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[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4302 Enrolled Bill (ENR)]

        H.R.4302

                     One Hundred Thirteenth Congress

                                 of the

                        United States of America

                          AT THE SECOND SESSION

           Begun and held at the City of Washington on Friday,
           the third day of January, two thousand and fourteen

                                 An Act

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

    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).

                               Speaker of the House of Representatives.

                            Vice President of the United States and    
                                               President of the Senate.
```