II 

110TH CONGRESS 

1ST SESSION S. 1471 

To provide for the voluntary development by States of qualifying best practices 

for health care and to encourage such voluntary development by amending titles XVIII and XIX of the Social Security Act to provide differential 

rates of payment favoring treatment provided consistent with qualifying 

best practices under the Medicare and Medicaid programs, and for other 

purposes. 

IN THE SENATE OF THE UNITED STATES 

MAY 24, 2007 

Mr. WHITEHOUSE introduced the following bill; which was read twice and 

referred to the Committee on Finance 

A BILL 

To provide for the voluntary development by States of qualifying best practices for health care and to encourage 

such voluntary development by amending titles XVIII 

and XIX of the Social Security Act to provide differential 

rates of payment favoring treatment provided consistent 

with qualifying best practices under the Medicare and 

Medicaid programs, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Improved Medical De3 cision Incentive Act of 2007’’. 

4 SEC. 2. FINDINGS. 

5 Congress makes the following findings: 

6 (1) The United States spends more per capita 

7 on health care than any other nation, and yet it has 

8 mediocre health outcomes, including the second9 highest infant mortality rate of all industrialized na10 tions. 

11 (2) The efficacy of best practices guidelines in 

12 improving health care delivery and patient outcomes 

13 is well established. 

14 (3) Existing payment systems compensate phy15 sicians without adequate attention to the appro16 priateness or quality of care delivered and often 

17 without reference to established best practices. 

18 (4) Identification of and adherence to best prac19 tices can improve the quality of health care while re20 ducing overall costs to the health care system. 

21 (5) Orderly administrative proceedings involving 

22 knowledgeable professionals will enhance best prac23 tices for health care. 

24 (6) Control of medical practices through denial 

25 of claims by insurance companies has proven waste26 ful and confusing, and has failed to motivate adeVerDate Aug 31 2005 23:09 May 29, 2007 Jkt 059200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1471.IS S1471

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1 quate development and use of best practices for 

2 health care. 

3 SEC. 3. VOLUNTARY STATE DEVELOPMENT AND APPROVAL 

4 OF QUALIFYING BEST PRACTICES; INCEN5 TIVES FOR PRIVATE INSURERS. 

6 (a) STATE APPROVAL OF BEST PRACTICES.— 

7 (1) IN GENERAL.—A State health department 

8 may approve best practices in a course of, or as a 

9 means of treatment for, a particular condition, ill10 ness, or procedure, as the qualifying standard of 

11 care for the State in order to take advantage of the 

12 differential rates of payment implemented under sec13 tions 1898 and 1902(dd) of the Social Security Act 

14 (as added by sections 4 and 5, respectively) and the 

15 private insurance incentive under subsection (b). 

16 (2) QUALIFYING PROCESS FOR STATE AP17 PROVAL.—In order for best practices approved by a 

18 State under paragraph (1) to qualify as best prac19 tices for purposes of implementing such differential 

20 rates of payment and for purposes of such private 

21 insurance incentive, a State health department 

22 shall— 

23 (A) allow any duly constituted State med24 ical society or medical specialty group to file 

25 with the State health department a course or 


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1 means of treatment representing best practices 

2 for a particular condition, illness, or procedure 

3 to be applicable in the State, including cost-ef4 fective prevention and management measures; 

5 (B) provide for notice and hearing con6 sistent with the administrative procedures of 

7 the State with respect to the approval of best 

8 practices for a particular condition, illness, or 

9 procedure; 

10 (C) permit any health insurer described in 

11 subsection (b)(1), including any individual au12 thorized by the Secretary of Health and Human 

13 Services to act as a representative of the Medi14 care and Medicaid programs under titles XVIII 

15 and XIX, respectively, of the Social Security 

16 Act (42 U.S.C. 1395 et seq.; 1396 et seq.), to 

17 intervene in any administrative proceeding to 

18 approve such best practices; 

19 (D) provide appropriate notice of any such 

20 administrative proceeding to established advo21 cacy groups concerned with the condition or ill22 ness involved in the proceeding; and 

23 (E) in the case where the State health de24 partment determines that a course of treatment 

25 filed in accordance with subparagraph (A) 


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1 would lower system costs and improve quality of 

2 care, approve that best practices course of 

3 treatment within its jurisdiction as the quali4 fying standard of care under this subsection for 

5 that condition, illness, or procedure. 

6 (3) PRIORITY OF APPROVALS.—State health de7 partments are encouraged to prioritize approval of 

8 best practices that address conditions, illnesses, or 

9 procedures where those best practices are reasonably 

10 anticipated to result in the greatest overall cost sav11 ings and quality improvements. 

12 (4) APPROVAL OF QUALIFYING BEST PRAC13 TICES.—If, at the conclusion of a process that meets 

14 the requirements of paragraph (2), the State health 

15 department approves best practices (as described in 

16 paragraph (1)), those best practices shall be— 

17 (A) deemed qualifying best practices; 

18 (B) the basis for differential rates of pay19 ment under sections 1898 and 1902(dd) of the 

20 Social Security Act (as added by sections 4 and 

21 5, respectively); and 

22 (C) eligible for the private insurance incen23 tive under subsection (b). 

24 (5) DEFINITION OF STATE.—In this subsection 

25 the term ‘‘State’’ includes such regional or local 


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1 areas as the State health department determines ap2 propriate. 

3 (b) INCENTIVE FOR PRIVATE INSURERS TO PROVIDE

4 TIMELY PAYMENT FOR SERVICES PROVIDED IN ACCORD5 ANCE WITH BEST PRACTICES.— 

6 (1) IN GENERAL.—Notwithstanding any other 

7 provision of law, in the case where qualifying best 

8 practices have been approved by a State health de9 partment in accordance with subsection (a), any 

10 health insurer doing business in interstate commerce 

11 and providing health care coverage within the State 

12 shall pay all provider charges for any service pro13 vided in accordance with such best practices not 

14 later than 30 days after the date on which such 

15 service is provided and, absent fraud, without regard 

16 for the insurer’s internal utilization review or claims 

17 denial procedure. 

18 (2) STANDING TO ENFORCE.—Any provider or 

19 specialty group that does business in a State where 

20 the State health department has approved qualifying 

21 best practices in accordance with subsection (a) may 

22 bring a civil action in an appropriate United States 

23 district court to enjoin efforts by any health insurer 

24 to challenge or delay payment for services provided 

25 by the provider or a member of the specialty group 


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1 in accordance with such best practices approved in 

2 the State. The district court shall award a provider 

3 or specialty group costs and attorney’s fees in such 

4 a civil action if the court finds that the challenge or 

5 delay was a willful violation of this Act. 

6 SEC. 4. IMPLEMENTATION OF DIFFERENTIAL RATES OF 

7 PAYMENT FOR QUALIFYING BEST PRACTICES 

8 UNDER THE MEDICARE PROGRAM. 

9 (a) DIFFERENTIAL RATES OF PAYMENT FOR QUALI10 FYING BEST PRACTICES.—Title XVIII of the Social Secu11 rity Act (42 U.S.C. 1395 et seq.) is amended by adding 

12 at the end the following new section: 

13 ‘‘DIFFERENTIAL RATES OF PAYMENT FOR QUALIFYING

14 BEST PRACTICES

15 ‘‘SEC. 1898. (a) IN GENERAL.— 

16 ‘‘(1) DIFFERENTIAL RATES OF PAYMENT.— 

17 Notwithstanding any other provision of law, the Sec18 retary shall establish procedures to provide differen19 tial rates of payment for items and services covered 

20 under the program under this title that favor treat21 ment provided consistent with qualifying best prac22 tices approved by a State in accordance with section 

23 3(a) of the Improved Medical Decision Incentive Act 

24 of 2007. 


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1 ‘‘(2) REGULATIONS.—Not later than March 31, 

2 2008, the Secretary shall promulgate regulations to 

3 carry out this subsection. 

4 ‘‘(3) BUDGET NEUTRALITY.—The Secretary 

5 shall ensure that the procedures established under 

6 paragraph (1) do not result in overall expenditures 

7 for any year under this title that are more than the 

8 expenditures which would have been made if such 

9 procedures had not been established, taking into ac10 count— 

11 ‘‘(A) any savings anticipated as a result of 

12 the application of best practices to items and 

13 services covered under the program under this 

14 title; and 

15 ‘‘(B) the net effects of reimbursement in16 creases and decreases as a result of the dif17 ferential in rates of payment established under 

18 such program. 

19 ‘‘(b) ADOPTION OF NATIONAL BEST PRACTICES.— 

20 ‘‘(1) IN GENERAL.—Such procedures shall 

21 specify that, in any case where the Secretary finds 

22 a national standard for best practices to be appro23 priate, the Secretary may adopt national best prac24 tices. Subject to paragraph (2), such national best 

25 practices shall be applicable within a State as a 


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1 qualifying best practice in accordance with section 

2 3(a) of the Improved Medical Decision Incentive Act 

3 of 2007 and the basis for the establishment of dif4 ferential rates of payment under the program under 

5 this title. 

6 ‘‘(2) LIMITATION.—In any case where the State 

7 health department has approved qualifying best 

8 practices in the State for a condition, illness, or pro9 cedure in accordance with such section 3(a), national 

10 best practices adopted under paragraph (1) shall 

11 only be applicable within such State as a qualifying 

12 best practice and the basis for the establishment of 

13 such differential rates of payment if the Secretary 

14 finds, after a hearing in the State that meets the 

15 procedural requirements under paragraph (2) of 

16 such section 3(a), that the national best practices 

17 will improve health care outcomes and lower health 

18 care costs in the State to a greater extent than the 

19 qualifying best practices approved by the State 

20 health department for that condition, illness, or pro21 cedure in accordance with such section 3(a).’’. 

22 (b) EFFECTIVE DATE.—The amendment made by 

23 this section shall apply to items and services furnished on 

24 or after March 31, 2008. 


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1 SEC. 5. IMPLEMENTATION OF DIFFERENTIAL RATES OF 

2 PAYMENT FOR QUALIFYING BEST PRACTICES 

3 UNDER THE MEDICAID PROGRAM. 

4 (a) STATE PLAN AMENDMENT.—Section 1902(a) of 

5 the Social Security Act (42 U.S.C. 1396a(a)) is amend6 ed— 

7 (1) in paragraph (69), by striking ‘‘and’’ at the 

8 end; 

9 (2) in paragraph (70)(B)(iv), by striking the 

10 period at the end and inserting ‘‘; and’’; and 

11 (3) by inserting after paragraph (70)(B)(iv) the 

12 following new paragraph: 

13 ‘‘(71) provide, in accordance with procedures 

14 established by the Secretary under subsection (dd) 

15 and after consultation with and upon the rec16 ommendation of the State health department (and 

17 the approval of the Secretary), for differential rates 

18 of payment for medical assistance under the plan 

19 that favor treatment provided consistent with quali20 fying best practices approved by the State health de21 partment in accordance with section 3(a) of the Im22 proved Medical Decision Incentive Act of 2007, ex23 cept that in establishing such payment rates, the 

24 State shall ensure that the amounts paid under such 

25 rates do not exceed the amount the State would have 

26 paid for such medical assistance under the plan if 


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1 such differential rates of payment had not been 

2 made, taking into account any annual increases in 

3 population and inflation.’’. 

4 (b) ESTABLISHMENT OF PROCEDURES.—Section 

5 1902 of the Social Security Act (42 U.S.C. 1396a) is 

6 amended by adding at the end the following new sub7 section: 

8 ‘‘(dd) DIFFERENTIAL RATES OF PAYMENT FOR

9 QUALIFYING BEST PRACTICES AND ADOPTION OF NA10 TIONAL BEST PRACTICES.— 

11 ‘‘(1) DIFFERENTIAL RATES OF PAYMENT FOR

12 QUALIFYING BEST PRACTICES.— 

13 ‘‘(A) IN GENERAL.—Notwithstanding any 

14 other provision of law, the Secretary shall es15 tablish procedures to provide differential rates 

16 of payment for medical assistance provided con17 sistent with qualifying best practices approved 

18 by a State in accordance with section 3(a) of 

19 the Improved Medical Decision Incentive Act of 

20 2007. 

21 ‘‘(B) REGULATIONS.—Not later than 

22 March 31, 2008, the Secretary shall promulgate 

23 regulations to carry out this subsection. 

24 ‘‘(C) BUDGET NEUTRALITY.—The Sec25 retary shall ensure that the procedures estabVerDate Aug 31 2005 23:09 May 29, 2007 Jkt 059200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S1471.IS S1471

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1 lished under subparagraph (A) do not result in 

2 overall expenditures for any year under a State 

3 plan that are more than the expenditures which 

4 would have been made if such procedures had 

5 not been established, taking into account— 

6 ‘‘(i) any savings anticipated as a re7 sult of the application of best practices to 

8 medical assistance provided under the 

9 State plan; and 

10 ‘‘(ii) the net effects of reimbursement 

11 increases and decreases as a result of the 

12 differential rates of payment established 

13 under such plan. 

14 ‘‘(2) ADOPTION OF NATIONAL BEST PRAC15 TICES.—Such procedures shall specify that, in any 

16 case where the Secretary adopts national best prac17 tices in accordance with section 1898(b), subject to 

18 the limitation under paragraph (2) of such section, 

19 such national best practices shall be— 

20 ‘‘(A) applicable within a State as a quali21 fying best practice in accordance with section 

22 3(a) of the Improved Medical Decision Incentive 

23 Act of 2007; and 


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1 ‘‘(B) the basis for the establishment of dif2 ferential rates of payment under the State 

3 plan.’’. 

4 (c) EFFECTIVE DATE.— 

5 (1) IN GENERAL.—Except as provided in para6 graph (2), the amendments made by this section 

7 shall apply to medical assistance furnished on or 

8 after March 31, 2008. 

9 (2) EXTENSION OF EFFECTIVE DATE FOR

10 STATE LAW AMENDMENT.—In the case of a State 

11 plan under title XIX of the Social Security Act (42 

12 U.S.C. 1396 et seq.) which the Secretary of Health 

13 and Human Services determines requires State legis14 lation in order for the plan to meet the additional 

15 requirements imposed by the amendments made by 

16 this section, the State plan shall not be regarded as 

17 failing to comply with the requirements of such title 

18 solely on the basis of its failure to meet these addi19 tional requirements before the first day of the first 

20 calendar quarter beginning after the close of the 

21 first regular session of the State legislature that be22 gins after the date of enactment of this Act. For 

23 purposes of the previous sentence, in the case of a 

24 State that has a 2-year legislative session, each year 


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1 of the session is considered to be a separate regular 

2 session of the State legislature. 

3 SEC. 6. OVERSIGHT BY THE CENTERS FOR MEDICARE & 

4 MEDICAID SERVICES. 

5 (a) REVIEW AND REPORT.— 

6 (1) REVIEW.— 

7 (A) IN GENERAL.—The Secretary shall 

8 conduct an annual review of the efficacy of all 

9 qualifying best practices approved pursuant to 

10 section 3(a) and, if applicable, any national best 

11 practices adopted pursuant to section 1898(b) 

12 of the Social Security Act, as added by section 

13 4(a). 

14 (B) CONSIDERATIONS.—The review con15 ducted under subparagraph (A) shall con16 sider— 

17 (i) the effect of such best practices 

18 with respect to improving outcomes and 

19 lowering the cost of care; and 

20 (ii) the effect and efficacy of differen21 tial rates of payment under the Medicare 

22 and Medicaid programs under titles XVIII 

23 and XIX, respectively, of the Social Secu24 rity Act (42 U.S.C. 1395 et seq.; 1396 et 

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1 ant to the amendments made by sections 4 

2 and 5. 

3 (2) REPORT.—The Secretary shall submit an 

4 annual report to Congress containing the results of 

5 the review conducted under paragraph (1)(A), to6 gether with recommendations for such legislation 

7 and administrative actions as the Secretary deter8 mines appropriate. 

9 (b) ANNUAL CONFERENCE.—The Secretary shall 

10 host an annual conference of all State health directors, 

11 and any State medical societies and medical specialty 

12 groups that have filed best practices for approval with a 

13 State health department in accordance with subparagraph 

14 (A) of section 3(a)(2) and any health insurers and advo15 cacy groups that have participated in any administrative 

16 proceeding to approve best practices in accordance with 

17 subparagraphs (C) and (D), respectively, of such section, 

18 to provide— 

19 (1) for the exchange of information; and 

20 (2) an opportunity to summarize the effects on 

21 health care costs, quality, and outcomes of quali22 fying best practices approved in accordance with sec23 tion 3(a) prior to the date on which the conference 

24 is held. 


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1 (c) AUTHORIZATION.—There are authorized to be ap2 propriated such sums as may be necessary for the purpose 

3 of carrying out this section. 

4 (d) DEFINITION OF SECRETARY.—In this section, the 

5 term ‘‘Secretary’’ means the Secretary of Health and 

6 Human Services, acting through the Administrator of the 

7 Centers for Medicare & Medicaid Services. 

Æ 


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