II 

113TH CONGRESS 

2D SESSION S. 2501 

To amend title XVIII of the Social Security Act to make improvements 

to the Medicare hospital readmissions reduction program. 

IN THE SENATE OF THE UNITED STATES 

JUNE 19, 2014 

Mr. MANCHIN (for himself, Mr. WICKER, Mr. KIRK, and Mr. NELSON) introduced the following bill; which was read twice and referred to the Committee on Finance 

A BILL 

To amend title XVIII of the Social Security Act to make 

improvements to the Medicare hospital readmissions reduction program. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Hospital Readmissions 

5 Program Accuracy and Accountability Act of 2014’’. 

6 SEC. 2. FINDINGS. 

7 Congress makes the following findings: 

8 (1) Eliminating avoidable hospital readmissions 

9 should be a core tenet of public and private efforts 


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1 to improve quality of care and reduce health care ex2 penditures. 

3 (2) Measures adopted by the Centers for Medi4 care & Medicaid Services should accurately reflect 

5 the quality of care provided by specific hospitals and 

6 providers, and such measures should never lower 

7 outcome or quality expectations for certain cohorts 

8 of hospitals and providers. 

9 (3) There are numerous socioeconomic condi10 tions that impact health outcomes and the Medicare 

11 hospital readmission reduction program is one of 

12 many Federal outcome performance programs that 

13 fails to accurately adjust for these influences. 

14 (4) Holding all other factors constant, socio15 economic conditions, such as poverty, low levels of 

16 literacy, limited English proficiency, minimal social 

17 support, poor living conditions, and limited commu18 nity resources, likely have direct and significant im19 pacts on avoidable hospital readmissions. 

20 (5) The Medicare hospital readmission reduc21 tion program includes risk adjustment for clinical 

22 variables, such as comorbidity and severity of illness, 

23 because hospitals should not be penalized for the ef24 fects of these uncontrollable factors. Socioeconomic 

25 factors can influence readmissions to an equal or 


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1 greater degree than these clinical factors and the 

2 Medicare hospital readmissions reduction program 

3 will more accurately measure quality of care once 

4 risk adjustment for socioeconomic status is imple5 mented. 

6 (6) Research by the Medicare Payment Advi7 sory Commission, the National Quality Forum, and 

8 other independent experts has provided compelling 

9 evidence that failing to adjust for socioeconomic sta10 tus in the Medicare hospital readmission reduction 

11 program may provide an inaccurate picture of the 

12 quality of care provided by hospitals, and has led to 

13 the unfair penalization and stigmatization of hos14 pitals serving low-income populations that are, in 

15 fact, delivering high-quality health care. 

16 (7) Risk adjustment for socioeconomic status in 

17 the Medicare hospital readmission reduction pro18 gram will improve quality of care, increase account19 ability for all inpatient hospitals serving Medicare 

20 beneficiaries, and further reduce preventable re21 admissions nationwide. 

22 (8) The Secretary of Health and Human Serv23 ices should consider the adoption of socioeconomic 

24 adjustment methodologies in other quality reporting 


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1 and pay-for-performance programs under the Medi2 care program. 

3 SEC. 3. IMPROVEMENTS TO THE MEDICARE HOSPITAL RE4 ADMISSIONS REDUCTION PROGRAM. 

5 Section 1886(q) of the Social Security Act (42 U.S.C. 

6 1395ww(q)) is amended— 

7 (1) in paragraph (4)(C)— 

8 (A) in clause (i), in the matter preceding 

9 subclause (I), by striking ‘‘clause (ii)’’ and in10 serting ‘‘clauses (ii) and (iii)’’; and 

11 (B) by adding at the end the following new 

12 clause: 

13 ‘‘(iii) ADJUSTMENT FOR SOCIO14 ECONOMIC STATUS.— 

15 ‘‘(I) IN GENERAL.—In deter16 mining a hospital’s excess readmission 

17 ratio under clause (i) for purposes of 

18 making payments for discharges oc19 curring on or after October 1, 2016, 

20 the Secretary shall risk adjust re21 admissions to account for the socio22 economic status of the patients served 

23 by the hospital. 

24 ‘‘(II) SOCIOECONOMIC STATUS.— 

25 For purposes of subclause (I), subject 


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1 to subclauses (III) and (V), the Sec2 retary shall, to the maximum extent 

3 practicable, utilize the most recent 

4 data available from the Bureau of the 

5 Census in order to develop a quan6 titative method to adjust for socio7 economic status. In developing such 

8 quantitative method, the Secretary— 

9 ‘‘(aa) shall, to the maximum 

10 extent practicable, use inputs 

11 that address at least one of the 

12 following factors— 

13 ‘‘(AA) income; 

14 ‘‘(BB) education level; 

15 and 

16 ‘‘(CC) poverty rate; and 

17 ‘‘(bb) may include inputs 

18 that address other socioeconomic 

19 and sociodemographic factors de20 termined appropriate by the Sec21 retary. 

22 ‘‘(III) REVISION OF INPUTS.— 

23 The Secretary may revise the inputs 

24 for such quantitative method under 

25 subclause (II) on an annual basis to 


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1 improve the accuracy and validity of 

2 the adjustment under subclause (I). 

3 ‘‘(IV) PATIENTS SERVED BY THE

4 HOSPITAL.—For purposes of sub5 clause (I), the Secretary shall, to the 

6 maximum extent practicable, measure 

7 the socioeconomic status for all pa8 tients served by each hospital. The 

9 Secretary may supplement incomplete 

10 or inaccessible patient-level data with 

11 data related to the geographic region 

12 of the patients served by the hospital. 

13 ‘‘(V) USE OF ALTERNATIVE AD14 JUSTMENT METHOD.— 

15 ‘‘(aa) IN GENERAL.—For 

16 purposes of subclause (I), in the 

17 case of payments for discharges 

18 occurring on or after October 1, 

19 2017, the Secretary may apply a 

20 socioeconomic status adjustment 

21 using a method other than the 

22 method described in subclause 

23 (II), such as peer groupings and 

24 stratification. 


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1 ‘‘(bb) COMPARATIVE ANAL2 YSIS.—Prior to the application of 

3 the alternative adjustment meth4 od under item (aa), the Secretary 

5 shall conduct a comparative anal6 ysis of such alternative adjust7 ment method and the method de8 scribed in subclause (II). The 

9 Secretary shall publish the re10 sults of such comparative anal11 ysis and the proposed alternative 

12 adjustment method in the Fed13 eral Register and seek public 

14 comment on such method. 

15 ‘‘(cc) REQUIREMENT.—The 

16 Secretary may not apply any al17 ternative adjustment method 

18 under item (aa) unless the Sec19 retary determines that such alter20 native method will demonstrate 

21 an aggregate improvement in the 

22 accuracy and effectiveness of hos23 pital readmissions reduction pro24 gram incentives and measure25 ments compared to the adjustVerDate Mar 15 2010 02:37 Jun 25, 2014 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S2501.IS S2501

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1 ment required under subclause 

2 (I).’’; 

3 (2) in paragraph (6)(A), by adding the fol4 lowing before the period at the end: ‘‘, including in5 formation on the results of the readmission meas6 ures under this subsection (both before and after the 

7 adjustment under paragraph (4)(C)(iii)) and the 

8 penalties under this subsection (both before and 

9 after such adjustment)’’; and 

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

11 paragraph: 

12 ‘‘(9) ADJUSTMENT.—The Secretary shall make 

13 proportional adjustments to base operating DRG 

14 payment amounts (as defined in paragraph (2)) of 

15 applicable hospitals to assure that the application of 

16 paragraph (4)(C)(iii) does not result in aggregate 

17 payments under this section in a fiscal year that are 

18 greater or less than those that would otherwise be 

19 made under this section in such fiscal year, as esti20 mated by the Secretary.’’. 

Æ 


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