian Self-De9 termination Act (25 U.S.C. 450 et seq.), or an 

10 urban Indian organization pursuant to a grant 

11 or contract with the Indian Health Service 

12 under title V of the Indian Health Care Im13 provement Act (25 U.S.C. 1601 et seq.). 

14 (b) GUIDANCE ON DEVELOPMENT OF PROSPECTIVE

15 PAYMENT SYSTEM FOR TESTING UNDER DEMONSTRA16 TION PROGRAMS.— 

17 (1) IN GENERAL.—Not later than September 1, 

18 2015, the Secretary, through the Administrator of 

19 the Centers for Medicare & Medicaid Services, shall 

20 issue guidance for the establishment of a prospective 

21 payment system that shall only apply to medical as22 sistance for mental health services furnished by a 

23 certified community behavioral health clinic partici24 pating in a demonstration program under subsection 

25 (d). 
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1 (2) REQUIREMENTS.—The guidance issued by 

2 the Secretary under paragraph (1) shall provide 

3 that— 

4 (A) no payment shall be made for inpatient 

5 care, residential treatment, room and board ex6 penses, or any other non-ambulatory services, 

7 as determined by the Secretary; and 

8 (B) no payment shall be made to satellite 

9 facilities of certified community behavioral 

10 health clinics if such facilities are established 

11 after the date of enactment of this Act. 

12 (c) PLANNING GRANTS.— 

13 (1) IN GENERAL.—Not later than January 1, 

14 2016, the Secretary shall award planning grants to 

15 States for the purpose of developing proposals to 

16 participate in time-limited demonstration programs 

17 described in subsection (d). 

18 (2) USE OF FUNDS.—A State awarded a plan19 ning grant under this subsection shall— 

20 (A) solicit input with respect to the devel21 opment of such a demonstration program from 

22 patients, providers, and other stakeholders; 

23 (B) certify clinics as certified community 

24 behavioral health clinics for purposes of partici-
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1 pating in a demonstration program conducted 

2 under subsection (d); and 

3 (C) establish a prospective payment system 

4 for mental health services furnished by a cer5 tified community behavioral health clinic par6 ticipating in a demonstration program under 

7 subsection (d) in accordance with the guidance 

8 issued under subsection (b). 

9 (d) DEMONSTRATION PROGRAMS.— 

10 (1) IN GENERAL.—Not later than September 1, 

11 2017, the Secretary shall select States to participate 

12 in demonstration programs that are developed 

13 through planning grants awarded under subsection 

14 (c), meet the requirements of this subsection, and 

15 represent a diverse selection of geographic areas, in16 cluding rural and underserved areas. 

17 (2) APPLICATION REQUIREMENTS.— 

18 (A) IN GENERAL.—The Secretary shall so19 licit applications to participate in demonstration 

20 programs under this subsection solely from 

21 States awarded planning grants under sub22 section (c). 

23 (B) REQUIRED INFORMATION.—An appli24 cation for a demonstration program under this 

25 subsection shall include the following: 
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1 (i) The target Medicaid population to 

2 be served under the demonstration pro3 gram. 

4 (ii) A list of participating certified 

5 community behavioral health clinics. 

6 (iii) Verification that the State has 

7 certified a participating clinic as a certified 

8 community behavioral health clinic in ac9 cordance with the requirements of sub10 section (b). 

11 (iv) A description of the scope of the 

12 mental health services available under the 

13 State Medicaid program that will be paid 

14 for under the prospective payment system 

15 tested in the demonstration program. 

16 (v) Verification that the State has 

17 agreed to pay for such services at the rate 

18 established under the prospective payment 

19 system. 

20 (vi) Such other information as the 

21 Secretary may require relating to the dem22 onstration program including with respect 

23 to determining the soundness of the pro24 posed prospective payment system. 
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1 (3) NUMBER AND LENGTH OF DEMONSTRATION

2 PROGRAMS.—Not more than 8 States shall be se3 lected for 2-year demonstration programs under this 

4 subsection. 

5 (4) REQUIREMENTS FOR SELECTING DEM6 ONSTRATION PROGRAMS.— 

7 (A) IN GENERAL.—The Secretary shall 

8 give preference to selecting demonstration pro9 grams where participating certified community 

10 behavioral health clinics— 

11 (i) provide the most complete scope of 

12 services described in subsection (a)(2)(D) 

13 to individuals eligible for medical assist14 ance under the State Medicaid program; 

15 (ii) will improve availability of, access 

16 to, and participation in, services described 

17 in subsection (a)(2)(D) to individuals eligi18 ble for medical assistance under the State 

19 Medicaid program; 

20 (iii) will improve availability of, access 

21 to, and participation in assisted outpatient 

22 mental health treatment in the State; or 

23 (iv) demonstrate the potential to ex24 pand available mental health services in a 

25 demonstration area and increase the qual-
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1 ity of such services without increasing net 

2 Federal spending. 

3 (5) PAYMENT FOR MEDICAL ASSISTANCE FOR

4 MENTAL HEALTH SERVICES PROVIDED BY CER5 TIFIED COMMUNITY BEHAVIORAL HEALTH CLIN6 ICS.— 

7 (A) IN GENERAL.—The Secretary shall pay 

8 a State participating in a demonstration pro9 gram under this subsection the Federal match10 ing percentage specified in subparagraph (B) 

11 for amounts expended by the State to provide 

12 medical assistance for mental health services 

13 described in the demonstration program appli14 cation in accordance with paragraph (2)(B)(iv) 

15 that are provided by certified community behav16 ioral health clinics to individuals who are en17 rolled in the State Medicaid program. Payments 

18 to States made under this paragraph shall be 

19 considered to have been under, and are subject 

20 to the requirements of, section 1903 of the So21 cial Security Act (42 U.S.C. 1396b). 

22 (B) FEDERAL MATCHING PERCENTAGE.— 

23 The Federal matching percentage specified in 

24 this subparagraph is with respect to medical as-
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1 sistance described in subparagraph (A) that is 

2 furnished— 

3 (i) to a newly eligible individual de4 scribed in paragraph (2) of section 1905(y) 

5 of the Social Security Act (42 U.S.C. 

6 1396d(y)), the matching rate applicable 

7 under paragraph (1) of that section; and 

8 (ii) to an individual who is not a 

9 newly eligible individual (as so described) 

10 but who is eligible for medical assistance 

11 under the State Medicaid program, the en12 hanced FMAP applicable to the State. 

13 (C) LIMITATIONS.— 

14 (i) IN GENERAL.—Payments shall be 

15 made under this paragraph to a State only 

16 for mental health services— 

17 (I) that are described in the dem18 onstration program application in ac19 cordance with paragraph (2)(iv); 

20 (II) for which payment is avail21 able under the State Medicaid pro22 gram; and 

23 (III) that are provided to an indi24 vidual who is eligible for medical as-
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1 sistance under the State Medicaid 

2 program. 

3 (ii) PROHIBITED PAYMENTS.—No 

4 payment shall be made under this para5 graph— 

6 (I) for inpatient care, residential 

7 treatment, room and board expenses, 

8 or any other non-ambulatory services, 

9 as determined by the Secretary; or 

10 (II) with respect to payments 

11 made to satellite facilities of certified 

12 community behavioral health clinics if 

13 such facilities are established after the 

14 date of enactment of this Act. 

15 (6) WAIVER OF STATEWIDENESS REQUIRE16 MENT.—The Secretary shall waive section 

17 1902(a)(1) of the Social Security Act (42 U.S.C. 

18 1396a(a)(1)) (relating to statewideness) as may be 

19 necessary to conduct demonstration programs in ac20 cordance with the requirements of this subsection. 

21 (7) ANNUAL REPORTS.— 

22 (A) IN GENERAL.—Not later than 1 year 

23 after the date on which the first State is se24 lected for a demonstration program under this 

25 subsection, and annually thereafter, the Sec-
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1 retary shall submit to Congress an annual re2 port on the use of funds provided under all 

3 demonstration programs conducted under this 

4 subsection. Each such report shall include— 

5 (i) an assessment of access to commu6 nity-based mental health services under the 

7 Medicaid program in the area or areas of 

8 a State targeted by a demonstration pro9 gram compared to other areas of the State; 

10 (ii) an assessment of the quality and 

11 scope of services provided by certified com12 munity behavioral health clinics compared 

13 to community-based mental health services 

14 provided in States not participating in a 

15 demonstration program under this sub16 section and in areas of a demonstration 

17 State that are not participating in the 

18 demonstration program; and 

19 (iii) an assessment of the impact of 

20 the demonstration programs on the Fed21 eral and State costs of a full range of men22 tal health services (including inpatient, 

23 emergency and ambulatory services). 

24 (B) RECOMMENDATIONS.—Not later than 

25 December 31, 2021, the Secretary shall submit 
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1 to Congress recommendations concerning 

2 whether the demonstration programs under this 

3 section should be continued, expanded, modi4 fied, or terminated. 

5 (e) DEFINITIONS.—In this section: 

6 (1) FEDERALLY-QUALIFIED HEALTH CENTER

7 SERVICES; FEDERALLY-QUALIFIED HEALTH CENTER; 

8 RURAL HEALTH CLINIC SERVICES; RURAL HEALTH

9 CLINIC.—The terms ‘‘Federally-qualified health cen10 ter services’’, ‘‘Federally-qualified health center’’, 

11 ‘‘rural health clinic services’’, and ‘‘rural health clin12 ic’’ have the meanings given those terms in section 

13 1905(l) of the Social Security Act (42 U.S.C. 

14 1396d(l)). 

15 (2) ENHANCED FMAP.—The term ‘‘enhanced 

16 FMAP’’ has the meaning given that term in section 

17 2105(b) of the Social Security Act (42 U.S.C. 

18 1397dd(b)) but without regard to the second and 

19 third sentences of that section. 

20 (3) SECRETARY.—The term ‘‘Secretary’’ means 

21 the Secretary of Health and Human Services. 

22 (4) STATE.—The term ‘‘State’’ has the mean23 ing given such term for purposes of title XIX of the 

24 Social Security Act (42 U.S.C. 1396 et seq.). 

25 (f) FUNDING.— 
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1 (1) IN GENERAL.—Out of any funds in the 

2 Treasury not otherwise appropriated, there is appro3 priated to the Secretary— 

4 (A) for purposes of carrying out sub5 sections (a), (b), and (d)(7), $2,000,000 for fis6 cal year 2014; and 

7 (B) for purposes of awarding planning 

8 grants under subsection (c), $25,000,000 for 

9 fiscal year 2016. 

10 (2) AVAILABILITY.—Funds appropriated under 

11 paragraph (1) shall remain available until expended. 

12 SEC. 224. ASSISTED OUTPATIENT TREATMENT GRANT PRO13 GRAM FOR INDIVIDUALS WITH SERIOUS MEN14 TAL ILLNESS. 

15 (a) IN GENERAL.—The Secretary shall establish a 4- 

16 year pilot program to award not more than 50 grants each 

17 year to eligible entities for assisted outpatient treatment 

18 programs for individuals with serious mental illness. 

19 (b) CONSULTATION.—The Secretary shall carry out 

20 this section in consultation with the Director of the Na21 tional Institute of Mental Health, the Attorney General 

22 of the United States, the Administrator of the Administra23 tion for Community Living, and the Administrator of the 

24 Substance Abuse and Mental Health Services Administra25 tion. 
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1 (c) SELECTING AMONG APPLICANTS.—The Sec2 retary— 

3 (1) may only award grants under this section to 

4 applicants that have not previously implemented an 

5 assisted outpatient treatment program; and 

6 (2) shall evaluate applicants based on their po7 tential to reduce hospitalization, homelessness, incar8 ceration, and interaction with the criminal justice 

9 system while improving the health and social out10 comes of the patient. 

11 (d) USE OF GRANT.—An assisted outpatient treat12 ment program funded with a grant awarded under this 

13 section shall include— 

14 (1) evaluating the medical and social needs of 

15 the patients who are participating in the program; 

16 (2) preparing and executing treatment plans for 

17 such patients that— 

18 (A) include criteria for completion of 

19 court-ordered treatment; and 

20 (B) provide for monitoring of the patient’s 

21 compliance with the treatment plan, including 

22 compliance with medication and other treat23 ment regimens; 

24 (3) providing for such patients case manage25 ment services that support the treatment plan; 
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1 (4) ensuring appropriate referrals to medical 

2 and social service providers; 

3 (5) evaluating the process for implementing the 

4 program to ensure consistency with the patient’s 

5 needs and State law; and 

6 (6) measuring treatment outcomes, including 

7 health and social outcomes such as rates of incarcer8 ation, health care utilization, and homelessness. 

9 (e) REPORT.—Not later than the end of each of fiscal 

10 years 2016, 2017, and 2018, the Secretary shall submit 

11 a report to the appropriate congressional committees on 

12 the grant program under this section. Each such report 

13 shall include an evaluation of the following: 

14 (1) Cost savings and public health outcomes 

15 such as mortality, suicide, substance abuse, hos16 pitalization, and use of services. 

17 (2) Rates of incarceration by patients. 

18 (3) Rates of homelessness among patients. 

19 (4) Patient and family satisfaction with pro20 gram participation. 

21 (f) DEFINITIONS.—In this section: 

22 (1) The term ‘‘assisted outpatient treatment’’ 

23 means medically prescribed mental health treatment 

24 that a patient receives while living in a community 
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1 under the terms of a law authorizing a State or local 

2 court to order such treatment. 

3 (2) The term ‘‘eligible entity’’ means a county, 

4 city, mental health system, mental health court, or 

5 any other entity with authority under the law of the 

6 State in which the grantee is located to implement, 

7 monitor, and oversee assisted outpatient treatment 

8 programs. 

9 (3) The term ‘‘Secretary’’ means the Secretary 

10 of Health and Human Services. 

11 (g) FUNDING.— 

12 (1) AMOUNT OF GRANTS.—A grant under this 

13 section shall be in an amount that is not more than 

14 $1,000,000 for each of fiscal years 2015 through 

15 2018. Subject to the preceding sentence, the Sec16 retary shall determine the amount of each grant 

17 based on the population of the area, including esti18 mated patients, to be served under the grant. 

19 (2) AUTHORIZATION OF APPROPRIATIONS.— 

20 There is authorized to be appropriated to carry out 

21 this section $15,000,000 for each of fiscal years 

22 2015 through 2018. 

23 SEC. 225. EXCLUSION FROM PAYGO SCORECARDS. 

24 (a) STATUTORY PAY-AS-YOU-GO SCORECARDS.—The 

25 budgetary effects of this Act shall not be entered on either 
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1 PAYGO scorecard maintained pursuant to section 4(d) of 

2 the Statutory Pay-As-You-Go Act of 2010. 

3 (b) SENATE PAYGO SCORECARDS.—The budgetary 

4 effects of this Act shall not be entered on any PAYGO 

5 scorecard maintained for purposes of section 201 of S. 

6 Con. Res. 21 (110th Congress). 

Passed the House of Representatives March 27, 

2014. 

Attest: 

Clerk. 

113TH CONGRESS 

2D SESSION H. R. 4302 

AN ACT 

To amend the Social Security Act to extend Mediother purposes. of the Medicare and Medicaid programs, and for care payments to physicians and other provisions