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[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4302 Introduced in House (IH)]

113th CONGRESS
  2d Session
                                H. R. 4302

    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.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             March 26, 2014

  Mr. Pitts introduced the following bill; which was referred to the 
Committee on Energy and Commerce, and in addition to the Committees on 
    Ways and Means and the Budget, for a period to be subsequently 
   determined by the Speaker, in each case for consideration of such 
 provisions as fall within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL

 
    To amend the Social Security Act to extend Medicare payments to 
physicians and other provisions of the Medicare and Medicaid programs, 
                        and for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Protecting Access 
to Medicare Act of 2014''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
                      TITLE I--MEDICARE EXTENDERS

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

Sec. 201. Extension of the qualifying individual (QI) program.
Sec. 202. Temporary extension of transitional medical assistance (TMA).
Sec. 203. Extension of Medicaid and CHIP express lane option.
Sec. 204. Extension of special diabetes program for type I diabetes and 
                            for Indians.
Sec. 205. Extension of abstinence education.
Sec. 206. Extension of personal responsibility education program 
                            (PREP).
Sec. 207. Extension of funding for family-to-family health information 
                            centers.
Sec. 208. Extension of health workforce demonstration project for low-
                            income individuals.
Sec. 209. Extension of maternal, infant, and early childhood home 
                            visiting programs.
Sec. 210. Pediatric quality measures.
Sec. 211. Delay of effective date for Medicaid amendments relating to 
                            beneficiary liability settlements.
Sec. 212. Delay in transition from ICD-9 TO ICD-10 code sets.
Sec. 213. Elimination of limitation on deductibles for employer-
                            sponsored health plans.
Sec. 214. GAO report on the Children's Hospital Graduate Medical 
                            Education Program.
Sec. 215. Skilled nursing facility value-based purchasing.
Sec. 216. Improving Medicare policies for clinical diagnostic 
                            laboratory tests.
Sec. 217. Revisions under the Medicare ESRD prospective payment system.
Sec. 218. Quality incentives for computed tomography diagnostic imaging 
                            and promoting evidence-based care.
Sec. 219. Using funding from Transitional Fund for Sustainable Growth 
                            Rate (SGR) Reform.
Sec. 220. Ensuring accurate valuation of services under the physician 
                            fee schedule.
Sec. 221. Medicaid DSH.
Sec. 222. Realignment of the Medicare sequester for fiscal year 2024.
Sec. 223. Demonstration programs to improve community mental health 
                            services.
Sec. 224. Assisted outpatient treatment grant program for individuals 
                            with serious mental illness.
Sec. 225. Exclusion from PAYGO scorecards.

                      TITLE I--MEDICARE EXTENDERS

SEC. 101. PHYSICIAN PAYMENT UPDATE.

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

SEC. 102. EXTENSION OF WORK GPCI FLOOR.

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

SEC. 103. EXTENSION OF THERAPY CAP EXCEPTIONS PROCESS.

    Section 1833(g) of the Social Security Act (42 U.S.C. 1395l(g)) is 
amended--
            (1) in paragraph (5)(A), in the first sentence, by striking 
        ``March 31, 2014'' and inserting ``March 31, 2015''; and
            (2) in paragraph (6)(A)--
                    (A) by striking ``March 31, 2014'' and inserting 
                ``March 31, 2015''; and
                    (B) by striking ``2012, 2013, or the first three 
                months of 2014'' and inserting ``2012, 2013, 2014, or 
                the first three months of 2015''.

SEC. 104. EXTENSION OF AMBULANCE ADD-ONS.

    (a) Ground Ambulance.--Section 1834(l)(13)(A) of the Social 
Security Act (42 U.S.C. 1395m(l)(13)(A)) is amended by striking ``April 
1, 2014'' and inserting ``April 1, 2015'' each place it appears.
    (b) Super Rural Ground Ambulance.--Section 1834(l)(12)(A) of the 
Social Security Act (42 U.S.C. 1395m(l)(12)(A)) is amended, in the 
first sentence, by striking ``April 1, 2014'' and inserting ``April 1, 
2015''.

SEC. 105. EXTENSION OF INCREASED INPATIENT HOSPITAL PAYMENT ADJUSTMENT 
              FOR CERTAIN LOW-VOLUME HOSPITALS.

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

SEC. 106. EXTENSION OF THE MEDICARE-DEPENDENT HOSPITAL (MDH) PROGRAM.

    (a) In General.--Section 1886(d)(5)(G) of the Social Security Act 
(42 U.S.C. 1395ww(d)(5)(G)) is amended--
            (1) in clause (i), by striking ``April 1, 2014'' and 
        inserting ``April 1, 2015''; and
            (2) in clause (ii)(II), by striking ``April 1, 2014'' and 
        inserting ``April 1, 2015''.
    (b) Conforming Amendments.--
            (1) Extension of target amount.--Section 1886(b)(3)(D) of 
        the Social Security Act (42 U.S.C. 1395ww(b)(3)(D)) is 
        amended--
                    (A) in the matter preceding clause (i), by striking 
                ``April 1, 2014'' and inserting ``April 1, 2015''; and
                    (B) in clause (iv), by striking ``through fiscal 
                year 2013 and the portion of fiscal year 2014 before 
                April 1, 2014'' and inserting ``through fiscal year 
                2014 and the portion of fiscal year 2015 before April 
                1, 2015''.
            (2) Permitting hospitals to decline reclassification.--
        Section 13501(e)(2) of the Omnibus Budget Reconciliation Act of 
        1993 (42 U.S.C. 1395ww note) is amended by striking ``through 
        the first 2 quarters of fiscal year 2014'' and inserting 
        ``through the first 2 quarters of fiscal year 2015''.

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

    Section 1859(f)(1) of the Social Security Act (42 U.S.C. 1395w-
28(f)(1)) is amended by striking ``2016'' and inserting ``2017''.

SEC. 108. EXTENSION OF MEDICARE REASONABLE COST CONTRACTS.

    Section 1876(h)(5)(C)(ii) of the Social Security Act (42 U.S.C. 
1395mm(h)(5)(C)(ii)) is amended, in the matter preceding subclause (I), 
by striking ``January 1, 2015'' and inserting ``January 1, 2016''.

SEC. 109. EXTENSION OF FUNDING FOR QUALITY MEASURE ENDORSEMENT, INPUT, 
              AND SELECTION.

    Section 1890(d) of the Social Security Act (42 U.S.C. 1395aaa(d)) 
is amended--
            (1) by inserting ``(1)'' before ``For purposes''; and
            (2) by adding at the end the following new paragraph:
    ``(2) For purposes of carrying out this section and section 1890A 
(other than subsections (e) and (f)), the Secretary shall provide for 
the transfer, from the Federal Hospital Insurance Trust Fund under 
section 1817 and the Federal Supplementary Medical Insurance Trust Fund 
under section 1841, in such proportion as the Secretary determines 
appropriate, to the Centers for Medicare & Medicaid Services Program 
Management Account of $5,000,000 for fiscal year 2014 and $15,000,000 
for the first 6 months of fiscal year 2015. Amounts transferred under 
the preceding sentence shall remain available until expended.''.

SEC. 110. EXTENSION OF FUNDING OUTREACH AND ASSISTANCE FOR LOW-INCOME 
              PROGRAMS.

    (a) Additional Funding for State Health Insurance Programs.--
Subsection (a)(1)(B) of section 119 of the Medicare Improvements for 
Patients and Providers Act of 2008 (42 U.S.C. 1395b-3 note), as amended 
by section 3306 of the Patient Protection and Affordable Care Act 
Public Law 111-148), section 610 of the American Taxpayer Relief Act of 
2012 (Public Law 112-240), and section 1110 of the Pathway for SGR 
Reform Act of 2013 (Public Law 113-67), is amended--
            (1) in clause (iii), by striking ``and'' at the end;
            (2) by striking clause (iv); and
            (3) by adding at the end the following new clauses:
                            ``(iv) for fiscal year 2014, of $7,500,000; 
                        and
                            ``(v) for the portion of fiscal year 2015 
                        before April 1, 2015, of $3,750,000.''.
    (b) Additional Funding for Area Agencies on Aging.--Subsection 
(b)(1)(B) of such section 119, as so amended, is amended--
            (1) in clause (iii), by striking ``and'' at the end;
            (2) by striking clause (iv); and
            (3) by inserting after clause (iii) the following new 
        clauses:
                            ``(iv) for fiscal year 2014, of $7,500,000; 
                        and
                            ``(v) for the portion of fiscal year 2015 
                        before April 1, 2015, of $3,750,000.''.
    (c) Additional Funding for Aging and Disability Resource Centers.--
Subsection (c)(1)(B) of such section 119, as so amended, is amended--
            (1) in clause (iii), by striking ``and'' at the end;
            (2) by striking clause (iv); and
            (3) by inserting after clause (iii) the following new 
        clauses:
                            ``(iv) for fiscal year 2014, of $5,000,000; 
                        and
                            ``(v) for the portion of fiscal year 2015 
                        before April 1, 2015, of $2,500,000.''.
    (d) Additional Funding for Contract With the National Center for 
Benefits and Outreach Enrollment.--Subsection (d)(2) of such section 
119, as so amended, is amended--
            (1) in clause (iii), by striking ``and'' at the end;
            (2) by striking clause (iv); and
            (3) by inserting after clause (iii) the following new 
        clauses:
                            ``(iv) for fiscal year 2014, of $5,000,000; 
                        and
                            ``(v) for the portion of fiscal year 2015 
                        before April 1, 2015, of $2,500,000.''.

SEC. 111. EXTENSION OF TWO-MIDNIGHT RULE.

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

SEC. 112. TECHNICAL CHANGES TO MEDICARE LTCH AMENDMENTS.

    (a) In General.--Subclauses (I) and (II) of section 
1886(m)(6)(C)(iv) of the Social Security Act (42 U.S.C. 
1395ww(m)(6)(C)(iv)) are each amended by striking ``discharges'' and 
inserting ``Medicare fee-for-service discharges''.
    (b) MMSEA Correction.--Section 114(d) of the Medicare, Medicaid, 
and SCHIP Extension Act of 2007 (42 U.S.C. 1395ww note), as amended by 
sections 3106(b) and 10312(b) of Public Law 111-148 and by section 
1206(b)(2) of the Pathway for SGR Reform Act of 2013 (division B of 
Public Law 113-67), is amended--
            (1) in paragraph (1), in the matter preceding subparagraph 
        (A), by striking ``January 1, 2015,'' and inserting ``on the 
        date of the enactment of paragraph (7) of this subsection'';
            (2) in paragraph (6), by striking ``January 1, 2015,'' and 
        inserting ``on the date of the enactment of paragraph (7) of 
        this subsection''; and
            (3) by adding at the end the following new paragraph:
            ``(7) Additional exception for certain long-term care 
        hospitals.--The moratorium under paragraph (1)(A) shall not 
        apply to a long-term care hospital that--
                    ``(A) began its qualifying period for payment as a 
                long-term care hospital under section 412.23(e) of 
                title 42, Code of Federal Regulations, on or before the 
                date of enactment of this paragraph;
                    ``(B) has a binding written agreement as of the 
                date of the enactment of this paragraph with an 
                outside, unrelated party for the actual construction, 
                renovation, lease, or demolition for a long-term care 
                hospital, and has expended, before such date of 
                enactment, at least 10 percent of the estimated cost of 
                the project (or, if less, $2,500,000); or
                    ``(C) has obtained an approved certificate of need 
                in a State where one is required on or before such date 
                of enactment.''.
    (c) Additional Amendments.--Section 1206(a) of the Pathway for SGR 
Reform Act of 2013 (division B of Public Law 113-67) is amended--
            (1) in paragraph (2)(A), by striking ``Assessment'' and 
        inserting ``Advisory''; and
            (2) in paragraph (3)(B), by striking ``shall not apply to a 
        hospital that is classified as of December 10, 2013, as a 
        subsection (d) hospital (as defined in section 1886(d)(1)(B) of 
        the Social Security Act, 42 U.S.C. 1395ww(d)(1)(B))'' and 
        inserting ``shall only apply to a hospital that is classified 
        as of December 10, 2013, as a long-term care hospital (as 
        defined in section 1861(ccc) of the Social Security Act, 42 
        U.S.C. 1395x(ccc))''.
    (d) Effective Date.--The amendments made by this section are 
effective as of the date of the enactment of this Act.

                   TITLE II--OTHER HEALTH PROVISIONS

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

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

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

    Sections 1902(e)(1)(B) and 1925(f) of the Social Security Act (42 
U.S.C. 1396a(e)(1)(B), 1396r-6(f)) are each amended by striking ``March 
31, 2014'' and inserting ``March 31, 2015''.

SEC. 203. EXTENSION OF MEDICAID AND CHIP EXPRESS LANE OPTION.

    Section 1902(e)(13)(I) of the Social Security Act (42 U.S.C. 
1396a(e)(13)(I)) is amended by striking ``September 30, 2014'' and 
inserting ``September 30, 2015''.

SEC. 204. EXTENSION OF SPECIAL DIABETES PROGRAM FOR TYPE I DIABETES AND 
              FOR INDIANS.

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

SEC. 205. EXTENSION OF ABSTINENCE EDUCATION.

    Subsections (a) and (d) of section 510 of the Social Security Act 
(42 U.S.C. 710) are each amended by striking ``2014'' and inserting 
``2015''.

SEC. 206. EXTENSION OF PERSONAL RESPONSIBILITY EDUCATION PROGRAM 
              (PREP).

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

SEC. 207. EXTENSION OF FUNDING FOR FAMILY-TO-FAMILY HEALTH INFORMATION 
              CENTERS.

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

SEC. 208. EXTENSION OF HEALTH WORKFORCE DEMONSTRATION PROJECT FOR LOW-
              INCOME INDIVIDUALS.

    Section 2008(c)(1) of the Social Security Act (42 U.S.C. 
1397g(c)(1)) is amended by striking ``2014'' and inserting ``2015''.

SEC. 209. EXTENSION OF MATERNAL, INFANT, AND EARLY CHILDHOOD HOME 
              VISITING PROGRAMS.

    Section 511(j) of the Social Security Act (42 U.S.C. 711(j)) is 
amended--
            (1) in paragraph (1)--
                    (A) by striking ``and'' at the end of subparagraph 
                (D);
                    (B) by striking the period at the end of 
                subparagraph (E) and inserting ``; and''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(F) for the period beginning on October 1, 2014, 
                and ending on March 31, 2015, an amount equal to the 
                amount provided in subparagraph (E).''; and
            (2) in paragraphs (2) and (3), by inserting ``(or portion 
        of a fiscal year)'' after ``for a fiscal year'' each place it 
        appears.

SEC. 210. PEDIATRIC QUALITY MEASURES.

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

SEC. 211. DELAY OF EFFECTIVE DATE FOR MEDICAID AMENDMENTS RELATING TO 
              BENEFICIARY LIABILITY SETTLEMENTS.

    Effective as if included in the enactment of the Bipartisan Budget 
Act of 2013 (Public Law 113-67), section 202(c) of such Act is amended 
by striking ``October 1, 2014'' and inserting ``October 1, 2016''.

SEC. 212. DELAY IN TRANSITION FROM ICD-9 TO ICD-10 CODE SETS.

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

SEC. 213. ELIMINATION OF LIMITATION ON DEDUCTIBLES FOR EMPLOYER-
              SPONSORED HEALTH PLANS.

    (a) In General.--Section 1302(c) of the Patient Protection and 
Affordable Care Act (Public Law 111-148; 42 U.S.C. 18022(c)) is 
amended--
            (1) by striking paragraph (2); and
            (2) in paragraph (4)(A), by striking ``paragraphs (1)(B)(i) 
        and (2)(B)(i)'' and inserting ``paragraph (1)(B)(i)''.
    (b) Conforming Amendment.--Section 2707(b) of the Public Health 
Service Act (42 U.S.C. 300gg-6(b)) is amended by striking ``paragraphs 
(1) and (2)'' and inserting ``paragraph (1)''.
    (c) Effective Date.--The amendments made by this Act shall be 
effective as if included in the enactment of the Patient Protection and 
Affordable Care Act (Public Law 111-148).

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

    (a) In General.--In the case that the Children's Hospital GME 
Support Reauthorization Act of 2013 is enacted into law, the 
Comptroller General of the United States shall, not later than November 
30, 2017, conduct an independent evaluation, and submit to the 
appropriate committees of Congress a report, concerning the 
implementation of section 340E(h) of the Public Health Service Act, as 
added by section 3 of the Children's Hospital GME Support 
Reauthorization Act of 2013.
    (b) Content.--The report described in subsection (a) shall review 
and assess each of the following, with respect to hospitals receiving 
payments under such section 340E(h) during the period of fiscal years 
2015 through 2017:
            (1) The number and type of such hospitals that applied for 
        such payments.
            (2) The number and type of such hospitals receiving such 
        payments.
            (3) The amount of such payments awarded to such hospitals.
            (4) How such hospitals used such payments.
            (5) The impact of such payments on--
                    (A) the number of pediatric providers; and
                    (B) health care needs of children.

SEC. 215. SKILLED NURSING FACILITY VALUE-BASED PURCHASING.

    (a) In General.--Section 1888 of the Social Security Act (42 U.S.C. 
1395yy) is amended by adding at the end the following new subsection:
    ``(g) Skilled Nursing Facility Readmission Measure.--
            ``(1) Readmission measure.--Not later than October 1, 2015, 
        the Secretary shall specify a skilled nursing facility all-
        cause all-condition hospital readmission measure (or any 
        successor to such a measure).
            ``(2) Resource use measure.--Not later than October 1, 
        2016, the Secretary shall specify a measure to reflect an all-
        condition risk-adjusted potentially preventable hospital 
        readmission rate for skilled nursing facilities.
            ``(3) Measure adjustments.--When specifying the measures 
        under paragraphs (1) and (2), the Secretary shall devise a 
        methodology to achieve a high level of reliability and 
        validity, especially for skilled nursing facilities with a low 
        volume of readmissions.
            ``(4) Pre-rulemaking process (measure application 
        partnership process).--The application of the provisions of 
        section 1890A shall be optional in the case of a measure 
        specified under paragraph (1) and a measure specified under 
        paragraph (2).
            ``(5)  Feedback reports to skilled nursing facilities.--
        Beginning October 1, 2016, and every quarter thereafter, the 
        Secretary shall provide confidential feedback reports to 
        skilled nursing facilities on the performance of such 
        facilities with respect to a measure specified under paragraph 
        (1) or (2).
            ``(6) Public reporting of skilled nursing facilities.--
                    ``(A) In general.--Subject to subparagraphs (B) and 
                (C), the Secretary shall establish procedures for 
                making available to the public by posting on the 
                Nursing Home Compare Medicare website (or a successor 
                website) described in section 1819(i) information on 
                the performance of skilled nursing facilities with 
                respect to a measure specified under paragraph (1) and 
                a measure specified under paragraph (2).
                    ``(B) Opportunity to review.--The procedures under 
                subparagraph (A) shall ensure that a skilled nursing 
                facility has the opportunity to review and submit 
                corrections to the information that is to be made 
                public with respect to the facility prior to such 
                information being made public.
                    ``(C) Timing.--Such procedures shall provide that 
                the information described in subparagraph (A) is made 
                publicly available beginning not later than October 1, 
                2017.
            ``(7) Non-application of paperwork reduction act.--Chapter 
        35 of title 44, United States Code (commonly referred to as the 
        `Paperwork Reduction Act of 1995') shall not apply to this 
        subsection.''.
    (b) Value-Based Purchasing Program for Skilled Nursing 
Facilities.--Section 1888 of the Social Security Act (42 U.S.C. 
1395yy), as amended by subsection (a), is further amended by adding at 
the end the following new subsection:
    ``(h) Skilled Nursing Facility Value-Based Purchasing Program.--
            ``(1) Establishment.--
                    ``(A) In general.--Subject to the succeeding 
                provisions of this subsection, the Secretary shall 
                establish a skilled nursing facility value-based 
                purchasing program (in this subsection referred to as 
                the `SNF VBP Program') under which value-based 
                incentive payments are made in a fiscal year to skilled 
                nursing facilities.
                    ``(B) Program to begin in fiscal year 2019.--The 
                SNF VBP Program shall apply to payments for services 
                furnished on or after October 1, 2018.
            ``(2) Application of measures.--
                    ``(A) In general.--The Secretary shall apply the 
                measure specified under subsection (g)(1) for purposes 
                of the SNF VBP Program.
                    ``(B) Replacement.--For purposes of the SNF VBP 
                Program, the Secretary shall apply the measure 
                specified under (g)(2) instead of the measure specified 
                under (g)(1) as soon as practicable.
            ``(3) Performance standards.--
                    ``(A) Establishment.--The Secretary shall establish 
                performance standards with respect to the measure 
                applied under paragraph (2) for a performance period 
                for a fiscal year.
                    ``(B) Higher of achievement and improvement.--The 
                performance standards established under subparagraph 
                (A) shall include levels of achievement and 
                improvement. In calculating the SNF performance score 
                under paragraph (4), the Secretary shall use the higher 
                of either improvement or achievement.
                    ``(C) Timing.--The Secretary shall establish and 
                announce the performance standards established under 
                subparagraph (A) not later than 60 days prior to the 
                beginning of the performance period for the fiscal year 
                involved.
            ``(4) SNF performance score.--
                    ``(A) In general.--The Secretary shall develop a 
                methodology for assessing the total performance of each 
                skilled nursing facility based on performance standards 
                established under paragraph (3) with respect to the 
                measure applied under paragraph (2). Using such 
                methodology, the Secretary shall provide for an 
                assessment (in this subsection referred to as the `SNF 
                performance score') for each skilled nursing facility 
                for each such performance period.
                    ``(B) Ranking of snf performance scores.--The 
                Secretary shall, for the performance period for each 
                fiscal year, rank the SNF performance scores determined 
                under subparagraph (A) from low to high.
            ``(5) Calculation of value-based incentive payments.--
                    ``(A) In general.--With respect to a skilled 
                nursing facility, based on the ranking under paragraph 
                (4)(B) for a performance period for a fiscal year, the 
                Secretary shall increase the adjusted Federal per diem 
                rate determined under subsection (e)(4)(G) otherwise 
                applicable to such skilled nursing facility (and after 
                application of paragraph (6)) for services furnished by 
                such facility during such fiscal year by the value-
                based incentive payment amount under subparagraph (B).
                    ``(B) Value-based incentive payment amount.--The 
                value-based incentive payment amount for services 
                furnished by a skilled nursing facility in a fiscal 
                year shall be equal to the product of--
                            ``(i) the adjusted Federal per diem rate 
                        determined under subsection (e)(4)(G) otherwise 
                        applicable to such skilled nursing facility for 
                        such services furnished by the skilled nursing 
                        facility during such fiscal year; and
                            ``(ii) the value-based incentive payment 
                        percentage specified under subparagraph (C) for 
                        the skilled nursing facility for such fiscal 
                        year.
                    ``(C) Value-based incentive payment percentage.--
                            ``(i) In general.--The Secretary shall 
                        specify a value-based incentive payment 
                        percentage for a skilled nursing facility for a 
                        fiscal year which may include a zero 
                        percentage.
                            ``(ii) Requirements.--In specifying the 
                        value-based incentive payment percentage for 
                        each skilled nursing facility for a fiscal year 
                        under clause (i), the Secretary shall ensure 
                        that--
                                    ``(I) such percentage is based on 
                                the SNF performance score of the 
                                skilled nursing facility provided under 
                                paragraph (4) for the performance 
                                period for such fiscal year;
                                    ``(II) the application of all such 
                                percentages in such fiscal year results 
                                in an appropriate distribution of 
                                value-based incentive payments under 
                                subparagraph (B) such that--
                                            ``(aa) skilled nursing 
                                        facilities with the highest 
                                        rankings under paragraph (4)(B) 
                                        receive the highest value-based 
                                        incentive payment amounts under 
                                        subparagraph (B);
                                            ``(bb) skilled nursing 
                                        facilities with the lowest 
                                        rankings under paragraph (4)(B) 
                                        receive the lowest value-based 
                                        incentive payment amounts under 
                                        subparagraph (B); and
                                            ``(cc) in the case of 
                                        skilled nursing facilities in 
                                        the lowest 40 percent of the 
                                        ranking under paragraph (4)(B), 
                                        the payment rate under 
                                        subparagraph (A) for services 
                                        furnished by such facility 
                                        during such fiscal year shall 
                                        be less than the payment rate 
                                        for such services for such 
                                        fiscal year that would 
                                        otherwise apply under 
                                        subsection (e)(4)(G) without 
                                        application of this subsection; 
                                        and
                                    ``(III) the total amount of value-
                                based incentive payments under this 
                                paragraph for all skilled nursing 
                                facilities in such fiscal year shall be 
                                greater than or equal to 50 percent, 
                                but not greater than 70 percent, of the 
                                total amount of the reductions to 
                                payments for such fiscal year under 
                                paragraph (6), as estimated by the 
                                Secretary.
            ``(6) Funding for value-based incentive payments.--
                    ``(A) In general.--The Secretary shall reduce the 
                adjusted Federal per diem rate determined under 
                subsection (e)(4)(G) otherwise applicable to a skilled 
                nursing facility for services furnished by such 
                facility during a fiscal year (beginning with fiscal 
                year 2019) by the applicable percent (as defined in 
                subparagraph (B)). The Secretary shall make such 
                reductions for all skilled nursing facilities in the 
                fiscal year involved, regardless of whether or not the 
                skilled nursing facility has been determined by the 
                Secretary to have earned a value-based incentive 
                payment under paragraph (5) for such fiscal year.
                    ``(B) Applicable percent.--For purposes of 
                subparagraph (A), the term `applicable percent' means, 
                with respect to fiscal year 2019 and succeeding fiscal 
                years, 2 percent.
            ``(7) Announcement of net result of adjustments.--Under the 
        SNF VBP Program, the Secretary shall, not later than 60 days 
        prior to the fiscal year involved, inform each skilled nursing 
        facility of the adjustments to payments to the skilled nursing 
        facility for services furnished by such facility during the 
        fiscal year under paragraphs (5) and (6).
            ``(8) No effect in subsequent fiscal years.--The value-
        based incentive payment under paragraph (5) and the payment 
        reduction under paragraph (6) shall each apply only with 
        respect to the fiscal year involved, and the Secretary shall 
        not take into account such value-based incentive payment or 
        payment reduction in making payments to a skilled nursing 
        facility under this section in a subsequent fiscal year.
            ``(9) Public reporting.--
                    ``(A) SNF specific information.--The Secretary 
                shall make available to the public, by posting on the 
                Nursing Home Compare Medicare website (or a successor 
                website) described in section 1819(i) in an easily 
                understandable format, information regarding the 
                performance of individual skilled nursing facilities 
                under the SNF VBP Program, with respect to a fiscal 
                year, including--
                            ``(i) the SNF performance score of the 
                        skilled nursing facility for such fiscal year; 
                        and
                            ``(ii) the ranking of the skilled nursing 
                        facility under paragraph (4)(B) for the 
                        performance period for such fiscal year.
                    ``(B)  Aggregate information.--The Secretary shall 
                periodically post on the Nursing Home Compare Medicare 
                website (or a successor website) described in section 
                1819(i) aggregate information on the SNF VBP Program, 
                including--
                            ``(i) the range of SNF performance scores 
                        provided under paragraph (4)(A); and
                            ``(ii) the number of skilled nursing 
                        facilities receiving value-based incentive 
                        payments under paragraph (5) and the range and 
                        total amount of such value-based incentive 
                        payments.
            ``(10) Limitation on review.--There shall be no 
        administrative or judicial review under section 1869, section 
        1878, or otherwise of the following:
                    ``(A) The methodology used to determine the value-
                based incentive payment percentage and the amount of 
                the value-based incentive payment under paragraph (5).
                    ``(B) The determination of the amount of funding 
                available for such value-based incentive payments under 
                paragraph (5)(C)(ii)(III) and the payment reduction 
                under paragraph (6).
                    ``(C) The establishment of the performance 
                standards under paragraph (3) and the performance 
                period.
                    ``(D) The methodology developed under paragraph (4) 
                that is used to calculate SNF performance scores and 
                the calculation of such scores.
                    ``(E) The ranking determinations under paragraph 
                (4)(B).
            ``(11) Funding for program management.--The Secretary shall 
        provide for the one time transfer from the Federal Hospital 
        Insurance Trust Fund established under section 1817 to the 
        Centers for Medicare & Medicaid Services Program Management 
        Account of--
                    ``(A) for purposes of subsection (g)(2), 
                $2,000,000; and
                    ``(B) for purposes of implementing this subsection, 
                $10,000,000.
        Such funds shall remain available until expended.''.
    (c) MedPAC Study.--Not later than June 30, 2021, the Medicare 
Payment Advisory Commission shall submit to Congress a report that 
reviews the progress of the skilled nursing facility value-based 
purchasing program established under section 1888(h) of the Social 
Security Act, as added by subsection (b), and makes recommendations, as 
appropriate, on any improvements that should be made to such program. 
For purposes of the previous sentence, the Medicare Payment Advisory 
Commission shall consider any unintended consequences with respect to 
such skilled nursing facility value-based purchasing program and any 
potential adjustments to the readmission measure specified under 
section 1888(g)(1) of such Act, as added by subsection (a), for 
purposes of determining the effect of the socio-economic status of a 
beneficiary under the Medicare program under title XVIII of the Social 
Security Act for the SNF performance score of a skilled nursing 
facility provided under section 1888(h)(4) of such Act, as added by 
subsection (b).

SEC. 216. IMPROVING MEDICARE POLICIES FOR CLINICAL DIAGNOSTIC 
              LABORATORY TESTS.

    (a) In General.--Title XVIII of the Social Security Act is amended 
by inserting after section 1834 (42 U.S.C. 1395m) the following new 
section:

``SEC. 1834A. IMPROVING POLICIES FOR CLINICAL DIAGNOSTIC LABORATORY 
              TESTS.

    ``(a) Reporting of Private Sector Payment Rates for Establishment 
of Medicare Payment Rates.--
            ``(1) In general.--Beginning January 1, 2016, and every 3 
        years thereafter (or, annually, in the case of reporting with 
        respect to an advanced diagnostic laboratory test, as defined 
        in subsection (d)(5)), an applicable laboratory (as defined in 
        paragraph (2)) shall report to the Secretary, at a time 
        specified by the Secretary, applicable information (as defined 
        in paragraph (3)) for a data collection period (as defined in 
        paragraph (4)) for each clinical diagnostic laboratory test 
        that the laboratory furnishes during such period for which 
        payment is made under this part.
            ``(2) Definition of applicable laboratory.--In this 
        section, the term `applicable laboratory' means a laboratory 
        that, with respect to its revenues under this title, a majority 
        of such revenues are from this section, section 1833(h), or 
        section 1848. The Secretary may establish a low volume or low 
        expenditure threshold for excluding a laboratory from the 
        definition of applicable laboratory under this paragraph, as 
        the Secretary determines appropriate.
            ``(3) Applicable information defined.--
                    ``(A) In general.--In this section, subject to 
                subparagraph (B), the term `applicable information' 
                means, with respect to a laboratory test for a data 
                collection period, the following:
                            ``(i) The payment rate (as determined in 
                        accordance with paragraph (5)) that was paid by 
                        each private payor for the test during the 
                        period.
                            ``(ii) The volume of such tests for each 
                        such payor for the period.
                    ``(B) Exception for certain contractual 
                arrangements.--Such term shall not include information 
                with respect to a laboratory test for which payment is 
                made on a capitated basis or other similar payment 
                basis during the data collection period.
            ``(4) Data collection period defined.--In this section, the 
        term `data collection period' means a period of time, such as a 
        previous 12 month period, specified by the Secretary.
            ``(5) Treatment of discounts.--The payment rate reported by 
        a laboratory under this subsection shall reflect all discounts, 
        rebates, coupons, and other price concessions, including those 
        described in section 1847A(c)(3).
            ``(6) Ensuring complete reporting.--In the case where an 
        applicable laboratory has more than one payment rate for the 
        same payor for the same test or more than one payment rate for 
        different payors for the same test, the applicable laboratory 
        shall report each such payment rate and the volume for the test 
        at each such rate under this subsection. Beginning with January 
        1, 2019, the Secretary may establish rules to aggregate 
        reporting with respect to the situations described in the 
        preceding sentence.
            ``(7) Certification.--An officer of the laboratory shall 
        certify the accuracy and completeness of the information 
        reported under this subsection.
            ``(8) Private payor defined.--In this section, the term 
        `private payor' means the following:
                    ``(A) A health insurance issuer and a group health 
                plan (as such terms are defined in section 2791 of the 
                Public Health Service Act).
                    ``(B) A Medicare Advantage plan under part C.
                    ``(C) A medicaid managed care organization (as 
                defined in section 1903(m)).
            ``(9) Civil money penalty.--
                    ``(A) In general.--If the Secretary determines that 
                an applicable laboratory has failed to report or made a 
                misrepresentation or omission in reporting information 
                under this subsection with respect to a clinical 
                diagnostic laboratory test, the Secretary may apply a 
                civil money penalty in an amount of up to $10,000 per 
                day for each failure to report or each such 
                misrepresentation or omission.
                    ``(B) Application.--The provisions of section 1128A 
                (other than subsections (a) and (b)) shall apply to a 
                civil money penalty under this paragraph in the same 
                manner as they apply to a civil money penalty or 
                proceeding under section 1128A(a).
            ``(10) Confidentiality of information.--Notwithstanding any 
        other provision of law, information disclosed by a laboratory 
        under this subsection is confidential and shall not be 
        disclosed by the Secretary or a Medicare contractor in a form 
        that discloses the identity of a specific payor or laboratory, 
        or prices charged or payments made to any such laboratory, 
        except--
                    ``(A) as the Secretary determines to be necessary 
                to carry out this section;
                    ``(B) to permit the Comptroller General to review 
                the information provided;
                    ``(C) to permit the Director of the Congressional 
                Budget Office to review the information provided; and
                    ``(D) to permit the Medicare Payment Advisory 
                Commission to review the information provided.
            ``(11) Protection from public disclosure.--A payor shall 
        not be identified on information reported under this 
        subsection. The name of an applicable laboratory under this 
        subsection shall be exempt from disclosure under section 
        552(b)(3) of title 5, United States Code.
            ``(12) Regulations.--Not later than June 30, 2015, the 
        Secretary shall establish through notice and comment rulemaking 
        parameters for data collection under this subsection.
    ``(b) Payment for Clinical Diagnostic Laboratory Tests.--
            ``(1) Use of private payor rate information to determine 
        medicare payment rates.--
                    ``(A) In general.--Subject to paragraph (3) and 
                subsections (c) and (d), in the case of a clinical 
                diagnostic laboratory test furnished on or after 
                January 1, 2017, the payment amount under this section 
                shall be equal to the weighted median determined for 
                the test under paragraph (2) for the most recent data 
                collection period.
                    ``(B) Application of payment amounts to hospital 
                laboratories.--The payment amounts established under 
                this section shall apply to a clinical diagnostic 
                laboratory test furnished by a hospital laboratory if 
                such test is paid for separately, and not as part of a 
                bundled payment under section 1833(t).
            ``(2) Calculation of weighted median.--For each laboratory 
        test with respect to which information is reported under 
        subsection (a) for a data collection period, the Secretary 
        shall calculate a weighted median for the test for the period, 
        by arraying the distribution of all payment rates reported for 
        the period for each test weighted by volume for each payor and 
        each laboratory.
            ``(3) Phase-in of reductions from private payor rate 
        implementation.--
                    ``(A) In general.--Payment amounts determined under 
                this subsection for a clinical diagnostic laboratory 
                test for each of 2017 through 2022 shall not result in 
                a reduction in payments for a clinical diagnostic 
                laboratory test for the year of greater than the 
                applicable percent (as defined in subparagraph (B)) of 
                the amount of payment for the test for the preceding 
                year.
                    ``(B) Applicable percent defined.--In this 
                paragraph, the term `applicable percent' means--
                            ``(i) for each of 2017 through 2019, 10 
                        percent; and
                            ``(ii) for each of 2020 through 2022, 15 
                        percent.
                    ``(C) No application to new tests.--This paragraph 
                shall not apply to payment amounts determined under 
                this section for either of the following.
                            ``(i) A new test under subsection (c).
                            ``(ii) A new advanced diagnostic test (as 
                        defined in subsection (d)(5)) under subsection 
                        (d).
            ``(4) Application of market rates.--
                    ``(A) In general.--Subject to paragraph (3), once 
                established for a year following a data collection 
                period, the payment amounts under this subsection shall 
                continue to apply until the year following the next 
                data collection period.
                    ``(B) Other adjustments not applicable.--The 
                payment amounts under this section shall not be subject 
                to any adjustment (including any geographic adjustment, 
                budget neutrality adjustment, annual update, or other 
                adjustment).
            ``(5) Sample collection fee.--In the case of a sample 
        collected from an individual in a skilled nursing facility or 
        by a laboratory on behalf of a home health agency, the nominal 
        fee that would otherwise apply under section 1833(h)(3)(A) 
        shall be increased by $2.
    ``(c) Payment for New Tests That Are Not Advanced Diagnostic 
Laboratory Tests.--
            ``(1) Payment during initial period.--In the case of a 
        clinical diagnostic laboratory test that is assigned a new or 
        substantially revised HCPCS code on or after the date of 
        enactment of this section, and which is not an advanced 
        diagnostic laboratory test (as defined in subsection (d)(5)), 
        during an initial period until payment rates under subsection 
        (b) are established for the test, payment for the test shall be 
        determined--
                    ``(A) using cross-walking (as described in section 
                414.508(a) of title 42, Code of Federal Regulations, or 
                any successor regulation) to the most appropriate 
                existing test under the fee schedule under this section 
                during that period; or
                    ``(B) if no existing test is comparable to the new 
                test, according to the gapfilling process described in 
                paragraph (2).
            ``(2) Gapfilling process described.--The gapfilling process 
        described in this paragraph shall take into account the 
        following sources of information to determine gapfill amounts, 
        if available:
                    ``(A) Charges for the test and routine discounts to 
                charges.
                    ``(B) Resources required to perform the test.
                    ``(C) Payment amounts determined by other payors.
                    ``(D) Charges, payment amounts, and resources 
                required for other tests that may be comparable or 
                otherwise relevant.
                    ``(E) Other criteria the Secretary determines 
                appropriate.
            ``(3) Additional consideration.--In determining the payment 
        amount under crosswalking or gapfilling processes under this 
        subsection, the Secretary shall consider recommendations from 
        the panel established under subsection (f)(1).
            ``(4) Explanation of payment rates.--In the case of a 
        clinical diagnostic laboratory test for which payment is made 
        under this subsection, the Secretary shall make available to 
        the public an explanation of the payment rate for the test, 
        including an explanation of how the criteria described in 
        paragraph (2) and paragraph (3) are applied.
    ``(d) Payment for New Advanced Diagnostic Laboratory Tests.--
            ``(1) Payment during initial period.--
                    ``(A) In general.--In the case of an advanced 
                diagnostic laboratory test for which payment has not 
                been made under the fee schedule under section 1833(h) 
                prior to the date of enactment of this section, during 
                an initial period of three quarters, the payment amount 
                for the test for such period shall be based on the 
                actual list charge for the laboratory test.
                    ``(B) Actual list charge.--For purposes of 
                subparagraph (A), the term `actual list charge', with 
                respect to a laboratory test furnished during such 
                period, means the publicly available rate on the first 
                day at which the test is available for purchase by a 
                private payor.
            ``(2) Special rule for timing of initial reporting.--With 
        respect to an advanced diagnostic laboratory test described in 
        paragraph (1)(A), an applicable laboratory shall initially be 
        required to report under subsection (a) not later than the last 
        day of the second quarter of the initial period under such 
        paragraph.
            ``(3) Application of market rates after initial period.--
        Subject to paragraph (4), data reported under paragraph (2) 
        shall be used to establish the payment amount for an advanced 
        diagnostic laboratory test after the initial period under 
        paragraph (1)(A) using the methodology described in subsection 
        (b). Such payment amount shall continue to apply until the year 
        following the next data collection period.
            ``(4) Recoupment if actual list charge exceeds market 
        rate.--With respect to the initial period described in 
        paragraph (1)(A), if, after such period, the Secretary 
        determines that the payment amount for an advanced diagnostic 
        laboratory test under paragraph (1)(A) that was applicable 
        during the period was greater than 130 percent of the payment 
        amount for the test established using the methodology described 
        in subsection (b) that is applicable after such period, the 
        Secretary shall recoup the difference between such payment 
        amounts for tests furnished during such period.
            ``(5) Advanced diagnostic laboratory test defined.--In this 
        subsection, the term `advanced diagnostic laboratory test' 
        means a clinical diagnostic laboratory test covered under this 
        part that is offered and furnished only by a single laboratory 
        and not sold for use by a laboratory other than the original 
        developing laboratory (or a successor owner) and meets one of 
        the following criteria:
                    ``(A) The test is an analysis of multiple 
                biomarkers of DNA, RNA, or proteins combined with a 
                unique algorithm to yield a single patient-specific 
                result.
                    ``(B) The test is cleared or approved by the Food 
                and Drug Administration.
                    ``(C) The test meets other similar criteria 
                established by the Secretary.
    ``(e) Coding.--
            ``(1) Temporary codes for certain new tests.--
                    ``(A) In general.--The Secretary shall adopt 
                temporary HCPCS codes to identify new advanced 
                diagnostic laboratory tests (as defined in subsection 
                (d)(5)) and new laboratory tests that are cleared or 
                approved by the Food and Drug Administration.
                    ``(B) Duration.--
                            ``(i) In general.--Subject to clause (ii), 
                        the temporary code shall be effective until a 
                        permanent HCPCS code is established (but not to 
                        exceed 2 years).
                            ``(ii) Exception.--The Secretary may extend 
                        the temporary code or establish a permanent 
                        HCPCS code, as the Secretary determines 
                        appropriate.
            ``(2) Existing tests.--Not later than January 1, 2016, for 
        each existing advanced diagnostic laboratory test (as so 
        defined) and each existing clinical diagnostic laboratory test 
        that is cleared or approved by the Food and Drug Administration 
        for which payment is made under this part as of the date of 
        enactment of this section, if such test has not already been 
        assigned a unique HCPCS code, the Secretary shall--
                    ``(A) assign a unique HCPCS code for the test; and
                    ``(B) publicly report the payment rate for the 
                test.
            ``(3) Establishment of unique identifier for certain 
        tests.--For purposes of tracking and monitoring, if a 
        laboratory or a manufacturer requests a unique identifier for 
        an advanced diagnostic laboratory test (as so defined) or a 
        laboratory test that is cleared or approved by the Food and 
        Drug Administration, the Secretary shall utilize a means to 
        uniquely track such test through a mechanism such as a HCPCS 
        code or modifier.
    ``(f) Input From Clinicians and Technical Experts.--
            ``(1) In general.--The Secretary shall consult with an 
        expert outside advisory panel, established by the Secretary not 
        later than July 1, 2015, composed of an appropriate selection 
        of individuals with expertise, which may include molecular 
        pathologists, researchers, and individuals with expertise in 
        laboratory science or health economics, in issues related to 
        clinical diagnostic laboratory tests, which may include the 
        development, validation, performance, and application of such 
        tests, to provide--
                    ``(A) input on--
                            ``(i) the establishment of payment rates 
                        under this section for new clinical diagnostic 
                        laboratory tests, including whether to use 
                        crosswalking or gapfilling processes to 
                        determine payment for a specific new test; and
                            ``(ii) the factors used in determining 
                        coverage and payment processes for new clinical 
                        diagnostic laboratory tests; and
                    ``(B) recommendations to the Secretary under this 
                section.
            ``(2) Compliance with faca.--The panel shall be subject to 
        the Federal Advisory Committee Act (5 U.S.C. App.).
            ``(3) Continuation of annual meeting.--The Secretary shall 
        continue to convene the annual meeting described in section 
        1833(h)(8)(B)(iii) after the implementation of this section for 
        purposes of receiving comments and recommendations (and data on 
        which the recommendations are based) as described in such 
        section on the establishment of payment amounts under this 
        section.
    ``(g) Coverage.--
            ``(1) Issuance of coverage policies.--
                    ``(A) In general.--A medicare administrative 
                contractor shall only issue a coverage policy with 
                respect to a clinical diagnostic laboratory test in 
                accordance with the process for making a local coverage 
                determination (as defined in section 1869(f)(2)(B)), 
                including the appeals and review process for local 
                coverage determinations under part 426 of title 42, 
                Code of Federal Regulations (or successor regulations).
                    ``(B) No effect on national coverage determination 
                process.--This paragraph shall not apply to the 
                national coverage determination process (as defined in 
                section 1869(f)(1)(B)).
                    ``(C) Effective date.--This paragraph shall apply 
                to coverage policies issued on or after January 1, 
                2015.
            ``(2) Designation of one or more medicare administrative 
        contractors for clinical diagnostic laboratory tests.--The 
        Secretary may designate one or more (not to exceed 4) medicare 
        administrative contractors to either establish coverage 
        policies or establish coverage policies and process claims for 
        payment for clinical diagnostic laboratory tests, as determined 
        appropriate by the Secretary.
    ``(h) Implementation.--
            ``(1) Implementation.--There shall be no administrative or 
        judicial review under section 1869, section 1878, or otherwise, 
        of the establishment of payment amounts under this section.
            ``(2) Administration.--Chapter 35 of title 44, United 
        States Code, shall not apply to information collected under 
        this section.
            ``(3) Funding.--For purposes of implementing this section, 
        the Secretary shall provide for the transfer, from the Federal 
        Supplementary Medical Insurance Trust Fund under section 1841, 
        to the Centers for Medicare & Medicaid Services Program 
        Management Account, for each of fiscal years 2014 through 2018, 
        $4,000,000, and for each of fiscal years 2019 through 2023, 
        $3,000,000. Amounts transferred under the preceding sentence 
        shall remain available until expended.
    ``(i) Transitional Rule.--During the period beginning on the date 
of enactment of this section and ending on December 31, 2016, with 
respect to advanced diagnostic laboratory tests under this part, the 
Secretary shall use the methodologies for pricing, coding, and coverage 
in effect on the day before such date of enactment, which may include 
cross-walking or gapfilling methods.''.
    (b) Conforming Amendments.--
            (1) Section 1833(a) of the Social Security Act (42 U.S.C. 
        1395l(a)) is amended--
                    (A) in paragraph (1)(D)--
                            (i) by striking ``(i) on the basis'' and 
                        inserting ``(i)(I) on the basis'';
                            (ii) in subclause (I), as added by clause 
                        (i), by striking ``subsection (h)(1)'' and 
                        inserting ``subsection (h)(1) (for tests 
                        furnished before January 1, 2017)'';
                            (iii) by striking ``or (ii)'' and inserting 
                        ``or (II) under section 1834A (for tests 
                        furnished on or after January 1, 2017), the 
                        amount paid shall be equal to 80 percent (or 
                        100 percent, in the case of such tests for 
                        which payment is made on an assignment-related 
                        basis) of the lesser of the amount determined 
                        under such section or the amount of the charges 
                        billed for the tests, or (ii)''; and
                            (iv) in clause (ii), by striking ``on the 
                        basis'' and inserting ``for tests furnished 
                        before January 1, 2017, on the basis'';
                    (B) in paragraph (2)(D)--
                            (i) by striking ``(i) on the basis'' and 
                        inserting ``(i)(I) on the basis'';
                            (ii) in subclause (I), as added by clause 
                        (i), by striking ``subsection (h)(1)'' and 
                        inserting ``subsection (h)(1) (for tests 
                        furnished before January 1, 2017)'';
                            (iii) by striking ``or (ii)'' and inserting 
                        ``or (II) under section 1834A (for tests 
                        furnished on or after January 1, 2017), the 
                        amount paid shall be equal to 80 percent (or 
                        100 percent, in the case of such tests for 
                        which payment is made on an assignment-related 
                        basis or to a provider having an agreement 
                        under section 1866) of the lesser of the amount 
                        determined under such section or the amount of 
                        the charges billed for the tests, or (ii)''; 
                        and
                            (iv) in clause (ii), by striking ``on the 
                        basis'' and inserting ``for tests furnished 
                        before January 1, 2017, on the basis'';
                    (C) in subsection (b)(3)(B), by striking ``on the 
                basis'' and inserting ``for tests furnished before 
                January 1, 2017, on the basis'';
                    (D) in subsection (h)(2)(A)(i), by striking ``and 
                subject to'' and inserting ``and, for tests furnished 
                before the date of enactment of section 1834A, subject 
                to'';
                    (E) in subsection (h)(3), in the matter preceding 
                subparagraph (A), by striking ``fee schedules'' and 
                inserting ``fee schedules (for tests furnished before 
                January 1, 2017) or under section 1834A (for tests 
                furnished on or after January 1, 2017), subject to 
                subsection (b)(5) of such section'';
                    (F) in subsection (h)(6), by striking ``In the 
                case'' and inserting ``For tests furnished before 
                January 1, 2017, in the case''; and
                    (G) in subsection (h)(7), in the first sentence--
                            (i) by striking ``and (4)'' and inserting 
                        ``and (4) and section 1834A''; and
                            (ii) by striking ``under this subsection'' 
                        and inserting ``under this part''.
            (2) Section 1869(f)(2) of the Social Security Act (42 
        U.S.C. 1395ff(f)(2)) is amended by adding at the end the 
        following new subparagraph:
                    ``(C) Local coverage determinations for clinical 
                diagnostic laboratory tests.--For provisions relating 
                to local coverage determinations for clinical 
                diagnostic laboratory tests, see section 1834A(g).''.
    (c) GAO Study and Report; Monitoring of Medicare Expenditures and 
Implementation of New Payment System for Laboratory Tests.--
            (1) GAO study and report on implementation of new payment 
        rates for clinical diagnostic laboratory tests.--
                    (A) Study.--The Comptroller General of the United 
                States (in this subsection referred to as the 
                ``Comptroller General'') shall conduct a study on the 
                implementation of section 1834A of the Social Security 
                Act, as added by subsection (a). The study shall 
                include an analysis of--
                            (i) payment rates paid by private payors 
                        for laboratory tests furnished in various 
                        settings, including--
                                    (I) how such payment rates compare 
                                across settings;
                                    (II) the trend in payment rates 
                                over time; and
                                    (III) trends by private payors to 
                                move to alternative payment 
                                methodologies for laboratory tests;
                            (ii) the conversion to the new payment rate 
                        for laboratory tests under such section;
                            (iii) the impact of such implementation on 
                        beneficiary access under title XVIII of the 
                        Social Security Act;
                            (iv) the impact of the new payment system 
                        on laboratories that furnish a low volume of 
                        services and laboratories that specialize in a 
                        small number of tests;
                            (v) the number of new Healthcare Common 
                        Procedure Coding System (HCPCS) codes issued 
                        for laboratory tests;
                            (vi) the spending trend for laboratory 
                        tests under such title;
                            (vii) whether the information reported by 
                        laboratories and the new payment rates for 
                        laboratory tests under such section accurately 
                        reflect market prices;
                            (viii) the initial list price for new 
                        laboratory tests and the subsequent reported 
                        rates for such tests under such section;
                            (ix) changes in the number of advanced 
                        diagnostic laboratory tests and laboratory 
                        tests cleared or approved by the Food and Drug 
                        Administration for which payment is made under 
                        such section; and
                            (x) healthcare economic information on 
                        downstream cost impacts for such tests and 
                        decision making based on accepted 
                        methodologies.
                    (B) Report.--Not later than October 1, 2018, the 
                Comptroller General shall submit to the Committee on 
                Ways and Means and the Committee on Energy and Commerce 
                of the House of Representatives and the Committee on 
                Finance of the Senate a report on the study under 
                subparagraph (A), including recommendations for such 
                legislation and administrative action as the 
                Comptroller General determines appropriate.
            (2) Monitoring of medicare expenditures and implementation 
        of new payment system for laboratory tests.--The Inspector 
        General of the Department of Health and Human Services shall--
                    (A) publicly release an annual analysis of the top 
                25 laboratory tests by expenditures under title XVIII 
                of the Social Security Act; and
                    (B) conduct analyses the Inspector General 
                determines appropriate with respect to the 
                implementation and effect of the new payment system for 
                laboratory tests under section 1834A of the Social 
                Security Act, as added by subsection (a).

SEC. 217. REVISIONS UNDER THE MEDICARE ESRD PROSPECTIVE PAYMENT SYSTEM.

    (a) Delay of Implementation of Oral-Only Policy.--Section 632(b)(1) 
of the American Taxpayer Relief Act of 2012 (42 U.S.C. 1395rr note) is 
amended--
            (1) by striking ``2016'' and inserting ``2024''; and
            (2) by adding at the end the following new sentence: 
        ``Notwithstanding section 1881(b)(14)(A)(ii) of the Social 
        Security Act (42 U.S.C. 1395rr(b)(14)(A)(ii)), implementation 
        of the policy described in the previous sentence shall be based 
        on data from the most recent year available.''.
    (b) Mitigation of the Application of Adjustment to ESRD Bundled 
Payment Rate To Account for Changes in the Utilization of Certain Drugs 
and Biologicals.--
            (1) In general.--Section 1881(b)(14)(I) of the Social 
        Security Act (42 U.S.C. 1395rr(b)(14)(I)) is amended by 
        inserting ``and before January 1, 2015,'' after ``January 1, 
        2014,''.
            (2) Market basket.--Section 1881(b)(14)(F)(i) of the Social 
        Security Act (42 U.S.C. 1395rr(b)(14)(F)(i)) is amended--
                    (A) in subclause (I)--
                            (i) by striking ``subclause (II)'' and 
                        inserting ``subclauses (II) and (III)''; and
                            (ii) by adding at the end the following new 
                        sentence: ``In order to accomplish the purposes 
                        of subparagraph (I) with respect to 2016, 2017, 
                        and 2018, after determining the increase factor 
                        described in the preceding sentence for each of 
                        2016, 2017, and 2018, the Secretary shall 
                        reduce such increase factor by 1.25 percentage 
                        points for each of 2016 and 2017 and by 1 
                        percentage point for 2018.'';
                    (B) in subclause (II), by striking ``For 2012'' and 
                inserting ``Subject to subclause (III), for 2012''; and
                    (C) by adding at the end the following new 
                subclause:
            ``(III) Notwithstanding subclauses (I) and (II), in order 
        to accomplish the purposes of subparagraph (I) with respect to 
        2015, the increase factor described in subclause (I) for 2015 
        shall be 0.0 percent pursuant to the regulation issued by the 
        Secretary on December 2, 2013, entitled `Medicare Program; End-
        Stage Renal Disease Prospective Payment System, Quality 
        Incentive Program, and Durable Medical Equipment, Prosthetics, 
        Orthotics, and Supplies; Final Rule' (78 Fed. Reg. 72156).''.
    (c) Drug Designations.--As part of the promulgation of annual rule 
for the Medicare end stage renal disease prospective payment system 
under section 1881(b)(14) of the Social Security Act (42 U.S.C. 
1395rr(b)(14)) for calendar year 2016, the Secretary of Health and 
Human Services (in this subsection referred to as the ``Secretary'') 
shall establish a process for--
            (1) determining when a product is no longer an oral-only 
        drug; and
            (2) including new injectable and intravenous products into 
        the bundled payment under such system.
    (d) Quality Measures Related to Conditions Treated by Oral-Only 
Drugs Under the ESRD Quality Incentive Program.--Section 1881(h)(2) of 
the Social Security Act (42 U.S.C. 1395rr(h)(2)) is amended--
            (1) in subparagraph (A)--
                    (A) in clause (ii), by striking ``and'' at the end;
                    (B) by redesignating clause (iii) as clause (iv); 
                and
                    (C) by inserting after clause (ii) the following 
                new clause:
                            ``(iii) for 2016 and subsequent years, 
                        measures described in subparagraph (E)(i); 
                        and'';
            (2) in subparagraph (B)(i), by striking ``(A)(iii)'' and 
        inserting ``(A)(iv)''; and
            (3) by adding at the end the following new subparagraph:
                    ``(E) Measures specific to the conditions treated 
                with oral-only drugs.--
                            ``(i) In general.--The measures described 
                        in this subparagraph are measures specified by 
                        the Secretary that are specific to the 
                        conditions treated with oral-only drugs. To the 
                        extent feasible, such measures shall be 
                        outcomes-based measures.
                            ``(ii) Consultation.--In specifying the 
                        measures under clause (i), the Secretary shall 
                        consult with interested stakeholders.
                            ``(iii) Use of endorsed measures.--
                                    ``(I) In general.--Subject to 
                                subclause (I), any measures specified 
                                under clause (i) must have been 
                                endorsed by the entity with a contract 
                                under section 1890(a).
                                    ``(II) Exception.--If the entity 
                                with a contract under section 1890(a) 
                                has not endorsed a measure for a 
                                specified area or topic related to 
                                measures described in clause (i) that 
                                the Secretary determines appropriate, 
                                the Secretary may specify a measure 
                                that is endorsed or adopted by a 
                                consensus organization recognized by 
                                the Secretary that has expertise in 
                                clinical guidelines for kidney 
                                disease.''.
    (e) Audits of Cost Reports of ESRD Providers as Recommended by 
MedPAC.--
            (1) In general.--The Secretary of Health and Human Services 
        shall conduct audits of Medicare cost reports beginning during 
        2012 for a representative sample of providers of services and 
        renal dialysis facilities furnishing renal dialysis services.
            (2) Funding.--For purposes of carrying out paragraph (1), 
        the Secretary of Health and Human Services shall provide for 
        the transfer from the Federal Supplementary Medical Insurance 
        Trust Fund established under section 1841 of the Social 
        Security Act (42 U.S.C. 1395t) to the Centers for Medicare & 
        Medicaid Services Program Management Account of $18,000,000 for 
        fiscal year 2014. Amounts transferred under this paragraph for 
        a fiscal year shall be available until expended.

SEC. 218. QUALITY INCENTIVES FOR COMPUTED TOMOGRAPHY DIAGNOSTIC IMAGING 
              AND PROMOTING EVIDENCE-BASED CARE.

    (a) Quality Incentives To Promote Patient Safety and Public Health 
in Computed Tomography Diagnostic Imaging.--
            (1) In general.--Section 1834 of the Social Security Act 
        (42 U.S.C. 1395m) is amended by adding at the end the following 
        new subsection:
    ``(p) Quality Incentives To Promote Patient Safety and Public 
Health in Computed Tomography.--
            ``(1) Quality incentives.--In the case of an applicable 
        computed tomography service (as defined in paragraph (2)) for 
        which payment is made under an applicable payment system (as 
        defined in paragraph (3)) and that is furnished on or after 
        January 1, 2016, using equipment that is not consistent with 
        the CT equipment standard (described in paragraph (4)), the 
        payment amount for such service shall be reduced by the 
        applicable percentage (as defined in paragraph (5)).
            ``(2) Applicable computed tomography services defined.--In 
        this subsection, the term `applicable computed tomography 
        service' means a service billed using diagnostic radiological 
        imaging codes for computed tomography (identified as of January 
        1, 2014, by HCPCS codes 70450-70498, 71250-71275, 72125-72133, 
        72191-72194, 73200-73206, 73700-73706, 74150-74178, 74261-
        74263, and 75571-75574 (and any succeeding codes).
            ``(3) Applicable payment system defined.--In this 
        subsection, the term `applicable payment system' means the 
        following:
                    ``(A) The technical component and the technical 
                component of the global fee under the fee schedule 
                established under section 1848(b).
                    ``(B) The prospective payment system for hospital 
                outpatient department services under section 1833(t).
            ``(4) Consistency with ct equipment standard.--In this 
        subsection, the term `not consistent with the CT equipment 
        standard' means, with respect to an applicable computed 
        tomography service, that the service was furnished using 
        equipment that does not meet each of the attributes of the 
        National Electrical Manufacturers Association (NEMA) Standard 
        XR-29-2013, entitled `Standard Attributes on CT Equipment 
        Related to Dose Optimization and Management'. Through 
        rulemaking, the Secretary may apply successor standards.
            ``(5) Applicable percentage defined.--In this subsection, 
        the term `applicable percentage' means--
                    ``(A) for 2016, 5 percent; and
                    ``(B) for 2017 and subsequent years, 15 percent.
            ``(6) Implementation.--
                    ``(A) Information.--The Secretary shall require 
                that information be provided and attested to by a 
                supplier and a hospital outpatient department that 
                indicates whether an applicable computed tomography 
                service was furnished that was not consistent with the 
                CT equipment standard (described in paragraph (4)). 
                Such information may be included on a claim and may be 
                a modifier. Such information shall be verified, as 
                appropriate, as part of the periodic accreditation of 
                suppliers under section 1834(e) and hospitals under 
                section 1865(a).
                    ``(B) Administration.--Chapter 35 of title 44, 
                United States Code, shall not apply to information 
                described in subparagraph (A).''.
            (2) Conforming amendments.--
                    (A) Prospective payment system for hospital 
                outpatient department services.--Section 1833(t) of the 
                Social Security Act (42 1395l(t)) is amended by adding 
                at the end the following new paragraph:
            ``(20) Not budget neutral application of reduced 
        expenditures resulting from quality incentives for computed 
        tomography.--The Secretary shall not take into account the 
        reduced expenditures that result from the application of 
        section 1834(p) in making any budget neutrality adjustments 
        this subsection.''.
                    (B) Physician fee schedule.--Section 
                1848(c)(2)(B)(v) of the Social Security Act (42 U.S.C. 
                1395w-4(c)(2)(B)(v)) is amended by adding at the end 
                the following new subclause:
                                    ``(VIII) Reduced expenditures 
                                attributable to application of quality 
                                incentives for computed tomography.--
                                Effective for fee schedules established 
                                beginning with 2016, reduced 
                                expenditures attributable to the 
                                application of the quality incentives 
                                for computed tomography under section 
                                1834(p)''.
    (b) Promoting Evidence-Based Care.--
            (1) In general.--Section 1834 of the Social Security Act 
        (42 U.S.C. 1395m), as amended by subsection (a), is amended by 
        adding at the end the following new subsection:
    ``(q) Recognizing Appropriate Use Criteria for Certain Imaging 
Services.--
            ``(1) Program established.--
                    ``(A) In general.--The Secretary shall establish a 
                program to promote the use of appropriate use criteria 
                (as defined in subparagraph (B)) for applicable imaging 
                services (as defined in subparagraph (C)) furnished in 
                an applicable setting (as defined in subparagraph (D)) 
                by ordering professionals and furnishing professionals 
                (as defined in subparagraphs (E) and (F), 
                respectively).
                    ``(B) Appropriate use criteria defined.--In this 
                subsection, the term `appropriate use criteria' means 
                criteria, only developed or endorsed by national 
                professional medical specialty societies or other 
                provider-led entities, to assist ordering professionals 
                and furnishing professionals in making the most 
                appropriate treatment decision for a specific clinical 
                condition for an individual. To the extent feasible, 
                such criteria shall be evidence-based.
                    ``(C) Applicable imaging service defined.--In this 
                subsection, the term `applicable imaging service' means 
                an advanced diagnostic imaging service (as defined in 
                subsection (e)(1)(B)) for which the Secretary 
                determines--
                            ``(i) one or more applicable appropriate 
                        use criteria specified under paragraph (2) 
                        apply;
                            ``(ii) there are one or more qualified 
                        clinical decision support mechanisms listed 
                        under paragraph (3)(C); and
                            ``(iii) one or more of such mechanisms is 
                        available free of charge.
                    ``(D) Applicable setting defined.--In this 
                subsection, the term `applicable setting' means a 
                physician's office, a hospital outpatient department 
                (including an emergency department), an ambulatory 
                surgical center, and any other provider-led outpatient 
                setting determined appropriate by the Secretary.
                    ``(E) Ordering professional defined.--In this 
                subsection, the term `ordering professional' means a 
                physician (as defined in section 1861(r)) or a 
                practitioner described in section 1842(b)(18)(C) who 
                orders an applicable imaging service.
                    ``(F) Furnishing professional defined.--In this 
                subsection, the term `furnishing professional' means a 
                physician (as defined in section 1861(r)) or a 
                practitioner described in section 1842(b)(18)(C) who 
                furnishes an applicable imaging service.
            ``(2) Establishment of applicable appropriate use 
        criteria.--
                    ``(A) In general.--Not later than November 15, 
                2015, the Secretary shall through rulemaking, and in 
                consultation with physicians, practitioners, and other 
                stakeholders, specify applicable appropriate use 
                criteria for applicable imaging services only from 
                among appropriate use criteria developed or endorsed by 
                national professional medical specialty societies or 
                other provider-led entities.
                    ``(B) Considerations.--In specifying applicable 
                appropriate use criteria under subparagraph (A), the 
                Secretary shall take into account whether the 
                criteria--
                            ``(i) have stakeholder consensus;
                            ``(ii) are scientifically valid and 
                        evidence based; and
                            ``(iii) are based on studies that are 
                        published and reviewable by stakeholders.
                    ``(C) Revisions.--The Secretary shall review, on an 
                annual basis, the specified applicable appropriate use 
                criteria to determine if there is a need to update or 
                revise (as appropriate) such specification of 
                applicable appropriate use criteria and make such 
                updates or revisions through rulemaking.
                    ``(D) Treatment of multiple applicable appropriate 
                use criteria.--In the case where the Secretary 
                determines that more than one appropriate use criterion 
                applies with respect to an applicable imaging service, 
                the Secretary shall apply one or more applicable 
                appropriate use criteria under this paragraph for the 
                service.
            ``(3) Mechanisms for consultation with applicable 
        appropriate use criteria.--
                    ``(A) Identification of mechanisms to consult with 
                applicable appropriate use criteria.--
                            ``(i) In general.--The Secretary shall 
                        specify qualified clinical decision support 
                        mechanisms that could be used by ordering 
                        professionals to consult with applicable 
                        appropriate use criteria for applicable imaging 
                        services.
                            ``(ii) Consultation.--The Secretary shall 
                        consult with physicians, practitioners, health 
                        care technology experts, and other stakeholders 
                        in specifying mechanisms under this paragraph.
                            ``(iii) Inclusion of certain mechanisms.--
                        Mechanisms specified under this paragraph may 
                        include any or all of the following that meet 
                        the requirements described in subparagraph 
                        (B)(ii):
                                    ``(I) Use of clinical decision 
                                support modules in certified EHR 
                                technology (as defined in section 
                                1848(o)(4)).
                                    ``(II) Use of private sector 
                                clinical decision support mechanisms 
                                that are independent from certified EHR 
                                technology, which may include use of 
                                clinical decision support mechanisms 
                                available from medical specialty 
                                organizations.
                                    ``(III) Use of a clinical decision 
                                support mechanism established by the 
                                Secretary.
                    ``(B) Qualified clinical decision support 
                mechanisms.--
                            ``(i) In general.--For purposes of this 
                        subsection, a qualified clinical decision 
                        support mechanism is a mechanism that the 
                        Secretary determines meets the requirements 
                        described in clause (ii).
                            ``(ii) Requirements.--The requirements 
                        described in this clause are the following:
                                    ``(I) The mechanism makes available 
                                to the ordering professional applicable 
                                appropriate use criteria specified 
                                under paragraph (2) and the supporting 
                                documentation for the applicable 
                                imaging service ordered.
                                    ``(II) In the case where there is 
                                more than one applicable appropriate 
                                use criterion specified under such 
                                paragraph for an applicable imaging 
                                service, the mechanism indicates the 
                                criteria that it uses for the service.
                                    ``(III) The mechanism determines 
                                the extent to which an applicable 
                                imaging service ordered is consistent 
                                with the applicable appropriate use 
                                criteria so specified.
                                    ``(IV) The mechanism generates and 
                                provides to the ordering professional a 
                                certification or documentation that 
                                documents that the qualified clinical 
                                decision support mechanism was 
                                consulted by the ordering professional.
                                    ``(V) The mechanism is updated on a 
                                timely basis to reflect revisions to 
                                the specification of applicable 
                                appropriate use criteria under such 
                                paragraph.
                                    ``(VI) The mechanism meets privacy 
                                and security standards under applicable 
                                provisions of law.
                                    ``(VII) The mechanism performs such 
                                other functions as specified by the 
                                Secretary, which may include a 
                                requirement to provide aggregate 
                                feedback to the ordering professional.
                    ``(C) List of mechanisms for consultation with 
                applicable appropriate use criteria.--
                            ``(i) Initial list.--Not later than April 
                        1, 2016, the Secretary shall publish a list of 
                        mechanisms specified under this paragraph.
                            ``(ii) Periodic updating of list.--The 
                        Secretary shall identify on an annual basis the 
                        list of qualified clinical decision support 
                        mechanisms specified under this paragraph.
            ``(4) Consultation with applicable appropriate use 
        criteria.--
                    ``(A) Consultation by ordering professional.--
                Beginning with January 1, 2017, subject to subparagraph 
                (C), with respect to an applicable imaging service 
                ordered by an ordering professional that would be 
                furnished in an applicable setting and paid for under 
                an applicable payment system (as defined in 
                subparagraph (D)), an ordering professional shall--
                            ``(i) consult with a qualified decision 
                        support mechanism listed under paragraph 
                        (3)(C); and
                            ``(ii) provide to the furnishing 
                        professional the information described in 
                        clauses (i) through (iii) of subparagraph (B).
                    ``(B) Reporting by furnishing professional.--
                Beginning with January 1, 2017, subject to subparagraph 
                (C), with respect to an applicable imaging service 
                furnished in an applicable setting and paid for under 
                an applicable payment system (as defined in 
                subparagraph (D)), payment for such service may only be 
                made if the claim for the service includes the 
                following:
                            ``(i) Information about which qualified 
                        clinical decision support mechanism was 
                        consulted by the ordering professional for the 
                        service.
                            ``(ii) Information regarding--
                                    ``(I) whether the service ordered 
                                would adhere to the applicable 
                                appropriate use criteria specified 
                                under paragraph (2);
                                    ``(II) whether the service ordered 
                                would not adhere to such criteria; or
                                    ``(III) whether such criteria was 
                                not applicable to the service ordered.
                            ``(iii) The national provider identifier of 
                        the ordering professional (if different from 
                        the furnishing professional).
                    ``(C) Exceptions.--The provisions of subparagraphs 
                (A) and (B) and paragraph (6)(A) shall not apply to the 
                following:
                            ``(i) Emergency services.--An applicable 
                        imaging service ordered for an individual with 
                        an emergency medical condition (as defined in 
                        section 1867(e)(1)).
                            ``(ii) Inpatient services.--An applicable 
                        imaging service ordered for an inpatient and 
                        for which payment is made under part A.
                            ``(iii) Significant hardship.--An 
                        applicable imaging service ordered by an 
                        ordering professional who the Secretary may, on 
                        a case-by-case basis, exempt from the 
                        application of such provisions if the Secretary 
                        determines, subject to annual renewal, that 
                        consultation with applicable appropriate use 
                        criteria would result in a significant 
                        hardship, such as in the case of a professional 
                        who practices in a rural area without 
                        sufficient Internet access.
                    ``(D) Applicable payment system defined.--In this 
                subsection, the term `applicable payment system' means 
                the following:
                            ``(i) The physician fee schedule 
                        established under section 1848(b).
                            ``(ii) The prospective payment system for 
                        hospital outpatient department services under 
                        section 1833(t).
                            ``(iii) The ambulatory surgical center 
                        payment systems under section 1833(i).
            ``(5) Identification of outlier ordering professionals.--
                    ``(A) In general.--With respect to applicable 
                imaging services furnished beginning with 2017, the 
                Secretary shall determine, on an annual basis, no more 
                than five percent of the total number of ordering 
                professionals who are outlier ordering professionals.
                    ``(B) Outlier ordering professionals.--The 
                determination of an outlier ordering professional 
                shall--
                            ``(i) be based on low adherence to 
                        applicable appropriate use criteria specified 
                        under paragraph (2), which may be based on 
                        comparison to other ordering professionals; and
                            ``(ii) include data for ordering 
                        professionals for whom prior authorization 
                        under paragraph (6)(A) applies.
                    ``(C) Use of two years of data.--The Secretary 
                shall use two years of data to identify outlier 
                ordering professionals under this paragraph.
                    ``(D) Process.--The Secretary shall establish a 
                process for determining when an outlier ordering 
                professional is no longer an outlier ordering 
                professional.
                    ``(E) Consultation with stakeholders.--The 
                Secretary shall consult with physicians, practitioners 
                and other stakeholders in developing methods to 
                identify outlier ordering professionals under this 
                paragraph.
            ``(6) Prior authorization for ordering professionals who 
        are outliers.--
                    ``(A) In general.--Beginning January 1, 2020, 
                subject to paragraph (4)(C), with respect to services 
                furnished during a year, the Secretary shall, for a 
                period determined appropriate by the Secretary, apply 
                prior authorization for applicable imaging services 
                that are ordered by an outlier ordering professional 
                identified under paragraph (5).
                    ``(B) Appropriate use criteria in prior 
                authorization.--In applying prior authorization under 
                subparagraph (A), the Secretary shall utilize only the 
                applicable appropriate use criteria specified under 
                this subsection.
                    ``(C) Funding.--For purposes of carrying out this 
                paragraph, the Secretary shall provide for the 
                transfer, from the Federal Supplementary Medical 
                Insurance Trust Fund under section 1841, of $5,000,000 
                to the Centers for Medicare & Medicaid Services Program 
                Management Account for each of fiscal years 2019 
                through 2021. Amounts transferred under the preceding 
                sentence shall remain available until expended.
            ``(7) Construction.--Nothing in this subsection shall be 
        construed as granting the Secretary the authority to develop or 
        initiate the development of clinical practice guidelines or 
        appropriate use criteria.''.
            (2) Conforming amendment.--Section 1833(t)(16) of the 
        Social Security Act (42 U.S.C. 1395l(t)(16)) is amended by 
        adding at the end the following new subparagraph:
                    ``(E) Application of appropriate use criteria for 
                certain imaging services.--For provisions relating to 
                the application of appropriate use criteria for certain 
                imaging services, see section 1834(q).''.
            (3) Report on experience of imaging appropriate use 
        criteria program.--Not later than 18 months after the date of 
        the enactment of this Act, the Comptroller General of the 
        United States shall submit to Congress a report that includes a 
        description of the extent to which appropriate use criteria 
        could be used for other services under part B of title XVIII of 
        the Social Security Act (42 U.S.C. 1395j et seq.), such as 
        radiation therapy and clinical diagnostic laboratory services.

SEC. 219. USING FUNDING FROM TRANSITIONAL FUND FOR SUSTAINABLE GROWTH 
              RATE (SGR) REFORM.

    Section 1898(b)(1) of the Social Security Act (42 U.S.C. 
1395iii(b)(1)) is amended by striking ``$2,300,000,000'' and inserting 
``$0''.

SEC. 220. ENSURING ACCURATE VALUATION OF SERVICES UNDER THE PHYSICIAN 
              FEE SCHEDULE.

    (a) Authority To Collect and Use Information on Physicians' 
Services in the Determination of Relative Values.--
            (1) In general.--Section 1848(c)(2) of the Social Security 
        Act (42 U.S.C. 1395w-4(c)(2)) is amended by adding at the end 
        the following new subparagraph:
                    ``(M) Authority to collect and use information on 
                physicians' services in the determination of relative 
                values.--
                            ``(i) Collection of information.--
                        Notwithstanding any other provision of law, the 
                        Secretary may collect or obtain information on 
                        the resources directly or indirectly related to 
                        furnishing services for which payment is made 
                        under the fee schedule established under 
                        subsection (b). Such information may be 
                        collected or obtained from any eligible 
                        professional or any other source.
                            ``(ii) Use of information.--Notwithstanding 
                        any other provision of law, subject to clause 
                        (v), the Secretary may (as the Secretary 
                        determines appropriate) use information 
                        collected or obtained pursuant to clause (i) in 
                        the determination of relative values for 
                        services under this section.
                            ``(iii) Types of information.--The types of 
                        information described in clauses (i) and (ii) 
                        may, at the Secretary's discretion, include any 
                        or all of the following:
                                    ``(I) Time involved in furnishing 
                                services.
                                    ``(II) Amounts and types of 
                                practice expense inputs involved with 
                                furnishing services.
                                    ``(III) Prices (net of any 
                                discounts) for practice expense inputs, 
                                which may include paid invoice prices 
                                or other documentation or records.
                                    ``(IV) Overhead and accounting 
                                information for practices of physicians 
                                and other suppliers.
                                    ``(V) Any other element that would 
                                improve the valuation of services under 
                                this section.
                            ``(iv) Information collection mechanisms.--
                        Information may be collected or obtained 
                        pursuant to this subparagraph from any or all 
                        of the following:
                                    ``(I) Surveys of physicians, other 
                                suppliers, providers of services, 
                                manufacturers, and vendors.
                                    ``(II) Surgical logs, billing 
                                systems, or other practice or facility 
                                records.
                                    ``(III) Electronic health records.
                                    ``(IV) Any other mechanism 
                                determined appropriate by the 
                                Secretary.
                            ``(v) Transparency of use of information.--
                                    ``(I) In general.--Subject to 
                                subclauses (II) and (III), if the 
                                Secretary uses information collected or 
                                obtained under this subparagraph in the 
                                determination of relative values under 
                                this subsection, the Secretary shall 
                                disclose the information source and 
                                discuss the use of such information in 
                                such determination of relative values 
                                through notice and comment rulemaking.
                                    ``(II) Thresholds for use.--The 
                                Secretary may establish thresholds in 
                                order to use such information, 
                                including the exclusion of information 
                                collected or obtained from eligible 
                                professionals who use very high 
                                resources (as determined by the 
                                Secretary) in furnishing a service.
                                    ``(III) Disclosure of 
                                information.--The Secretary shall make 
                                aggregate information available under 
                                this subparagraph but shall not 
                                disclose information in a form or 
                                manner that identifies an eligible 
                                professional or a group practice, or 
                                information collected or obtained 
                                pursuant to a nondisclosure agreement.
                            ``(vi) Incentive to participate.--The 
                        Secretary may provide for such payments under 
                        this part to an eligible professional that 
                        submits such solicited information under this 
                        subparagraph as the Secretary determines 
                        appropriate in order to compensate such 
                        eligible professional for such submission. Such 
                        payments shall be provided in a form and manner 
                        specified by the Secretary.
                            ``(vii) Administration.--Chapter 35 of 
                        title 44, United States Code, shall not apply 
                        to information collected or obtained under this 
                        subparagraph.
                            ``(viii) Definition of eligible 
                        professional.--In this subparagraph, the term 
                        `eligible professional' has the meaning given 
                        such term in subsection (k)(3)(B).
                            ``(ix) Funding.--For purposes of carrying 
                        out this subparagraph, in addition to funds 
                        otherwise appropriated, the Secretary shall 
                        provide for the transfer, from the Federal 
                        Supplementary Medical Insurance Trust Fund 
                        under section 1841, of $2,000,000 to the 
                        Centers for Medicare & Medicaid Services 
                        Program Management Account for each fiscal year 
                        beginning with fiscal year 2014. Amounts 
                        transferred under the preceding sentence for a 
                        fiscal year shall be available until 
                        expended.''.
            (2) Limitation on review.--Section 1848(i)(1) of the Social 
        Security Act (42 U.S.C. 1395w-4(i)(1)) is amended--
                    (A) in subparagraph (D), by striking ``and'' at the 
                end;
                    (B) in subparagraph (E), by striking the period at 
                the end and inserting ``, and''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(F) the collection and use of information in the 
                determination of relative values under subsection 
                (c)(2)(M).''.
    (b) Authority for Alternative Approaches To Establishing Practice 
Expense Relative Values.--Section 1848(c)(2) of the Social Security Act 
(42 U.S.C. 1395w-4(c)(2)), as amended by subsection (a), is amended by 
adding at the end the following new subparagraph:
                    ``(N) Authority for alternative approaches to 
                establishing practice expense relative values.--The 
                Secretary may establish or adjust practice expense 
                relative values under this subsection using cost, 
                charge, or other data from suppliers or providers of 
                services, including information collected or obtained 
                under subparagraph (M).''.
    (c) Revised and Expanded Identification of Potentially Misvalued 
Codes.--Section 1848(c)(2)(K)(ii) of the Social Security Act (42 U.S.C. 
1395w-4(c)(2)(K)(ii)) is amended to read as follows:
                            ``(ii) Identification of potentially 
                        misvalued codes.--For purposes of identifying 
                        potentially misvalued codes pursuant to clause 
                        (i)(I), the Secretary shall examine codes (and 
                        families of codes as appropriate) based on any 
                        or all of the following criteria:
                                    ``(I) Codes that have experienced 
                                the fastest growth.
                                    ``(II) Codes that have experienced 
                                substantial changes in practice 
                                expenses.
                                    ``(III) Codes that describe new 
                                technologies or services within an 
                                appropriate time period (such as 3 
                                years) after the relative values are 
                                initially established for such codes.
                                    ``(IV) Codes which are multiple 
                                codes that are frequently billed in 
                                conjunction with furnishing a single 
                                service.
                                    ``(V) Codes with low relative 
                                values, particularly those that are 
                                often billed multiple times for a 
                                single treatment.
                                    ``(VI) Codes that have not been 
                                subject to review since implementation 
                                of the fee schedule.
                                    ``(VII) Codes that account for the 
                                majority of spending under the 
                                physician fee schedule.
                                    ``(VIII) Codes for services that 
                                have experienced a substantial change 
                                in the hospital length of stay or 
                                procedure time.
                                    ``(IX) Codes for which there may be 
                                a change in the typical site of service 
                                since the code was last valued.
                                    ``(X) Codes for which there is a 
                                significant difference in payment for 
                                the same service between different 
                                sites of service.
                                    ``(XI) Codes for which there may be 
                                anomalies in relative values within a 
                                family of codes.
                                    ``(XII) Codes for services where 
                                there may be efficiencies when a 
                                service is furnished at the same time 
                                as other services.
                                    ``(XIII) Codes with high intra-
                                service work per unit of time.
                                    ``(XIV) Codes with high practice 
                                expense relative value units.
                                    ``(XV) Codes with high cost 
                                supplies.
                                    ``(XVI) Codes as determined 
                                appropriate by the Secretary.''.
    (d) Target for Relative Value Adjustments for Misvalued Services.--
            (1) In general.--Section 1848(c)(2) of the Social Security 
        Act (42 U.S.C. 1395w-4(c)(2)), as amended by subsections (a) 
        and (b), is amended by adding at the end the following new 
        subparagraph:
                    ``(O) Target for relative value adjustments for 
                misvalued services.--With respect to fee schedules 
                established for each of 2017 through 2020, the 
                following shall apply:
                            ``(i) Determination of net reduction in 
                        expenditures.--For each year, the Secretary 
                        shall determine the estimated net reduction in 
                        expenditures under the fee schedule under this 
                        section with respect to the year as a result of 
                        adjustments to the relative values established 
                        under this paragraph for misvalued codes.
                            ``(ii) Budget neutral redistribution of 
                        funds if target met and counting overages 
                        towards the target for the succeeding year.--If 
                        the estimated net reduction in expenditures 
                        determined under clause (i) for the year is 
                        equal to or greater than the target for the 
                        year--
                                    ``(I) reduced expenditures 
                                attributable to such adjustments shall 
                                be redistributed for the year in a 
                                budget neutral manner in accordance 
                                with subparagraph (B)(ii)(II); and
                                    ``(II) the amount by which such 
                                reduced expenditures exceeds the target 
                                for the year shall be treated as a 
                                reduction in expenditures described in 
                                clause (i) for the succeeding year, for 
                                purposes of determining whether the 
                                target has or has not been met under 
                                this subparagraph with respect to that 
                                year.
                            ``(iii) Exemption from budget neutrality if 
                        target not met.--If the estimated net reduction 
                        in expenditures determined under clause (i) for 
                        the year is less than the target for the year, 
                        reduced expenditures in an amount equal to the 
                        target recapture amount shall not be taken into 
                        account in applying subparagraph (B)(ii)(II) 
                        with respect to fee schedules beginning with 
                        2017.
                            ``(iv) Target recapture amount.--For 
                        purposes of clause (iii), the target recapture 
                        amount is, with respect to a year, an amount 
                        equal to the difference between--
                                    ``(I) the target for the year; and
                                    ``(II) the estimated net reduction 
                                in expenditures determined under clause 
                                (i) for the year.
                            ``(v) Target.--For purposes of this 
                        subparagraph, with respect to a year, the 
                        target is calculated as 0.5 percent of the 
                        estimated amount of expenditures under the fee 
                        schedule under this section for the year.''.
            (2) Conforming amendment.--Section 1848(c)(2)(B)(v) of the 
        Social Security Act (42 U.S.C. 1395w-4(c)(2)(B)(v)) is amended 
        by adding at the end the following new subclause:
                                    ``(VIII) Reductions for misvalued 
                                services if target not met.--Effective 
                                for fee schedules beginning with 2017, 
                                reduced expenditures attributable to 
                                the application of the target recapture 
                                amount described in subparagraph 
                                (O)(iii).''.
    (e) Phase-In of Significant Relative Value Unit (RVU) Reductions.--
            (1) In general.--Section 1848(c) of the Social Security Act 
        (42 U.S.C. 1395w-4(c)) is amended by adding at the end the 
        following new paragraph:
            ``(7) Phase-in of significant relative value unit (rvu) 
        reductions.--Effective for fee schedules established beginning 
        with 2017, for services that are not new or revised codes, if 
        the total relative value units for a service for a year would 
        otherwise be decreased by an estimated amount equal to or 
        greater than 20 percent as compared to the total relative value 
        units for the previous year, the applicable adjustments in 
        work, practice expense, and malpractice relative value units 
        shall be phased-in over a 2-year period.''.
            (2) Conforming amendments.--Section 1848(c)(2) of the 
        Social Security Act (42 U.S.C. 1395w-4(c)(2)) is amended--
                    (A) in subparagraph (B)(ii)(I), by striking 
                ``subclause (II)'' and inserting ``subclause (II) and 
                paragraph (7)''; and
                    (B) in subparagraph (K)(iii)(VI)--
                            (i) by striking ``provisions of 
                        subparagraph (B)(ii)(II)'' and inserting 
                        ``provisions of subparagraph (B)(ii)(II) and 
                        paragraph (7)''; and
                            (ii) by striking ``under subparagraph 
                        (B)(ii)(II)'' and inserting ``under 
                        subparagraph (B)(ii)(I)''.
    (f) Authority To Smooth Relative Values Within Groups of 
Services.--Section 1848(c)(2)(C) of the Social Security Act (42 U.S.C. 
1395w-4(c)(2)(C)) is amended--
            (1) in each of clauses (i) and (iii), by striking ``the 
        service'' and inserting ``the service or group of services'' 
        each place it appears; and
            (2) in the first sentence of clause (ii), by inserting ``or 
        group of services'' before the period.
    (g) GAO Study and Report on Relative Value Scale Update 
Committee.--
            (1) Study.--The Comptroller General of the United States 
        (in this subsection referred to as the ``Comptroller General'') 
        shall conduct a study of the processes used by the Relative 
        Value Scale Update Committee (RUC) to provide recommendations 
        to the Secretary of Health and Human Services regarding 
        relative values for specific services under the Medicare 
        physician fee schedule under section 1848 of the Social 
        Security Act (42 U.S.C. 1395w-4).
            (2) Report.--Not later than 1 year after the date of the 
        enactment of this Act, the Comptroller General shall submit to 
        Congress a report containing the results of the study conducted 
        under paragraph (1).
    (h) Adjustment to Medicare Payment Localities.--
            (1) In general.--Section 1848(e) of the Social Security Act 
        (42 U.S.C. 1395w-4(e)) is amended by adding at the end the 
        following new paragraph:
            ``(6) Use of msas as fee schedule areas in california.--
                    ``(A) In general.--Subject to the succeeding 
                provisions of this paragraph and notwithstanding the 
                previous provisions of this subsection, for services 
                furnished on or after January 1, 2017, the fee schedule 
                areas used for payment under this section applicable to 
                California shall be the following:
                            ``(i) Each Metropolitan Statistical Area 
                        (each in this paragraph referred to as an 
                        `MSA'), as defined by the Director of the 
                        Office of Management and Budget as of December 
                        31 of the previous year, shall be a fee 
                        schedule area.
                            ``(ii) All areas not included in an MSA 
                        shall be treated as a single rest-of-State fee 
                        schedule area.
                    ``(B) Transition for msas previously in rest-of-
                state payment locality or in locality 3.--
                            ``(i) In general.--For services furnished 
                        in California during a year beginning with 2017 
                        and ending with 2021 in an MSA in a transition 
                        area (as defined in subparagraph (D)), subject 
                        to subparagraph (C), the geographic index 
                        values to be applied under this subsection for 
                        such year shall be equal to the sum of the 
                        following:
                                    ``(I) Current law component.--The 
                                old weighting factor (described in 
                                clause (ii)) for such year multiplied 
                                by the geographic index values under 
                                this subsection for the fee schedule 
                                area that included such MSA that would 
                                have applied in such area (as estimated 
                                by the Secretary) if this paragraph did 
                                not apply.
                                    ``(II) MSA-based component.--The 
                                MSA-based weighting factor (described 
                                in clause (iii)) for such year 
                                multiplied by the geographic index 
                                values computed for the fee schedule 
                                area under subparagraph (A) for the 
                                year (determined without regard to this 
                                subparagraph).
                            ``(ii) Old weighting factor.--The old 
                        weighting factor described in this clause--
                                    ``(I) for 2017, is \5/6\; and
                                    ``(II) for each succeeding year, is 
                                the old weighting factor described in 
                                this clause for the previous year minus 
                                \1/6\.
                            ``(iii) MSA-based weighting factor.--The 
                        MSA-based weighting factor described in this 
                        clause for a year is 1 minus the old weighting 
                        factor under clause (ii) for that year.
                    ``(C) Hold harmless.--For services furnished in a 
                transition area in California during a year beginning 
                with 2017, the geographic index values to be applied 
                under this subsection for such year shall not be less 
                than the corresponding geographic index values that 
                would have applied in such transition area (as 
                estimated by the Secretary) if this paragraph did not 
                apply.
                    ``(D) Transition area defined.--In this paragraph, 
                the term `transition area' means each of the following 
                fee schedule areas for 2013:
                            ``(i) The rest-of-State payment locality.
                            ``(ii) Payment locality 3.
                    ``(E) References to fee schedule areas.--Effective 
                for services furnished on or after January 1, 2017, for 
                California, any reference in this section to a fee 
                schedule area shall be deemed a reference to a fee 
                schedule area established in accordance with this 
                paragraph.''.
            (2) Conforming amendment to definition of fee schedule 
        area.--Section 1848(j)(2) of the Social Security Act (42 U.S.C. 
        1395w-4(j)(2)) is amended by striking ``The term'' and 
        inserting ``Except as provided in subsection (e)(6)(D), the 
        term''.
    (i) Disclosure of Data Used To Establish Multiple Procedure Payment 
Reduction Policy.--The Secretary of Health and Human Services shall 
make publicly available the information used to establish the multiple 
procedure payment reduction policy to the professional component of 
imaging services in the final rule published in the Federal Register, 
v. 77, n. 222, November 16, 2012, pages 68891-69380 under the physician 
fee schedule under section 1848 of the Social Security Act (42 U.S.C. 
1395w-4).

SEC. 221. MEDICAID DSH.

    (a) Modifications of Reductions to Allotments.--Section 1923(f) of 
the Social Security Act (42 U.S.C. 1396r-4(f)) is amended--
            (1) in paragraph (7)(A)--
                    (A) in clause (i), by striking ``2016 through 
                2020'' and inserting ``2017 through 2024''; and
                    (B) in clause (ii), by striking subclauses (I) 
                through (IV), and inserting the following:
                                    ``(I) $1,800,000,000 for fiscal 
                                year 2017;
                                    ``(II) $4,700,000,000 for fiscal 
                                year 2018;
                                    ``(III) $4,700,000,000 for fiscal 
                                year 2019;
                                    ``(IV) $4,700,000,000 for fiscal 
                                year 2020;
                                    ``(V) $4,800,000,000 for fiscal 
                                year 2021;
                                    ``(VI) $5,000,000,000 for fiscal 
                                year 2022;
                                    ``(VII) $5,000,000,000 for fiscal 
                                year 2023; and
                                    ``(VIII) $4,400,000,000 for fiscal 
                                year 2024.''; and
            (2) by striking paragraph (8) and inserting the following:
            ``(8) Calculation of DSH allotments after reductions 
        period.--The DSH allotment for a State for fiscal years after 
        fiscal year 2024 shall be calculated under paragraph (3) 
        without regard to paragraph (7).''.
    (b) MACPAC Review and Report.--Section 1900(b)(6) of the Social 
Security Act (42 U.S.C. 1396(b)(6)) is amended--
            (1) by striking ``MACPAC shall consult'' and inserting the 
        following:
                    ``(A) In general.--MACPAC shall consult''; and
            (2) by adding at the end the following:
                    ``(B) Review and reports regarding medicaid dsh.--
                            ``(i) In general.--MACPAC shall review and 
                        submit an annual report to Congress on 
                        disproportionate share hospital payments under 
                        section 1923. Each report shall include the 
                        information specified in clause (ii).
                            ``(ii) Required report information.--Each 
                        report required under this subparagraph shall 
                        include the following:
                                    ``(I) Data relating to changes in 
                                the number of uninsured individuals.
                                    ``(II) Data relating to the amount 
                                and sources of hospitals' uncompensated 
                                care costs, including the amount of 
                                such costs that are the result of 
                                providing unreimbursed or under-
                                reimbursed services, charity care, or 
                                bad debt.
                                    ``(III) Data identifying hospitals 
                                with high levels of uncompensated care 
                                that also provide access to essential 
                                community services for low-income, 
                                uninsured, and vulnerable populations, 
                                such as graduate medical education, and 
                                the continuum of primary through 
                                quarternary care, including the 
                                provision of trauma care and public 
                                health services.
                                    ``(IV) State-specific analyses 
                                regarding the relationship between the 
                                most recent State DSH allotment and the 
                                projected State DSH allotment for the 
                                succeeding year and the data reported 
                                under subclauses (I), (II), and (III) 
                                for the State.
                            ``(iii) Data.--Notwithstanding any other 
                        provision of law, the Secretary regularly shall 
                        provide MACPAC with the most recent State 
                        reports and most recent independent certified 
                        audits submitted under section 1923(j), cost 
                        reports submitted under title XVIII, and such 
                        other data as MACPAC may request for purposes 
                        of conducting the reviews and preparing and 
                        submitting the annual reports required under 
                        this subparagraph.
                            ``(iv) Submission deadlines.--The first 
                        report required under this subparagraph shall 
                        be submitted to Congress not later than 
                        February 1, 2016. Subsequent reports shall be 
                        submitted as part of, or with, each annual 
                        report required under paragraph (1)(C) during 
                        the period of fiscal years 2017 through 
                        2024.''.

SEC. 222. REALIGNMENT OF THE MEDICARE SEQUESTER FOR FISCAL YEAR 2024.

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

SEC. 223. DEMONSTRATION PROGRAMS TO IMPROVE COMMUNITY MENTAL HEALTH 
              SERVICES.

    (a) Criteria for Certified Community Behavioral Health Clinics To 
Participate in Demonstration Programs.--
            (1) Publication.--Not later than September 1, 2015, the 
        Secretary shall publish criteria for a clinic to be certified 
        by a State as a certified community behavioral health clinic 
        for purposes of participating in a demonstration program 
        conducted under subsection (d).
            (2) Requirements.--The criteria published under this 
        subsection shall include criteria with respect to the 
        following:
                    (A) Staffing.--Staffing requirements, including 
                criteria that staff have diverse disciplinary 
                backgrounds, have necessary State-required license and 
                accreditation, and are culturally and linguistically 
                trained to serve the needs of the clinic's patient 
                population.
                    (B) Availability and accessibility of services.--
                Availability and accessibility of services, including 
                crisis management services that are available and 
                accessible 24 hours a day, the use of a sliding scale 
                for payment, and no rejection for services or limiting 
                of services on the basis of a patient's ability to pay 
                or a place of residence.
                    (C) Care coordination.--Care coordination, 
                including requirements to coordinate care across 
                settings and providers to ensure seamless transitions 
                for patients across the full spectrum of health 
                services including acute, chronic, and behavioral 
                health needs. Care coordination requirements shall 
                include partnerships or formal contracts with the 
                following:
                            (i) Federally-qualified health centers (and 
                        as applicable, rural health clinics) to provide 
                        Federally-qualified health center services (and 
                        as applicable, rural health clinic services) to 
                        the extent such services are not provided 
                        directly through the certified community 
                        behavioral health clinic.
                            (ii) Inpatient psychiatric facilities and 
                        substance use detoxification, post-
                        detoxification step-down services, and 
                        residential programs.
                            (iii) Other community or regional services, 
                        supports, and providers, including schools, 
                        child welfare agencies, juvenile and criminal 
                        justice agencies and facilities, Indian Health 
                        Service youth regional treatment centers, State 
                        licensed and nationally accredited child 
                        placing agencies for therapeutic foster care 
                        service, and other social and human services.
                            (iv) Department of Veterans Affairs medical 
                        centers, independent outpatient clinics, drop-
                        in centers, and other facilities of the 
                        Department as defined in section 1801 of title 
                        38, United States Code.
                            (v) Inpatient acute care hospitals and 
                        hospital outpatient clinics.
                    (D) Scope of services.--Provision (in a manner 
                reflecting person-centered care) of the following 
                services which, if not available directly through the 
                certified community behavioral health clinic, are 
                provided or referred through formal relationships with 
                other providers:
                            (i) Crisis mental health services, 
                        including 24-hour mobile crisis teams, 
                        emergency crisis intervention services, and 
                        crisis stabilization.
                            (ii) Screening, assessment, and diagnosis, 
                        including risk assessment.
                            (iii) Patient-centered treatment planning 
                        or similar processes, including risk assessment 
                        and crisis planning.
                            (iv) Outpatient mental health and substance 
                        use services.
                            (v) Outpatient clinic primary care 
                        screening and monitoring of key health 
                        indicators and health risk.
                            (vi) Targeted case management.
                            (vii) Psychiatric rehabilitation services.
                            (viii) Peer support and counselor services 
                        and family supports.
                            (ix) Intensive, community-based mental 
                        health care for members of the armed forces and 
                        veterans, particularly those members and 
                        veterans located in rural areas, provided the 
                        care is consistent with minimum clinical mental 
                        health guidelines promulgated by the Veterans 
                        Health Administration including clinical 
                        guidelines contained in the Uniform Mental 
                        Health Services Handbook of such 
                        Administration.
                    (E) Quality and other reporting.--Reporting of 
                encounter data, clinical outcomes data, quality data, 
                and such other data as the Secretary requires.
                    (F) Organizational authority.--Criteria that a 
                clinic be a non-profit or part of a local government 
                behavioral health authority or operated under the 
                authority of the Indian Health Service, an Indian tribe 
                or tribal organization pursuant to a contract, grant, 
                cooperative agreement, or compact with the Indian 
                Health Service pursuant to the Indian Self-
                Determination Act (25 U.S.C. 450 et seq.), or an urban 
                Indian organization pursuant to a grant or contract 
                with the Indian Health Service under title V of the 
                Indian Health Care Improvement Act (25 U.S.C. 1601 et 
                seq.).
    (b) Guidance on Development of Prospective Payment System for 
Testing Under Demonstration Programs.--
            (1) In general.--Not later than September 1, 2015, the 
        Secretary, through the Administrator of the Centers for 
        Medicare & Medicaid Services, shall issue guidance for the 
        establishment of a prospective payment system that shall only 
        apply to medical assistance for mental health services 
        furnished by a certified community behavioral health clinic 
        participating in a demonstration program under subsection (d).
            (2) Requirements.--The guidance issued by the Secretary 
        under paragraph (1) shall provide that--
                    (A) no payment shall be made for inpatient care, 
                residential treatment, room and board expenses, or any 
                other non-ambulatory services, as determined by the 
                Secretary; and
                    (B) no payment shall be made to satellite 
                facilities of certified community behavioral health 
                clinics if such facilities are established after the 
                date of enactment of this Act.
    (c) Planning Grants.--
            (1) In general.--Not later than January 1, 2016, the 
        Secretary shall award planning grants to States for the purpose 
        of developing proposals to participate in time-limited 
        demonstration programs described in subsection (d).
            (2) Use of funds.--A State awarded a planning grant under 
        this subsection shall--
                    (A) solicit input with respect to the development 
                of such a demonstration program from patients, 
                providers, and other stakeholders;
                    (B) certify clinics as certified community 
                behavioral health clinics for purposes of participating 
                in a demonstration program conducted under subsection 
                (d); and
                    (C) establish a prospective payment system for 
                mental health services furnished by a certified 
                community behavioral health clinic participating in a 
                demonstration program under subsection (d) in 
                accordance with the guidance issued under subsection 
                (b).
    (d) Demonstration Programs.--
            (1) In general.--Not later than September 1, 2017, the 
        Secretary shall select States to participate in demonstration 
        programs that are developed through planning grants awarded 
        under subsection (c), meet the requirements of this subsection, 
        and represent a diverse selection of geographic areas, 
        including rural and underserved areas.
            (2) Application requirements.--
                    (A) In general.--The Secretary shall solicit 
                applications to participate in demonstration programs 
                under this subsection solely from States awarded 
                planning grants under subsection (c).
                    (B) Required information.--An application for a 
                demonstration program under this subsection shall 
                include the following:
                            (i) The target Medicaid population to be 
                        served under the demonstration program.
                            (ii) A list of participating certified 
                        community behavioral health clinics.
                            (iii) Verification that the State has 
                        certified a participating clinic as a certified 
                        community behavioral health clinic in 
                        accordance with the requirements of subsection 
                        (b).
                            (iv) A description of the scope of the 
                        mental health services available under the 
                        State Medicaid program that will be paid for 
                        under the prospective payment system tested in 
                        the demonstration program.
                            (v) Verification that the State has agreed 
                        to pay for such services at the rate 
                        established under the prospective payment 
                        system.
                            (vi) Such other information as the 
                        Secretary may require relating to the 
                        demonstration program including with respect to 
                        determining the soundness of the proposed 
                        prospective payment system.
            (3) Number and length of demonstration programs.--Not more 
        than 8 States shall be selected for 2-year demonstration 
        programs under this subsection.
            (4) Requirements for selecting demonstration programs.--
                    (A) In general.--The Secretary shall give 
                preference to selecting demonstration programs where 
                participating certified community behavioral health 
                clinics--
                            (i) provide the most complete scope of 
                        services described in subsection (a)(2)(D) to 
                        individuals eligible for medical assistance 
                        under the State Medicaid program;
                            (ii) will improve availability of, access 
                        to, and participation in, services described in 
                        subsection (a)(2)(D) to individuals eligible 
                        for medical assistance under the State Medicaid 
                        program;
                            (iii) will improve availability of, access 
                        to, and participation in assisted outpatient 
                        mental health treatment in the State; or
                            (iv) demonstrate the potential to expand 
                        available mental health services in a 
                        demonstration area and increase the quality of 
                        such services without increasing net Federal 
                        spending.
            (5) Payment for medical assistance for mental health 
        services provided by certified community behavioral health 
        clinics.--
                    (A) In general.--The Secretary shall pay a State 
                participating in a demonstration program under this 
                subsection the Federal matching percentage specified in 
                subparagraph (B) for amounts expended by the State to 
                provide medical assistance for mental health services 
                described in the demonstration program application in 
                accordance with paragraph (2)(B)(iv) that are provided 
                by certified community behavioral health clinics to 
                individuals who are enrolled in the State Medicaid 
                program. Payments to States made under this paragraph 
                shall be considered to have been under, and are subject 
                to the requirements of, section 1903 of the Social 
                Security Act (42 U.S.C. 1396b).
                    (B) Federal matching percentage.--The Federal 
                matching percentage specified in this subparagraph is 
                with respect to medical assistance described in 
                subparagraph (A) that is furnished--
                            (i) to a newly eligible individual 
                        described in paragraph (2) of section 1905(y) 
                        of the Social Security Act (42 U.S.C. 
                        1396d(y)), the matching rate applicable under 
                        paragraph (1) of that section; and
                            (ii) to an individual who is not a newly 
                        eligible individual (as so described) but who 
                        is eligible for medical assistance under the 
                        State Medicaid program, the enhanced FMAP 
                        applicable to the State.
                    (C) Limitations.--
                            (i) In general.--Payments shall be made 
                        under this paragraph to a State only for mental 
                        health services--
                                    (I) that are described in the 
                                demonstration program application in 
                                accordance with paragraph (2)(iv);
                                    (II) for which payment is available 
                                under the State Medicaid program; and
                                    (III) that are provided to an 
                                individual who is eligible for medical 
                                assistance under the State Medicaid 
                                program.
                            (ii) Prohibited payments.--No payment shall 
                        be made under this paragraph--
                                    (I) for inpatient care, residential 
                                treatment, room and board expenses, or 
                                any other non-ambulatory services, as 
                                determined by the Secretary; or
                                    (II) with respect to payments made 
                                to satellite facilities of certified 
                                community behavioral health clinics if 
                                such facilities are established after 
                                the date of enactment of this Act.
            (6) Waiver of statewideness requirement.--The Secretary 
        shall waive section 1902(a)(1) of the Social Security Act (42 
        U.S.C. 1396a(a)(1)) (relating to statewideness) as may be 
        necessary to conduct demonstration programs in accordance with 
        the requirements of this subsection.
            (7) Annual reports.--
                    (A) In general.--Not later than 1 year after the 
                date on which the first State is selected for a 
                demonstration program under this subsection, and 
                annually thereafter, the Secretary shall submit to 
                Congress an annual report on the use of funds provided 
                under all demonstration programs conducted under this 
                subsection. Each such report shall include--
                            (i) an assessment of access to community-
                        based mental health services under the Medicaid 
                        program in the area or areas of a State 
                        targeted by a demonstration program compared to 
                        other areas of the State;
                            (ii) an assessment of the quality and scope 
                        of services provided by certified community 
                        behavioral health clinics compared to 
                        community-based mental health services provided 
                        in States not participating in a demonstration 
                        program under this subsection and in areas of a 
                        demonstration State that are not participating 
                        in the demonstration program; and
                            (iii) an assessment of the impact of the 
                        demonstration programs on the Federal and State 
                        costs of a full range of mental health services 
                        (including inpatient, emergency and ambulatory 
                        services).
                    (B) Recommendations.--Not later than December 31, 
                2021, the Secretary shall submit to Congress 
                recommendations concerning whether the demonstration 
                programs under this section should be continued, 
                expanded, modified, or terminated.
    (e) Definitions.--In this section:
            (1) Federally-qualified health center services; federally-
        qualified health center; rural health clinic services; rural 
        health clinic.--The terms ``Federally-qualified health center 
        services'', ``Federally-qualified health center'', ``rural 
        health clinic services'', and ``rural health clinic'' have the 
        meanings given those terms in section 1905(l) of the Social 
        Security Act (42 U.S.C. 1396d(l)).
            (2) Enhanced fmap.--The term ``enhanced FMAP'' has the 
        meaning given that term in section 2105(b) of the Social 
        Security Act (42 U.S.C. 1397dd(b)) but without regard to the 
        second and third sentences of that section.
            (3) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (4) State.--The term ``State'' has the meaning given such 
        term for purposes of title XIX of the Social Security Act (42 
        U.S.C. 1396 et seq.).
    (f) Funding.--
            (1) In general.--Out of any funds in the Treasury not 
        otherwise appropriated, there is appropriated to the 
        Secretary--
                    (A) for purposes of carrying out subsections (a), 
                (b), and (d)(7), $2,000,000 for fiscal year 2014; and
                    (B) for purposes of awarding planning grants under 
                subsection (c), $25,000,000 for fiscal year 2016.
            (2) Availability.--Funds appropriated under paragraph (1) 
        shall remain available until expended.

SEC. 224. ASSISTED OUTPATIENT TREATMENT GRANT PROGRAM FOR INDIVIDUALS 
              WITH SERIOUS MENTAL ILLNESS.

    (a) In General.--The Secretary shall establish a 4-year pilot 
program to award not more than 50 grants each year to eligible entities 
for assisted outpatient treatment programs for individuals with serious 
mental illness.
    (b) Consultation.--The Secretary shall carry out this section in 
consultation with the Director of the National Institute of Mental 
Health, the Attorney General of the United States, the Administrator of 
the Administration for Community Living, and the Administrator of the 
Substance Abuse and Mental Health Services Administration.
    (c) Selecting Among Applicants.--The Secretary--
            (1) may only award grants under this section to applicants 
        that have not previously implemented an assisted outpatient 
        treatment program; and
            (2) shall evaluate applicants based on their potential to 
        reduce hospitalization, homelessness, incarceration, and 
        interaction with the criminal justice system while improving 
        the health and social outcomes of the patient.
    (d) Use of Grant.--An assisted outpatient treatment program funded 
with a grant awarded under this section shall include--
            (1) evaluating the medical and social needs of the patients 
        who are participating in the program;
            (2) preparing and executing treatment plans for such 
        patients that--
                    (A) include criteria for completion of court-
                ordered treatment; and
                    (B) provide for monitoring of the patient's 
                compliance with the treatment plan, including 
                compliance with medication and other treatment 
                regimens;
            (3) providing for such patients case management services 
        that support the treatment plan;
            (4) ensuring appropriate referrals to medical and social 
        service providers;
            (5) evaluating the process for implementing the program to 
        ensure consistency with the patient's needs and State law; and
            (6) measuring treatment outcomes, including health and 
        social outcomes such as rates of incarceration, health care 
        utilization, and homelessness.
    (e) Report.--Not later than the end of each of fiscal years 2016, 
2017, and 2018, the Secretary shall submit a report to the appropriate 
congressional committees on the grant program under this section. Each 
such report shall include an evaluation of the following:
            (1) Cost savings and public health outcomes such as 
        mortality, suicide, substance abuse, hospitalization, and use 
        of services.
            (2) Rates of incarceration by patients.
            (3) Rates of homelessness among patients.
            (4) Patient and family satisfaction with program 
        participation.
    (f) Definitions.--In this section:
            (1) The term ``assisted outpatient treatment'' means 
        medically prescribed mental health treatment that a patient 
        receives while living in a community under the terms of a law 
        authorizing a State or local court to order such treatment.
            (2) The term ``eligible entity'' means a county, city, 
        mental health system, mental health court, or any other entity 
        with authority under the law of the State in which the grantee 
        is located to implement, monitor, and oversee assisted 
        outpatient treatment programs.
            (3) The term ``Secretary'' means the Secretary of Health 
        and Human Services.
    (g) Funding.--
            (1) Amount of grants.--A grant under this section shall be 
        in an amount that is not more than $1,000,000 for each of 
        fiscal years 2015 through 2018. Subject to the preceding 
        sentence, the Secretary shall determine the amount of each 
        grant based on the population of the area, including estimated 
        patients, to be served under the grant.
            (2) Authorization of appropriations.--There is authorized 
        to be appropriated to carry out this section $15,000,000 for 
        each of fiscal years 2015 through 2018.

SEC. 225. EXCLUSION FROM PAYGO SCORECARDS.

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