H. R. 6331—22 
(1) Health care providers in eligible counties selected to 
participate in the demonstration project under subsection (d)(3) 
shall (when determined appropriate by the Secretary), instead 
of the payment rates otherwise applicable under the Medicare 
program, be reimbursed at a rate that covers at least the 
reasonable costs of the provider in furnishing acute care, 
extended care, and other essential health care services to Medi-
care beneficiaries. 
(2) Methods to coordinate the survey and certification 
process under the Medicare program and the Medicaid program 
across all health service categories included in the demonstra-
tion project shall be tested with the goal of assuring quality 
and safety while reducing administrative burdens, as appro-
priate, related to completing such survey and certification 
process. 
(3) Health care providers in eligible counties selected to 
participate in the demonstration project under subsection (d)(3) 
and the Secretary shall work with the State to explore ways 
to revise reimbursement policies under the Medicaid program 
to improve access to the range of health care services available 
in such eligible counties. 
(4) The Secretary shall identify regulatory requirements 
that may be revised appropriately to improve access to care 
in eligible counties. 
(5) Other essential health care services necessary to ensure 
access to the range of health care services in eligible counties 
selected to participate in the demonstration project under sub-
section (d)(3) shall be identified. Ways to ensure adequate 
funding for such services shall also be explored. 
(d) APPLICATION PROCESS.— 
(1) ELIGIBILITY.— 
(A) IN GENERAL.—Eligibility to participate in the dem-
onstration project under this section shall be limited to 
eligible entities. 
(B) ELIGIBLE
ENTITY
DEFINED.—In this section, the 
term ‘‘eligible entity’’ means an entity that— 
(i) is a Rural Hospital Flexibility Program grantee 
under section 1820(g) of the Social Security Act (42 
U.S.C. 1395i–4(g)); and 
(ii) is located in a State in which at least 65 
percent of the counties in the State are counties that 
have 6 or less residents per square mile. 
(2) APPLICATION.— 
(A) IN GENERAL.—An eligible entity seeking to partici-
pate in the demonstration project under this section shall 
submit an application to the Secretary at such time, in 
such manner, and containing such information as the Sec-
retary may require. 
(B) LIMITATION.—The Secretary shall select eligible 
entities located in not more than 4 States to participate 
in the demonstration project under this section. 
(3) SELECTION OF ELIGIBLE COUNTIES.—An eligible entity 
selected by the Secretary to participate in the demonstration 
project under this section shall select not more than 6 eligible 
counties in the State in which the entity is located in which 
to conduct the demonstration project.
H. R. 6331—23 
(4) ELIGIBLE COUNTY DEFINED.—In this section, the term 
‘‘eligible county’’ means a county that meets the following 
requirements: 
(A) The county has 6 or less residents per square 
mile. 
(B) As of the date of the enactment of this Act, a 
facility designated as a critical access hospital which meets 
the following requirements was located in the county: 
(i) As of the date of the enactment of this Act, 
the critical access hospital furnished 1 or more of the 
following: 
(I) Home health services. 
(II) Hospice care. 
(III) Rural health clinic services. 
(ii) As of the date of the enactment of this Act, 
the critical access hospital has an average daily 
inpatient census of 5 or less. 
(C) As of the date of the enactment of this Act, skilled 
nursing facility services were available in the county in— 
(i) a critical access hospital using swing beds; or 
(ii) a local nursing home. 
(e) ADMINISTRATION.— 
(1) IN
GENERAL.—The demonstration project under this 
section shall be administered jointly by the Administrator of 
the Office of Rural Health Policy of the Health Resources and 
Services Administration and the Administrator of the Centers 
for Medicare & Medicaid Services, in accordance with para-
graphs (2) and (3). 
(2) HRSA DUTIES.—In administering the demonstration 
project under this section, the Administrator of the Office of 
Rural Health Policy of the Health Resources and Services 
Administration shall— 
(A) award grants to the eligible entities selected to 
participate in the demonstration project; and 
(B) work with such entities to provide technical assist-
ance related to the requirements under the project. 
(3) CMS DUTIES.—In administering the demonstration 
project under this section, the Administrator of the Centers 
for Medicare & Medicaid Services shall determine which provi-
sions of titles XVIII and XIX of the Social Security Act (42 
U.S.C. 1395 et seq.; 1396 et seq.) the Secretary should waive 
under the waiver authority under subsection (i) that are rel-
evant to the development of alternative reimbursement meth-
odologies, which may include, as appropriate, covering at least 
the reasonable costs of the provider in furnishing acute care, 
extended care, and other essential health care services to Medi-
care beneficiaries and coordinating the survey and certification 
process under the Medicare and Medicaid programs, as appro-
priate, across all service categories included in the demonstra-
tion project. 
(f) DURATION.— 
(1) IN
GENERAL.—The demonstration project under this 
section shall be conducted for a 3-year period beginning on 
October 1, 2009. 
(2) BEGINNING
DATE
OF
DEMONSTRATION
PROJECT.—The 
demonstration project under this section shall be considered 
to have begun in a State on the date on which the eligible
H. R. 6331—24 
counties selected to participate in the demonstration project 
under subsection (d)(3) begin operations in accordance with 
the requirements under the demonstration project. 
(g) FUNDING.— 
(1) CMS.— 
(A) IN GENERAL.—The Secretary shall provide for the 
transfer, in appropriate part from the Federal Hospital 
Insurance Trust Fund established under section 1817 of 
the Social Security Act (42 U.S.C. 1395i) and the Federal 
Supplementary Medical Insurance Trust Fund established 
under section 1841 of such Act (42 U.S.C. 1395t), of such 
sums as are necessary for the costs to the Centers for 
Medicare & Medicaid Services of carrying out its duties 
under the demonstration project under this section. 
(B) BUDGET
NEUTRALITY.—In conducting the dem-
onstration project under this section, the Secretary shall 
ensure that the aggregate payments made by the Secretary 
do not exceed the amount which the Secretary estimates 
would have been paid if the demonstration project under 
this section was not implemented. 
(2) HRSA.—There are authorized to be appropriated to 
the Office of Rural Health Policy of the Health Resources and 
Services Administration $800,000 for each of fiscal years 2010, 
2011, and 2012 for the purpose of carrying out the duties 
of such Office under the demonstration project under this sec-
tion, to remain available for the duration of the demonstration 
project. 
(h) REPORT.— 
(1) INTERIM REPORT.—Not later than the date that is 2 
years after the date on which the demonstration project under 
this section is implemented, the Administrator of the Office 
of Rural Health Policy of the Health Resources and Services 
Administration, in coordination with the Administrator of the 
Centers for Medicare & Medicaid Services, shall submit a report 
to Congress on the status of the demonstration project that 
includes initial recommendations on ways to improve access 
to, and the availability of, health care services in eligible coun-
ties based on the findings of the demonstration project. 
(2) FINAL REPORT.—Not later than 1 year after the comple-
tion of the demonstration project, the Administrator of the 
Office of Rural Health Policy of the Health Resources and 
Services Administration, in coordination with the Administrator 
of the Centers for Medicare & Medicaid Services, shall submit 
a report to Congress on such project, together with rec-
ommendations for such legislation and administrative action 
as the Secretary determines appropriate. 
(i) WAIVER AUTHORITY.—The Secretary may waive such require-
ments of titles XVIII and XIX of the Social Security Act (42 U.S.C. 
1395 et seq.; 1396 et seq.) as may be necessary and appropriate 
for the purpose of carrying out the demonstration project under 
this section. 
(j) DEFINITIONS.—In this section: 
(1) EXTENDED CARE SERVICES.—The term ‘‘extended care 
services’’ means the following: 
(A) Home health services. 
(B) Covered skilled nursing facility services. 
(C) Hospice care.
H. R. 6331—25 
(2) COVERED
SKILLED
NURSING
FACILITY
SERVICES.—The 
term ‘‘covered skilled nursing facility services’’ has the meaning 
given such term in section 1888(e)(2)(A) of the Social Security 
Act (42 U.S.C. 1395yy(e)(2)(A)). 
(3) CRITICAL ACCESS HOSPITAL.—The term ‘‘critical access 
hospital’’ means a facility designated as a critical access hospital 
under section 1820(c) of such Act (42 U.S.C. 1395i–4(c)). 
(4) HOME HEALTH SERVICES.—The term ‘‘home health serv-
ices’’ has the meaning given such term in section 1861(m) 
of such Act (42 U.S.C. 1395x(m)). 
(5) HOSPICE
CARE.—The term ‘‘hospice care’’ has the 
meaning given such term in section 1861(dd) of such Act (42 
U.S.C. 1395x(dd)). 
(6) MEDICAID
PROGRAM.—The term ‘‘Medicaid program’’ 
means the program under title XIX of such Act (42 U.S.C. 
1396 et seq.). 
(7) MEDICARE
PROGRAM.—The term ‘‘Medicare program’’ 
means the program under title XVIII of such Act (42 U.S.C. 
1395 et seq.). 
(8) OTHER ESSENTIAL HEALTH CARE SERVICES.—The term 
‘‘other essential health care services’’ means the following: 
(A) Ambulance services (as described in section 
1861(s)(7) of the Social Security Act (42 U.S.C. 1395x(s)(7))). 
(B) Rural health clinic services. 
(C) Public health services (as defined by the Secretary). 
(D) Other health care services determined appropriate 
by the Secretary. 
(9) RURAL
HEALTH
CLINIC
SERVICES.—The term ‘‘rural 
health clinic services’’ has the meaning given such term in 
section 1861(aa)(1) of such Act (42 U.S.C. 1395x(aa)(1)). 
(10) SECRETARY.—The term ‘‘Secretary’’ means the Sec-
retary of Health and Human Services. 
SEC. 124. EXTENSION OF THE RECLASSIFICATION OF CERTAIN HOS-
PITALS. 
(a) IN GENERAL.—Subsection (a) of section 106 of division B 
of the Tax Relief and Health Care Act of 2006 (42 U.S.C. 1395 
note), as amended by section 117 of the Medicare, Medicaid, and 
SCHIP Extension Act of 2007 (Public Law 110–173), is amended 
by striking ‘‘September 30, 2008’’ and inserting ‘‘September 30, 
2009’’. 
(b) SPECIAL EXCEPTION RECLASSIFICATIONS.—Section 117(a)(2) 
of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public 
Law 110–173)) is amended by striking ‘‘September 30, 2008’’ and 
inserting ‘‘the last date of the extension of reclassifications under 
section 106(a) of the Medicare Improvement and Extension Act 
of 2006 (division B of Public Law 109–432)’’. 
(c) DISREGARDING SECTION 508 HOSPITAL RECLASSIFICATIONS 
FOR PURPOSES
OF GROUP RECLASSIFICATIONS.—Section 508(g) of 
the Medicare Prescription Drug, Improvement, and Modernization 
Act of 2003 (Public Law 108–173, 42 U.S.C. 1395ww note), as 
added by section 117(b) of the Medicare, Medicaid, and SCHIP 
Extension Act of 2008 (Public Law 110–173)), is amended by 
striking ‘‘during fiscal year 2008’’ and inserting ‘‘beginning on 
October 1, 2007, and ending on the last date of the extension
H. R. 6331—26 
of reclassifications under section 106(a) of the Medicare Improve-
ment and Extension Act of 2006 (division B of Public Law 109– 
432)’’. 
SEC. 125. REVOCATION OF UNIQUE DEEMING AUTHORITY OF THE 
JOINT COMMISSION. 
(a) REVOCATION.—Section 1865 of the Social Security Act (42 
U.S.C. 1395bb) is amended— 
(1) by striking subsection (a); and 
(2) by redesignating subsections (b), (c), (d), and (e) as 
subsections (a), (b), (c), and (d), respectively. 
(b) CONFORMING AMENDMENTS.—(1) Section 1865 of the Social 
Security Act (42 U.S.C. 1395bb) is amended— 
(A) in subsection (a)(1), as redesignated by subsection (a)(2), 
by striking ‘‘In addition, if’’ and inserting ‘‘If’’; 
(B) in subsection (b), as so redesignated— 
(i) by striking ‘‘released to him by the Joint Commission 
on Accreditation of Hospitals,’’ and inserting ‘‘released to 
the Secretary by’’; and 
(ii) by striking the comma after ‘‘Association’’; 
(C) in subsection (c), as so redesignated, by striking ‘‘pursu-
ant to subsection (a) or (b)(1)’’ and inserting ‘‘pursuant to sub-
section (a)(1)’’; and 
(D) in subsection (d), as so redesignated, by striking ‘‘pursu-
ant to subsection (a) or (b)(1)’’ and inserting ‘‘pursuant to sub-
section (a)(1)’’. 
(2) Section 1861(e) of the Social Security Act (42 U.S.C. 
1395x(e)) is amended in the fourth sentence by striking ‘‘and (ii) 
is accredited by the Joint Commission on Accreditation of Hospitals, 
or is accredited by or approved by a program of the country in 
which such institution is located if the Secretary finds the accredita-
tion or comparable approval standards of such program to be essen-
tially equivalent to those of the Joint Commission on Accreditation 
of Hospitals’’ and inserting ‘‘and (ii) is accredited by a national 
accreditation body recognized by the Secretary under section 
1865(a), or is accredited by or approved by a program of the country 
in which such institution is located if the Secretary finds the accredi-
tation or comparable approval standards of such program to be 
essentially equivalent to those of such a national accreditation 
body.’’. 
(3) Section 1864(c) of the Social Security Act (42 U.S.C. 
1395aa(c)) is amended by striking ‘‘pursuant to subsection (a) or 
(b)(1) of section 1865’’ and inserting ‘‘pursuant to section 1865(a)(1)’’. 
(4) Section 1875(b) of the Social Security Act (42 U.S.C. 
1395ll(b)) is amended by striking ‘‘the Joint Commission on Accredi-
tation of Hospitals,’’ and inserting ‘‘national accreditation bodies 
under section 1865(a)’’. 
(5) Section 1834(a)(20)(B) of the Social Security Act (42 U.S.C. 
1395m(a)(20)(B)) is amended by striking ‘‘section 1865(b)’’ and 
inserting ‘‘section 1865(a)’’. 
(6) Section 1852(e)(4)(C) of the Social Security Act (42 U.S.C. 
1395w–22(e)(4)(C)) is amended by striking ‘‘section 1865(b)(2)’’ and 
inserting ‘‘section 1865(a)(2)’’. 
(c) AUTHORITY TO RECOGNIZE
THE JOINT COMMISSION
AS
A 
NATIONAL ACCREDITATION BODY.—The Secretary of Health and 
Human Services may recognize the Joint Commission as a national 
accreditation body under section 1865 of the Social Security Act
H. R. 6331—27 
(42 U.S.C. 1395bb), as amended by this section, upon such terms 
and conditions, and upon submission of such information, as the 
Secretary may require. 
(d) EFFECTIVE DATE; TRANSITION RULE.—(1) Subject to para-
graph (2), the amendments made by this section shall apply with 
respect to accreditations of hospitals granted on or after the date 
that is 24 months after the date of the enactment of this Act. 
(2) For purposes of title XVIII of the Social Security Act (42 
U.S.C. 1395 et seq.), the amendments made by this section shall 
not effect the accreditation of a hospital by the Joint Commission, 
or under accreditation or comparable approval standards found 
to be essentially equivalent to accreditation or approval standards 
of the Joint Commission, for the period of time applicable under 
such accreditation. 
Subtitle C—Provisions Relating to Part B 
PART I—PHYSICIANS’ SERVICES 
SEC. 131. PHYSICIAN PAYMENT, EFFICIENCY, AND QUALITY IMPROVE-
MENTS. 
(a) IN GENERAL.— 
(1) INCREASE IN UPDATE FOR THE SECOND HALF OF 2008 
AND FOR 2009.— 
(A) FOR THE SECOND HALF OF 2008.—Section 1848(d)(8) 
of the Social Security Act (42 U.S.C. 1395w–4(d)(8)), as 
added by section 101 of the Medicare, Medicaid, and SCHIP 
Extension Act of 2007 (Public Law 110–173), is amended— 
(i) in the heading, by striking ‘‘A PORTION OF’’; 
(ii) in subparagraph (A), by striking ‘‘for the period 
beginning on January 1, 2008, and ending on June 
30, 2008,’’; and 
(iii) in subparagraph (B)— 
(I) in the heading, by striking ‘‘THE REMAINING 
PORTION OF 2008 AND’’; and 
(II) by striking ‘‘for the period beginning on 
July 1, 2008, and ending on December 31, 2008, 
and’’. 
(B) FOR 2009.—Section 1848(d) of the Social Security 
Act (42 U.S.C. 1395w–4(d)), as amended by section 101 
of the Medicare, Medicaid, and SCHIP Extension Act of 
2007 (Public Law 110–173), is amended by adding at the 
end the following new paragraph: 
‘‘(9) UPDATE FOR 2009.— 
‘‘(A) IN GENERAL.—Subject to paragraphs (7)(B) and 
(8)(B), in lieu of the update to the single conversion factor 
established in paragraph (1)(C) that would otherwise apply 
for 2009, the update to the single conversion factor shall 
be 1.1 percent. 
‘‘(B) NO
EFFECT
ON
COMPUTATION
OF
CONVERSION 
FACTOR FOR 2010 AND SUBSEQUENT YEARS.—The conversion 
factor under this subsection shall be computed under para-
graph (1)(A) for 2010 and subsequent years as if subpara-
graph (A) had never applied.’’. 
(3) REVISION OF THE PHYSICIAN ASSISTANCE AND QUALITY 
INITIATIVE FUND.—
H. R. 6331—28 
(A) IN GENERAL.—Subject to subparagraph (B), section 
1848(l)(2) of the Social Security Act (42 U.S.C. 1395w– 
4(l)(2)), as amended by section 101(a)(2) of the Medicare, 
Medicaid, and SCHIP Extension Act of 2007 (Public Law 
110–173), is amended— 
(i) in subparagraph (A)— 
(I) by striking clause (i)(III); and 
(II) by striking clause (ii)(III); and 
(ii) in subparagraph (B)— 
(I) in clause (i), by adding ‘‘and’’ at the end; 
(II) in clause (ii), by striking ‘‘; and’’ and 
inserting a period; and 
(III) by striking clause (iii). 
(B) CONTINGENCY.—If there is enacted, before, on, or 
after the date of the enactment of this Act, a Supplemental 
Appropriations Act, 2008 that includes a provision 
amending section 1848(l) of the Social Security Act, the 
alternative amendment described in subparagraph (C)— 
(i) shall apply instead of the amendments made 
by subparagraph (A); and 
(ii) shall be executed after such provision in such 
Supplemental Appropriations Act. 
(C) ALTERNATIVE AMENDMENT DESCRIBED.—The alter-
native amendment described in this subparagraph is as 
follows: Section 1848(l)(2) of the Social Security Act (42 
U.S.C. 1395w–4(l)(2)), as amended by section 101(a)(2) of 
the Medicare, Medicaid, and SCHIP Extension Act of 2007 
(Public Law 110–173) and by the Supplemental Appropria-
tions Act, 2008, is amended— 
(i) in subparagraph (A)— 
(I) by striking subclauses (III) and (IV) of 
clause (i); and 
(II) by striking subclauses (III) and (IV) of 
clause (ii); and 
(ii) in subparagraph (B)— 
(I) in clause (i), by adding ‘‘and’’ at the end; 
(II) in clause (ii), by striking the semicolon 
at the end and inserting a period; and 
(III) by striking clauses (iii) and (iv). 
(b) EXTENSION AND IMPROVEMENT OF THE QUALITY REPORTING 
SYSTEM.— 
(1) SYSTEM.—Section 1848(k)(2) of the Social Security Act 
(42 U.S.C. 1395w–4(k)(2)), as amended by section 101(b)(1) 
of the Medicare, Medicaid, and SCHIP Extension Act of 2007 
(Public Law 110–173), is amended by adding at the end the 
following new subparagraphs: 
‘‘(C) FOR 2010 AND SUBSEQUENT YEARS.— 
‘‘(i) IN GENERAL.—Subject to clause (ii), for pur-
poses of reporting data on quality measures for covered 
professional services furnished during 2010 and each 
subsequent year, subject to subsection (m)(3)(C), the 
quality measures (including electronic prescribing 
quality measures) specified under this paragraph shall 
be such measures selected by the Secretary from meas-
ures that have been endorsed by the entity with a 
contract with the Secretary under section 1890(a).
H. R. 6331—29 
‘‘(ii) EXCEPTION.—In the case of a specified area 
or medical topic determined appropriate by the Sec-
retary for which a feasible and practical measure has 
not been endorsed by the entity with a contract under 
section 1890(a), the Secretary may specify a measure 
that is not so endorsed as long as due consideration 
is given to measures that have been endorsed or 
adopted by a consensus organization identified by the 
Secretary, such as the AQA alliance. 
‘‘(D) OPPORTUNITY
TO
PROVIDE
INPUT
ON
MEASURES 
FOR
2009
AND
SUBSEQUENT
YEARS.—For each quality 
measure (including an electronic prescribing quality 
measure) adopted by the Secretary under subparagraph 
(B) (with respect to 2009) or subparagraph (C), the Sec-
retary shall ensure that eligible professionals have the 
opportunity to provide input during the development, 
endorsement, or selection of measures applicable to services 
they furnish.’’. 
(2) REDESIGNATION OF REPORTING SYSTEM.—Subsection (c) 
of section 101 of division B of the Tax Relief and Health 
Care Act of 2006 (42 U.S.C. 1395w–4 note), as amended by 
section 101(b)(2) of the Medicare, Medicaid, and SCHIP Exten-
sion Act of 2007 (Public Law 110–173), is redesignated as 
subsection (m) of section 1848 of the Social Security Act. 
(3) INCENTIVE PAYMENTS UNDER REPORTING SYSTEM.—Sec-
tion 1848(m) of the Social Security Act, as redesignated by 
paragraph (2), is amended— 
(A) by amending the heading to read as follows: 
‘‘INCENTIVE PAYMENTS FOR QUALITY REPORTING’’; 
(B) by striking paragraph (1) and inserting the fol-
lowing: 
‘‘(1) INCENTIVE PAYMENTS.— 
‘‘(A) IN GENERAL.—For 2007 through 2010, with respect 
to covered professional services furnished during a 
reporting period by an eligible professional, if— 
‘‘(i) there are any quality measures that have been 
established under the physician reporting system that 
are applicable to any such services furnished by such 
professional for such reporting period; and 
‘‘(ii) the eligible professional satisfactorily submits 
(as determined under this subsection) to the Secretary 
data on such quality measures in accordance with such 
reporting system for such reporting period, 
in addition to the amount otherwise paid under this part, 
there also shall be paid to the eligible professional (or 
to an employer or facility in the cases described in clause 
(A) of section 1842(b)(6)) or, in the case of a group practice 
under paragraph (3)(C), to the group practice, from the 
Federal Supplementary Medical Insurance Trust Fund 
established under section 1841 an amount equal to the 
applicable quality percent of the Secretary’s estimate (based 
on claims submitted not later than 2 months after the 
end of the reporting period) of the allowed charges under 
this part for all such covered professional services furnished 
by the eligible professional (or, in the case of a group 
practice under paragraph (3)(C), by the group practice) 
during the reporting period.
H. R. 6331—30 
‘‘(B) APPLICABLE QUALITY PERCENT.—For purposes of 
subparagraph (A), the term ‘applicable quality percent’ 
means— 
‘‘(i) for 2007 and 2008, 1.5 percent; and 
‘‘(ii) for 2009 and 2010, 2.0 percent.’’; 
(C) by striking paragraph (3) and redesignating para-
graph (2) as paragraph (3); 
(D) in paragraph (3), as so redesignated— 
(i) in the matter preceding subparagraph (A), by 
striking ‘‘For purposes’’ and inserting the following: 
‘‘(A) IN GENERAL.—For purposes’’; 
(ii) by redesignating subparagraphs (A) and (B) 
as clauses (i) and (ii), respectively, and moving the 
indentation of such clauses 2 ems to the right; 
(iii) in subparagraph (A), as added by clause (i), 
by adding at the end the following flush sentence: 
‘‘For years after 2008, quality measures for purposes of 
this subparagraph shall not include electronic prescribing 
quality measures.’’; and 
(iv) by adding at the end the following new sub-
paragraphs: 
‘‘(C) SATISFACTORY REPORTING MEASURES FOR GROUP 
PRACTICES.— 
‘‘(i) IN GENERAL.—By January 1, 2010, the Sec-
retary shall establish and have in place a process under 
which eligible professionals in a group practice (as 
defined by the Secretary) shall be treated as satisfac-
torily submitting data on quality measures under 
subparagraph (A) and as meeting the requirement 
described in subparagraph (B)(ii) for covered profes-
sional services for a reporting period (or, for purposes 
of subsection (a)(5), for a reporting period for a year) 
if, in lieu of reporting measures under subsection 
(k)(2)(C), the group practice reports measures deter-
mined appropriate by the Secretary, such as measures 
that target high-cost chronic conditions and preventive 
care, in a form and manner, and at a time, specified 
by the Secretary. 
‘‘(ii) STATISTICAL SAMPLING MODEL.—The process 
under clause (i) shall provide for the use of a statistical 
sampling model to submit data on measures, such as 
the model used under the Physician Group Practice 
demonstration project under section 1866A. 
‘‘(iii) NO DOUBLE PAYMENTS.—Payments to a group 
practice under this subsection by reason of the process 
under clause (i) shall be in lieu of the payments that 
would otherwise be made under this subsection to 
eligible professionals in the group practice for satisfac-
torily submitting data on quality measures. 
‘‘(D) AUTHORITY TO REVISE SATISFACTORILY REPORTING 
DATA.—For years after 2009, the Secretary, in consultation 
with stakeholders and experts, may revise the criteria 
under this subsection for satisfactorily submitting data on 
quality measures under subparagraph (A) and the criteria 
for submitting data on electronic prescribing quality meas-
ures under subparagraph (B)(ii).’’; 
(E) in paragraph (5)—
H. R. 6331—31 
(i) in subparagraph (C), by inserting ‘‘for 2007, 
2008, and 2009,’’ after ‘‘provision of law,’’; 
(ii) in subparagraph (D)— 
(I) in clause (i)— 
(aa) by inserting ‘‘for 2007 and 2008’’ after 
‘‘under this subsection’’; and 
(bb) by striking ‘‘paragraph (2)’’ and 
inserting ‘‘this subsection’’; 
(II) in clause (ii), by striking ‘‘shall’’ and 
inserting ‘‘may establish procedures to’’; and 
(III) in clause (iii)— 
(aa) by inserting ‘‘(or, in the case of a 
group practice under paragraph (3)(C), the 
group practice)’’ after ‘‘an eligible profes-
sional’’; 
(bb) by striking ‘‘bonus incentive payment’’ 
and inserting ‘‘incentive payment under this 
subsection’’; and 
(cc) by adding at the end the following 
new sentence: ‘‘If such payments for such 
period have already been made, the Secretary 
shall recoup such payments from the eligible 
professional (or the group practice).’’; 
(iii) in subparagraph (E)— 
(I) by striking ‘‘(I) IN GENERAL.—’’; 
(II) by striking clause (ii); 
(III) by redesignating subclauses (I) through 
(IV) as clauses (i) through (iv), respectively, and 
moving the indentation of such clauses 2 ems to 
the left; 
(IV) in clause (ii), as so redesignated, by 
striking ‘‘paragraph (2)’’ and inserting ‘‘this sub-
section’’; and 
(V) in clause (iv), as so redesignated— 
(aa) by striking ‘‘the bonus’’ and inserting 
‘‘any’’; and 
(bb) by inserting ‘‘and the payment adjust-
ment under subsection (a)(5)(A)’’ before the 
period at the end; 
(iv) in subparagraph (F)— 
(I) by striking ‘‘2009, paragraph (3) shall not 
apply, and’’ and inserting ‘‘subsequent years,’’; and 
(II) by striking ‘‘paragraph (2)’’ and inserting 
‘‘this subsection’’; and 
(v) by adding at the end the following new subpara-
graph: 
‘‘(G) 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 following: 
‘‘(i) The eligible professionals (or, in the case of 
reporting under paragraph (3)(C), the group practices) 
who satisfactorily submitted data on quality measures 
under this subsection. 
‘‘(ii) The eligible professionals (or, in the case of 
reporting under paragraph (3)(C), the group practices) 
who are successful electronic prescribers.’’; and
H. R. 6331—33 
(II) by striking ‘‘paragraph (4) of such section’’ 
and inserting ‘‘subsection (k)(4)’’; 
(B) in paragraph (6)— 
(i) in subparagraph (A), by striking ‘‘section 
1848(k)(3) of the Social Security Act, as added by sub-
section (b)’’ and inserting ‘‘subsection (k)(3)’’; and 
(ii) in subparagraph (B), by striking ‘‘section 
1848(k) of the Social Security Act, as added by sub-
section (b)’’ and inserting ‘‘subsection (k)’’; and 
(C) by striking paragraph (6)(D). 
(6) NO AFFECT ON INCENTIVE PAYMENTS FOR 2007 OR 2008.— 
Nothing in the amendments made by this subsection or section 
132 shall affect the operation of the provisions of section 
1848(m) of the Social Security Act, as redesignated and 
amended by such subsection and section, with respect to 2007 
or 2008. 
(c) PHYSICIAN FEEDBACK PROGRAM TO IMPROVE EFFICIENCY 
AND CONTROL COSTS.— 
(1) IN GENERAL.—Section 1848 of the Social Security Act 
(42 U.S.C. 1395w–4), as amended by subsection (b), is amended 
by adding at the end the following new subsection: 
‘‘(n) PHYSICIAN FEEDBACK PROGRAM.— 
‘‘(1) ESTABLISHMENT.— 
‘‘(A) IN
GENERAL.—The Secretary shall establish a 
Physician Feedback Program (in this subsection referred 
to as the ‘Program’) under which the Secretary shall use 
claims data under this title (and may use other data) 
to provide confidential reports to physicians (and, as deter-
mined appropriate by the Secretary, to groups of physi-
cians) that measure the resources involved in furnishing 
care to individuals under this title. If determined appro-
priate by the Secretary, the Secretary may include informa-
tion on the quality of care furnished to individuals under 
this title by the physician (or group of physicians) in such 
reports. 
‘‘(B) RESOURCE
USE.—The resources described in 
subparagraph (A) may be measured— 
‘‘(i) on an episode basis; 
‘‘(ii) on a per capita basis; or 
‘‘(iii) on both an episode and a per capita basis. 
‘‘(2) IMPLEMENTATION.—The Secretary shall implement the 
Program by not later than January 1, 2009. 
‘‘(3) DATA FOR REPORTS.—To the extent practicable, reports 
under the Program shall be based on the most recent data 
available. 
‘‘(4) AUTHORITY TO FOCUS APPLICATION.—The Secretary may 
focus the application of the Program as appropriate, such as 
focusing the Program on— 
‘‘(A) physician specialties that account for a certain 
percentage of all spending for physicians’ services under 
this title; 
‘‘(B) physicians who treat conditions that have a high 
cost or a high volume, or both, under this title; 
‘‘(C) physicians who use a high amount of resources 
compared to other physicians; 
‘‘(D) physicians practicing in certain geographic areas; 
or
H. R. 6331—34 
‘‘(E) physicians who treat a minimum number of 
individuals under this title. 
‘‘(5) AUTHORITY
TO
EXCLUDE
CERTAIN
INFORMATION
IF 
INSUFFICIENT INFORMATION.—The Secretary may exclude cer-
tain information regarding a service from a report under the 
Program with respect to a physician (or group of physicians) 
if the Secretary determines that there is insufficient informa-
tion relating to that service to provide a valid report on that 
service. 
‘‘(6) ADJUSTMENT OF DATA.—To the extent practicable, the 
Secretary shall make appropriate adjustments to the data used 
in preparing reports under the Program, such as adjustments 
to take into account variations in health status and other 
patient characteristics. 
‘‘(7) EDUCATION AND OUTREACH.—The Secretary shall pro-
vide for education and outreach activities to physicians on 
the operation of, and methodologies employed under, the Pro-
gram. 
‘‘(8) DISCLOSURE EXEMPTION.—Reports under the Program 
shall be exempt from disclosure under section 552 of title 
5, United States Code.’’. 
(2) GAO STUDY AND REPORT ON THE PHYSICIAN FEEDBACK 
PROGRAM.— 
(A) STUDY.—The Comptroller General of the United 
States shall conduct a study of the Physician Feedback 
Program conducted under section 1848(n) of the Social 
Security Act, as added by paragraph (1), including the 
implementation of the Program. 
(B) REPORT.—Not later than March 1, 2011, the Comp-
troller General of the United States shall submit a report 
to Congress containing the results of the study conducted 
under subparagraph (A), together with recommendations 
for such legislation and administrative action as the Comp-
troller General determines appropriate. 
(d) PLAN FOR TRANSITION TO VALUE-BASED PURCHASING PRO-
GRAM FOR PHYSICIANS AND OTHER PRACTITIONERS.— 
(1) IN
GENERAL.—The Secretary of Health and Human 
Services shall develop a plan to transition to a value-based 
purchasing program for payment under the Medicare program 
for covered professional services (as defined in section 
1848(k)(3)(A) of the Social Security Act (42 U.S.C. 1395w– 
4(k)(3)(A))). 
(2) REPORT.—Not later than May 1, 2010, the Secretary 
of Health and Human Services shall submit a report to Con-
gress containing the plan developed under paragraph (1), 
together with recommendations for such legislation and 
administrative action as the Secretary determines appropriate. 
SEC. 132. INCENTIVES FOR ELECTRONIC PRESCRIBING. 
(a) INCENTIVE PAYMENTS.—Section 1848(m) of the Social Secu-
rity Act, as added and amended by section 131(b), is amended— 
(1) by inserting after paragraph (1), the following new 
paragraph: 
‘‘(2) INCENTIVE PAYMENTS FOR ELECTRONIC PRESCRIBING.— 
‘‘(A) IN GENERAL.—For 2009 through 2013, with respect 
to covered professional services furnished during a 
reporting period by an eligible professional, if the eligible
H. R. 6331—35 
professional is a successful electronic prescriber for such 
reporting period, in addition to the amount otherwise paid 
under this part, there also shall be paid to the eligible 
professional (or to an employer or facility in the cases 
described in clause (A) of section 1842(b)(6)) or, in the 
case of a group practice under paragraph (3)(C), to the 
group practice, from the Federal Supplementary Medical 
Insurance Trust Fund established under section 1841 an 
amount equal to the applicable electronic prescribing per-
cent of the Secretary’s estimate (based on claims submitted 
not later than 2 months after the end of the reporting 
period) of the allowed charges under this part for all such 
covered professional services furnished by the eligible 
professional (or, in the case of a group practice under 
paragraph (3)(C), by the group practice) during the 
reporting period. 
‘‘(B) LIMITATION WITH RESPECT TO ELECTRONIC PRE-
SCRIBING QUALITY MEASURES.—The provisions of this para-
graph and subsection (a)(5) 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 reporting 
period (or, for purposes of subsection (a)(5), for the 
reporting period for a year)— 
‘‘(i) the allowed charges under this part for all 
covered professional services furnished by the eligible 
professional (or group, as applicable) for the codes to 
which the electronic prescribing quality measure 
applies (as identified by the Secretary and published 
on the Internet website of the Centers for Medicare 
& Medicaid Services as of January 1, 2008, and as 
subsequently modified by the Secretary) are less than 
10 percent of the total of the allowed charges under 
this part for all such covered professional services fur-
nished by the eligible professional (or the group, as 
applicable); or 
‘‘(ii) if determined appropriate by the Secretary, 
the eligible professional does not submit (including 
both electronically and nonelectronically) a sufficient 
number (as determined by the Secretary) of prescrip-
tions under part D. 
If the Secretary makes the determination to apply clause 
(ii) for a period, then clause (i) shall not apply for such 
period. 
‘‘(C) APPLICABLE ELECTRONIC PRESCRIBING PERCENT.— 
For purposes of subparagraph (A), the term ‘applicable 
electronic prescribing percent’ means— 
‘‘(i) for 2009 and 2010, 2.0 percent; 
‘‘(ii) for 2011 and 2012, 1.0 percent; and 
‘‘(iii) for 2013, 0.5 percent.’’; 
(2) in paragraph (3), as redesignated by section 131(b)— 
(A) in the heading, by inserting ‘‘AND SUCCESSFUL ELEC-
TRONIC PRESCRIBER’’ after ‘‘REPORTING’’; and 
(B) by inserting after subparagraph (A) the following 
new subparagraph: 
‘‘(B) SUCCESSFUL ELECTRONIC PRESCRIBER.— 
‘‘(i) IN GENERAL.—For purposes of paragraph (2) 
and subsection (a)(5), an eligible professional shall be
H. R. 6331—36 
treated as a successful electronic prescriber for a 
reporting period (or, for purposes of subsection (a)(5), 
for the reporting period for a year) if the eligible profes-
sional meets the requirement described in clause (ii), 
or, if the Secretary determines appropriate, the 
requirement described in clause (iii). If the Secretary 
makes the determination under the preceding sentence 
to apply the requirement described in clause (iii) for 
a period, then the requirement described in clause 
(ii) shall not apply for such period. 
‘‘(ii) REQUIREMENT FOR SUBMITTING DATA ON ELEC-
TRONIC PRESCRIBING QUALITY MEASURES.—The require-
ment described in this clause is that, with respect 
to covered professional services furnished by an eligible 
professional during a reporting period (or, for purposes 
of subsection (a)(5), for the reporting period for a year), 
if there are any electronic prescribing quality measures 
that have been established under the physician 
reporting system and are applicable to any such serv-
ices furnished by such professional for the period, such 
professional reported each such measure under such 
system in at least 50 percent of the cases in which 
such measure is reportable by such professional under 
such system. 
‘‘(iii) REQUIREMENT
FOR
ELECTRONICALLY
PRE-
SCRIBING UNDER PART D.—The requirement described 
in this clause is that the eligible professional electroni-
cally submitted a sufficient number (as determined 
by the Secretary) of prescriptions under part D during 
the reporting period (or, for purposes of subsection 
(a)(5), for the reporting period for a year). 
‘‘(iv) 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 clause (iii), paragraph (2)(B)(ii), and 
paragraph (5)(G). 
‘‘(v) STANDARDS FOR ELECTRONIC PRESCRIBING.— 
To the extent practicable, in determining whether 
eligible professionals meet the requirements under 
clauses (ii) and (iii) for purposes of clause (i), the 
Secretary shall ensure that eligible professionals utilize 
electronic prescribing systems in compliance with 
standards established for such systems pursuant to 
the Part D Electronic Prescribing Program under sec-
tion 1860D–4(e).’’; and 
(3) in paragraph (5)(E), by striking clause (iii) and inserting 
the following new clause: 
‘‘(iii) the determination of a successful electronic 
prescriber under paragraph (3), the limitation under 
paragraph (2)(B), and the exception under subsection 
(a)(5)(B); and’’. 
(b) INCENTIVE PAYMENT ADJUSTMENT.—Section 1848(a) of the 
Social Security Act (42 U.S.C. 1395w–4(a)) is amended by adding 
at the end the following new paragraph: 
‘‘(5) INCENTIVES FOR ELECTRONIC PRESCRIBING.— 
‘‘(A) ADJUSTMENT.—
H. R. 6331—37 
‘‘(i) IN GENERAL.—Subject to subparagraph (B) and 
subsection (m)(2)(B), with respect to covered profes-
sional services furnished by an eligible professional 
during 2012 or any subsequent year, if the eligible 
professional is not a successful electronic prescriber 
for the reporting period for the year (as determined 
under subsection (m)(3)(B)), the fee schedule amount 
for such services furnished by such professional during 
the year (including the fee schedule amount for pur-
poses of determining a payment based on such amount) 
shall be equal to the applicable percent of the fee 
schedule amount that would otherwise apply to such 
services under this subsection (determined after 
application of paragraph (3) but without regard to this 
paragraph). 
‘‘(ii) APPLICABLE PERCENT.—For purposes of clause 
(i), the term ‘applicable percent’ means— 
‘‘(I) for 2012, 99 percent; 
‘‘(II) for 2013, 98.5 percent; and 
‘‘(III) for 2014 and each subsequent year, 98 
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 successful electronic prescriber would 
result in a significant hardship, such as in the case of 
an eligible professional who practices in a rural area with-
out sufficient Internet access. 
‘‘(C) APPLICATION.— 
‘‘(i) PHYSICIAN REPORTING SYSTEM RULES.—Para-
graphs (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. 
‘‘(ii) INCENTIVE
PAYMENT
VALIDATION
RULES.— 
Clauses (ii) and (iii) of subsection (m)(5)(D) shall apply 
for purposes of this paragraph in a similar manner 
as they apply for purposes of such subsection. 
‘‘(D) DEFINITIONS.—For purposes of this paragraph: 
‘‘(i) ELIGIBLE
PROFESSIONAL; COVERED
PROFES-
SIONAL SERVICES.—The terms ‘eligible professional’ and 
‘covered professional services’ have the meanings given 
such terms in subsection (k)(3). 
‘‘(ii) PHYSICIAN
REPORTING
SYSTEM.—The term 
‘physician reporting system’ means the system estab-
lished under subsection (k). 
‘‘(iii) REPORTING
PERIOD.—The term ‘reporting 
period’ means, with respect to a year, a period specified 
by the Secretary.’’. 
(c) GAO REPORT ON ELECTRONIC PRESCRIBING.—Not later than 
September 1, 2012, the Comptroller General of the United States 
shall submit to Congress a report on the implementation of the 
incentives for electronic prescribing established under the provisions 
of, and amendments made by, this section. Such report shall include 
information regarding the following:
H. R. 6331—38 
(1) The percentage of eligible professionals (as defined in 
section 1848(k)(3) of the Social Security Act (42 U.S.C. 1395w– 
4(k)(3)) that are using electronic prescribing systems, including 
a determination of whether less than 50 percent of eligible 
professionals are using electronic prescribing systems. 
(2) If less than 50 percent of eligible professionals are 
using electronic prescribing systems, recommendations for 
increasing the use of electronic prescribing systems by eligible 
professionals, such as changes to the incentive payment adjust-
ments established under section 1848(a)(5) of such Act, as 
added by subsection (b). 
(3) The estimated savings to the Medicare program under 
title XVIII of such Act resulting from the use of electronic 
prescribing systems. 
(4) Reductions in avoidable medical errors resulting from 
the use of electronic prescribing systems. 
(5) The extent to which the privacy and security of the 
personal health information of Medicare beneficiaries is pro-
tected when such beneficiaries’ prescription drug data and 
usage information is used for purposes other than their direct 
clinical care, including— 
(A) whether information identifying the beneficiary is, 
and remains, removed from data regarding the beneficiary’s 
prescription drug utilization; and 
(B) the extent to which current law requires sufficient 
and appropriate oversight and audit capabilities to monitor 
the practice of prescription drug data mining. 
(6) Such other recommendations and administrative action 
as the Comptroller General determines to be appropriate. 
SEC. 133. EXPANDING ACCESS TO PRIMARY CARE SERVICES. 
(a) REVISIONS TO THE MEDICARE MEDICAL HOME DEMONSTRA-
TION PROJECT.— 
(1) AUTHORITY TO EXPAND.—Section 204(b) of division B 
of the Tax Relief and Health Care Act of 2006 (42 U.S.C. 
1395b–1 note) is amended— 
(A) in paragraph (1), by striking ‘‘The project’’ and 
inserting ‘‘Subject to paragraph (3), the project’’; and 
(B) by adding at the end the following new paragraph: 
‘‘(3) EXPANSION.—The Secretary may expand the duration 
and the scope of the project under paragraph (1), to an extent 
determined appropriate by the Secretary, if the Secretary deter-
mines that such expansion will result in any of the following 
conditions being met: 
‘‘(A) The expansion of the project is expected to improve 
the quality of patient care without increasing spending 
under the Medicare program (not taking into account 
amounts available under subsection (g)). 
‘‘(B) The expansion of the project is expected to reduce 
spending under the Medicare program (not taking into 
account amounts available under subsection (g)) without 
reducing the quality of patient care.’’. 
(2) FUNDING
AND
APPLICATION.—Section 204 of division 
B of the Tax Relief and Health Care Act of 2006 (42 U.S.C. 
1395b–1 note) is amended by adding at the end the following 
new subsections:
H. R. 6331—39 
‘‘(g) FUNDING FROM SMI TRUST FUND.—There shall be avail-
able, from the Federal Supplementary Medical Insurance Trust 
Fund (under section 1841 of the Social Security Act (42 U.S.C. 
1395t)), the amount of $100,000,000 to carry out the project. 
‘‘(h) APPLICATION.—Chapter 35 of title 44, United States Code, 
shall not apply to the conduct of the project.’’. 
(b) APPLICATION OF BUDGET-NEUTRALITY ADJUSTOR TO CONVER-
SION FACTOR.—Section 1848(c)(2)(B) of the Social Security Act (42 
U.S.C. 1395w–4(c)(2)(B)) is amended by adding at the end the 
following new clause: 
‘‘(vi) ALTERNATIVE
APPLICATION
OF
BUDGET-NEU-
TRALITY
ADJUSTMENT.—Notwithstanding 
subsection 
(d)(9)(A), effective for fee schedules established begin-
ning with 2009, with respect to the 5-year review of 
work relative value units used in fee schedules for 
2007 and 2008, in lieu of continuing to apply budget- 
neutrality adjustments required under clause (ii) for 
2007 and 2008 to work relative value units, the Sec-
retary shall apply such budget-neutrality adjustments 
to the conversion factor otherwise determined for years 
beginning with 2009.’’. 
SEC. 134. EXTENSION OF FLOOR ON MEDICARE WORK GEOGRAPHIC 
ADJUSTMENT UNDER THE MEDICARE PHYSICIAN FEE 
SCHEDULE. 
(a) IN GENERAL.—Section 1848(e)(1)(E) of the Social Security 
Act (42 U.S.C. 1395w–4(e)(1)(E)), as amended by section 103 of 
the Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public 
Law 110–173), is amended by striking ‘‘before July 1, 2008’’ and 
inserting ‘‘before January 1, 2010’’. 
(b) TREATMENT OF PHYSICIANS’ SERVICES FURNISHED IN CER-
TAIN AREAS.—Section 1848(e)(1)(G) of the Social Security Act (42 
U.S.C. 1395w–4(e)(1)(G)) is amended by adding at the end the 
following new sentence: ‘‘For purposes of payment for services fur-
nished in the State described in the preceding sentence on or 
after January 1, 2009, after calculating the work geographic index 
in subparagraph (A)(iii), the Secretary shall increase the work 
geographic index to 1.5 if such index would otherwise be less 
than 1.5’’. 
(c) TECHNICAL CORRECTION.—Section 602(1) of the Medicare 
Prescription Drug, Improvement, and Modernization Act of 2003 
(Public Law 108–173; 117 Stat. 2301) is amended to read as follows: 
‘‘(1) in subparagraph (A), by striking ‘subparagraphs (B), 
(C), and (E)’ and inserting ‘subparagraphs (B), (C), (E), and 
(G)’; and’’. 
SEC. 135. IMAGING PROVISIONS. 
(a) ACCREDITATION REQUIREMENT.— 
(1) ACCREDITATION
REQUIREMENT.—Section 1834 of the 
Social Security Act (42 U.S.C. 1395m) is amended by inserting 
after subsection (d) the following new subsection: 
‘‘(e) ACCREDITATION REQUIREMENT FOR ADVANCED DIAGNOSTIC 
IMAGING SERVICES.— 
‘‘(1) IN GENERAL.— 
‘‘(A) IN GENERAL.—Beginning with January 1, 2012, 
with respect to the technical component of advanced diag-
nostic imaging services for which payment is made under 
the fee schedule established under section 1848(b) and
H. R. 6331—40 
that are furnished by a supplier, payment may only be 
made if such supplier is accredited by an accreditation 
organization designated by the Secretary under paragraph 
(2)(B)(i). 
‘‘(B) 
ADVANCED
DIAGNOSTIC
IMAGING
SERVICES 
DEFINED.—In this subsection, the term ‘advanced diagnostic 
imaging services’ includes— 
‘‘(i) diagnostic magnetic resonance imaging, com-
puted tomography, and nuclear medicine (including 
positron emission tomography); and 
‘‘(ii) such other diagnostic imaging services, 
including services described in section 1848(b)(4)(B) 
(excluding X-ray, ultrasound, and fluoroscopy), as 
specified by the Secretary in consultation with physi-
cian specialty organizations and other stakeholders. 
‘‘(C) SUPPLIER DEFINED.—In this subsection, the term 
‘supplier’ has the meaning given such term in section 
1861(d). 
‘‘(2) ACCREDITATION ORGANIZATIONS.— 
‘‘(A) FACTORS
FOR
DESIGNATION
OF
ACCREDITATION 
ORGANIZATIONS.—The Secretary shall consider the following 
factors in designating accreditation organizations under 
subparagraph (B)(i) and in reviewing and modifying the 
list of accreditation organizations designated pursuant to 
subparagraph (C): 
‘‘(i) The ability of the organization to conduct 
timely reviews of accreditation applications. 
‘‘(ii) Whether the organization has established a 
process for the timely integration of new advanced 
diagnostic imaging services into the organization’s 
accreditation program. 
‘‘(iii) Whether the organization uses random site 
visits, site audits, or other strategies for ensuring 
accredited suppliers maintain adherence to the criteria 
described in paragraph (3). 
‘‘(iv) The ability of the organization to take into 
account the capacities of suppliers located in a rural 
area (as defined in section 1886(d)(2)(D)). 
‘‘(v) Whether the organization has established 
reasonable fees to be charged to suppliers applying 
for accreditation. 
‘‘(vi) Such other factors as the Secretary deter-
mines appropriate. 
‘‘(B) DESIGNATION.—Not later than January 1, 2010, 
the Secretary shall designate organizations to accredit sup-
pliers furnishing the technical component of advanced diag-
nostic imaging services. The list of accreditation organiza-
tions so designated may be modified pursuant to subpara-
graph (C). 
‘‘(C) REVIEW AND MODIFICATION OF LIST OF ACCREDITA-
TION ORGANIZATIONS.— 
‘‘(i) IN GENERAL.—The Secretary shall review the 
list of accreditation organizations designated under 
subparagraph (B) taking into account the factors under 
subparagraph (A). Taking into account the results of 
such review, the Secretary may, by regulation, modify
H. R. 6331—41 
the list of accreditation organizations designated under 
subparagraph (B). 
‘‘(ii) SPECIAL
RULE
FOR
ACCREDITATIONS
DONE 
PRIOR TO REMOVAL FROM LIST OF DESIGNATED ACCREDI-
TATION ORGANIZATIONS.—In the case where the Sec-
retary removes an organization from the list of accredi-
tation organizations designated under subparagraph 
(B), any supplier that is accredited by the organization 
during the period beginning on the date on which 
the organization is designated as an accreditation 
organization under subparagraph (B) and ending on 
the date on which the organization is removed from 
such list shall be considered to have been accredited 
by an organization designated by the Secretary under 
subparagraph (B) for the remaining period such 
accreditation is in effect. 
‘‘(3) CRITERIA
FOR
ACCREDITATION.—The Secretary shall 
establish procedures to ensure that the criteria used by an 
accreditation organization designated under paragraph (2)(B) 
to evaluate a supplier that furnishes the technical component 
of advanced diagnostic imaging services for the purpose of 
accreditation of such supplier is specific to each imaging 
modality. Such criteria shall include— 
‘‘(A) standards for qualifications of medical personnel 
who are not physicians and who furnish the technical 
component of advanced diagnostic imaging services; 
‘‘(B) standards for qualifications and responsibilities 
of medical directors and supervising physicians, including 
standards that recognize the considerations described in 
paragraph (4); 
‘‘(C) procedures to ensure that equipment used in fur-
nishing the technical component of advanced diagnostic 
imaging services meets performance specifications; 
‘‘(D) standards that require the supplier have proce-
dures in place to ensure the safety of persons who furnish 
the technical component of advanced diagnostic imaging 
services and individuals to whom such services are fur-
nished; 
‘‘(E) standards that require the establishment and 
maintenance of a quality assurance and quality control 
program by the supplier that is adequate and appropriate 
to ensure the reliability, clarity, and accuracy of the tech-
nical quality of diagnostic images produced by such sup-
plier; and 
‘‘(F) any other standards or procedures the Secretary 
determines appropriate. 
‘‘(4) RECOGNITION IN STANDARDS FOR THE EVALUATION OF 
MEDICAL DIRECTORS AND SUPERVISING PHYSICIANS.—The stand-
ards described in paragraph (3)(B) shall recognize whether 
a medical director or supervising physician— 
‘‘(A) in a particular specialty receives training in 
advanced diagnostic imaging services in a residency pro-
gram; 
‘‘(B) has attained, through experience, the necessary 
expertise to be a medical director or a supervising physi-
cian;
H. R. 6331—42 
‘‘(C) has completed any continuing medical education 
courses relating to such services; or 
‘‘(D) has met such other standards as the Secretary 
determines appropriate. 
‘‘(5) RULE FOR ACCREDITATIONS MADE PRIOR TO DESIGNA-
TION.—In the case of a supplier that is accredited before 
January 1, 2010, by an accreditation organization designated 
by the Secretary under paragraph (2)(B) as of January 1, 2010, 
such supplier shall be considered to have been accredited by 
an organization designated by the Secretary under such para-
graph as of January 1, 2012, for the remaining period such 
accreditation is in effect.’’. 
(2) CONFORMING AMENDMENTS.— 
(A) IN GENERAL.—Section 1862(a) of the Social Security 
Act (42 U.S.C. 1395y(a)) is amended— 
(i) in paragraph (21), by striking ‘‘or’’ at the end; 
(ii) in paragraph (22), by striking the period at 
the end and inserting ‘‘; or’’; and 
(iii) by inserting after paragraph (22) the following 
new paragraph: 
‘‘(23) which are the technical component of advanced diag-
nostic imaging services described in section 1834(e)(1)(B) for 
which payment is made under the fee schedule established 
under section 1848(b) and that are furnished by a supplier 
(as defined in section 1861(d)), if such supplier is not accredited 
by an accreditation organization designated by the Secretary 
under section 1834(e)(2)(B).’’. 
(B) EFFECTIVE DATE.—The amendments made by this 
paragraph shall apply to advanced diagnostic imaging serv-
ices furnished on or after January 1, 2012. 
(b) DEMONSTRATION PROJECT TO ASSESS THE APPROPRIATE USE 
OF IMAGING SERVICES.— 
(1) CONDUCT OF DEMONSTRATION PROJECT.— 
(A) IN GENERAL.—The Secretary of Health and Human 
Services (in this section referred to as the ‘‘Secretary’’) 
shall conduct a demonstration project using the models 
described in paragraph (2)(E) to collect data regarding 
physician compliance with appropriateness criteria selected 
under paragraph (2)(D) in order to determine the appro-
priateness of advanced diagnostic imaging services fur-
nished to Medicare beneficiaries. 
(B) ADVANCED DIAGNOSTIC IMAGING SERVICES.—In this 
subsection, the term ‘‘advanced diagnostic imaging services’’ 
has the meaning given such term in section 1834(e)(1)(B) 
of the Social Security Act, as added by subsection (a). 
(C) AUTHORITY TO FOCUS DEMONSTRATION PROJECT.— 
The Secretary may focus the demonstration project with 
respect to certain advanced diagnostic imaging services, 
such as services that account for a large amount of expendi-
tures under the Medicare program, services that have 
recently experienced a high rate of growth, or services 
for which appropriateness criteria exists. 
(2) IMPLEMENTATION
AND
DESIGN
OF
DEMONSTRATION 
PROJECT.— 
(A) IMPLEMENTATION AND DURATION.—
H. R. 6331—43 
(i) IMPLEMENTATION.—The Secretary shall imple-
ment the demonstration project under this subsection 
not later than January 1, 2010. 
(ii) DURATION.—The Secretary shall conduct the 
demonstration project under this subsection for a 2- 
year period. 
(B) APPLICATION
AND
SELECTION
OF
PARTICIPATING 
PHYSICIANS.— 
(i) APPLICATION.—Each physician that desires to 
participate in the demonstration project under this 
subsection shall submit an application to the Secretary 
at such time, in such manner, and containing such 
information as the Secretary may require. 
(ii) SELECTION.—The Secretary shall select physi-
cians to participate in the demonstration project under 
this subsection from among physicians submitting 
applications under clause (i). The Secretary shall 
ensure that the physicians selected— 
(I) represent a wide range of geographic areas, 
demographic characteristics (such as urban, rural, 
and suburban), and practice settings (such as pri-
vate and academic practices); and 
(II) have the capability to submit data to the 
Secretary (or an entity under a subcontract with 
the Secretary) in an electronic format in accord-
ance with standards established by the Secretary. 
(C) ADMINISTRATIVE COSTS AND INCENTIVES.—The Sec-
retary shall— 
(i) reimburse physicians for reasonable administra-
tive costs incurred in participating in the demonstra-
tion project under this subsection; and 
(ii) provide reasonable incentives to physicians to 
encourage participation in the demonstration project 
under this subsection. 
(D) USE OF APPROPRIATENESS CRITERIA.— 
(i) IN
GENERAL.—The Secretary, in consultation 
with medical specialty societies and other stakeholders, 
shall select criteria with respect to the clinical appro-
priateness of advanced diagnostic imaging services for 
use in the demonstration project under this subsection. 
(ii) CRITERIA
SELECTED.—Any criteria selected 
under clause (i) shall— 
(I) be developed or endorsed by a medical spe-
cialty society; and 
(II) be developed in adherence to appropriate-
ness principles developed by a consensus organiza-
tion, such as the AQA alliance. 
(E) MODELS FOR COLLECTING DATA REGARDING PHYSI-
CIAN
COMPLIANCE
WITH
SELECTED
CRITERIA.—Subject to 
subparagraph (H), in carrying out the demonstration 
project under this subsection, the Secretary shall use each 
of the following models for collecting data regarding physi-
cian compliance with appropriateness criteria selected 
under subparagraph (D): 
(i) A model described in subparagraph (F). 
(ii) A model described in subparagraph (G).
H. R. 6331—44 
(iii) Any other model that the Secretary determines 
to be useful in evaluating the use of appropriateness 
criteria for advanced diagnostic imaging services. 
(F) POINT
OF
SERVICE
MODEL
DESCRIBED.—A model 
described in this subparagraph is a model that— 
(i) uses an electronic or paper intake form that— 
(I) contains a certification by the physician 
furnishing the imaging service that the data on 
the intake form was confirmed with the Medicare 
beneficiary before the service was furnished; 
(II) contains standardized data elements for 
diagnosis, service ordered, service furnished, and 
such other information determined by the Sec-
retary, in consultation with medical specialty soci-
eties and other stakeholders, to be germane to 
evaluating the effectiveness of the use of appro-
priateness criteria selected under subparagraph 
(D); and 
(III) is accessible to physicians participating 
in the demonstration project under this subsection 
in a format that allows for the electronic submis-
sion of such form; and 
(ii) provides for feedback reports in accordance 
with paragraph (3)(B). 
(G) POINT
OF
ORDER
MODEL
DESCRIBED.—A model 
described in this subparagraph is a model that— 
(i) uses a computerized order-entry system that 
requires 
the 
transmittal 
of 
relevant 
supporting 
information at the time of referral for advanced diag-
nostic imaging services and provides automated deci-
sion-support feedback to the referring physician 
regarding the appropriateness of furnishing such 
imaging services; and 
(ii) provides for feedback reports in accordance 
with paragraph (3)(B). 
(H) LIMITATION.—In no case may the Secretary use 
prior authorization— 
(i) as a model for collecting data regarding physi-
cian compliance with appropriateness criteria selected 
under subparagraph (D) under the demonstration 
project under this subsection; or 
(ii) under any model used for collecting such data 
under the demonstration project. 
(I) REQUIRED
CONTRACTS
AND
PERFORMANCE
STAND-
ARDS FOR CERTAIN ENTITIES.— 
(i) IN GENERAL.—The Secretary shall enter into 
contracts with entities to carry out the model described 
in subparagraph (G). 
(ii) PERFORMANCE
STANDARDS.—The Secretary 
shall establish and enforce performance standards for 
such entities under the contracts entered into under 
clause (i), including performance standards with 
respect to— 
(I) the satisfaction of Medicare beneficiaries 
who are furnished advanced diagnostic imaging 
services by a physician participating in the dem-
onstration project;
H. R. 6331—45 
(II) the satisfaction of physicians participating 
in the demonstration project; 
(III) if applicable, timelines for the provision 
of feedback reports under paragraph (3)(B); and 
(IV) any other areas determined appropriate 
by the Secretary. 
(3) COMPARISON OF UTILIZATION OF ADVANCED DIAGNOSTIC 
IMAGING SERVICES AND FEEDBACK REPORTS.— 
(A) COMPARISON OF UTILIZATION OF ADVANCED DIAG-
NOSTIC
IMAGING
SERVICES.—The Secretary shall consult 
with medical specialty societies and other stakeholders to 
develop mechanisms for comparing the utilization of 
advanced diagnostic imaging services by physicians partici-
pating in the demonstration project under this subsection 
against— 
(i) the appropriateness criteria selected under 
paragraph (2)(D); and 
(ii) to the extent feasible, the utilization of such 
services by physicians not participating in the dem-
onstration project. 
(B) FEEDBACK REPORTS.—The Secretary shall, in con-
sultation with medical specialty societies and other stake-
holders, develop mechanisms to provide feedback reports 
to physicians participating in the demonstration project 
under this subsection. Such feedback reports shall 
include— 
(i) a profile of the rate of compliance by the physi-
cian with appropriateness criteria selected under para-
graph (2)(D), including a comparison of— 
(I) the rate of compliance by the physician 
with such criteria; and 
(II) the rate of compliance by the physician’s 
peers (as defined by the Secretary) with such cri-
teria; and 
(ii) to the extent feasible, a comparison of— 
(I) the rate of utilization of advanced diag-
nostic imaging services by the physician; and 
(II) the rate of utilization of such services by 
the physician’s peers (as defined by the Secretary) 
who are not participating in the demonstration 
project. 
(4) CONDUCT OF DEMONSTRATION PROJECT AND WAIVER.— 
(A) CONDUCT OF DEMONSTRATION PROJECT.—Chapter 
35 of title 44, United States Code, shall not apply to the 
conduct of the demonstration project under this subsection. 
(B) WAIVER.—The Secretary may waive such provisions 
of titles XI and XVIII of the Social Security Act (42 U.S.C. 
1301 et seq.; 1395 et seq.) as may be necessary to carry 
out the demonstration project under this subsection. 
(5) EVALUATION AND REPORT.— 
(A) EVALUATION.—The Secretary shall evaluate the 
demonstration project under this subsection to— 
(i) assess the timeliness and efficacy of the dem-
onstration project; 
(ii) assess the performance of entities under a con-
tract entered into under paragraph (2)(I)(i); 
(iii) analyze data—
H. R. 6331—46 
(I) on the rates of appropriate, uncertain, and 
inappropriate advanced diagnostic imaging serv-
ices furnished by physicians participating in the 
demonstration project; 
(II) on patterns and trends in the appropriate-
ness and inappropriateness of such services fur-
nished by such physicians; 
(III) on patterns and trends in national and 
regional variations of care with respect to the fur-
nishing of such services; and 
(IV) on the correlation between the appro-
priateness of the services furnished and image 
results; and 
(iv) address— 
(I) the thresholds used under the demonstra-
tion project to identify acceptable and outlier levels 
of performance with respect to the appropriateness 
of advanced diagnostic imaging services furnished; 
(II) whether prospective use of appropriateness 
criteria could have an effect on the volume of such 
services furnished; 
(III) whether expansion of the use of appro-
priateness criteria with respect to such services 
to a broader population of Medicare beneficiaries 
would be advisable; 
(IV) whether, under such an expansion, physi-
cians who demonstrate consistent compliance with 
such appropriateness criteria should be exempted 
from certain requirements; 
(V) the use of incident-specific versus practice- 
specific outlier information in formulating future 
recommendations with respect to the use of appro-
priateness criteria for such services under the 
Medicare program; and 
(VI) the potential for using methods (including 
financial incentives), in addition to those used 
under the models under the demonstration project, 
to ensure compliance with such criteria. 
(B) REPORT.—Not later than 1 year after the comple-
tion of the demonstration project under this subsection, 
the Secretary shall submit to Congress a report containing 
the results of the evaluation of the demonstration project 
conducted under subparagraph (A), together with rec-
ommendations for such legislation and administrative 
action as the Secretary determines appropriate. 
(6) FUNDING.—The Secretary shall provide for the transfer 
from the Federal Supplementary Medical Insurance Trust Fund 
established under section 1841 of the Social Security Act (42 
U.S.C. 1395t) of $10,000,000, for carrying out the demonstration 
project under this subsection (including costs associated with 
administering the demonstration project, reimbursing physi-
cians for administrative costs and providing incentives to 
encourage participation under paragraph (2)(C), entering into 
contracts under paragraph (2)(I), and evaluating the demonstra-
tion project under paragraph (5)). 
(c) GAO STUDY AND REPORTS ON ACCREDITATION REQUIREMENT 
FOR ADVANCED DIAGNOSTIC IMAGING SERVICES.—
H. R. 6331—47 
(1) STUDY.— 
(A) IN
GENERAL.—The Comptroller General of the 
United States (in this subsection referred to as the ‘‘Comp-
troller General’’) shall conduct a study, by imaging 
modality, on— 
(i) the effect of the accreditation requirement under 
section 1834(e) of the Social Security Act, as added 
by subsection (a); and 
(ii) any other relevant questions involving access 
to, and the value of, advanced diagnostic imaging serv-
ices for Medicare beneficiaries. 
(B) ISSUES.—The study conducted under subparagraph 
(A) shall examine the following: 
(i) The impact of such accreditation requirement 
on the number, type, and quality of imaging services 
furnished to Medicare beneficiaries. 
(ii) The cost of such accreditation requirement, 
including costs to facilities of compliance with such 
requirement and costs to the Secretary of admin-
istering such requirement. 
(iii) Access to imaging services by Medicare bene-
ficiaries, especially in rural areas, before and after 
implementation of such accreditation requirement. 
(iv) Such other issues as the Secretary determines 
appropriate. 
(2) REPORTS.— 
(A) PRELIMINARY REPORT.—Not later than March 1, 
2013, the Comptroller General shall submit a preliminary 
report to Congress on the study conducted under paragraph 
(1). 
(B) FINAL
REPORT.—Not later than March 1, 2014, 
the Comptroller General shall submit a final report to 
Congress on the study conducted under paragraph (1), 
together with recommendations for such legislation and 
administrative action as the Comptroller General deter-
mines appropriate. 
SEC. 136. EXTENSION OF TREATMENT OF CERTAIN PHYSICIAN 
PATHOLOGY SERVICES UNDER MEDICARE. 
Section 542(c) of the Medicare, Medicaid, and SCHIP Benefits 
Improvement and Protection Act of 2000 (as enacted into law by 
section 1(a)(6) of Public Law 106–554), as amended by section 
732 of the Medicare Prescription Drug, Improvement, and Mod-
ernization Act of 2003 (42 U.S.C. 1395w–4 note), section 104 of 
division B of the Tax Relief and Health Care Act of 2006 (42 
U.S.C. 1395w–4 note), and section 104 of the Medicare, Medicaid, 
and SCHIP Extension Act of 2007 (Public Law 110–173), is amended 
by striking ‘‘2007, and the first 6 months of 2008’’ and inserting 
‘‘2007, 2008, and 2009’’. 
SEC. 137. ACCOMMODATION OF PHYSICIANS ORDERED TO ACTIVE 
DUTY IN THE ARMED SERVICES. 
Section 1842(b)(6)(D)(iii) of the Social Security Act (42 U.S.C. 
1395u(b)(6)(D)(iii)), as amended by section 116 of the Medicare, 
Medicaid, and SCHIP Extension Act of 2007 (Public Law 110– 
173), is amended by striking ‘‘(before July 1, 2008)’’.
H. R. 6331—48 
SEC. 138. ADJUSTMENT FOR MEDICARE MENTAL HEALTH SERVICES. 
(a) PAYMENT ADJUSTMENT.— 
(1) IN
GENERAL.—For purposes of payment for services 
furnished under the physician fee schedule under section 1848 
of the Social Security Act (42 U.S.C. 1395w–4) during the 
period beginning on July 1, 2008, and ending on December 
31, 2009, the Secretary of Health and Human Services shall 
increase the fee schedule otherwise applicable for specified 
services by 5 percent. 
(2) NONAPPLICATION OF BUDGET-NEUTRALITY.—The budget- 
neutrality provision of section 1848(c)(2)(B)(ii) of the Social 
Security Act (42 U.S.C. 1395w–4(c)(2)(B)(ii)) shall not apply 
to the adjustments described in paragraph (1). 
(b) DEFINITION OF SPECIFIED SERVICES.—In this section, the 
term ‘‘specified services’’ means procedure codes for services in 
the categories of the Health Care Common Procedure Coding 
System, established by the Secretary of Health and Human Services 
under section 1848(c)(5) of the Social Security Act (42 U.S.C. 1395w– 
4(c)(5)), as of July 1, 2007, and as subsequently modified by the 
Secretary, consisting of psychiatric therapeutic procedures furnished 
in office or other outpatient facility settings or in inpatient hospital, 
partial hospital, or residential care facility settings, but only with 
respect to such services in such categories that are in the subcat-
egories of services which are— 
(1) insight oriented, behavior modifying, or supportive 
psychotherapy; or 
(2) interactive psychotherapy. 
(c) IMPLEMENTATION.—Notwithstanding any other provision of 
law, the Secretary may implement this section by program instruc-
tion or otherwise. 
SEC. 139. IMPROVEMENTS FOR MEDICARE ANESTHESIA TEACHING 
PROGRAMS. 
(a) SPECIAL
PAYMENT
RULE
FOR
TEACHING
ANESTHESIOL-
OGISTS.—Section 1848(a) of the Social Security Act (42 U.S.C. 
1395w–4(a)), as amended by section 132(b), is amended— 
(1) in paragraph (4)(A), by inserting ‘‘except as provided 
in paragraph (5),’’ after ‘‘anesthesia cases,’’; and 
(2) by adding at the end the following new paragraph: 
‘‘(6) SPECIAL
RULE
FOR
TEACHING
ANESTHESIOLOGISTS.— 
With respect to physicians’ services furnished on or after 
January 1, 2010, in the case of teaching anesthesiologists 
involved in the training of physician residents in a single anes-
thesia case or two concurrent anesthesia cases, the fee schedule 
amount to be applied shall be 100 percent of the fee schedule 
amount otherwise applicable under this section if the anes-
thesia services were personally performed by the teaching 
anesthesiologist alone and paragraph (4) shall not apply if— 
‘‘(A) the teaching anesthesiologist is present during 
all critical or key portions of the anesthesia service or 
procedure involved; and 
‘‘(B) the teaching anesthesiologist (or another anesthe-
siologist with whom the teaching anesthesiologist has 
entered into an arrangement) is immediately available to 
furnish anesthesia services during the entire procedure.’’. 
(b) TREATMENT
OF
CERTIFIED
REGISTERED
NURSE
ANES-
THETISTS.—With respect to items and services furnished on or after
H. R. 6331—49 
January 1, 2010, the Secretary of Health and Human Services 
shall make appropriate adjustments to payments under the Medi-
care program under title XVIII of the Social Security Act for 
teaching certified registered nurse anesthetists to implement a 
policy with respect to teaching certified registered nurse anes-
thetists that— 
(1) is consistent with the adjustments made by the special 
rule for teaching anesthesiologists under section 1848(a)(6) of 
the Social Security Act, as added by subsection (a); and 
(2) maintains the existing payment differences between 
teaching anesthesiologists and teaching certified registered 
nurse anesthetists. 
PART II—OTHER PAYMENT AND COVERAGE 
IMPROVEMENTS 
SEC. 141. EXTENSION OF EXCEPTIONS PROCESS FOR MEDICARE 
THERAPY CAPS. 
Section 1833(g)(5) of the Social Security Act (42 U.S.C. 
1395l(g)(5)), as amended by section 105 of the Medicare, Medicaid, 
and SCHIP Extension Act of 2007 (Public Law 110–173), is amended 
by striking ‘‘June 30, 2008’’ and inserting ‘‘December 31, 2009’’. 
SEC. 142. EXTENSION OF PAYMENT RULE FOR BRACHYTHERAPY AND 
THERAPEUTIC RADIOPHARMACEUTICALS. 
Section 1833(t)(16)(C) of the Social Security Act (42 U.S.C. 
1395l(t)(16)(C)), as amended by section 106 of the Medicare, Med-
icaid, and SCHIP Extension Act of 2007 (Public Law 110–173), 
is amended by striking ‘‘July 1, 2008’’ each place it appears and 
inserting ‘‘January 1, 2010’’. 
SEC. 143. SPEECH-LANGUAGE PATHOLOGY SERVICES. 
(a) IN GENERAL.—Section 1861(ll) of the Social Security Act 
(42 U.S.C. 1395x(ll)) is amended— 
(1) by redesignating paragraphs (2) and (3) as paragraphs 
(3) and (4), respectively; and 
(2) by inserting after paragraph (1) the following new para-
graph: 
‘‘(2) The term ‘outpatient speech-language pathology services’ 
has the meaning given the term ‘outpatient physical therapy serv-
ices’ in subsection (p), except that in applying such subsection— 
‘‘(A) ‘speech-language pathology’ shall be substituted for 
‘physical therapy’ each place it appears; and 
‘‘(B) ‘speech-language pathologist’ shall be substituted for 
‘physical therapist’ each place it appears.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 1832(a)(2)(C) of the Social Security Act (42 
U.S.C. 1395k(a)(2)(C)) is amended— 
(A) by striking ‘‘and outpatient’’ and inserting ‘‘, out-
patient’’; and 
(B) by inserting before the semicolon at the end the 
following: ‘‘, and outpatient speech-language pathology 
services (other than services to which the second sentence 
of section 1861(p) applies through the application of section 
1861(ll)(2))’’. 
(2) Subparagraphs (A) and (B) of section 1833(a)(8) of the 
Social Security Act (42 U.S.C. 1395l(a)(8)) are each amended
H. R. 6331—50 
by striking ‘‘(which includes outpatient speech-language 
pathology services)’’ and inserting ‘‘, outpatient speech-language 
pathology services,’’. 
(3) Section 1833(g)(1) of the Social Security Act (42 U.S.C. 
1395l(g)(1)) is amended— 
(A) by inserting ‘‘and speech-language pathology serv-
ices of the type described in such section through the 
application of section 1861(ll)(2)’’ after ‘‘1861(p)’’; and 
(B) by inserting ‘‘and speech-language pathology serv-
ices’’ after ‘‘and physical therapy services’’. 
(4) The second sentence of section 1835(a) of the Social 
Security Act (42 U.S.C. 1395n(a)) is amended— 
(A) by striking ‘‘section 1861(g)’’ and inserting ‘‘sub-
section (g) or (ll)(2) of section 1861’’ each place it appears; 
and 
(B) by inserting ‘‘or outpatient speech-language 
pathology 
services, 
respectively’’ 
after 
‘‘occupational 
therapy services’’. 
(5) Section 1861(p) of the Social Security Act (42 U.S.C. 
1395x(p)) is amended by striking the fourth sentence. 
(6) Section 1861(s)(2)(D) of the Social Security Act (42 
U.S.C. 1395x(s)(2)(D)) is amended by inserting ‘‘, outpatient 
speech-language pathology services,’’ after ‘‘physical therapy 
services’’. 
(7) Section 1862(a)(20) of the Social Security Act (42 U.S.C. 
1395y(a)(20)) is amended— 
(A) by striking ‘‘outpatient occupational therapy serv-
ices or outpatient physical therapy services’’ and inserting 
‘‘outpatient physical therapy services, outpatient speech- 
language pathology services, or outpatient occupational 
therapy services’’; and 
(B) by striking ‘‘section 1861(g)’’ and inserting ‘‘sub-
section (g) or (ll)(2) of section 1861’’. 
(8) Section 1866(e)(1) of the Social Security Act (42 U.S.C. 
1395cc(e)(1)) is amended— 
(A) by striking ‘‘section 1861(g)’’ and inserting ‘‘sub-
section (g) or (ll)(2) of section 1861’’ the first two places 
it appears; 
(B) by striking ‘‘defined) or’’ and inserting ‘‘defined),’’; 
and 
(C) by inserting before the semicolon at the end the 
following: ‘‘, or (through the operation of section 1861(ll)(2)) 
with respect to the furnishing of outpatient speech-lan-
guage pathology’’. 
(9) Section 1877(h)(6) of the Social Security Act (42 U.S.C. 
1395nn(h)(6)) is amended by adding at the end the following 
new subparagraph: 
‘‘(L) Outpatient speech-language pathology services.’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to services furnished on or after July 1, 2009. 
(d) CONSTRUCTION.—Nothing in this section shall be construed 
to affect existing regulations and policies of the Centers for Medicare 
& Medicaid Services that require physician oversight of care as 
a condition of payment for speech-language pathology services under 
part B of the Medicare program.
H. R. 6331—51 
SEC. 144. PAYMENT AND COVERAGE IMPROVEMENTS FOR PATIENTS 
WITH CHRONIC OBSTRUCTIVE PULMONARY DISEASE AND 
OTHER CONDITIONS. 
(a) COVERAGE OF PULMONARY AND CARDIAC REHABILITATION.— 
(1) IN GENERAL.—Section 1861 of the Social Security Act 
(42 U.S.C. 1395x), as amended by section 101(a), is amended— 
(A) in subsection (s)(2)— 
(i) in subparagraph (AA), by striking ‘‘and’’ at the 
end; 
(ii) by adding at the end the following new sub-
paragraphs: 
‘‘(CC) items and services furnished under a cardiac 
rehabilitation program (as defined in subsection (eee)(1)) 
or under a pulmonary rehabilitation program (as defined 
in subsection (fff)(1)); and 
‘‘(DD) items and services furnished under an intensive 
cardiac rehabilitation program (as defined in subsection 
(eee)(4));’’; and 
(B) by adding at the end the following new subsections: 
‘‘Cardiac Rehabilitation Program; Intensive Cardiac Rehabilitation 
Program 
‘‘(eee)(1) The term ‘cardiac rehabilitation program’ means a 
physician-supervised program (as described in paragraph (2)) that 
furnishes the items and services described in paragraph (3). 
‘‘(2) A program described in this paragraph is a program under 
which— 
‘‘(A) items and services under the program are delivered— 
‘‘(i) in a physician’s office; 
‘‘(ii) in a hospital on an outpatient basis; or 
‘‘(iii) in other settings determined appropriate by the 
Secretary. 
‘‘(B) a physician is immediately available and accessible 
for medical consultation and medical emergencies at all times 
items and services are being furnished under the program, 
except that, in the case of items and services furnished under 
such a program in a hospital, such availability shall be pre-
sumed; and 
‘‘(C) individualized treatment is furnished under a written 
plan established, reviewed, and signed by a physician every 
30 days that describes— 
‘‘(i) the individual’s diagnosis; 
‘‘(ii) the type, amount, frequency, and duration of the 
items and services furnished under the plan; and 
‘‘(iii) the goals set for the individual under the plan. 
‘‘(3) The items and services described in this paragraph are— 
‘‘(A) physician-prescribed exercise; 
‘‘(B) cardiac risk factor modification, including education, 
counseling, and behavioral intervention (to the extent such 
education, counseling, and behavioral intervention is closely 
related to the individual’s care and treatment and is tailored 
to the individual’s needs); 
‘‘(C) psychosocial assessment; 
‘‘(D) outcomes assessment; and 
‘‘(E) such other items and services as the Secretary may 
determine, but only if such items and services are—
H. R. 6331—52 
‘‘(i) reasonable and necessary for the diagnosis or active 
treatment of the individual’s condition; 
‘‘(ii) reasonably expected to improve or maintain the 
individual’s condition and functional level; and 
‘‘(iii) furnished under such guidelines relating to the 
frequency and duration of such items and services as the 
Secretary shall establish, taking into account accepted 
norms of medical practice and the reasonable expectation 
of improvement of the individual. 
‘‘(4)(A) The term ‘intensive cardiac rehabilitation program’ 
means a physician-supervised program (as described in paragraph 
(2)) that furnishes the items and services described in paragraph 
(3) and has shown, in peer-reviewed published research, that it 
accomplished— 
‘‘(i) one or more of the following: 
‘‘(I) positively affected the progression of coronary heart 
disease; or 
‘‘(II) reduced the need for coronary bypass surgery; 
or 
‘‘(III) reduced the need for percutaneous coronary inter-
ventions; and 
‘‘(ii) a statistically significant reduction in 5 or more of 
the following measures from their level before receipt of cardiac 
rehabilitation services to their level after receipt of such serv-
ices: 
‘‘(I) low density lipoprotein; 
‘‘(II) triglycerides; 
‘‘(III) body mass index; 
‘‘(IV) systolic blood pressure; 
‘‘(V) diastolic blood pressure; or 
‘‘(VI) the need for cholesterol, blood pressure, and 
diabetes medications. 
‘‘(B) To be eligible for an intensive cardiac rehabilitation pro-
gram, an individual must have— 
‘‘(i) had an acute myocardial infarction within the preceding 
12 months; 
‘‘(ii) had coronary bypass surgery; 
‘‘(iii) stable angina pectoris; 
‘‘(iv) had heart valve repair or replacement; 
‘‘(v) had percutaneous transluminal coronary angioplasty 
(PTCA) or coronary stenting; or 
‘‘(vi) had a heart or heart-lung transplant. 
‘‘(C) An intensive cardiac rehabilitation program may be pro-
vided in a series of 72 one-hour sessions (as defined in section 
1848(b)(5)), up to 6 sessions per day, over a period of up to 18 
weeks. 
‘‘(5) The Secretary shall establish standards to ensure that 
a physician with expertise in the management of individuals with 
cardiac pathophysiology who is licensed to practice medicine in 
the State in which a cardiac rehabilitation program (or the intensive 
cardiac rehabilitation program, as the case may be) is offered— 
‘‘(A) is responsible for such program; and 
‘‘(B) in consultation with appropriate staff, is involved 
substantially in directing the progress of individual in the 
program.
H. R. 6331—53 
‘‘Pulmonary Rehabilitation Program 
‘‘(fff)(1) The term ‘pulmonary rehabilitation program’ means 
a physician-supervised program (as described in subsection (eee)(2) 
with respect to a program under this subsection) that furnishes 
the items and services described in paragraph (2). 
‘‘(2) The items and services described in this paragraph are— 
‘‘(A) physician-prescribed exercise; 
‘‘(B) education or training (to the extent the education 
or training is closely and clearly related to the individual’s 
care and treatment and is tailored to such individual’s needs); 
‘‘(C) psychosocial assessment; 
‘‘(D) outcomes assessment; and 
‘‘(E) such other items and services as the Secretary may 
determine, but only if such items and services are— 
‘‘(i) reasonable and necessary for the diagnosis or active 
treatment of the individual’s condition; 
‘‘(ii) reasonably expected to improve or maintain the 
individual’s condition and functional level; and 
‘‘(iii) furnished under such guidelines relating to the 
frequency and duration of such items and services as the 
Secretary shall establish, taking into account accepted 
norms of medical practice and the reasonable expectation 
of improvement of the individual. 
‘‘(3) The Secretary shall establish standards to ensure that 
a physician with expertise in the management of individuals with 
respiratory pathophysiology who is licensed to practice medicine 
in the State in which a pulmonary rehabilitation program is 
offered— 
‘‘(A) is responsible for such program; and 
‘‘(B) in consultation with appropriate staff, is involved 
substantially in directing the progress of individual in the 
program.’’. 
(2) PAYMENT FOR INTENSIVE CARDIAC REHABILITATION PRO-
GRAMS.— 
(A) INCLUSION IN PHYSICIAN FEE SCHEDULE.—Section 
1848(j)(3) of the Social Security Act (42 U.S.C. 1395w– 
4(j)(3)) is amended by inserting ‘‘(2)(DD),’’ after ‘‘(2)(AA),’’. 
(B) CONFORMING AMENDMENT.—Section 1848(b) of the 
Social Security Act (42 U.S.C. 1395w–4(b)) is amended 
by adding at the end the following new paragraph: 
‘‘(5) TREATMENT
OF
INTENSIVE
CARDIAC
REHABILITATION 
PROGRAM.— 
‘‘(A) IN GENERAL.—In the case of an intensive cardiac 
rehabilitation program described in section 1861(eee)(4), 
the Secretary shall substitute the Medicare OPD fee 
schedule amount established under the prospective pay-
ment system for hospital outpatient department service 
under paragraph (3)(D) of section 1833(t) for cardiac 
rehabilitation (under HCPCS codes 93797 and 93798 for 
calendar year 2007, or any succeeding HCPCS codes for 
cardiac rehabilitation). 
‘‘(B) DEFINITION
OF
SESSION.—Each of the services 
described in subparagraphs (A) through (E) of section 
1861(eee)(3), when furnished for one hour, is a separate 
session of intensive cardiac rehabilitation.
H. R. 6331—54 
‘‘(C) MULTIPLE SESSIONS PER DAY.—Payment may be 
made for up to 6 sessions per day of the series of 72 
one-hour sessions of intensive cardiac rehabilitation serv-
ices described in section 1861(eee)(4)(B).’’. 
(3) EFFECTIVE DATE.—The amendments made by this sub-
section shall apply to items and services furnished on or after 
January 1, 2010. 
(b) REPEAL OF TRANSFER OF OWNERSHIP OF OXYGEN EQUIP-
MENT.— 
(1) IN GENERAL.—Section 1834(a)(5)(F) of the Social Secu-
rity Act (42 U.S.C. 1395m(a)(5)(F)) is amended— 
(A) in the heading, by striking ‘‘OWNERSHIP OF 
EQUIPMENT’’ and inserting ‘‘RENTAL CAP’’; and 
(B) by striking clause (ii) and inserting the following: 
‘‘(ii) PAYMENTS AND RULES AFTER RENTAL CAP.— 
After the 36th continuous month during which pay-
ment is made for the equipment under this para-
graph— 
‘‘(I) the supplier furnishing such equipment 
under this subsection shall continue to furnish 
the equipment during any period of medical need 
for the remainder of the reasonable useful lifetime 
of the equipment, as determined by the Secretary; 
‘‘(II) payments for oxygen shall continue to 
be made in the amount recognized for oxygen 
under paragraph (9) for the period of medical need; 
and 
‘‘(III) maintenance and servicing payments 
shall, if the Secretary determines such payments 
are reasonable and necessary, be made (for parts 
and labor not covered by the supplier’s or manufac-
turer’s warranty, as determined by the Secretary 
to be appropriate for the equipment), and such 
payments shall be in an amount determined to 
be appropriate by the Secretary.’’. 
(2) EFFECTIVE DATE.—The amendments made by paragraph 
(1) shall take effect on January 1, 2009. 
SEC. 145. CLINICAL LABORATORY TESTS. 
(a) REPEAL OF MEDICARE COMPETITIVE BIDDING DEMONSTRA-
TION PROJECT FOR CLINICAL LABORATORY SERVICES.— 
(1) IN GENERAL.—Section 1847 of the Social Security Act 
(42 U.S.C. 1395w–3) is amended by striking subsection (e). 
(2) CONFORMING
AMENDMENTS.—Section 1833(a)(1)(D) of 
the Social Security Act (42 U.S.C. 1395l(a)(1)(D)) is amended— 
(A) by inserting ‘‘or’’ before ‘‘(ii)’’; and 
(B) by striking ‘‘or (iii) on the basis’’ and all that 
follows before the comma at the end. 
(3) EFFECTIVE DATE.—The amendments made by this sub-
section shall take effect on the date of the enactment of this 
Act. 
(b) CLINICAL LABORATORY TEST FEE SCHEDULE UPDATE ADJUST-
MENT.—Section 1833(h)(2)(A)(i) of the Social Security Act (42 U.S.C. 
1395l(h)(2)(A)(ii)) is amended by inserting ‘‘minus, for each of the 
years 2009 through 2013, 0.5 percentage points’’ after ‘‘city aver-
age)’’.
H. R. 6331—55 
SEC. 146. IMPROVED ACCESS TO AMBULANCE SERVICES. 
(a) EXTENSION OF INCREASED MEDICARE PAYMENTS FOR GROUND 
AMBULANCE SERVICES.—Section 1834(l)(13) of the Social Security 
Act (42 U.S.C. 1395m(l)(13)) is amended— 
(1) in subparagraph (A)— 
(A) in the matter preceding clause (i), by inserting 
‘‘and for such services furnished on or after July 1, 2008, 
and before January 1, 2010’’ after ‘‘2007,’’; 
(B) in clause (i), by inserting ‘‘(or 3 percent if such 
service is furnished on or after July 1, 2008, and before 
January 1, 2010)’’ after ‘‘2 percent’’; and 
(C) in clause (ii), by inserting ‘‘(or 2 percent if such 
service is furnished on or after July 1, 2008, and before 
January 1, 2010)’’ after ‘‘1 percent’’; and 
(2) in subparagraph (B)— 
(A) in the heading, by striking ‘‘2006’’ and inserting 
‘‘APPLICABLE PERIOD’’; and 
(B) by inserting ‘‘applicable’’ before ‘‘period’’. 
(b) AIR AMBULANCE PAYMENT IMPROVEMENTS.— 
(1) TREATMENT OF CERTAIN AREAS FOR PAYMENT FOR AIR 
AMBULANCE SERVICES UNDER THE AMBULANCE FEE SCHEDULE.— 
Notwithstanding any other provision of law, for purposes of 
making payments under section 1834(l) of the Social Security 
Act (42 U.S.C. 1395m(l)) for air ambulance services furnished 
during the period beginning on July 1, 2008, and ending on 
December 31, 2009, any area that was designated as a rural 
area for purposes of making payments under such section for 
air ambulance services furnished on December 31, 2006, shall 
be treated as a rural area for purposes of making payments 
under such section for air ambulance services furnished during 
such period. 
(2) CLARIFICATION REGARDING SATISFACTION OF REQUIRE-
MENT OF MEDICALLY NECESSARY.— 
(A) IN GENERAL.—Section 1834(l)(14)(B)(i) of the Social 
Security Act (42 U.S.C. 1395m(l)(14)(B)(i)) is amended by 
striking ‘‘reasonably determines or certifies’’ and inserting 
‘‘certifies or reasonably determines’’. 
(B) EFFECTIVE
DATE.—The amendment made by 
subparagraph (A) shall apply to services furnished on or 
after the date of the enactment of this Act. 
SEC. 147. EXTENSION AND EXPANSION OF THE MEDICARE HOLD HARM-
LESS PROVISION UNDER THE PROSPECTIVE PAYMENT 
SYSTEM 
FOR 
HOSPITAL 
OUTPATIENT 
DEPARTMENT 
(HOPD) SERVICES FOR CERTAIN HOSPITALS. 
Section 1833(t)(7)(D)(i) of the Social Security Act (42 U.S.C. 
1395l(t)(7)(D)(i)) is amended— 
(1) in subclause (II)— 
(A) in the first sentence, by striking ‘‘2009’’ and 
inserting ‘‘2010’’; and 
(B) by striking the second sentence and inserting the 
following new sentence: ‘‘For purposes of the preceding 
sentence, the applicable percentage shall be 95 percent 
with respect to covered OPD services furnished in 2006, 
90 percent with respect to such services furnished in 2007, 
and 85 percent with respect to such services furnished 
in 2008 or 2009.’’; and
H. R. 6331—56 
(2) by adding at the end the following new subclause: 
‘‘(III) In the case of a sole community hospital 
(as defined in section 1886(d)(5)(D)(iii)) that has not 
more than 100 beds, for covered OPD services fur-
nished on or after January 1, 2009, and before January 
1, 2010, for which the PPS amount is less than the 
pre-BBA amount, the amount of payment under this 
subsection shall be increased by 85 percent of the 
amount of such difference.’’. 
SEC. 148. CLARIFICATION OF PAYMENT FOR CLINICAL LABORATORY 
TESTS FURNISHED BY CRITICAL ACCESS HOSPITALS. 
(a) IN GENERAL.—Section 1834(g)(4) of the Social Security Act 
(42 U.S.C. 1395m(g)(4)) is amended— 
(1) in the heading, by striking ‘‘NO
BENEFICIARY
COST- 
SHARING FOR’’ and inserting ‘‘TREATMENT OF’’; and 
(2) by adding at the end the following new sentence: ‘‘For 
purposes of the preceding sentence and section 1861(mm)(3), 
clinical diagnostic laboratory services furnished by a critical 
access hospital shall be treated as being furnished as part 
of outpatient critical access services without regard to whether 
the individual with respect to whom such services are furnished 
is physically present in the critical access hospital, or in a 
skilled nursing facility or a clinic (including a rural health 
clinic) that is operated by a critical access hospital, at the 
time the specimen is collected.’’. 
(b) EFFECTIVE DATE.—The amendments made by subsection 
(a) shall apply to services furnished on or after July 1, 2009. 
SEC. 149. ADDING CERTAIN ENTITIES AS ORIGINATING SITES FOR PAY-
MENT OF TELEHEALTH SERVICES. 
(a) IN GENERAL.—Section 1834(m)(4)(C)(ii) of the Social Security 
Act (42 U.S.C. 1395m(m)(4)(C)(ii)) is amended by adding at the 
end the following new subclauses: 
‘‘(VI) A hospital-based or critical access hos-
pital-based renal dialysis center (including sat-
ellites). 
‘‘(VII) A skilled nursing facility (as defined 
in section 1819(a)). 
‘‘(VIII) A community mental health center (as 
defined in section 1861(ff)(3)(B)).’’. 
(b) CONFORMING AMENDMENT.—Section 1888(e)(2)(A)(ii) of the 
Social Security Act (42 U.S.C. 1395yy(e)(2)(A)(ii)) is amended by 
inserting 
‘‘telehealth 
services 
furnished 
under 
section 
1834(m)(4)(C)(ii)(VII),’’ after ‘‘section 1861(s)(2),’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to services furnished on or after January 1, 2009. 
SEC. 150. MEDPAC STUDY AND REPORT ON IMPROVING CHRONIC CARE 
DEMONSTRATION PROGRAMS. 
(a) STUDY.—The Medicare Payment Advisory Commission (in 
this section referred to as the ‘‘Commission’’) shall conduct a study 
on the feasability and advisability of establishing a Medicare 
Chronic Care Practice Research Network that would serve as a 
standing network of providers testing new models of care coordina-
tion and other care approaches for chronically ill beneficiaries, 
including the initiation, operation, evaluation, and, if appropriate,
H. R. 6331—57 
expansion of such models to the broader Medicare patient popu-
lation. In conducting such study, the Commission shall take into 
account the structure, implementation, and results of prior and 
existing care coordination and disease management demonstrations 
and pilots, including the Medicare Coordinated Care Demonstration 
Project under section 4016 of the Balanced Budget Act of 1997 
(42 U.S.C. 1395b–1 note) and the chronic care improvement pro-
grams under section 1807 of the Social Security Act (42 U.S.C. 
1395b–8), commonly known to as ‘‘Medicare Health Support’’. 
(b) REPORT.—Not later than June 15, 2009, the Commission 
shall submit to Congress a report containing the results of the 
study conducted under subsection (a). 
SEC. 151. INCREASE OF FQHC PAYMENT LIMITS. 
(a) IN GENERAL.—Section 1833 of the Social Security Act (42 
U.S.C. 1395l) is amended by adding at the end the following new 
subsection: 
‘‘(v) INCREASE OF FQHC PAYMENT LIMITS.—In the case of serv-
ices furnished by Federally qualified health centers (as defined 
in section 1861(aa)(4)), the Secretary shall establish payment limits 
with respect to such services under this part for services furnished— 
‘‘(1) in 2010, at the limits otherwise established under 
this part for such year increased by $5; and 
‘‘(2) in a subsequent year, at the limits established under 
this subsection for the previous year increased by the percent-
age increase in the MEI (as defined in section 1842(i)(3)) for 
such subsequent year.’’. 
(b) STUDY AND REPORT ON THE EFFECTS AND ADEQUACY OF 
THE MEDICARE FEDERALLY QUALIFIED HEALTH CENTER PAYMENT 
STRUCTURE.— 
(1) STUDY.—The Comptroller General of the United States 
shall conduct a study to determine whether the structure for 
payments for services furnished by Federally qualified health 
centers (as defined in section 1861(aa)(4) of the Social Security 
Act (42 U.S.C. 1395x(aa)(4)) under part B of title XVIII of 
the Social Security Act (42 U.S.C. 1395j et seq.) adequately 
reimburses Federally qualified health centers for the care fur-
nished to Medicare beneficiaries. In conducting such study, 
the Comptroller General shall— 
(A) use the most current cost report data available; 
(B) examine the effects of the payment limits estab-
lished with respect to such services under such part B 
on the ability of Federally qualified health centers to fur-
nish care to Medicare beneficiaries; and 
(C) examine the cost of furnishing services covered 
under the Medicare program as of the date of the enactment 
of this Act that were not covered under such program 
as of the date on which the Secretary determined the 
payment rate for Federally qualified health centers in 1991. 
(2) REPORT.—Not later than 15 months after the date of 
the enactment of this Act, the Comptroller General of the 
United States shall submit to Congress a report on the study 
conducted under paragraph (1), together with recommendations 
for such legislation and administrative action the Comptroller 
General determines appropriate, taking into consideration the 
structure and adequacy of the prospective payment methodology 
used to make payments to Federally qualified health centers
H. R. 6331—58 
under the Medicaid program under title XIX of the Social 
Security Act (42 U.S.C. 1396 et seq.). 
SEC. 152. KIDNEY DISEASE EDUCATION AND AWARENESS PROVISIONS. 
(a) CHRONIC KIDNEY DISEASE INITIATIVES.—Part P of title III 
of the Public Health Service Act (42 U.S.C. 280g et seq.) is amended 
by adding at the end the following new section: 
‘‘SEC. 399R. CHRONIC KIDNEY DISEASE INITIATIVES. 
‘‘(a) IN GENERAL.—The Secretary shall establish pilot projects 
to— 
‘‘(1) increase public and medical community awareness 
(particularly of those who treat patients with diabetes and 
hypertension) regarding chronic kidney disease, focusing on 
prevention; 
‘‘(2) increase screening for chronic kidney disease, focusing 
on Medicare beneficiaries at risk of chronic kidney disease; 
and 
‘‘(3) enhance surveillance systems to better assess the 
prevalence and incidence of chronic kidney disease. 
‘‘(b) SCOPE AND DURATION.— 
‘‘(1) SCOPE.—The Secretary shall select at least 3 States 
in which to conduct pilot projects under this section. 
‘‘(2) DURATION.—The pilot projects under this section shall 
be conducted for a period that is not longer than 5 years 
and shall begin on January 1, 2009. 
‘‘(c) EVALUATION
AND REPORT.—The Comptroller General of 
the United States shall conduct an evaluation of the pilot projects 
conducted under this section. Not later than 12 months after the 
date on which the pilot projects are completed, the Comptroller 
General shall submit to Congress a report on the evaluation. 
‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 
to be appropriated such sums as may be necessary for the purpose 
of carrying out this section.’’. 
(b) MEDICARE COVERAGE OF KIDNEY DISEASE PATIENT EDU-
CATION SERVICES.— 
(1) COVERAGE OF KIDNEY DISEASE EDUCATION SERVICES.— 
(A) COVERAGE.—Section 1861(s)(2) of the Social Secu-
rity Act (42 U.S.C. 1395x(s)(2)), as amended by section 
144(a), is amended— 
(i) in subparagraph (CC), by striking ‘‘and’’ after 
the semicolon at the end; 
(ii) in subparagraph (DD), by adding ‘‘and’’ after 
the semicolon at the end; and 
(iii) by adding at the end the following new 
subparagraph: 
‘‘(EE) kidney disease education services (as defined in sub-
section (ggg));’’. 
(B) SERVICES DESCRIBED.—Section 1861 of the Social 
Security Act (42 U.S.C. 1395x), as amended by section 
144(a), is amended by adding at the end the following 
new subsection: 
‘‘Kidney Disease Education Services 
‘‘(ggg)(1) The term ‘kidney disease education services’ means 
educational services that are—
H. R. 6331—59 
‘‘(A) furnished to an individual with stage IV chronic kidney 
disease who, according to accepted clinical guidelines identified 
by the Secretary, will require dialysis or a kidney transplant; 
‘‘(B) furnished, upon the referral of the physician managing 
the individual’s kidney condition, by a qualified person (as 
defined in paragraph (2)); and 
‘‘(C) designed— 
‘‘(i) to provide comprehensive information (consistent 
with the standards set under paragraph (3)) regarding— 
‘‘(I) the management of comorbidities, including 
for purposes of delaying the need for dialysis; 
‘‘(II) the prevention of uremic complications; and 
‘‘(III) each option for renal replacement therapy 
(including hemodialysis and peritoneal dialysis at home 
and in-center as well as vascular access options and 
transplantation); 
‘‘(ii) to ensure that the individual has the opportunity 
to actively participate in the choice of therapy; and 
‘‘(iii) to be tailored to meet the needs of the individual 
involved. 
‘‘(2)(A) The term ‘qualified person’ means— 
‘‘(i) a physician (as defined in section 1861(r)(1)) or a physi-
cian assistant, nurse practitioner, or clinical nurse specialist 
(as defined in section 1861(aa)(5)), who furnishes services for 
which payment may be made under the fee schedule established 
under section 1848; and 
‘‘(ii) a provider of services located in a rural area (as defined 
in section 1886(d)(2)(D)). 
‘‘(B) Such term does not include a provider of services (other 
than a provider of services described in subparagraph (A)(ii)) or 
a renal dialysis facility. 
‘‘(3) The Secretary shall set standards for the content of such 
information to be provided under paragraph (1)(C)(i) after con-
sulting with physicians, other health professionals, health edu-
cators, professional organizations, accrediting organizations, kidney 
patient organizations, dialysis facilities, transplant centers, network 
organizations described in section 1881(c)(2), and other knowledge-
able persons. To the extent possible the Secretary shall consult 
with persons or entities described in the previous sentence, other 
than a dialysis facility, that has not received industry funding 
from a drug or biological manufacturer or dialysis facility. 
‘‘(4) No individual shall be furnished more than 6 sessions 
of kidney disease education services under this title.’’. 
(C) PAYMENT UNDER THE PHYSICIAN FEE SCHEDULE.— 
Section 1848(j)(3) of the Social Security Act (42 U.S.C. 
1395w–4(j)(3)), as amended by section 144(b), is amended 
by inserting ‘‘(2)(EE),’’ after ‘‘(2)(DD),’’. 
(D) LIMITATION
ON
NUMBER
OF
SESSIONS.—Section 
1862(a)(1) of the Social Security Act (42 U.S.C. 1395y(a)(1)) 
is amended— 
(i) in subparagraph (M), by striking ‘‘and’’ at the 
end; 
(ii) in subparagraph (N), by striking the semicolon 
at the end and inserting ‘‘, and’’; and 
(iii) by adding at the end the following new 
subparagraph:
H. R. 6331—60 
‘‘(O) in the case of kidney disease education services (as 
defined in paragraph (1) of section 1861(ggg)), which are fur-
nished in excess of the number of sessions covered under para-
graph (4) of such section;’’. 
(2) EFFECTIVE DATE.—The amendments made by this sub-
section shall apply to services furnished on or after January 
1, 2010. 
SEC. 153. RENAL DIALYSIS PROVISIONS. 
(a) COMPOSITE RATE.— 
(1) UPDATE.—Section 1881(b)(12)(G) of the Social Security 
Act (42 U.S.C. 1395rr(b)(12)(G)) is amended— 
(A) in clause (i), by striking ‘‘and’’ at the end; 
(B) in clause (ii)— 
(i) by inserting ‘‘and before January 1, 2009,’’ after 
‘‘April 1, 2007,’’; and 
(ii) by striking the period at the end and inserting 
a semicolon; and 
(C) by adding at the end the following new clauses: 
‘‘(iii) furnished on or after January 1, 2009, and before 
January 1, 2010, by 1.0 percent above the amount of such 
composite rate component for such services furnished on 
December 31, 2008; and 
‘‘(iv) furnished on or after January 1, 2010, by 1.0 percent 
above the amount of such composite rate component for such 
services furnished on December 31, 2009.’’. 
(2) SITE NEUTRAL COMPOSITE RATE.—Section 1881(b)(12)(A) 
of the Social Security Act (42 U.S.C. 1395rr(b)(12)(A)) is 
amended by adding at the end the following new sentence: 
‘‘Under such system, the payment rate for dialysis services 
furnished on or after January 1, 2009, by providers of services 
shall be the same as the payment rate (computed without 
regard to this sentence) for such services furnished by renal 
dialysis facilities, and in applying the geographic index under 
subparagraph (D) to providers of services, the labor share shall 
be based on the labor share otherwise applied for renal dialysis 
facilities.’’. 
(b) DEVELOPMENT OF ESRD BUNDLED PAYMENT SYSTEM.— 
(1) IN GENERAL.—Section 1881(b) of the Social Security 
Act (42 U.S.C. 1395rr(b)) is amended by adding at the end 
the following new paragraph: 
‘‘(14)(A)(i) Subject to subparagraph (E), for services furnished 
on or after January 1, 2011, the Secretary shall implement a 
payment system under which a single payment is made under 
this title to a provider of services or a renal dialysis facility for 
renal dialysis services (as defined in subparagraph (B)) in lieu 
of any other payment (including a payment adjustment under para-
graph (12)(B)(ii)) and for such services and items furnished pursu-
ant to paragraph (4). 
‘‘(ii) In implementing the system under this paragraph the 
Secretary shall ensure that the estimated total amount of payments 
under this title for 2011 for renal dialysis services shall equal 
98 percent of the estimated total amount of payments for renal 
dialysis services, including payments under paragraph (12)(B)(ii), 
that would have been made under this title with respect to services 
furnished in 2011 if such system had not been implemented. In 
making the estimation under subclause (I), the Secretary shall
H. R. 6331—61 
use per patient utilization data from 2007, 2008, or 2009, whichever 
has the lowest per patient utilization. 
‘‘(B) For purposes of this paragraph, the term ‘renal dialysis 
services’ includes— 
‘‘(i) items and services included in the composite rate for 
renal dialysis services as of December 31, 2010; 
‘‘(ii) erythropoiesis stimulating agents and any oral form 
of such agents that are furnished to individuals for the treat-
ment of end stage renal disease; 
‘‘(iii) other drugs and biologicals that are furnished to 
individuals for the treatment of end stage renal disease and 
for which payment was (before the application of this para-
graph) made separately under this title, and any oral equivalent 
form of such drug or biological; and 
‘‘(iv) diagnostic laboratory tests and other items and serv-
ices not described in clause (i) that are furnished to individuals 
for the treatment of end stage renal disease. 
Such term does not include vaccines. 
‘‘(C) The system under this paragraph may provide for payment 
on the basis of services furnished during a week or month or 
such other appropriate unit of payment as the Secretary specifies. 
‘‘(D) Such system— 
‘‘(i) shall include a payment adjustment based on case 
mix that may take into account patient weight, body mass 
index, comorbidities, length of time on dialysis, age, race, eth-
nicity, and other appropriate factors; 
‘‘(ii) shall include a payment adjustment for high cost 
outliers due to unusual variations in the type or amount of 
medically necessary care, including variations in the amount 
of erythropoiesis stimulating agents necessary for anemia 
management; 
‘‘(iii) shall include a payment adjustment that reflects the 
extent to which costs incurred by low-volume facilities (as 
defined by the Secretary) in furnishing renal dialysis services 
exceed the costs incurred by other facilities in furnishing such 
services, and for payment for renal dialysis services furnished 
on or after January 1, 2011, and before January 1, 2014, 
such payment adjustment shall not be less than 10 percent; 
and 
‘‘(iv) may include such other payment adjustments as the 
Secretary determines appropriate, such as a payment adjust-
ment— 
‘‘(I) for pediatric providers of services and renal dialysis 
facilities; 
‘‘(II) by a geographic index, such as the index referred 
to in paragraph (12)(D), as the Secretary determines to 
be appropriate; and 
‘‘(III) for providers of services or renal dialysis facilities 
located in rural areas. 
The Secretary shall take into consideration the unique treatment 
needs of children and young adults in establishing such system. 
‘‘(E)(i) The Secretary shall provide for a four-year phase-in 
(in equal increments) of the payment amount under the payment 
system under this paragraph, with such payment amount being 
fully implemented for renal dialysis services furnished on or after 
January 1, 2014.
H. R. 6331—62 
‘‘(ii) A provider of services or renal dialysis facility may make 
a one-time election to be excluded from the phase-in under clause 
(i) and be paid entirely based on the payment amount under the 
payment system under this paragraph. Such an election shall be 
made prior to January 1, 2011, in a form and manner specified 
by the Secretary, and is final and may not be rescinded. 
‘‘(iii) The Secretary shall make an adjustment to the payments 
under this paragraph for years during which the phase-in under 
clause (i) is applicable so that the estimated total amount of pay-
ments under this paragraph, including payments under this 
subparagraph, shall equal the estimated total amount of payments 
that would otherwise occur under this paragraph without such 
phase-in. 
‘‘(F)(i) Subject to clause (ii), beginning in 2012, the Secretary 
shall annually increase payment amounts established under this 
paragraph by an ESRD market basket percentage increase factor 
for a bundled payment system for renal dialysis services that 
reflects changes over time in the prices of an appropriate mix 
of goods and services included in renal dialysis services minus 
1.0 percentage point. 
‘‘(ii) For years during which a phase-in of the payment system 
pursuant to subparagraph (E) is applicable, the following rules 
shall apply to the portion of the payment under the system that 
is based on the payment of the composite rate that would otherwise 
apply if the system under this paragraph had not been enacted: 
‘‘(I) The update under clause (i) shall not apply. 
‘‘(II) The Secretary shall annually increase such composite 
rate by the ESRD market basket percentage increase factor 
described in clause (i) minus 1.0 percentage point. 
‘‘(G) There shall be no administrative or judicial review under 
section 1869, section 1878, or otherwise of the determination of 
payment amounts under subparagraph (A), the establishment of 
an appropriate unit of payment under subparagraph (C), the identi-
fication of renal dialysis services included in the bundled payment, 
the adjustments under subparagraph (D), the application of the 
phase-in under subparagraph (E), and the establishment of the 
market basket percentage increase factors under subparagraph (F). 
‘‘(H) Erythropoiesis stimulating agents and other drugs and 
biologicals shall be treated as prescribed and dispensed or adminis-
tered and available only under part B if they are— 
‘‘(i) furnished to an individual for the treatment of end 
stage renal disease; and 
‘‘(ii) included in subparagraph (B) for purposes of payment 
under this paragraph.’’. 
(2) PROHIBITION OF UNBUNDLING.—Section 1862(a) of the 
Social Security Act (42 U.S.C. 1395y(a)), as amended by section 
135(a)(2), is amended— 
(A) in paragraph (22), by striking ‘‘or’’ at the end; 
(B) in paragraph (23), by striking the period at the 
end and inserting ‘‘; or’’; and 
(C) by inserting after paragraph (23) the following 
new paragraph: 
‘‘(24) where such expenses are for renal dialysis services 
(as defined in subparagraph (B) of section 1881(b)(14)) for which 
payment is made under such section unless such payment 
is made under such section to a provider of services or a 
renal dialysis facility for such services.’’.
H. R. 6331—63 
(3) CONFORMING AMENDMENTS.—(A) Section 1881(b) of the 
Social Security Act (42 U.S.C. 1395rr(b)) is amended— 
(i) in paragraph (12)(A), by striking ‘‘In lieu of pay-
ment’’ and inserting ‘‘Subject to paragraph (14), in lieu 
of payment’’; 
(ii) in the second sentence of paragraph (12)(F)— 
(I) by inserting ‘‘or paragraph (14)’’ after ‘‘this para-
graph’’; and 
(II) by inserting ‘‘or under the system under para-
graph (14)’’ after ‘‘subparagraph (B)’’; and 
(iii) in paragraph (13)— 
(I) in subparagraph (A), in the matter preceding 
clause (i), by striking ‘‘The payment amounts’’ and 
inserting ‘‘Subject to paragraph (14), the payment 
amounts’’; and 
(II) in subparagraph (B)— 
(aa) in clause (i), by striking ‘‘(i)’’ after ‘‘(B)’’ 
and by inserting ‘‘, subject to paragraph (14)’’ 
before the period at the end; and 
(bb) by striking clause (ii). 
(B) Section 1861(s)(2)(F) of the Social Security Act (42 
U.S.C. 1395x(s)(2)(F)) is amended by inserting ‘‘, and, for items 
and services furnished on or after January 1, 2011, renal 
dialysis services (as defined in section 1881(b)(14)(B))’’ before 
the semicolon at the end. 
(C) Section 623(e) of the Medicare Prescription Drug, 
Improvement, and Modernization Act of 2003 (42 U.S.C. 1395rr 
note) is repealed. 
(4) RULE OF CONSTRUCTION.—Nothing in this subsection 
or the amendments made by this subsection shall be construed 
as authorizing or requiring the Secretary of Health and Human 
Services to make payments under the payment system imple-
mented under paragraph (14)(A)(i) of section 1881(b) of the 
Social Security Act (42 U.S.C. 1395rr(b)), as added by paragraph 
(1), for any unrecovered amount for any bad debt attributable 
to deductible and coinsurance on items and services not 
included in the basic case-mix adjusted composite rate under 
paragraph (12) of such section as in effect before the date 
of the enactment of this Act. 
(c) QUALITY INCENTIVES
IN
THE END-STAGE RENAL DISEASE 
PROGRAM.—Section 1881 of the Social Security Act (42 U.S.C. 
1395rr) is amended by adding at the end the following new sub-
section: 
‘‘(h) QUALITY INCENTIVES IN THE END-STAGE RENAL DISEASE 
PROGRAM.— 
‘‘(1) QUALITY INCENTIVES.— 
‘‘(A) IN GENERAL.—With respect to renal dialysis serv-
ices (as defined in subsection (b)(14)(B)) furnished on or 
after January 1, 2012, in the case of a provider of services 
or a renal dialysis facility that does not meet the require-
ment described in subparagraph (B) with respect to the 
year, payments otherwise made to such provider or facility 
under the system under subsection (b)(14) for such services 
shall be reduced by up to 2.0 percent, as determined appro-
priate by the Secretary. 
‘‘(B) REQUIREMENT.—The requirement described in this 
subparagraph is that the provider or facility meets (or
H. R. 6331—64 
exceeds) the total performance score under paragraph (3) 
with respect to performance standards established by the 
Secretary with respect to measures specified in paragraph 
(2). 
‘‘(C) NO EFFECT IN SUBSEQUENT YEARS.—The reduction 
under subparagraph (A) shall apply only with respect to 
the year involved, and the Secretary shall not take into 
account such reduction in computing the single payment 
amount under the system under paragraph (14) in a subse-
quent year. 
‘‘(2) MEASURES.— 
‘‘(A) IN GENERAL.—The measures specified under this 
paragraph with respect to the year involved shall include— 
‘‘(i) measures on anemia management that reflect 
the labeling approved by the Food and Drug Adminis-
tration for such management and measures on dialysis 
adequacy; 
‘‘(ii) to the extent feasible, such measure (or meas-
ures) of patient satisfaction as the Secretary shall 
specify; and 
‘‘(iii) such other measures as the Secretary speci-
fies, including, to the extent feasible, measures on— 
‘‘(I) iron management; 
‘‘(II) bone mineral metabolism; and 
‘‘(III) vascular access, including for maximizing 
the placement of arterial venous fistula. 
‘‘(B) USE OF ENDORSED MEASURES.— 
‘‘(i) IN
GENERAL.—Subject to clause (ii), any 
measure specified by the Secretary under subpara-
graph (A)(iii) must have been endorsed by the entity 
with a contract under section 1890(a). 
‘‘(ii) EXCEPTION.—In the case of a specified area 
or medical topic determined appropriate by the Sec-
retary for which a feasible and practical measure has 
not been endorsed by the entity with a contract under 
section 1890(a), the Secretary may specify a measure 
that is not so endorsed as long as due consideration 
is given to measures that have been endorsed or 
adopted by a consensus organization identified by the 
Secretary. 
‘‘(C) UPDATING MEASURES.—The Secretary shall estab-
lish a process for updating the measures specified under 
subparagraph (A) in consultation with interested parties. 
‘‘(D) CONSIDERATION.—In specifying measures under 
subparagraph (A), the Secretary shall consider the avail-
ability of measures that address the unique treatment 
needs of children and young adults with kidney failure. 
‘‘(3) PERFORMANCE SCORES.— 
‘‘(A) TOTAL PERFORMANCE SCORE.— 
‘‘(i) IN GENERAL.—Subject to clause (ii), the Sec-
retary shall develop a methodology for assessing the 
total performance of each provider of services and renal 
dialysis facility based on performance standards with 
respect to the measures selected under paragraph (2) 
for a performance period established under paragraph 
(4)(D) (in this subsection referred to as the ‘total 
performance score’).
H. R. 6331—65 
‘‘(ii) APPLICATION.—For providers of services and 
renal dialysis facilities that do not meet (or exceed) 
the total performance score established by the Sec-
retary, the Secretary shall ensure that the application 
of the methodology developed under clause (i) results 
in an appropriate distribution of reductions in payment 
under paragraph (1) among providers and facilities 
achieving different levels of total performance scores, 
with providers and facilities achieving the lowest total 
performance scores receiving the largest reduction in 
payment under paragraph (1)(A). 
‘‘(iii) WEIGHTING OF MEASURES.—In calculating the 
total performance score, the Secretary shall weight 
the scores with respect to individual measures cal-
culated under subparagraph (B) to reflect priorities 
for quality improvement, such as weighting scores to 
ensure that providers of services and renal dialysis 
facilities have strong incentives to meet or exceed 
anemia management and dialysis adequacy perform-
ance standards, as determined appropriate by the Sec-
retary. 
‘‘(B) PERFORMANCE SCORE WITH RESPECT TO INDIVIDUAL 
MEASURES.—The Secretary shall also calculate separate 
performance scores for each measure, including for dialysis 
adequacy and anemia management. 
‘‘(4) PERFORMANCE STANDARDS.— 
‘‘(A) ESTABLISHMENT.—Subject to subparagraph (E), 
the Secretary shall establish performance standards with 
respect to measures selected under paragraph (2) for a 
performance period with respect to a year (as established 
under subparagraph (D)). 
‘‘(B) ACHIEVEMENT AND IMPROVEMENT.—The perform-
ance standards established under subparagraph (A) shall 
include levels of achievement and improvement, as deter-
mined appropriate by the Secretary. 
‘‘(C) TIMING.—The Secretary shall establish the 
performance standards under subparagraph (A) prior to 
the beginning of the performance period for the year 
involved. 
‘‘(D) PERFORMANCE PERIOD.—The Secretary shall estab-
lish the performance period with respect to a year. Such 
performance period shall occur prior to the beginning of 
such year. 
‘‘(E) SPECIAL RULE.—The Secretary shall initially use 
as the performance standard for the measures specified 
under paragraph (2)(A)(i) for a provider of services or a 
renal dialysis facility the lesser of— 
‘‘(i) the performance of such provider or facility 
for such measures in the year selected by the Secretary 
under the second sentence of subsection (b)(14)(A)(ii); 
or 
‘‘(ii) a performance standard based on the national 
performance rates for such measures in a period deter-
mined by the Secretary. 
‘‘(5) LIMITATION ON REVIEW.—There shall be no administra-
tive or judicial review under section 1869, section 1878, or 
otherwise of the following:
H. R. 6331—66 
‘‘(A) The determination of the amount of the payment 
reduction under paragraph (1). 
‘‘(B) The establishment of the performance standards 
and the performance period under paragraph (4). 
‘‘(C) The specification of measures under paragraph 
(2). 
‘‘(D) The methodology developed under paragraph (3) 
that is used to calculate total performance scores and 
performance scores for individual measures. 
‘‘(6) PUBLIC REPORTING.— 
‘‘(A) IN GENERAL.—The Secretary shall establish proce-
dures for making information regarding performance under 
this subsection available to the public, including— 
‘‘(i) the total performance score achieved by the 
provider of services or renal dialysis facility under 
paragraph (3) and appropriate comparisons of pro-
viders of services and renal dialysis facilities to the 
national average with respect to such scores; and 
‘‘(ii) the performance score achieved by the provider 
or facility with respect to individual measures. 
‘‘(B) OPPORTUNITY TO REVIEW.—The procedures estab-
lished under subparagraph (A) shall ensure that a provider 
of services and a renal dialysis facility has the opportunity 
to review the information that is to be made public with 
respect to the provider or facility prior to such data being 
made public. 
‘‘(C) CERTIFICATES.— 
‘‘(i) IN GENERAL.—The Secretary shall provide cer-
tificates to providers of services and renal dialysis 
facilities who furnish renal dialysis services under this 
section to display in patient areas. The certificate shall 
indicate the total performance score achieved by the 
provider or facility under paragraph (3). 
‘‘(ii) DISPLAY.—Each facility or provider receiving 
a certificate under clause (i) shall prominently display 
the certificate at the provider or facility. 
‘‘(D) WEB-BASED LIST.—The Secretary shall establish 
a list of providers of services and renal dialysis facilities 
who furnish renal dialysis services under this section that 
indicates the total performance score and the performance 
score for individual measures achieved by the provider 
and facility under paragraph (3). Such information shall 
be posted on the Internet website of the Centers for Medi-
care & Medicaid Services in an easily understandable for-
mat.’’. 
(d) GAO REPORT ON ESRD BUNDLING SYSTEM AND QUALITY 
INITIATIVE.—Not later than March 1, 2013, the Comptroller General 
of the United States shall submit to Congress a report on the 
implementation of the payment system under subsection (b)(14) 
of section 1881 of the Social Security Act (as added by subsection 
(b)) for renal dialysis services and related services (defined in 
subparagraph (B) of such subsection (b)(14)) and the quality initia-
tive under subsection (h) of such section 1881 (as added by sub-
section (b)). Such report shall include the following information: 
(1) The changes in utilization rates for erythropoiesis 
stimulating agents.
H. R. 6331—67 
(2) The mode of administering such agents, including 
information on the proportion of individuals receiving such 
agents intravenously as compared to subcutaneously. 
(3) An analysis of the payment adjustment under subpara-
graph (D)(iii) of such subsection (b)(14), including an examina-
tion of the extent to which costs incurred by rural, low-volume 
providers and facilities (as defined by the Secretary) in fur-
nishing renal dialysis services exceed the costs incurred by 
other providers and facilities in furnishing such services, and 
a recommendation regarding the appropriateness of such 
adjustment. 
(4) The changes, if any, in utilization rates of drugs and 
biologicals that the Secretary identifies under subparagraph 
(B)(iii) of such subsection (b)(14), and any oral equivalent or 
oral substitutable forms of such drugs and biologicals or of 
drugs and biologicals described in clause (ii), that have occurred 
after implementation of the payment system under such sub-
section (b)(14). 
(5) Any other information or recommendations for legisla-
tive and administrative actions determined appropriate by the 
Comptroller General. 
SEC. 154. DELAY IN AND REFORM OF MEDICARE DMEPOS COMPETI-
TIVE ACQUISITION PROGRAM. 
(a) TEMPORARY DELAY AND REFORM.— 
(1) IN GENERAL.—Section 1847(a)(1) of the Social Security 
Act (42 U.S.C. 1395w–3(a)(1)) is amended— 
(A) in paragraph (1)— 
(i) in subparagraph (B)(i), in the matter before 
subclause (I), by inserting ‘‘consistent with subpara-
graph (D)’’ after ‘‘in a manner’’; 
(ii) in subparagraph (B)(i)(II), by striking ‘‘80’’ and 
‘‘in 2009’’ and inserting ‘‘an additional 70’’ and ‘‘in 
2011’’, respectively; 
(iii) in subparagraph (B)(i)(III), by striking ‘‘after 
2009’’ and inserting ‘‘after 2011 (or, in the case of 
national mail order for items and services, after 2010)’’; 
and 
(iv) by adding at the end the following new sub-
paragraphs: 
‘‘(D) CHANGES
IN
COMPETITIVE
ACQUISITION
PRO-
GRAMS.— 
‘‘(i) ROUND
OF
COMPETITIVE
ACQUISITION
PRO-
GRAM.—Notwithstanding subparagraph (B)(i)(I) and in 
implementing the first round of the competitive 
acquisition programs under this section— 
‘‘(I) the contracts awarded under this section 
before the date of the enactment of this subpara-
graph are terminated, no payment shall be made 
under this title on or after the date of the enact-
ment of this subparagraph based on such a con-
tract, and, to the extent that any damages may 
be applicable as a result of the termination of 
such contracts, such damages shall be payable 
from the Federal Supplementary Medical Insur-
ance Trust Fund under section 1841;
H. R. 6331—68 
‘‘(II) the Secretary shall conduct the competi-
tion for such round in a manner so that it occurs 
in 2009 with respect to the same items and services 
and the same areas, except as provided in sub-
clauses (III) and (IV); 
‘‘(III) the Secretary shall exclude Puerto Rico 
so that such round of competition covers 9, instead 
of 10, of the largest metropolitan statistical areas; 
and 
‘‘(IV) there shall be excluded negative pressure 
wound therapy items and services. 
Nothing in subclause (I) shall be construed to provide 
an independent cause of action or right to administra-
tive or judicial review with regard to the termination 
provided under such subclause. 
‘‘(ii) ROUND 2 OF COMPETITIVE ACQUISITION PRO-
GRAM.—In implementing the second round of the 
competitive acquisition programs under this section 
described in subparagraph (B)(i)(II)— 
‘‘(I) the metropolitan statistical areas to be 
included shall be those metropolitan statistical 
areas selected by the Secretary for such round 
as of June 1, 2008; and 
‘‘(II) the Secretary may subdivide metropolitan 
statistical areas with populations (based upon the 
most recent data from the Census Bureau) of at 
least 8,000,000 into separate areas for competitive 
acquisition purposes. 
‘‘(iii) EXCLUSION OF CERTAIN AREAS IN SUBSEQUENT 
ROUNDS OF COMPETITIVE ACQUISITION PROGRAMS.—In 
implementing subsequent rounds of the competitive 
acquisition programs under this section, including 
under subparagraph (B)(i)(III), for competitions occur-
ring before 2015, the Secretary shall exempt from the 
competitive acquisition program (other than national 
mail order) the following: 
‘‘(I) Rural areas. 
‘‘(II) Metropolitan statistical areas not selected 
under round 1 or round 2 with a population of 
less than 250,000. 
‘‘(III) Areas with a low population density 
within a metropolitan statistical area that is other-
wise selected, as determined for purposes of para-
graph (3)(A). 
‘‘(E) VERIFICATION BY OIG.—The Inspector General of 
the Department of Health and Human Services shall, 
through post-award audit, survey, or otherwise, assess the 
process used by the Centers for Medicare & Medicaid Serv-
ices to conduct competitive bidding and subsequent pricing 
determinations under this section that are the basis for 
pivotal bid amounts and single payment amounts for items 
and services in competitive bidding areas under rounds 
1 and 2 of the competitive acquisition programs under 
this section and may continue to verify such calculations 
for subsequent rounds of such programs. 
‘‘(F) SUPPLIER FEEDBACK ON MISSING FINANCIAL DOCU-
MENTATION.—
H. R. 6331—69 
‘‘(i) IN GENERAL.—In the case of a bid where one 
or more covered documents in connection with such 
bid have been submitted not later than the covered 
document review date specified in clause (ii), the Sec-
retary— 
‘‘(I) shall provide, by not later than 45 days 
(in the case of the first round of the competitive 
acquisition programs as described in subparagraph 
(B)(i)(I)) or 90 days (in the case of a subsequent 
round of such programs) after the covered docu-
ment review date, for notice to the bidder of all 
such documents that are missing as of the covered 
document review date; and 
‘‘(II) may not reject the bid on the basis that 
any covered document is missing or has not been 
submitted on a timely basis, if all such missing 
documents identified in the notice provided to the 
bidder under subclause (I) are submitted to the 
Secretary not later than 10 business days after 
the date of such notice. 
‘‘(ii) COVERED DOCUMENT REVIEW DATE.—The cov-
ered document review date specified in this clause 
with respect to a competitive acquisition program is 
the later of— 
‘‘(I) the date that is 30 days before the final 
date specified by the Secretary for submission of 
bids under such program; or 
‘‘(II) the date that is 30 days after the first 
date specified by the Secretary for submission of 
bids under such program. 
‘‘(iii) LIMITATIONS OF PROCESS.—The process pro-
vided under this subparagraph— 
‘‘(I) applies only to the timely submission of 
covered documents; 
‘‘(II) does not apply to any determination as 
to the accuracy or completeness of covered docu-
ments submitted or whether such documents meet 
applicable requirements; 
‘‘(III) shall not prevent the Secretary from 
rejecting a bid based on any basis not described 
in clause (i)(II); and 
‘‘(IV) shall not be construed as permitting a 
bidder to change bidding amounts or to make other 
changes in a bid submission. 
‘‘(iv) 
COVERED
DOCUMENT
DEFINED.—In 
this 
subparagraph, the term ‘covered document’ means a 
financial, tax, or other document required to be sub-
mitted by a bidder as part of an original bid submission 
under a competitive acquisition program in order to 
meet required financial standards. Such term does not 
include other documents, such as the bid itself or 
accreditation documentation.’’; and 
(B) in paragraph (2)(A), by inserting before the period 
at the end the following: ‘‘and excluding certain complex 
rehabilitative power wheelchairs recognized by the Sec-
retary as classified within group 3 or higher (and related
H. R. 6331—70 
accessories when furnished in connection with such wheel-
chairs)’’. 
(2) BUDGET NEUTRAL OFFSET.— 
(A) IN GENERAL.—Section 1834(a)(14) of such Act (42 
U.S.C. 1395m(a)(14)) is amended— 
(i) by striking ‘‘and’’ at the end of subparagraphs 
(H) and (I); 
(ii) by redesignating subparagraph (J) as subpara-
graph (M); and 
(iii) by inserting after subparagraph (I) the fol-
lowing new subparagraphs: 
‘‘(J) for 2009— 
‘‘(i) in the case of items and services furnished 
in any geographic area, if such items or services were 
selected for competitive acquisition in any area under 
the competitive acquisition program under section 
1847(a)(1)(B)(i)(I) before July 1, 2008, including related 
accessories but only if furnished with such items and 
services selected for such competition and diabetic sup-
plies but only if furnished through mail order, - 9.5 
percent; or 
‘‘(ii) in the case of other items and services, the 
percentage increase in the consumer price index for 
all urban consumers (U.S. urban average) for the 12- 
month period ending with June 2008; 
‘‘(K) for 2010, 2011, 2012, and 2013, the percentage 
increase in the consumer price index for all urban con-
sumers (U.S. urban average) for the 12-month period 
ending with June of the previous year; 
‘‘(L) for 2014— 
‘‘(i) in the case of items and services described 
in subparagraph (J)(i) for which a payment adjustment 
has not been made under subsection (a)(1)(F)(ii) in 
any previous year, the percentage increase in the con-
sumer price index for all urban consumers (U.S. urban 
average) for the 12-month period ending with June 
2013, plus 2.0 percentage points; or 
‘‘(ii) in the case of other items and services, the 
percentage increase in the consumer price index for 
all urban consumers (U.S. urban average) for the 12- 
month period ending with June 2013; and’’. 
(B) CONFORMING TREATMENT FOR CERTAIN ITEMS AND 
SERVICES.—The second sentence of section 1842(s)(1) of 
such Act (42 U.S.C. 1395u(s)(1)) is amended by striking 
‘‘except that’’ and all that follows and inserting the fol-
lowing: ‘‘except that for items and services described in 
paragraph (2)(D)— 
‘‘(A) for 2009 section 1834(a)(14)(J)(i) shall apply under 
this paragraph instead of the percentage increase otherwise 
applicable; and 
‘‘(B) for 2014, if subparagraph (A) is applied to the items 
and services and there has not been a payment adjustment 
under paragraph (3)(B) for the items and services for any 
previous year, the percentage increase computed under section 
1834(a)(14)(L)(i) shall apply instead of the percentage increase 
otherwise applicable.’’.
H. R. 6331—71 
(3) 
CONFORMING
DELAY.—Subsections 
(a)(1)(F) 
and 
(h)(1)(H) of section 1834 of the Social Security Act (42 U.S.C. 
1395m) are each amended by striking ‘‘January 1, 2009’’ and 
inserting ‘‘January 1, 2011’’. 
(4) CONSIDERATIONS IN APPLICATION.—Section 1834 of such 
Act (42 U.S.C. 1395m) is amended— 
(A) in subsection (a)(1)— 
(i) in subparagraph (F), by inserting ‘‘subject to 
subparagraph (G),’’ before ‘‘that are included’’; and 
(ii) by adding at the end the following new 
subparagraph: 
‘‘(G) USE OF INFORMATION ON COMPETITIVE BID RATES.— 
The Secretary shall specify by regulation the methodology 
to be used in applying the provisions of subparagraph 
(F)(ii) and subsection (h)(1)(H)(ii). In promulgating such 
regulation, the Secretary shall consider the costs of items 
and services in areas in which such provisions would be 
applied compared to the payment rates for such items 
and services in competitive acquisition areas.’’; and 
(B) in subsection (h)(1)(H), by inserting ‘‘subject to 
subsection (a)(1)(G),’’ before ‘‘that are included’’. 
(b) QUALITY STANDARDS.— 
(1) APPLICATION OF ACCREDITATION REQUIREMENT.— 
(A) IN
GENERAL.—Section 1834(a)(20) of the Social 
Security Act (42 U.S.C. 1395m(a)(20)) is amended— 
(i) in subparagraph (E), by inserting ‘‘including 
subparagraph (F),’’ after ‘‘under this paragraph,’’; and 
(ii) by adding at the end the following new 
subparagraph: 
‘‘(F) APPLICATION OF ACCREDITATION REQUIREMENT.— 
In implementing quality standards under this paragraph— 
‘‘(i) subject to clause (ii), the Secretary shall require 
suppliers furnishing items and services described in 
subparagraph (D) on or after October 1, 2009, directly 
or as a subcontractor for another entity, to have sub-
mitted to the Secretary evidence of accreditation by 
an 
accreditation 
organization 
designated 
under 
subparagraph (B) as meeting applicable quality stand-
ards; and 
‘‘(ii) in applying such standards and the accredita-
tion requirement of clause (i) with respect to eligible 
professionals (as defined in section 1848(k)(3)(B)), and 
including such other persons, such as orthotists and 
prosthetists, as specified by the Secretary, furnishing 
such items and services— 
‘‘(I) such standards and accreditation require-
ment shall not apply to such professionals and 
persons unless the Secretary determines that the 
standards being applied are designed specifically 
to be applied to such professionals and persons; 
and 
‘‘(II) the Secretary may exempt such profes-
sionals and persons from such standards and 
requirement if the Secretary determines that 
licensing, accreditation, or other mandatory quality
H. R. 6331—72 
requirements apply to such professionals and per-
sons with respect to the furnishing of such items 
and services.’’. 
(B) CONSTRUCTION.—Section 1834(a)(20)(F)(ii) of the 
Social Security Act, as added by subparagraph (A), shall 
not be construed as preventing the Secretary of Health 
and Human Services from implementing the first round 
of competition under section 1847 of such Act on a timely 
basis. 
(2) DISCLOSURE OF SUBCONTRACTORS UNDER COMPETITIVE 
ACQUISITION
PROGRAM.—Section 1847(b)(3) of such Act (42 
U.S.C. 1395w–3(b)(3)) is amended by adding at the end the 
following new subparagraph: 
‘‘(C) DISCLOSURE OF SUBCONTRACTORS.— 
‘‘(i) INITIAL DISCLOSURE.—Not later than 10 days 
after the date a supplier enters into a contract with 
the Secretary under this section, such supplier shall 
disclose to the Secretary, in a form and manner speci-
fied by the Secretary, the information on— 
‘‘(I) each subcontracting relationship that such 
supplier has in furnishing items and services 
under the contract; and 
‘‘(II) whether each such subcontractor meets 
the requirement of section 1834(a)(20)(F)(i), if 
applicable to such subcontractor. 
‘‘(ii) SUBSEQUENT DISCLOSURE.—Not later than 10 
days after such a supplier subsequently enters into 
a subcontracting relationship described in clause (i)(II), 
such supplier shall disclose to the Secretary, in such 
form and manner, the information described in sub-
clauses (I) and (II) of clause (i).’’. 
(3) COMPETITIVE ACQUISITION OMBUDSMAN.—Such section 
is further amended by adding at the end the following new 
subsection: 
‘‘(f) COMPETITIVE ACQUISITION OMBUDSMAN.—The Secretary 
shall provide for a competitive acquisition ombudsman within the 
Centers for Medicare & Medicaid Services in order to respond 
to complaints and inquiries made by suppliers and individuals 
relating to the application of the competitive acquisition program 
under this section. The ombudsman may be within the office of 
the Medicare Beneficiary Ombudsman appointed under section 
1808(c). The ombudsman shall submit to Congress an annual report 
on the activities under this subsection, which report shall be coordi-
nated with the report provided under section 1808(c)(2)(C).’’. 
(c) CHANGE IN REPORTS AND DEADLINES.— 
(1) GAO 
REPORT.—Section 302(b)(3) of the Medicare 
Prescription Drug, Improvement, and Modernization Act of 
2003 (Public Law 108-173) is amended— 
(A) in subparagraph (A)— 
(i) by inserting ‘‘and as amended by section 2 of 
the 
Medicare 
DMEPOS 
Competitive 
Acquisition 
Reform Act of 2008’’ after ‘‘as amended by paragraph 
(1)’’; and 
(ii) by inserting before the period at the end the 
following: ‘‘and the topics specified in subparagraph 
(C)’’;
H. R. 6331—73 
(B) in subparagraph (B), by striking ‘‘Not later than 
January 1, 2009,’’ and inserting ‘‘Not later than 1 year 
after the first date that payments are made under section 
1847 of the Social Security Act,’’; and 
(C) by adding at the end the following new subpara-
graph: 
‘‘(C) TOPICS.—The topics specified in this subpara-
graph, for the study under subparagraph (A) concerning 
the competitive acquisition program, are the following: 
‘‘(i) Beneficiary access to items and services under 
the program, including the impact on such access of 
awarding contracts to bidders that— 
‘‘(I) did not have a physical presence in an 
area where they received a contract; or 
‘‘(II) had no previous experience providing the 
product category they were contracted to provide. 
‘‘(ii) Beneficiary satisfaction with the program and 
cost savings to beneficiaries under the program. 
‘‘(iii) Costs to suppliers of participating in the pro-
gram and recommendations about ways to reduce those 
costs without compromising quality standards or 
savings to the Medicare program. 
‘‘(iv) Impact of the program on small business sup-
pliers. 
‘‘(v) Analysis of the impact on utilization of dif-
ferent items and services paid within the same 
Healthcare 
Common 
Procedure 
Coding 
System 
(HCPCS) code. 
‘‘(vi) Costs to the Centers for Medicare & Medicaid 
Services, including payments made to contractors, for 
administering the program compared with administra-
tion of a fee schedule, in comparison with the relative 
savings of the program. 
‘‘(vii) Impact on access, Medicare spending, and 
beneficiary spending of any difference in treatment 
for diabetic testing supplies depending on how such 
supplies are furnished. 
‘‘(viii) Such other topics as the Comptroller General 
determines to be appropriate.’’. 
(2) DELAY IN OTHER DEADLINES.— 
(A) PROGRAM ADVISORY AND OVERSIGHT COMMITTEE.— 
Section 1847(c)(5) of the Social Security Act (42 U.S.C. 
1395w–3(c)(5)) is amended by striking ‘‘December 31, 2009’’ 
and inserting ‘‘December 31, 2011’’. 
(B) SECRETARIAL REPORT.—Section 1847(d) of such Act 
(42 U.S.C. 1395w–3(d)) is amended by striking ‘‘July 1, 
2009’’ and inserting ‘‘July 1, 2011’’. 
(C) IG 
REPORT.—Section 302(e) of the Medicare 
Prescription Drug, Improvement, and Modernization Act 
of 2003 (Public Law 108-173) is amended by striking ‘‘July 
1, 2009’’ and inserting ‘‘July 1, 2011’’. 
(3) EVALUATION
OF
CERTAIN
CODE.—The Secretary of 
Health and Human Services shall evaluate the existing Health 
Care Common Procedure Coding System (HCPCS) codes for 
negative pressure wound therapy to ensure accurate reporting 
and billing for items and services under such codes. In carrying 
out such evaluation, the Secretary shall use an existing process,
H. R. 6331—74 
administered by the Durable Medical Equipment Medicare 
Administrative Contractors, for the consideration of coding 
changes and consider all relevant studies and information fur-
nished pursuant to such process. 
(d) OTHER PROVISIONS.— 
(1) EXEMPTION FROM COMPETITIVE ACQUISITION FOR CER-
TAIN OFF-THE-SHELF ORTHOTICS.—Section 1847(a) of the Social 
Security Act (42 U.S.C. 1395w–3(a)) is amended by adding 
at the end the following new paragraph: 
‘‘(7) EXEMPTION FROM COMPETITIVE ACQUISITION.—The pro-
grams under this section shall not apply to the following: 
‘‘(A) CERTAIN OFF-THE-SHELF ORTHOTICS.—Items and 
services described in paragraph (2)(C) if furnished— 
‘‘(i) by a physician or other practitioner (as defined 
by the Secretary) to the physician’s or practitioner’s 
own patients as part of the physician’s or practitioner’s 
professional service; or 
‘‘(ii) by a hospital to the hospital’s own patients 
during an admission or on the date of discharge. 
‘‘(B) CERTAIN
DURABLE
MEDICAL
EQUIPMENT.—Those 
items and services described in paragraph (2)(A)— 
‘‘(i) that are furnished by a hospital to the hos-
pital’s own patients during an admission or on the 
date of discharge; and 
‘‘(ii) to which such programs would not apply, as 
specified by the Secretary, if furnished by a physician 
to the physician’s own patients as part of the physi-
cian’s professional service.’’. 
(2) CORRECTION IN FACE-TO-FACE EXAMINATION REQUIRE-
MENT.—Section 1834(a)(1)(E)(ii) of such Act (42 U.S.C. 
1395m(a)(1)(E)(ii)) is amended by striking ‘‘1861(r)(1)’’ and 
inserting ‘‘1861(r)’’. 
(3) SPECIAL RULE IN CASE OF NATIONAL MAIL-ORDER COM-
PETITION FOR DIABETIC TESTING STRIPS.—Section 1847(b) of such 
Act (42 U.S.C. 1395w–3(b)) is amended— 
(A) by redesignating paragraph (10) as paragraph (11); 
and 
(B) by inserting after paragraph (9) the following new 
paragraph: 
‘‘(10) SPECIAL RULE IN CASE OF COMPETITION FOR DIABETIC 
TESTING STRIPS.— 
‘‘(A) IN
GENERAL.—With respect to the competitive 
acquisition program for diabetic testing strips conducted 
after the first round of the competitive acquisition pro-
grams, if an entity does not demonstrate to the Secretary 
that its bid covers types of diabetic testing strip products 
that, in the aggregate and taking into account volume 
for the different products, cover 50 percent (or such higher 
percentage as the Secretary may specify) of all such types 
of products, the Secretary shall reject such bid. The volume 
for such types of products may be determined in accordance 
with such data (which may be market based data) as 
the Secretary recognizes. 
‘‘(B) STUDY OF TYPES OF TESTING STRIP PRODUCTS.— 
Before 2011, the Inspector General of the Department of 
Health and Human Services shall conduct a study to deter-
mine the types of diabetic testing strip products by volume
H. R. 6331—75 
that could be used to make determinations pursuant to 
subparagraph (A) for the first competition under the 
competitive acquisition program described in such subpara-
graph and submit to the Secretary a report on the results 
of the study. The Inspector General shall also conduct 
such a study and submit such a report before the Secretary 
conducts a subsequent competitive acquistion program 
described in subparagraph (A).’’. 
(4) OTHER CONFORMING AMENDMENTS.—Section 1847(b)(11) 
of such Act, as redesignated by paragraph (3), is amended— 
(A) in subparagraph (C), by inserting ‘‘and the identi-
fication of areas under subsection (a)(1)(D)(iii)’’ after 
‘‘(a)(1)(A)’’; 
(B) in subparagraph (D), by inserting ‘‘and implementa-
tion of subsection (a)(1)(D)’’ after ‘‘(a)(1)(B)’’; 
(C) in subparagraph (E), by striking ‘‘or’’ at the end; 
(D) in subparagraph (F), by striking the period at 
the end and inserting ‘‘; or’’; and 
(E) by adding at the end the following new subpara-
graph: 
‘‘(G) the implementation of the special rule described 
in paragraph (10).’’. 
(5) FUNDING FOR IMPLEMENTATION.—In addition to funds 
otherwise available, for purposes of implementing the provi-
sions of, and amendments made by, this section, other than 
the amendment made by subsection (c)(1) and other than sec-
tion 1847(a)(1)(E) of the Social Security Act, the Secretary 
of Health and Human Services shall provide for the transfer 
from the Federal Supplementary Medical Insurance Trust Fund 
established under section 1841 of the Social Security Act (42 
U.S.C. 1395t) to the Centers for Medicare & Medicaid Services 
Program Management Account of $20,000,000 for fiscal year 
2008, and $25,000,000 for each of fiscal years 2009 through 
2012. Amounts transferred under this paragraph for a fiscal 
year shall be available until expended. 
(e) EFFECTIVE DATE.—The amendments made by this section 
shall take effect as of June 30, 2008. 
Subtitle D—Provisions Relating to Part C 
SEC. 161. PHASE-OUT OF INDIRECT MEDICAL EDUCATION (IME). 
(a) IN GENERAL.—Section 1853(k) of the Social Security Act 
(42 U.S.C. 1395w–23(k)) is amended— 
(1) in paragraph (1), in the matter preceding subparagraph 
(A), by striking ‘‘paragraph (2)’’ and inserting ‘‘paragraphs (2) 
and (4)’’; and 
(2) by adding at the end the following new paragraph: 
‘‘(4) PHASE-OUT OF THE INDIRECT COSTS OF MEDICAL EDU-
CATION FROM CAPITATION RATES.— 
‘‘(A) IN
GENERAL.—After determining the applicable 
amount for an area for a year under paragraph (1) (begin-
ning with 2010), the Secretary shall adjust such applicable 
amount to exclude from such applicable amount the phase- 
in percentage (as defined in subparagraph (B)(i)) for the 
year of the Secretary’s estimate of the standardized costs 
for payments under section 1886(d)(5)(B) in the area for
H. R. 6331—76 
the year. Any adjustment under the preceding sentence 
shall be made prior to the application of paragraph (2). 
‘‘(B) PERCENTAGES
DEFINED.—For purposes of this 
paragraph: 
‘‘(i) PHASE-IN
PERCENTAGE.—The term ‘phase-in 
percentage’ means, for an area for a year, the ratio 
(expressed as a percentage, but in no case greater 
than 100 percent) of— 
‘‘(I) the maximum cumulative adjustment 
percentage for the year (as defined in clause (ii)); 
to 
‘‘(II) the standardized IME cost percentage (as 
defined in clause (iii)) for the area and year. 
‘‘(ii) MAXIMUM CUMULATIVE ADJUSTMENT PERCENT-
AGE.—The term ‘maximum cumulative adjustment 
percentage’ means, for— 
‘‘(I) 2010, 0.60 percent; and 
‘‘(II) a subsequent year, the maximum cumu-
lative adjustment percentage for the previous year 
increased by 0.60 percentage points. 
‘‘(iii) STANDARDIZED IME COST PERCENTAGE.—The 
term ‘standardized IME cost percentage’ means, for 
an area for a year, the per capita costs for payments 
under section 1886(d)(5)(B) (expressed as a percentage 
of the fee-for-service amount specified in subparagraph 
(C)) for the area and the year. 
‘‘(C) FEE-FOR-SERVICE
AMOUNT.—The fee-for-service 
amount specified in this subparagraph for an area for 
a year is the amount specified under subsection (c)(1)(D) 
for the area and the year.’’. 
(b) EXCLUDING
ADJUSTMENT
FROM
THE
UPDATE.—Section 
1853(k)(1)(B)(i) of the Social Security Act (42 U.S.C. 1395w– 
23(k)(1)(B)(i)) is amended by striking ‘‘paragraph (2)’’ and inserting 
‘‘paragraphs (2) and (4)’’. 
(c) HOLD HARMLESS FOR PACE PROGRAM PAYMENTS.—Section 
1894(d) of the Social Security Act (42 U.S.C. 1395eee(d)) is amended 
by adding at the end the following new paragraph: 
‘‘(3) CAPITATION RATES DETERMINED WITHOUT REGARD TO 
THE PHASE-OUT OF THE INDIRECT COSTS OF MEDICAL EDUCATION 
FROM THE ANNUAL MEDICARE ADVANTAGE CAPITATION RATE.— 
Capitation amounts under this subsection shall be determined 
without regard to the application of section 1853(k)(4).’’. 
SEC. 162. REVISIONS TO REQUIREMENTS FOR MEDICARE ADVANTAGE 
PRIVATE FEE-FOR-SERVICE PLANS. 
(a) REQUIREMENTS TO ASSURE ACCESS
TO NETWORK COV-
ERAGE.— 
(1) INDIVIDUAL
MARKET.—Section 1852(d) of the Social 
Security Act (42 U.S.C. 1395w–22(d)) is amended— 
(A) in paragraph (4), in the second sentence, by striking 
‘‘The Secretary’’ and inserting ‘‘Subject to paragraph (5), 
the Secretary’’; and 
(B) by adding at the end the following new paragraph: 
‘‘(5) REQUIREMENT
OF
CERTAIN
NONEMPLOYER
MEDICARE 
ADVANTAGE PRIVATE FEE-FOR-SERVICE PLANS TO USE CONTRACTS 
WITH PROVIDERS.—