II 

114TH CONGRESS 

1ST SESSION S. 688 

To amend title XVIII of the Social Security Act to adjust the Medicare 

hospital readmission reduction program to respond to patient disparities, 

and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MARCH 10, 2015 

Mr. MANCHIN (for himself, Mr. PORTMAN, Mr. WICKER, Mr. KIRK, Mr. NELSON, and Mr. BROWN) 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 adjust 

the Medicare hospital readmission reduction program to 

respond to patient disparities, 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, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Establishing Bene5 ficiary Equity in the Hospital Readmission Program Act 

6 of 2015’’. 


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1 SEC. 2. ESTABLISHING BENEFICIARY EQUITY IN THE MEDI2 CARE HOSPITAL READMISSION PROGRAM. 

3 (a) TRANSITIONAL ADJUSTMENT FOR DUAL ELIGI4 BLE POPULATION AND SOCIOECONOMIC STATUS.—Sec5 tion 1886(q)(4)(C) of the Social Security Act (42 U.S.C. 

6 1395ww(q)(4)(C)) is amended by adding at the end the 

7 following new clause: 

8 ‘‘(iii) TRANSITIONAL ADJUSTMENT

9 FOR DUAL ELIGIBLE POPULATION AND SO10 CIOECONOMIC STATUS.— 

11 ‘‘(I) IN GENERAL.—In deter12 mining a hospital’s excess readmission 

13 ratio under clause (i) for purposes of 

14 making payments for discharges oc15 curring during fiscal years 2016 and 

16 2017, and before the initial applica17 tion of clause (iv), and in order to en18 sure that hospitals that treat the most 

19 vulnerable populations are not un20 fairly penalized by the program under 

21 this subsection, the Secretary shall 

22 provide for such risk adjustment as 

23 will take into account both a hos24 pital’s proportion of inpatients who 

25 are full-benefit dual eligible individ26 uals (as defined in section 1935(c)(6)) 


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1 and the socioeconomic status of the 

2 patients served by the hospital. 

3 ‘‘(II) QUANTITATIVE METHOD.— 

4 For purposes of applying subclause 

5 (I)(bb), the Secretary, to the max6 imum extent practicable, shall utilize 

7 the most recent data available from 

8 the Bureau of the Census in order to 

9 develop a quantitative method to ad10 just for socioeconomic status. In de11 veloping such quantitative method, the 

12 Secretary— 

13 ‘‘(aa) shall, to the maximum 

14 extent practicable, use inputs 

15 that address at least income, 

16 education level, or poverty rate; 

17 and 

18 ‘‘(bb) may include inputs 

19 that address other socioeconomic 

20 and sociodemographic factors de21 termined appropriate by the Sec22 retary. 

23 ‘‘(III) PATIENTS SERVED BY THE

24 HOSPITAL.—For purposes of sub25 clause (I)(bb), the Secretary shall, to 


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1 the maximum extent practicable, 

2 measure the socioeconomic status for 

3 all patients served by each hospital. 

4 The Secretary may supplement incom5 plete or inaccessible patient-level data 

6 with data related to the geographic re7 gion of the patients served by the hos8 pital. 

9 ‘‘(IV) MINIMIZING REPORTING

10 BURDEN ON HOSPITALS.—In carrying 

11 out this clause, the Secretary shall not 

12 impose any additional reporting re13 quirements on hospitals.’’. 

14 (b) SUBSEQUENT ADJUSTMENTS BASED ON IM15 PACT AND MEDPAC REPORTS.—Section 1886(q)(4)(C) 

16 of the Social Security Act (42 U.S.C. 1395ww(q)(4)(C)) 

17 is further amended by adding at the end the following new 

18 clause: 

19 ‘‘(iv) RISK ADJUSTMENTS UNDER RE20 ADMISSION PROGRAM BASED ON IMPACT

21 AND MEDPAC REPORTS.—In making rec22 ommendations under subparagraph (D) of 

23 section 2(d)(1) of the IMPACT Act of 

24 2014 (Public Law 113–185; 42 U.S.C. 

25 1395lll note) with respect to the applicaVerDate Sep 11 2014 00:03 Mar 13, 2015 Jkt 049200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S688.IS S688

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1 tion of risk adjustment under this sub2 section, the Secretary is required to base 

3 such risk adjustment on the reports sub4 mitted under subparagraphs (A)(ii) and 

5 (B)(ii) of such section as well as on the re6 port submitted by the Medicare Payment 

7 Advisory Commission under section 2(c) of 

8 the Establishing Beneficiary Equity in the 

9 Hospital Readmission Program Act of 

10 2015. The Administrator of the Centers 

11 for Medicare & Medicaid Services shall in12 corporate such recommendations in car13 rying out risk adjustment under this sub14 section for discharges occurring in fiscal 

15 years after fiscal year 2017 in order to en16 sure that hospitals that treat the most vul17 nerable populations are not unfairly penal18 ized by the program under this subsection. 

19 For fiscal years beginning more than 5 

20 years after the date of submission of the 

21 report under section 2(d)(1)(B)(ii) of the 

22 IMPACT Act of 2014, the Secretary may 

23 use alternative adjustment mechanisms 

24 under this subsection to account for socio25 economic factors if the Secretary finds that 


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1 such measures are better at accounting for 

2 socioeconomic factors than the mechanisms 

3 that would otherwise apply.’’. 

4 (c) MEDPAC STUDY ON 30-DAY READMISSION

5 THRESHOLD.—The Medicare Payment Advisory Commis6 sion shall conduct a study on the appropriateness of using 

7 a threshold of 30 days for readmissions under section 

8 1886(q)(5)(E) of the Social Security Act (42 U.S.C. 

9 1395ww(q)(5)(E)). The Commission shall submit to Con10 gress a report on such study in its report to Congress in 

11 June 2016. 

12 (d) ADDRESSING ISSUE OF NONCOMPLIANT PA13 TIENTS.—Section 1886(q)(4)(C) of the Social Security 

14 Act (42 U.S.C. 1395ww(q)(4)(C)), as amended by sub15 sections (b) and (c), is further amended by adding at the 

16 end the following new clause: 

17 ‘‘(v) CONSIDERATION OF EXCLUSION

18 OF NONCOMPLIANT PATIENT CASES BASED

19 ON V OR OTHER APPROPRIATE CODES.—In 

20 promulgating regulations to carry out this 

21 subsection for the applicable period with 

22 respect to fiscal year 2017, the Secretary 

23 shall consider the use of V or other ICD24 related codes for potential exclusions of 


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1 cases in order to address the issue of non2 compliant patients.’’. 

3 (e) EXCLUDING CERTAIN CLINICAL CONDITIONS.— 

4 (1) STUDY.— 

5 (A) IN GENERAL.—The Secretary of 

6 Health and Human Services shall conduct a 

7 study, consistent with this paragraph, that as8 sesses and makes recommendations with respect 

9 to excluding patients whose clinical conditions 

10 or diagnoses may require frequent hospitaliza11 tions, from the calculation of excess readmis12 sions under section 1886(q)(5)(E) of the Social 

13 Security Act (42 U.S.C. 1395ww(q)(5)(E)). 

14 (B) USE OF A TECHNICAL EXPERT

15 PANEL.—The Secretary shall convene a multi16 stakeholder technical expert panel comprised of 

17 individuals knowledgeable about clinical care of 

18 hospitalized patients and quality measurement, 

19 to provide input and recommendations on the 

20 study conducted under this paragraph. 

21 (C) CLINICAL CONDITIONS TO BE CONSID22 ERED.—In conducting the study, the Secretary 

23 shall consider exclusions for patients with 

24 transplants, burns, psychosis, and substance 

25 abuse disorders. The Secretary may include adVerDate Sep 11 2014 20:47 Mar 16, 2015 Jkt 049200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S688.IS S688

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1 ditional clinical conditions where appropriate 

2 care may require frequent hospitalizations. 

3 (D) TRANSPARENCY.—The Secretary shall 

4 make a draft of report on such study available 

5 for public comment for a period of not less than 

6 30 days. The final study and recommendations 

7 shall address the Secretary’s response to public 

8 comments. 

9 (E) DEADLINE.—The Secretary shall sub10 mit a final report on the study to Congress no 

11 later than Oct. 1, 2016. Such final report shall 

12 include recommendations regarding the relevant 

13 clinical conditions that should be excluded from 

14 the calculation of excess readmissions described 

15 in subparagraph (A). 

16 (2) APPLICATION TO CALCULATION OF EXCESS

17 READMISSIONS.—Beginning with fiscal year 2018, 

18 the Secretary shall exclude any relevant clinical con19 ditions identified in the recommendations made in 

20 the final report under paragraph (1)(E) in deter21 mining a hospital’s publicly reported readmission 

22 rate and excess readmissions ratio under section 

23 1886(q)(4)(C) of the Social Security Act (42 U.S.C. 

24 1395ww(q)(4)(C)). The Secretary also is encouraged 

25 to consider applying the exclusions so identified to 


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1 other Medicare public reporting and pay-for-per2 formance programs in which readmission measures 

3 are used. 

4 (f) BUDGET NEUTRAL IMPLEMENTATION.—The Sec5 retary of Health and Human Services shall make such 

6 payment adjustment to subsection (d) hospitals under the 

7 inpatient prospective payment system under section 1886 

8 of the Social Security Act (42 U.S.C. 1395ww) as may 

9 be necessary to ensure that the implementation of the this 

10 section (including the amendments made by this section) 

11 does not result in an increase in aggregate expenditures 

12 under such section 1886. 

Æ 


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