H. R. 1—359 
that the proportion of eligible professionals who are 
meaningful EHR users (as determined under sub-
section (o)(2)) is less than 75 percent, the applicable 
percent shall be decreased by 1 percentage point from 
the applicable percent in the preceding year, but in 
no case shall the applicable percent be less than 95 
percent. 
‘‘(B) SIGNIFICANT HARDSHIP EXCEPTION.—The Secretary 
may, on a case-by-case basis, exempt an eligible profes-
sional from the application of the payment adjustment 
under subparagraph (A) if the Secretary determines, sub-
ject to annual renewal, that compliance with the require-
ment for being a meaningful EHR user would result in 
a significant hardship, such as in the case of an eligible 
professional who practices in a rural area without sufficient 
Internet access. In no case may an eligible professional 
be granted an exemption under this subparagraph for more 
than 5 years. 
‘‘(C) APPLICATION
OF
PHYSICIAN
REPORTING
SYSTEM 
RULES.—Paragraphs (5), (6), and (8) of subsection (k) shall 
apply for purposes of this paragraph in the same manner 
as they apply for purposes of such subsection. 
‘‘(D) NON-APPLICATION
TO
HOSPITAL-BASED
ELIGIBLE 
PROFESSIONALS.—No payment adjustment may be made 
under subparagraph (A) in the case of hospital-based 
eligible professionals (as defined in subsection (o)(1)(C)(ii)). 
‘‘(E) DEFINITIONS.—For purposes of this paragraph: 
‘‘(i) COVERED PROFESSIONAL SERVICES.—The term 
‘covered professional services’ has the meaning given 
such term in subsection (k)(3). 
‘‘(ii) EHR REPORTING
PERIOD.—The term ‘EHR 
reporting period’ means, with respect to a year, a 
period (or periods) specified by the Secretary. 
‘‘(iii) ELIGIBLE PROFESSIONAL.—The term ‘eligible 
professional’ means a physician, as defined in section 
1861(r).’’. 
(c) APPLICATION TO CERTAIN MA-AFFILIATED ELIGIBLE PROFES-
SIONALS.—Section 1853 of the Social Security Act (42 U.S.C. 1395w– 
23) is amended by adding at the end the following new subsection: 
‘‘(l) APPLICATION OF ELIGIBLE PROFESSIONAL INCENTIVES FOR 
CERTAIN MA ORGANIZATIONS FOR ADOPTION AND MEANINGFUL USE 
OF CERTIFIED EHR TECHNOLOGY.— 
‘‘(1) IN GENERAL.—Subject to paragraphs (3) and (4), in 
the case of a qualifying MA organization, the provisions of 
sections 1848(o) and 1848(a)(7) shall apply with respect to 
eligible professionals described in paragraph (2) of the organiza-
tion who the organization attests under paragraph (6) to be 
meaningful EHR users in a similar manner as they apply 
to eligible professionals under such sections. Incentive pay-
ments under paragraph (3) shall be made to and payment 
adjustments under paragraph (4) shall apply to such qualifying 
organizations. 
‘‘(2) ELIGIBLE PROFESSIONAL DESCRIBED.—With respect to 
a qualifying MA organization, an eligible professional described 
in this paragraph is an eligible professional (as defined for 
purposes of section 1848(o)) who— 
‘‘(A)(i) is employed by the organization; or
H. R. 1—360 
‘‘(ii)(I) is employed by, or is a partner of, an entity 
that through contract with the organization furnishes at 
least 80 percent of the entity’s Medicare patient care serv-
ices to enrollees of such organization; and 
‘‘(II) furnishes at least 80 percent of the professional 
services of the eligible professional covered under this title 
to enrollees of the organization; and 
‘‘(B) furnishes, on average, at least 20 hours per week 
of patient care services. 
‘‘(3) ELIGIBLE PROFESSIONAL INCENTIVE PAYMENTS.— 
‘‘(A) IN GENERAL.—In applying section 1848(o) under 
paragraph (1), instead of the additional payment amount 
under section 1848(o)(1)(A) and subject to subparagraph 
(B), the Secretary may substitute an amount determined 
by the Secretary to the extent feasible and practical to 
be similar to the estimated amount in the aggregate that 
would be payable if payment for services furnished by 
such professionals was payable under part B instead of 
this part. 
‘‘(B) AVOIDING DUPLICATION OF PAYMENTS.— 
‘‘(i) IN GENERAL.—In the case of an eligible profes-
sional described in paragraph (2)— 
‘‘(I) that is eligible for the maximum incentive 
payment under section 1848(o)(1)(A) for the same 
payment period, the payment incentive shall be 
made only under such section and not under this 
subsection; and 
‘‘(II) that is eligible for less than such max-
imum incentive payment for the same payment 
period, the payment incentive shall be made only 
under this subsection and not under section 
1848(o)(1)(A). 
‘‘(ii) METHODS.—In the case of an eligible profes-
sional described in paragraph (2) who is eligible for 
an incentive payment under section 1848(o)(1)(A) but 
is not described in clause (i) for the same payment 
period, the Secretary shall develop a process— 
‘‘(I) to ensure that duplicate payments are not 
made with respect to an eligible professional both 
under 
this 
subsection 
and 
under 
section 
1848(o)(1)(A); and 
‘‘(II) to collect data from Medicare Advantage 
organizations to ensure against such duplicate pay-
ments. 
‘‘(C) FIXED SCHEDULE FOR APPLICATION OF LIMITATION 
ON
INCENTIVE
PAYMENTS
FOR
ALL
ELIGIBLE
PROFES-
SIONALS.—In 
applying 
section 
1848(o)(1)(B)(ii) 
under 
subparagraph (A), in accordance with rules specified by 
the Secretary, a qualifying MA organization shall specify 
a year (not earlier than 2011) that shall be treated as 
the first payment year for all eligible professionals with 
respect to such organization. 
‘‘(4) PAYMENT ADJUSTMENT.— 
‘‘(A) IN GENERAL.—In applying section 1848(a)(7) under 
paragraph (1), instead of the payment adjustment being 
an applicable percent of the fee schedule amount for a 
year under such section, subject to subparagraph (D), the
H. R. 1—361 
payment adjustment under paragraph (1) shall be equal 
to the percent specified in subparagraph (B) for such year 
of the payment amount otherwise provided under this sec-
tion for such year. 
‘‘(B) SPECIFIED PERCENT.—The percent specified under 
this subparagraph for a year is 100 percent minus a 
number of percentage points equal to the product of— 
‘‘(i) the number of percentage points by which the 
applicable percent (under section 1848(a)(7)(A)(ii)) for 
the year is less than 100 percent; and 
‘‘(ii) the Medicare physician expenditure proportion 
specified in subparagraph (C) for the year. 
‘‘(C) MEDICARE PHYSICIAN EXPENDITURE PROPORTION.— 
The Medicare physician expenditure proportion under this 
subparagraph for a year is the Secretary’s estimate of 
the proportion, of the expenditures under parts A and 
B that are not attributable to this part, that are attrib-
utable to expenditures for physicians’ services. 
‘‘(D) APPLICATION OF PAYMENT ADJUSTMENT.—In the 
case that a qualifying MA organization attests that not 
all eligible professionals of the organization are meaningful 
EHR users with respect to a year, the Secretary shall 
apply the payment adjustment under this paragraph based 
on the proportion of all such eligible professionals of the 
organization that are not meaningful EHR users for such 
year. 
‘‘(5) QUALIFYING MA ORGANIZATION DEFINED.—In this sub-
section and subsection (m), the term ‘qualifying MA organiza-
tion’ means a Medicare Advantage organization that is orga-
nized as a health maintenance organization (as defined in sec-
tion 2791(b)(3) of the Public Health Service Act). 
‘‘(6) MEANINGFUL EHR USER ATTESTATION.—For purposes 
of this subsection and subsection (m), a qualifying MA organiza-
tion shall submit an attestation, in a form and manner specified 
by the Secretary which may include the submission of such 
attestation as part of submission of the initial bid under section 
1854(a)(1)(A)(iv), identifying— 
‘‘(A) whether each eligible professional described in 
paragraph (2), with respect to such organization is a mean-
ingful EHR user (as defined in section 1848(o)(2)) for a 
year specified by the Secretary; and 
‘‘(B) whether each eligible hospital described in sub-
section (m)(1), with respect to such organization, is a mean-
ingful EHR user (as defined in section 1886(n)(3)) for an 
applicable period specified by the Secretary. 
‘‘(7) POSTING ON WEBSITE.—The Secretary shall post on 
the Internet website of the Centers for Medicare & Medicaid 
Services, in an easily understandable format, a list of the 
names, business addresses, and business phone numbers of— 
‘‘(A) each qualifying MA organization receiving an 
incentive payment under this subsection for eligible profes-
sionals of the organization; and 
‘‘(B) the eligible professionals of such organization for 
which such incentive payment is based. 
‘‘(8) LIMITATION ON REVIEW.—There shall be no administra-
tive or judicial review under section 1869, section 1878, or 
otherwise, of—
H. R. 1—362 
‘‘(A) the methodology and standards for determining 
payment amounts and payment adjustments under this 
subsection, including avoiding duplication of payments 
under paragraph (3)(B) and the specification of rules for 
the fixed schedule for application of limitation on incentive 
payments for all eligible professionals under paragraph 
(3)(C); 
‘‘(B) the methodology and standards for determining 
eligible professionals under paragraph (2); and 
‘‘(C) the methodology and standards for determining 
a meaningful EHR user under section 1848(o)(2), including 
specification of the means of demonstrating meaningful 
EHR use under section 1848(o)(3)(C) and selection of meas-
ures under section 1848(o)(3)(B).’’. 
(d) STUDY AND REPORT RELATING TO MA ORGANIZATIONS.— 
(1) STUDY.—The Secretary of Health and Human Services 
shall conduct a study on the extent to which and manner 
in which payment incentives and adjustments (such as under 
sections 1848(o) and 1848(a)(7) of the Social Security Act) could 
be made available to professionals, as defined in 1861(r), who 
are not eligible for HIT incentive payments under section 
1848(o) and receive payments for Medicare patient services 
nearly-exclusively through contractual arrangements with one 
or more Medicare Advantage organizations, or an intermediary 
organization or organizations with contracts with Medicare 
Advantage organizations. Such study shall assess approaches 
for measuring meaningful use of qualified EHR technology 
among such professionals and mechanisms for delivering incen-
tives and adjustments to those professionals, including through 
incentive payments and adjustments through Medicare Advan-
tage organizations or intermediary organizations. 
(2) REPORT.—Not later than 120 days after the date of 
the enactment of this Act, the Secretary of Health and Human 
Services shall submit to Congress a report on the findings 
and the conclusions of the study conducted under paragraph 
(1), together with recommendations for such legislation and 
administrative action as the Secretary determines appropriate. 
(e) CONFORMING AMENDMENTS.—Section 1853 of the Social 
Security Act (42 U.S.C. 1395w–23) is amended— 
(1) in subsection (a)(1)(A), by striking ‘‘and (i)’’ and inserting 
‘‘(i), and (l)’’; 
(2) in subsection (c)— 
(A) in paragraph (1)(D)(i), by striking ‘‘section 1886(h)’’ 
and inserting ‘‘sections 1848(o) and 1886(h)’’; and 
(B) in paragraph (6)(A), by inserting after ‘‘under part 
B,’’ the following: ‘‘excluding expenditures attributable to 
subsections (a)(7) and (o) of section 1848,’’; and 
(3) in subsection (f), by inserting ‘‘and for payments under 
subsection (l)’’ after ‘‘with the organization’’. 
(f) CONFORMING AMENDMENTS TO E-PRESCRIBING.— 
(1) Section 1848(a)(5)(A) of the Social Security Act (42 
U.S.C. 1395w–4(a)(5)(A)) is amended— 
(A) in clause (i), by striking ‘‘or any subsequent year’’ 
and inserting ‘‘, 2013 or 2014’’; and 
(B) in clause (ii), by striking ‘‘and each subsequent 
year’’.
H. R. 1—363 
(2) Section 1848(m)(2) of such Act (42 U.S.C. 1395w– 
4(m)(2)) is amended— 
(A) in subparagraph (A), by striking ‘‘For 2009’’ and 
inserting ‘‘Subject to subparagraph (D), for 2009’’; and 
(B) by adding at the end the following new subpara-
graph: 
‘‘(D) LIMITATION WITH RESPECT TO EHR INCENTIVE PAY-
MENTS.—The provisions of this paragraph shall not apply 
to an eligible professional (or, in the case of a group practice 
under paragraph (3)(C), to the group practice) if, for the 
EHR reporting period the eligible professional (or group 
practice) receives an incentive payment under subsection 
(o)(1)(A) with respect to a certified EHR technology (as 
defined in subsection (o)(4)) that has the capability of elec-
tronic prescribing.’’. 
SEC. 4102. INCENTIVES FOR HOSPITALS. 
(a) INCENTIVE PAYMENT.— 
(1) IN GENERAL.—Section 1886 of the Social Security Act 
(42 U.S.C. 1395ww) is amended by adding at the end the 
following new subsection: 
‘‘(n) INCENTIVES FOR ADOPTION AND MEANINGFUL USE OF CER-
TIFIED EHR TECHNOLOGY.— 
‘‘(1) IN GENERAL.—Subject to the succeeding provisions of 
this subsection, with respect to inpatient hospital services fur-
nished by an eligible hospital during a payment year (as defined 
in paragraph (2)(G)), if the eligible hospital is a meaningful 
EHR user (as determined under paragraph (3)) for the EHR 
reporting period with respect to such year, in addition to the 
amount otherwise paid under this section, there also shall 
be paid to the eligible hospital, from the Federal Hospital 
Insurance Trust Fund established under section 1817, an 
amount equal to the applicable amount specified in paragraph 
(2)(A) for the hospital for such payment year. 
‘‘(2) PAYMENT AMOUNT.— 
‘‘(A) IN GENERAL.—Subject to the succeeding subpara-
graphs of this paragraph, the applicable amount specified 
in this subparagraph for an eligible hospital for a payment 
year is equal to the product of the following: 
‘‘(i) INITIAL AMOUNT.—The sum of— 
‘‘(I) the base amount specified in subparagraph 
(B); plus 
‘‘(II) the discharge related amount specified 
in subparagraph (C) for a 12-month period selected 
by the Secretary with respect to such payment 
year. 
‘‘(ii) MEDICARE
SHARE.—The Medicare share as 
specified in subparagraph (D) for the eligible hospital 
for a period selected by the Secretary with respect 
to such payment year. 
‘‘(iii) TRANSITION
FACTOR.—The transition factor 
specified in subparagraph (E) for the eligible hospital 
for the payment year. 
‘‘(B) BASE AMOUNT.—The base amount specified in this 
subparagraph is $2,000,000. 
‘‘(C) DISCHARGE
RELATED
AMOUNT.—The discharge 
related amount specified in this subparagraph for a 12-
H. R. 1—367 
‘‘(ii) USE OF PART D DATA.—Notwithstanding sec-
tions 1860D–15(d)(2)(B) and 1860D–15(f)(2), the Sec-
retary may use data regarding drug claims submitted 
for purposes of section 1860D–15 that are necessary 
for purposes of subparagraph (A). 
‘‘(4) APPLICATION.— 
‘‘(A) LIMITATIONS
ON
REVIEW.—There shall be no 
administrative or judicial review under section 1869, sec-
tion 1878, or otherwise, of— 
‘‘(i) the methodology and standards for determining 
payment amounts under this subsection and payment 
adjustments under subsection (b)(3)(B)(ix), including 
selection of periods under paragraph (2) for deter-
mining, and making estimates or using proxies of, 
discharges under paragraph (2)(C) and inpatient-bed- 
days, hospital charges, charity charges, and Medicare 
share under paragraph (2)(D); 
‘‘(ii) the methodology and standards for deter-
mining a meaningful EHR user under paragraph (3), 
including selection of measures under paragraph (3)(B), 
specification of the means of demonstrating meaningful 
EHR use under paragraph (3)(C), and the hardship 
exception under subsection (b)(3)(B)(ix)(II); and 
‘‘(iii) the specification of EHR reporting periods 
under paragraph (6)(B) and the selection of the form 
of payment under paragraph (2)(F). 
‘‘(B) POSTING ON WEBSITE.—The Secretary shall post 
on the Internet website of the Centers for Medicare & 
Medicaid Services, in an easily understandable format, a 
list of the names of the eligible hospitals that are meaning-
ful EHR users under this subsection or subsection 
(b)(3)(B)(ix) (and a list of the names of critical access hos-
pitals to which paragraph (3) or (4) of section 1814(l) 
applies), and other relevant data as determined appropriate 
by the Secretary. The Secretary shall ensure that an 
eligible hospital (or critical access hospital) has the oppor-
tunity to review the other relevant data that are to be 
made public with respect to the hospital (or critical access 
hospital) prior to such data being made public. 
‘‘(5) CERTIFIED EHR TECHNOLOGY DEFINED.—The term ‘cer-
tified EHR technology’ has the meaning given such term in 
section 1848(o)(4). 
‘‘(6) DEFINITIONS.—For purposes of this subsection: 
‘‘(A) 
EHR 
REPORTING
PERIOD.—The 
term 
‘EHR 
reporting period’ means, with respect to a payment year, 
any period (or periods) as specified by the Secretary. 
‘‘(B) ELIGIBLE HOSPITAL.—The term ‘eligible hospital’ 
means a subsection (d) hospital.’’. 
(2) CRITICAL
ACCESS
HOSPITALS.—Section 1814(l) of the 
Social Security Act (42 U.S.C. 1395f(l)) is amended— 
(A) in paragraph (1), by striking ‘‘paragraph (2)’’ and 
inserting ‘‘the subsequent paragraphs of this subsection’’; 
and 
(B) by adding at the end the following new paragraph: 
‘‘(3)(A) The following rules shall apply in determining payment 
and reasonable costs under paragraph (1) for costs described in 
subparagraph (C) for a critical access hospital that would be a
H. R. 1—368 
meaningful EHR user (as would be determined under paragraph 
(3) of section 1886(n)) for an EHR reporting period for a cost 
reporting period beginning during a payment year if such critical 
access hospital was treated as an eligible hospital under such 
section: 
‘‘(i) The Secretary shall compute reasonable costs by 
expensing such costs in a single payment year and not depre-
ciating such costs over a period of years (and shall include 
as costs with respect to cost reporting periods beginning during 
a payment year costs from previous cost reporting periods to 
the extent they have not been fully depreciated as of the period 
involved). 
‘‘(ii) There shall be substituted for the Medicare share 
that would otherwise be applied under paragraph (1) a percent 
(not to exceed 100 percent) equal to the sum of— 
‘‘(I) the Medicare share (as would be specified under 
paragraph (2)(D) of section 1886(n)) for such critical access 
hospital if such critical access hospital was treated as an 
eligible hospital under such section; and 
‘‘(II) 20 percentage points. 
‘‘(B) The payment under this paragraph with respect to a crit-
ical access hospital shall be paid through a prompt interim payment 
(subject to reconciliation) after submission and review of such 
information (as specified by the Secretary) necessary to make such 
payment, including information necessary to apply this paragraph. 
In no case may payment under this paragraph be made with respect 
to a cost reporting period beginning during a payment year after 
2015 and in no case may a critical access hospital receive payment 
under this paragraph with respect to more than 4 consecutive 
payment years. 
‘‘(C) The costs described in this subparagraph are costs for 
the purchase of certified EHR technology to which purchase depre-
ciation (excluding interest) would apply if payment was made under 
paragraph (1) and not under this paragraph. 
‘‘(D) For purposes of this paragraph, paragraph (4), and para-
graph (5), the terms ‘certified EHR technology’, ‘eligible hospital’, 
‘EHR reporting period’, and ‘payment year’ have the meanings 
given such terms in sections 1886(n).’’. 
(b) INCENTIVE MARKET BASKET ADJUSTMENT.— 
(1) IN GENERAL.—Section 1886(b)(3)(B) of the Social Secu-
rity Act (42 U.S.C. 1395ww(b)(3)(B)) is amended— 
(A) in clause (viii)(I), by inserting ‘‘(or, beginning with 
fiscal year 2015, by one-quarter)’’ after ‘‘2.0 percentage 
points’’; and 
(B) by adding at the end the following new clause: 
‘‘(ix)(I) For purposes of clause (i) for fiscal year 2015 and each 
subsequent fiscal year, in the case of an eligible hospital (as defined 
in subsection (n)(6)(A)) that is not a meaningful EHR user (as 
defined in subsection (n)(3)) for an EHR reporting period for such 
fiscal year, three-quarters of the applicable percentage increase 
otherwise applicable under clause (i) for such fiscal year shall 
be reduced by 331⁄3 percent for fiscal year 2015, 662⁄3 percent 
for fiscal year 2016, and 100 percent for fiscal year 2017 and 
each subsequent fiscal year. Such reduction shall apply only with 
respect to the fiscal year involved and the Secretary shall not 
take into account such reduction in computing the applicable 
percentage increase under clause (i) for a subsequent fiscal year.
H. R. 1—369 
‘‘(II) The Secretary may, on a case-by-case basis, exempt a 
subsection (d) hospital from the application of subclause (I) with 
respect to a fiscal year if the Secretary determines, subject to 
annual renewal, that requiring such hospital to be a meaningful 
EHR user during such fiscal year would result in a significant 
hardship, such as in the case of a hospital in a rural area without 
sufficient Internet access. In no case may a hospital be granted 
an exemption under this subclause for more than 5 years. 
‘‘(III) For fiscal year 2015 and each subsequent fiscal year, 
a State in which hospitals are paid for services under section 
1814(b)(3) shall adjust the payments to each subsection (d) hospital 
in the State that is not a meaningful EHR user (as defined in 
subsection (n)(3)) in a manner that is designed to result in an 
aggregate reduction in payments to hospitals in the State that 
is equivalent to the aggregate reduction that would have occurred 
if payments had been reduced to each subsection (d) hospital in 
the State in a manner comparable to the reduction under the 
previous provisions of this clause. The State shall report to the 
Secretary the methodology it will use to make the payment adjust-
ment under the previous sentence. 
‘‘(IV) For purposes of this clause, the term ‘EHR reporting 
period’ means, with respect to a fiscal year, any period (or periods) 
as specified by the Secretary.’’. 
(2) CRITICAL
ACCESS
HOSPITALS.—Section 1814(l) of the 
Social Security Act (42 U.S.C. 1395f(l)), as amended by sub-
section (a)(2), is further amended by adding at the end the 
following new paragraphs: 
‘‘(4)(A) Subject to subparagraph (C), for cost reporting periods 
beginning in fiscal year 2015 or a subsequent fiscal year, in the 
case of a critical access hospital that is not a meaningful EHR 
user (as would be determined under paragraph (3) of section 1886(n) 
if such critical access hospital was treated as an eligible hospital 
under such section) for an EHR reporting period with respect to 
such fiscal year, paragraph (1) shall be applied by substituting 
the applicable percent under subparagraph (B) for the percent 
described in such paragraph (1). 
‘‘(B) The percent described in this subparagraph is— 
‘‘(i) for fiscal year 2015, 100.66 percent; 
‘‘(ii) for fiscal year 2016, 100.33 percent; and 
‘‘(iii) for fiscal year 2017 and each subsequent fiscal year, 
100 percent. 
‘‘(C) The provisions of subclause (II) of section 1886(b)(3)(B)(ix) 
shall apply with respect to subparagraph (A) for a critical access 
hospital with respect to a cost reporting period beginning in a 
fiscal year in the same manner as such subclause applies with 
respect to subclause (I) of such section for a subsection (d) hospital 
with respect to such fiscal year. 
‘‘(5) There shall be no administrative or judicial review under 
section 1869, section 1878, or otherwise, of— 
‘‘(A) the methodology and standards for determining the 
amount of payment and reasonable cost under paragraph (3) 
and payment adjustments under paragraph (4), including selec-
tion of periods under section 1886(n)(2) for determining, and 
making estimates or using proxies of, inpatient-bed-days, hos-
pital charges, charity charges, and Medicare share under 
subparagraph (D) of section 1886(n)(2);
H. R. 1—370 
‘‘(B) the methodology and standards for determining a 
meaningful EHR user under section 1886(n)(3) as would apply 
if the hospital was treated as an eligible hospital under section 
1886(n), and the hardship exception under paragraph (4)(C); 
‘‘(C) the specification of EHR reporting periods under sec-
tion 1886(n)(6)(B) as applied under paragraphs (3) and (4); 
and 
‘‘(D) the identification of costs for purposes of paragraph 
(3)(C).’’. 
(c) APPLICATION
TO CERTAIN MA-AFFILIATED ELIGIBLE HOS-
PITALS.—Section 1853 of the Social Security Act (42 U.S.C. 1395w– 
23), as amended by section 4101(c), is further amended by adding 
at the end the following new subsection: 
‘‘(m) APPLICATION OF ELIGIBLE HOSPITAL INCENTIVES FOR CER-
TAIN MA ORGANIZATIONS
FOR ADOPTION
AND MEANINGFUL USE 
OF CERTIFIED EHR TECHNOLOGY.— 
‘‘(1) APPLICATION.—Subject to paragraphs (3) and (4), in 
the case of a qualifying MA organization, the provisions of 
sections 1886(n) and 1886(b)(3)(B)(ix) shall apply with respect 
to eligible hospitals described in paragraph (2) of the organiza-
tion which the organization attests under subsection (l)(6) to 
be meaningful EHR users in a similar manner as they apply 
to eligible hospitals under such sections. Incentive payments 
under paragraph (3) shall be made to and payment adjustments 
under paragraph (4) shall apply to such qualifying organiza-
tions. 
‘‘(2) ELIGIBLE
HOSPITAL
DESCRIBED.—With respect to a 
qualifying MA organization, an eligible hospital described in 
this paragraph is an eligible hospital (as defined in section 
1886(n)(6)(A)) that is under common corporate governance with 
such organization and serves individuals enrolled under an 
MA plan offered by such organization. 
‘‘(3) ELIGIBLE HOSPITAL INCENTIVE PAYMENTS.— 
‘‘(A) IN GENERAL.—In applying section 1886(n)(2) under 
paragraph (1), instead of the additional payment amount 
under section 1886(n)(2), there shall be substituted an 
amount determined by the Secretary to be similar to the 
estimated amount in the aggregate that would be payable 
if payment for services furnished by such hospitals was 
payable under part A instead of this part. In implementing 
the previous sentence, the Secretary— 
‘‘(i) shall, insofar as data to determine the dis-
charge related amount under section 1886(n)(2)(C) for 
an eligible hospital are not available to the Secretary, 
use such alternative data and methodology to estimate 
such discharge related amount as the Secretary deter-
mines appropriate; and 
‘‘(ii) shall, insofar as data to determine the medi-
care share described in section 1886(n)(2)(D) for an 
eligible hospital are not available to the Secretary, 
use such alternative data and methodology to estimate 
such share, which data and methodology may include 
use of the inpatient-bed-days (or discharges) with 
respect to an eligible hospital during the appropriate 
period which are attributable to both individuals for
H. R. 1—371 
whom payment may be made under part A or individ-
uals enrolled in an MA plan under a Medicare Advan-
tage organization under this part as a proportion of 
the estimated total number of patient-bed-days (or dis-
charges) with respect to such hospital during such 
period. 
‘‘(B) AVOIDING DUPLICATION OF PAYMENTS.— 
‘‘(i) IN GENERAL.—In the case of a hospital that 
for a payment year is an eligible hospital described 
in paragraph (2) and for which at least one-third of 
their discharges (or bed-days) of Medicare patients for 
the year are covered under part A, payment for the 
payment year shall be made only under section 1886(n) 
and not under this subsection. 
‘‘(ii) METHODS.—In the case of a hospital that is 
an eligible hospital described in paragraph (2) and 
also is eligible for an incentive payment under section 
1886(n) but is not described in clause (i) for the same 
payment period, the Secretary shall develop a 
process— 
‘‘(I) to ensure that duplicate payments are not 
made with respect to an eligible hospital both 
under this subsection and under section 1886(n); 
and 
‘‘(II) to collect data from Medicare Advantage 
organizations to ensure against such duplicate pay-
ments. 
‘‘(4) PAYMENT ADJUSTMENT.— 
‘‘(A) Subject to paragraph (3), in the case of a qualifying 
MA organization (as defined in section 1853(l)(5)), if, 
according to the attestation of the organization submitted 
under subsection (l)(6) for an applicable period, one or 
more eligible hospitals (as defined in section 1886(n)(6)(A)) 
that are under common corporate governance with such 
organization and that serve individuals enrolled under a 
plan offered by such organization are not meaningful EHR 
users (as defined in section 1886(n)(3)) with respect to 
a period, the payment amount payable under this section 
for such organization for such period shall be the percent 
specified in subparagraph (B) for such period of the pay-
ment amount otherwise provided under this section for 
such period. 
‘‘(B) SPECIFIED PERCENT.—The percent specified under 
this subparagraph for a year is 100 percent minus a 
number of percentage points equal to the product of— 
‘‘(i) the number of the percentage point reduction 
effected under section 1886(b)(3)(B)(ix)(I) for the period; 
and 
‘‘(ii) the Medicare hospital expenditure proportion 
specified in subparagraph (C) for the year. 
‘‘(C) MEDICARE HOSPITAL EXPENDITURE PROPORTION.— 
The Medicare hospital expenditure proportion under this 
subparagraph for a year is the Secretary’s estimate of 
the proportion, of the expenditures under parts A and 
B that are not attributable to this part, that are attrib-
utable to expenditures for inpatient hospital services.
H. R. 1—372 
‘‘(D) APPLICATION OF PAYMENT ADJUSTMENT.—In the 
case that a qualifying MA organization attests that not 
all eligible hospitals are meaningful EHR users with 
respect to an applicable period, the Secretary shall apply 
the payment adjustment under this paragraph based on 
a methodology specified by the Secretary, taking into 
account the proportion of such eligible hospitals, or dis-
charges from such hospitals, that are not meaningful EHR 
users for such period. 
‘‘(5) POSTING ON WEBSITE.—The Secretary shall post on 
the Internet website of the Centers for Medicare & Medicaid 
Services, in an easily understandable format— 
‘‘(A) a list of the names, business addresses, and busi-
ness phone numbers of each qualifying MA organization 
receiving an incentive payment under this subsection for 
eligible hospitals described in paragraph (2); and 
‘‘(B) a list of the names of the eligible hospitals for 
which such incentive payment is based. 
‘‘(6) LIMITATIONS ON REVIEW.—There shall be no adminis-
trative or judicial review under section 1869, section 1878, 
or otherwise, of— 
‘‘(A) the methodology and standards for determining 
payment amounts and payment adjustments under this 
subsection, including avoiding duplication of payments 
under paragraph (3)(B); 
‘‘(B) the methodology and standards for determining 
eligible hospitals under paragraph (2); and 
‘‘(C) the methodology and standards for determining 
a meaningful EHR user under section 1886(n)(3), including 
specification of the means of demonstrating meaningful 
EHR use under subparagraph (C) of such section and selec-
tion of measures under subparagraph (B) of such section.’’. 
(d) CONFORMING AMENDMENTS.— 
(1) Section 1814(b) of the Social Security Act (42 U.S.C. 
1395f(b)) is amended— 
(A) in paragraph (3), in the matter preceding subpara-
graph 
(A), 
by 
inserting 
‘‘, 
subject 
to 
section 
1886(d)(3)(B)(ix)(III),’’ after ‘‘then’’; and 
(B) by adding at the end the following: ‘‘For purposes 
of applying paragraph (3), there shall be taken into account 
incentive payments, and payment adjustments under sub-
section (b)(3)(B)(ix) or (n) of section 1886.’’. 
(2) Section 1851(i)(1) of the Social Security Act (42 U.S.C. 
1395w–21(i)(1)) is amended by striking ‘‘and 1886(h)(3)(D)’’ and 
inserting ‘‘1886(h)(3)(D), and 1853(m)’’. 
(3) Section 1853 of the Social Security Act (42 U.S.C. 
1395w–23), as amended by section 4101(d), is amended— 
(A) in subsection (c)— 
(i) in paragraph (1)(D)(i), by striking ‘‘1848(o)’’ and 
inserting ‘‘, 1848(o), and 1886(n)’’; and 
(ii) in paragraph (6)(A), by inserting ‘‘and sub-
sections (b)(3)(B)(ix) and (n) of section 1886’’ after ‘‘sec-
tion 1848’’; and 
(B) in subsection (f), by inserting ‘‘and subsection (m)’’ 
after ‘‘under subsection (l)’’.
H. R. 1—373 
SEC. 4103. TREATMENT OF PAYMENTS AND SAVINGS; IMPLEMENTA-
TION FUNDING. 
(a) PREMIUM HOLD HARMLESS.— 
(1) IN GENERAL.—Section 1839(a)(1) of the Social Security 
Act (42 U.S.C. 1395r(a)(1)) is amended by adding at the end 
the following: ‘‘In applying this paragraph there shall not be 
taken into account additional payments under section 1848(o) 
and section 1853(l)(3) and the Government contribution under 
section 1844(a)(3).’’. 
(2) PAYMENT.—Section 1844(a) of such Act (42 U.S.C. 
1395w(a)) is amended— 
(A) in paragraph (2), by striking the period at the 
end and inserting ‘‘; plus’’; and 
(B) by adding at the end the following new paragraph: 
‘‘(3) a Government contribution equal to the amount of 
payment incentives payable under sections 1848(o) and 
1853(l)(3).’’. 
(b) MEDICARE IMPROVEMENT FUND.—Section 1898 of the Social 
Security Act (42 U.S.C. 1395iii), as added by section 7002(a) of 
the Supplemental Appropriations Act, 2008 (Public Law 110–252) 
and as amended by section 188(a)(2) of the Medicare Improvements 
for Patients and Providers Act of 2008 (Public Law 110–275; 122 
Stat. 2589) and by section 6 of the QI Program Supplemental 
Funding Act of 2008, is amended— 
(1) in subsection (a)— 
(A) by inserting ‘‘medicare’’ before ‘‘fee-for-service’’; and 
(B) by inserting before the period at the end the fol-
lowing: ‘‘including, but not limited to, an increase in the 
conversion factor under section 1848(d) to address, in whole 
or in part, any projected shortfall in the conversion factor 
for 2014 relative to the conversion factor for 2008 and 
adjustments to payments for items and services furnished 
by providers of services and suppliers under such original 
medicare fee-for-service program’’; and 
(2) in subsection (b)— 
(A) in paragraph (1), by striking ‘‘during fiscal year 
2014,’’ and all that follows and inserting the following: 
‘‘during— 
‘‘(A) fiscal year 2014, $22,290,000,000; and 
‘‘(B) fiscal year 2020 and each subsequent fiscal year, 
the Secretary’s estimate, as of July 1 of the fiscal year, 
of the aggregate reduction in expenditures under this title 
during the preceding fiscal year directly resulting from 
the 
reduction 
in 
payment 
amounts 
under 
sections 
1848(a)(7), 1853(l)(4), 1853(m)(4), and 1886(b)(3)(B)(ix).’’; 
and 
(B) by adding at the end the following new paragraph: 
‘‘(4) NO
EFFECT
ON
PAYMENTS
IN
SUBSEQUENT
YEARS.— 
In the case that expenditures from the Fund are applied to, 
or otherwise affect, a payment rate for an item or service 
under this title for a year, the payment rate for such item 
or service shall be computed for a subsequent year as if such 
application or effect had never occurred.’’. 
(c) IMPLEMENTATION FUNDING.—In addition to funds otherwise 
available, out of any funds in the Treasury not otherwise appro-
priated, there are appropriated to the Secretary of Health and 
Human Services for the Center for Medicare & Medicaid Services
H. R. 1—374 
Program Management Account, $100,000,000 for each of fiscal years 
2009 through 2015 and $45,000,000 for fiscal year 2016, which 
shall be available for purposes of carrying out the provisions of 
(and amendments made by) this subtitle. Amounts appropriated 
under this subsection for a fiscal year shall be available until 
expended. 
SEC. 4104. STUDIES AND REPORTS ON HEALTH INFORMATION TECH-
NOLOGY. 
(a) STUDY
AND REPORT
ON APPLICATION
OF EHR PAYMENT 
INCENTIVES FOR PROVIDERS NOT RECEIVING OTHER INCENTIVE PAY-
MENTS.— 
(1) STUDY.— 
(A) IN GENERAL.—The Secretary of Health and Human 
Services shall conduct a study to determine the extent 
to which and manner in which payment incentives (such 
as under title XVIII or XIX of the Social Security Act) 
and other funding for purposes of implementing and using 
certified EHR technology (as defined in section 1848(o)(4) 
of the Social Security Act, as added by section 4101(a)) 
should be made available to health care providers who 
are receiving minimal or no payment incentives or other 
funding under this Act, under title XIII of division A, 
under title XVIII or XIX of such Act, or otherwise, for 
such purposes. 
(B) DETAILS OF STUDY.—Such study shall include an 
examination of— 
(i) the adoption rates of certified EHR technology 
by such health care providers; 
(ii) the clinical utility of such technology by such 
health care providers; 
(iii) whether the services furnished by such health 
care providers are appropriate for or would benefit 
from the use of such technology; 
(iv) the extent to which such health care providers 
work in settings that might otherwise receive an incen-
tive payment or other funding under this Act, under 
title XIII of division A, under title XVIII or XIX of 
the Social Security Act, or otherwise; 
(v) the potential costs and the potential benefits 
of making payment incentives and other funding avail-
able to such health care providers; and 
(vi) any other issues the Secretary deems to be 
appropriate. 
(2) REPORT.—Not later than June 30, 2010, the Secretary 
shall submit to Congress a report on the findings and conclu-
sions of the study conducted under paragraph (1). 
(b) STUDY
AND REPORT
ON AVAILABILITY
OF OPEN SOURCE 
HEALTH INFORMATION TECHNOLOGY SYSTEMS.— 
(1) STUDY.— 
(A) IN GENERAL.—The Secretary of Health and Human 
Services shall, in consultation with the Under Secretary 
for Health of the Veterans Health Administration, the 
Director of the Indian Health Service, the Secretary of 
Defense, the Director of the Agency for Healthcare 
Research and Quality, the Administrator of the Health 
Resources and Services Administration, and the Chairman
H. R. 1—375 
of the Federal Communications Commission, conduct a 
study on— 
(i) the current availability of open source health 
information technology systems to Federal safety net 
providers (including small, rural providers); 
(ii) the total cost of ownership of such systems 
in comparison to the cost of proprietary commercial 
products available; 
(iii) the ability of such systems to respond to the 
needs of, and be applied to, various populations 
(including children and disabled individuals); and 
(iv) the capacity of such systems to facilitate inter-
operability. 
(B) CONSIDERATIONS.—In conducting the study under 
subparagraph (A), the Secretary of Health and Human 
Services shall take into account the circumstances of 
smaller health care providers, health care providers located 
in rural or other medically underserved areas, and safety 
net providers that deliver a significant level of health care 
to uninsured individuals, Medicaid beneficiaries, SCHIP 
beneficiaries, and other vulnerable individuals. 
(2) REPORT.—Not later than October 1, 2010, the Secretary 
of Health and Human Services shall submit to Congress a 
report on the findings and the conclusions of the study con-
ducted under paragraph (1), together with recommendations 
for such legislation and administrative action as the Secretary 
determines appropriate. 
Subtitle B—Medicaid Incentives 
SEC. 4201. MEDICAID PROVIDER HIT ADOPTION AND OPERATION PAY-
MENTS; IMPLEMENTATION FUNDING. 
(a) IN GENERAL.—Section 1903 of the Social Security Act (42 
U.S.C. 1396b) is amended— 
(1) in subsection (a)(3)— 
(A) by striking ‘‘and’’ at the end of subparagraph (D); 
(B) by striking ‘‘plus’’ at the end of subparagraph (E) 
and inserting ‘‘and’’; and 
(C) by adding at the end the following new subpara-
graph: 
‘‘(F)(i) 100 percent of so much of the sums expended 
during such quarter as are attributable to payments to 
Medicaid providers described in subsection (t)(1) to encour-
age the adoption and use of certified EHR technology; 
and 
‘‘(ii) 90 percent of so much of the sums expended during 
such quarter as are attributable to payments for reasonable 
administrative expenses related to the administration of 
payments described in clause (i) if the State meets the 
condition described in subsection (t)(9); plus’’; and 
(2) by inserting after subsection (s) the following new sub-
section: 
‘‘(t)(1) For purposes of subsection (a)(3)(F), the payments 
described in this paragraph to encourage the adoption and use 
of certified EHR technology are payments made by the State in 
accordance with this subsection —
H. R. 1—376 
‘‘(A) to Medicaid providers described in paragraph (2)(A) 
not in excess of 85 percent of net average allowable costs 
(as defined in paragraph (3)(E)) for certified EHR technology 
(and support services including maintenance and training that 
is for, or is necessary for the adoption and operation of, such 
technology) with respect to such providers; and 
‘‘(B) to Medicaid providers described in paragraph (2)(B) 
not in excess of the maximum amount permitted under para-
graph (5) for the provider involved. 
‘‘(2) In this subsection and subsection (a)(3)(F), the term ‘Med-
icaid provider’ means— 
‘‘(A) an eligible professional (as defined in paragraph 
(3)(B))— 
‘‘(i) who is not hospital-based and has at least 30 
percent of the professional’s patient volume (as estimated 
in accordance with a methodology established by the Sec-
retary) attributable to individuals who are receiving med-
ical assistance under this title; 
‘‘(ii) who is not described in clause (i), who is a pediatri-
cian, who is not hospital-based, and who has at least 20 
percent of the professional’s patient volume (as estimated 
in accordance with a methodology established by the Sec-
retary) attributable to individuals who are receiving med-
ical assistance under this title; and 
‘‘(iii) who practices predominantly in a Federally quali-
fied health center or rural health clinic and has at least 
30 percent of the professional’s patient volume (as esti-
mated in accordance with a methodology established by 
the Secretary) attributable to needy individuals (as defined 
in paragraph (3)(F)); and 
‘‘(B)(i) a children’s hospital, or 
‘‘(ii) an acute-care hospital that is not described in clause 
(i) and that has at least 10 percent of the hospital’s patient 
volume (as estimated in accordance with a methodology estab-
lished by the Secretary) attributable to individuals who are 
receiving medical assistance under this title. 
An eligible professional shall not qualify as a Medicaid provider 
under this subsection unless any right to payment under sections 
1848(o) and 1853(l) with respect to the eligible professional has 
been waived in a manner specified by the Secretary. For purposes 
of calculating patient volume under subparagraph (A)(iii), insofar 
as it is related to uncompensated care, the Secretary may require 
the adjustment of such uncompensated care data so that it would 
be an appropriate proxy for charity care, including a downward 
adjustment to eliminate bad debt data from uncompensated care. 
In applying subparagraphs (A) and (B)(ii), the methodology estab-
lished by the Secretary for patient volume shall include individuals 
enrolled in a Medicaid managed care plan (under section 1903(m) 
or section 1932). 
‘‘(3) In this subsection and subsection (a)(3)(F): 
‘‘(A) The term ‘certified EHR technology’ means a qualified 
electronic health record (as defined in 3000(13) of the Public 
Health Service Act) that is certified pursuant to section 
3001(c)(5) of such Act as meeting standards adopted under 
section 3004 of such Act that are applicable to the type of 
record involved (as determined by the Secretary, such as an
H. R. 1—377 
ambulatory electronic health record for office-based physicians 
or an inpatient hospital electronic health record for hospitals). 
‘‘(B) The term ‘eligible professional’ means a— 
‘‘(i) physician; 
‘‘(ii) dentist; 
‘‘(iii) certified nurse mid-wife; 
‘‘(iv) nurse practitioner; and 
‘‘(v) physician assistant insofar as the assistant is prac-
ticing in a rural health clinic that is led by a physician 
assistant or is practicing in a Federally qualified health 
center that is so led. 
‘‘(C) The term ‘average allowable costs’ means, with respect 
to certified EHR technology of Medicaid providers described 
in paragraph (2)(A) for— 
‘‘(i) the first year of payment with respect to such 
a provider, the average costs for the purchase and initial 
implementation or upgrade of such technology (and support 
services including training that is for, or is necessary for 
the adoption and initial operation of, such technology) for 
such providers, as determined by the Secretary based upon 
studies conducted under paragraph (4)(C); and 
‘‘(ii) a subsequent year of payment with respect to 
such a provider, the average costs not described in clause 
(i) relating to the operation, maintenance, and use of such 
technology for such providers, as determined by the Sec-
retary based upon studies conducted under paragraph 
(4)(C). 
‘‘(D) The term ‘hospital-based’ means, with respect to an 
eligible professional, a professional (such as a pathologist, 
anesthesiologist, or emergency physician) who furnishes 
substantially all of the individual’s professional services in a 
hospital setting (whether inpatient or outpatient) and through 
the use of the facilities and equipment, including qualified 
electronic health records, of the hospital. The determination 
of whether an eligible professional is a hospital-based eligible 
professional shall be made on the basis of the site of service 
(as defined by the Secretary) and without regard to any employ-
ment or billing arrangement between the eligible professional 
and any other provider. 
‘‘(E) The term ‘net average allowable costs’ means, with 
respect to a Medicaid provider described in paragraph (2)(A), 
average allowable costs reduced by any payment that is made 
to such Medicaid provider from any other source (other than 
under this subsection or by a State or local government) that 
is directly attributable to payment for certified EHR technology 
or support services described in subparagraph (C). 
‘‘(F) The term ‘needy individual’ means, with respect to 
a Medicaid provider, an individual— 
‘‘(i) who is receiving assistance under this title; 
‘‘(ii) who is receiving assistance under title XXI; 
‘‘(iii) who is furnished uncompensated care by the pro-
vider; or 
‘‘(iv) for whom charges are reduced by the provider 
on a sliding scale basis based on an individual’s ability 
to pay. 
‘‘(4)(A) With respect to a Medicaid provider described in para-
graph (2)(A), subject to subparagraph (B), in no case shall—
H. R. 1—378 
‘‘(i) the net average allowable costs under this sub-
section for the first year of payment (which may not be 
later than 2016), which is intended to cover the costs 
described in paragraph (3)(C)(i), exceed $25,000 (or such 
lesser amount as the Secretary determines based on studies 
conducted under subparagraph (C)); 
‘‘(ii) the net average allowable costs under this sub-
section for a subsequent year of payment, which is intended 
to cover costs described in paragraph (3)(C)(ii), exceed 
$10,000; and 
‘‘(iii) payments be made for costs described in clause 
(ii) after 2021 or over a period of longer than 5 years. 
‘‘(B) In the case of Medicaid provider described in paragraph 
(2)(A)(ii), the dollar amounts specified in subparagraph (A) shall 
be 2⁄3 of the dollar amounts otherwise specified. 
‘‘(C) For the purposes of determining average allowable costs 
under this subsection, the Secretary shall study the average costs 
to Medicaid providers described in paragraph (2)(A) of purchase 
and initial implementation and upgrade of certified EHR technology 
described in paragraph (3)(C)(i) and the average costs to such 
providers of operations, maintenance, and use of such technology 
described in paragraph (3)(C)(ii). In determining such costs for 
such providers, the Secretary may utilize studies of such amounts 
submitted by States. 
‘‘(5)(A) In no case shall the payments described in paragraph 
(1)(B) with respect to a Medicaid provider described in paragraph 
(2)(B) exceed— 
‘‘(i) in the aggregate the product of— 
‘‘(I) the overall hospital EHR amount for the pro-
vider computed under subparagraph (B); and 
‘‘(II) the Medicaid share for such provider com-
puted under subparagraph (C); 
‘‘(ii) in any year 50 percent of the product described in 
clause (i); and 
‘‘(iii) in any 2-year period 90 percent of such product. 
‘‘(B) For purposes of this paragraph, the overall hospital EHR 
amount, with respect to a Medicaid provider, is the sum of the 
applicable amounts specified in section 1886(n)(2)(A) for such pro-
vider for the first 4 payment years (as estimated by the Secretary) 
determined as if the Medicare share specified in clause (ii) of 
such section were 1. The Secretary shall establish, in consultation 
with the State, the overall hospital EHR amount for each such 
Medicaid provider eligible for payments under paragraph (1)(B). 
For purposes of this subparagraph in computing the amounts under 
section 1886(n)(2)(C) for payment years after the first payment 
year, the Secretary shall assume that in subsequent payment years 
discharges increase at the average annual rate of growth of the 
most recent 3 years for which discharge data are available per 
year. 
‘‘(C) The Medicaid share computed under this subparagraph, 
for a Medicaid provider for a period specified by the Secretary, 
shall be calculated in the same manner as the Medicare share 
under section 1886(n)(2)(D) for such a hospital and period, except 
that there shall be substituted for the numerator under clause 
(i) of such section the amount that is equal to the number of 
inpatient-bed-days (as established by the Secretary) which are 
attributable to individuals who are receiving medical assistance
H. R. 1—379 
under this title and who are not described in section 1886(n)(2)(D)(i). 
In computing inpatient-bed-days under the previous sentence, the 
Secretary shall take into account inpatient-bed-days attributable 
to inpatient-bed-days that are paid for individuals enrolled in a 
Medicaid managed care plan (under section 1903(m) or section 
1932). 
‘‘(D) In no case may the payments described in paragraph 
(1)(B) with respect to a Medicaid provider described in paragraph 
(2)(B) be paid— 
‘‘(i) for any year beginning after 2016 unless the provider 
has been provided payment under paragraph (1)(B) for the 
previous year; and 
‘‘(ii) over a period of more than 6 years of payment. 
‘‘(6) Payments described in paragraph (1) are not in accordance 
with this subsection unless the following requirements are met: 
‘‘(A)(i) The State provides assurances satisfactory to the 
Secretary that amounts received under subsection (a)(3)(F) with 
respect to payments to a Medicaid provider are paid, subject 
to clause (ii), directly to such provider (or to an employer 
or facility to which such provider has assigned payments) with-
out any deduction or rebate. 
‘‘(ii) Amounts described in clause (i) may also be paid 
to an entity promoting the adoption of certified EHR technology, 
as designated by the State, if participation in such a payment 
arrangement is voluntary for the eligible professional involved 
and if such entity does not retain more than 5 percent of 
such payments for costs not related to certified EHR technology 
(and support services including maintenance and training) that 
is for, or is necessary for the operation of, such technology. 
‘‘(B) A Medicaid provider described in paragraph (2)(A) 
is responsible for payment of the remaining 15 percent of 
the net average allowable cost. 
‘‘(C)(i) Subject to clause (ii), with respect to payments to 
a Medicaid provider— 
‘‘(I) for the first year of payment to the Medicaid pro-
vider under this subsection, the Medicaid provider dem-
onstrates that it is engaged in efforts to adopt, implement, 
or upgrade certified EHR technology; and 
‘‘(II) for a year of payment, other than the first year 
of payment to the Medicaid provider under this subsection, 
the Medicaid provider demonstrates meaningful use of cer-
tified EHR technology through a means that is approved 
by the State and acceptable to the Secretary, and that 
may be based upon the methodologies applied under section 
1848(o) or 1886(n). 
‘‘(ii) In the case of a Medicaid provider who has completed 
adopting, implementing, or upgrading such technology prior 
to the first year of payment to the Medicaid provider under 
this subsection, clause (i)(I) shall not apply and clause (i)(II) 
shall apply to each year of payment to the Medicaid provider 
under this subsection, including the first year of payment. 
‘‘(D) To the extent specified by the Secretary, the certified 
EHR technology is compatible with State or Federal administra-
tive management systems. 
For purposes of subparagraph (B), a Medicaid provider described 
in paragraph (2)(A) may accept payments for the costs described
H. R. 1—380 
in such subparagraph from a State or local government. For pur-
poses of subparagraph (C), in establishing the means described 
in such subparagraph, which may include clinical quality reporting 
to the State, the State shall ensure that populations with unique 
needs, such as children, are appropriately addressed. 
‘‘(7) With respect to Medicaid providers described in paragraph 
(2)(A), the Secretary shall ensure coordination of payment with 
respect to such providers under sections 1848(o) and 1853(l) and 
under this subsection to assure no duplication of funding. Such 
coordination shall include, to the extent practicable, a data matching 
process between State Medicaid agencies and the Centers for Medi-
care & Medicaid Services using national provider identifiers. For 
such purposes, the Secretary may require the submission of such 
data relating to payments to such Medicaid providers as the Sec-
retary may specify. 
‘‘(8) In carrying out paragraph (6)(C), the State and Secretary 
shall seek, to the maximum extent practicable, to avoid duplicative 
requirements from Federal and State governments to demonstrate 
meaningful use of certified EHR technology under this title and 
title XVIII. In doing so, the Secretary may deem satisfaction of 
requirements for such meaningful use for a payment year under 
title XVIII to be sufficient to qualify as meaningful use under 
this subsection. The Secretary may also specify the reporting periods 
under this subsection in order to carry out this paragraph. 
‘‘(9) In order to be provided Federal financial participation 
under subsection (a)(3)(F)(ii), a State must demonstrate to the satis-
faction of the Secretary, that the State— 
‘‘(A) is using the funds provided for the purposes of admin-
istering payments under this subsection, including tracking 
of meaningful use by Medicaid providers; 
‘‘(B) is conducting adequate oversight of the program under 
this subsection, including routine tracking of meaningful use 
attestations and reporting mechanisms; and 
‘‘(C) is pursuing initiatives to encourage the adoption of 
certified EHR technology to promote health care quality and 
the exchange of health care information under this title, subject 
to applicable laws and regulations governing such exchange. 
‘‘(10) The Secretary shall periodically submit reports to the 
Committee on Energy and Commerce of the House of Representa-
tives and the Committee on Finance of the Senate on status, 
progress, and oversight of payments described in paragraph (1), 
including steps taken to carry out paragraph (7). Such reports 
shall also describe the extent of adoption of certified EHR technology 
among Medicaid providers resulting from the provisions of this 
subsection and any improvements in health outcomes, clinical 
quality, or efficiency resulting from such adoption.’’. 
(b) IMPLEMENTATION FUNDING.—In addition to funds otherwise 
available, out of any funds in the Treasury not otherwise appro-
priated, there are appropriated to the Secretary of Health and 
Human Services for the Centers for Medicare & Medicaid Services 
Program Management Account, $40,000,000 for each of fiscal years 
2009 through 2015 and $20,000,000 for fiscal year 2016, which 
shall be available for purposes of carrying out the provisions of 
(and the amendments made by) this section. Amounts appropriated 
under this subsection for a fiscal year shall be available until 
expended.